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Overview of TELUS Q2 Financial and Operational Results

TELUS Corporation recently revealed its unaudited financial results for the second quarter ending June 30, 2026. Along with the company's operational highlights, a significant reset of its quarterly dividend was announced to align with new strategic priorities aimed at strengthening the financial foundation and facilitating long-term growth.

Key Highlights of Q2 2026 Results

In the second quarter, TELUS achieved several notable milestones, including:

• - New Strategic Priorities: TELUS introduced three key priorities, focusing on strengthening its financial foundation, enhancing operational discipline, and directing resources towards profitable growth.
• - User Growth: The company witnessed a disciplined increase in its mobile and internet subscriber base, reporting net additions of 17,000 mobile and 20,000 internet subscribers. Furthermore, connected devices saw a net increase of 187,000.
• - Revenue Dynamics: Mobile network revenue totaled $1.7 billion, showing a slight year-over-year increase of 1%. This growth was largely driven by an expanding subscriber base, although the average revenue per user (ARPU) showed a minor decline, falling by 0.4% to $56.36. Additionally, the company's blended mobile churn increased marginally to 1.08%.

Financial Challenges and Strategic Restructuring

Despite these positive highlights, TELUS faced significant operational challenges.

• - Net Loss: The company reported a substantial net loss of $1.8 billion, attributed to a pre-tax, non-cash impairment of intangible assets and goodwill amounting to $2.1 billion related to TELUS Digital.
• - Service Revenue Decline: Consolidated service revenues decreased by 1% to $4.4 billion compared to the previous year. This was impacted by lower expected growth in TELUS Digital, albeit partially offset by mobile network revenue gains and increased TELUS Health revenue streams.
• - Adjusted EBITDA: The Adjusted EBITDA figures also reflected a decline of 2%, standing at $1.8 billion for the quarter, influenced by varying results across different segments and diminished real estate gains.

In response to these challenges, TELUS reset its quarterly dividend to $0.1875 per share, marking a drastic 55% reduction from the previous annualized amount of $1.6736 per share. This adjustment aims to accumulate approximately $2.7 billion in cash savings by 2028 for debt reduction purposes. To further enhance flexibility in capital distribution, the company will remove the Dividend Reinvestment Plan (DRIP) discount starting October 1, 2026.

Future Outlook and Financial Guidance

Looking ahead, TELUS has updated its financial guidance for the remainder of 2026. Full-year consolidated service revenue is now anticipated to be between flat and a decline of 2%. Adjusted EBITDA estimates have been revised to a possible reduction between 2% to 4%.

Notably, TELUS continues to pursue a disciplined capital expenditure approach, projecting around $2.6 billion in capital investments for the year. The company reaffirms its commitment to maintaining a capital intensity target of 10%.

Strategic Focus Areas

As part of its strategic realignment, TELUS aims to:
1. Strengthen Financial Foundation: Targeting reductions in net debt to Adjusted EBITDA to approximately 3.0 times or lower by year-end 2028.
2. Operational Discipline: Ensuring investment focus on areas yielding returns above capital costs, emphasizing core business excellence through technology integration and operational efficiency improvements.
3. Resource Allocation for Growth: Concentrating investments on sectors where their competitive advantage is clearest, specifically within wireless and TELUS PureFibre networks, while expanding their digital footprint within healthcare and AI.

In essence, TELUS is determined to navigate through a challenging landscape while positioning itself for sustainable long-term growth. As Victor Dodig, President and CEO, summarized, the company is committed to strict financial practices, leveraging its strengths in network capabilities, and cultivating enduring customer loyalty as it strives for value creation and operational excellence in future quarters.