TELUS Q3 2025 slides: Strong customer growth and AI focus amid mixed segment performance

Introduction & Market Context

TELUS Corporation (TSX:T) presented its third-quarter 2025 results on November 7, highlighting robust customer growth and strategic initiatives despite mixed financial performance across segments. The Canadian telecommunications giant reported flat consolidated revenue year-over-year but managed to grow its adjusted EBITDA by 1% and free cash flow by 8%.

The company’s shares closed at $20.66 on the day of the presentation, up just 0.02% from the previous close, reflecting investor neutrality toward the mixed results. This represents a slight decline from the $21.34 closing price following the Q2 2025 earnings announcement, suggesting some market caution despite operational improvements.

Quarterly Performance Highlights

TELUS delivered industry-leading total customer additions of 288,000 in Q3 2025, a significant acceleration from the 198,000 reported in Q2. The company maintained strong customer loyalty with an industry-best postpaid mobile phone churn of 0.91%.

Mobile segment performance showed resilience with 82,000 mobile phone net additions and 169,000 connected device net additions. However, mobile phone ARPU (average revenue per user) declined 2.8% year-over-year to $57.21, indicating continued pricing pressure in the competitive Canadian wireless market.

As shown in the following mobile operating results:

The fixed segment also contributed positively to customer growth with 37,000 total fixed net additions, including 40,000 internet, 5,000 TV, and 6,000 security and automation net additions, partially offset by 14,000 residential voice net losses.

Fixed segment details are illustrated here:

Strategic Initiatives

A significant development during the quarter was TELUS’s completion of the privatization of TELUS Digital in October. The company expects this integration to generate approximately $150 million in annualized cash synergies by the end of 2026 through operational efficiencies.

The company highlighted this strategic move in its presentation:

TELUS is increasingly positioning itself as a leader in AI-powered solutions, projecting its AI-enabling capabilities revenue to grow from approximately $800 million in 2025 to $2 billion by 2028, representing a compound annual growth rate exceeding 30%.

This ambitious growth trajectory in AI is illustrated in the following chart:

The company continues to invest in network infrastructure, connecting over 3.6 million premises to fiber technology and providing 5G coverage to 89% of Canadians. These investments are aimed at bridging digital divides while supporting long-term financial sustainability.

Financial Analysis

TELUS Technology Solutions (TTech) showed modest growth with mobile network revenue up 1% year-over-year to $1.8 billion and fixed data services revenue increasing 1% to $1.2 billion. The segment’s adjusted EBITDA grew 2% to $1.7 billion, with margin expansion of 2.1 percentage points to 43.4%.

The TTech segment performance is summarized here:

TELUS Health emerged as a standout performer with operating revenues increasing 18% year-over-year to $517 million and adjusted EBITDA growing 24% to $91 million. The segment now covers 160.6 million lives globally, an increase of 85 million compared to the previous year, largely due to the Workplace Options acquisition which added 79.3 million healthcare lives.

The health segment’s strong performance is detailed in this slide:

In contrast, TELUS Digital Experience showed mixed results with 5% revenue growth to $708 million but an 18% decline in adjusted EBITDA to $105 million. The segment’s adjusted EBITDA margin contracted by 3.4 percentage points to 11.1%, reflecting ongoing margin pressures.

On a consolidated basis, TELUS reported flat operating revenues of $5.1 billion, while adjusted EBITDA increased 1% to $1.9 billion. Free cash flow grew 8% year-over-year to $611 million, and capital expenditures decreased 4% to $616 million.

The consolidated financial performance is summarized in this slide:

Forward-Looking Statements

TELUS maintained its 2025 financial targets, expecting TTech operating revenue growth at the lower end of the previously guided 2-4% range. The company reaffirmed its TTech adjusted EBITDA growth target of 3-5%, consolidated free cash flow of approximately $2.15 billion, and consolidated capital expenditures of approximately $2.5 billion.

The company’s 2025 outlook is detailed here:

TELUS declared a quarterly dividend of $0.4184 per share, payable on January 2, 2026, representing a 4% increase year-over-year. The company is targeting 3-8% annual dividend growth from 2026 through 2028 while focusing on balance sheet deleveraging to reach a net debt to EBITDA ratio of approximately 3.0 times by the end of 2027.

The company plans to gradually step down its Discounted Dividend Reinvestment Plan (DRIP) beginning in 2026, with full removal planned by the end of 2027, signaling confidence in its ability to generate sufficient free cash flow to support both dividend growth and deleveraging initiatives.

As of September 30, 2025, TELUS’s leverage ratio stood at 3.5 times, down 0.2 from the previous quarter, showing progress toward its deleveraging goals. The company maintains a strong liquidity position with over $4.2 billion available and a weighted average cost of long-term debt of 4.61%.

Full presentation:

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