Telus Corp
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.47%.
Did TU Beat Earnings? Q3 2025 Results
TELUS delivered a sharply split quarter in Q3 2025, posting earnings that well exceeded expectations even as revenue came in slightly light. The Canadian telecom reported EPS of $0.32, beating the $0.19 consensus estimate by 67.98%, though revenue of $5.11 billion missed the $5.20 billion consensus by 1.88%, growing just 1.3% year-over-year. The EPS outperformance was largely driven by a $222 million gain on the repurchase of $1.80 billion in senior notes through tender offers, a one-time tailwind that meaningfully inflated the bottom line rather than reflecting organic operational strength. The quarter was otherwise defined by transformation, with TELUS completing the formation of Terrion, a tower infrastructure joint venture that helped reduce net debt by $2.40 billion to $25.70 billion and improved leverage to 3.5x. TELUS Health remained a bright spot, with Adjusted EBITDA surging 24%, while TELUS Digital continued to struggle amid macroeconomic headwinds. Looking ahead, TELUS is targeting a net debt to EBITDA ratio of roughly 3.0x by 2027 and raised its dividend 4%, though at least one analyst has flagged concerns about long-term dividend sustainability.
- Mobile, residential internet, and security and automation subscriber growth
- Cost reduction efforts including workforce reductions and increased adoption of TELUS Digital solutions across TTech
- Higher residential internet revenue per customer
- TELUS Health revenue growth from Workplace Options acquisition and organic payor and provider solutions growth
- Gain on purchase of long-term debt of $222 million from tender offers
- Hedge accounting change eliminating VPPA unrealized losses from financing costs
- TELUS Health healthcare lives covered grew to 160.6 million, up 84.6 million year-over-year
- TELUS Digital intersegment revenues continued to increase, comprising approximately 26% of total TELUS Digital revenues
- Favourable foreign currency impact from strengthening U.S. dollar, British pound and European euro against Canadian dollar
Forward Guidance & Outlook
TELUS targets a net debt to EBITDA ratio of circa 3.0 in 2027 and a return to circa 2.7 in the medium term. The company announced its intention to target ongoing semi-annual dividend increases with annual increases of 3-8% from 2026 through 2028. The Common Share dividend payout ratio guideline is 60-75% of free cash flow on a prospective basis. The company expects the TELUS Digital privatization to accelerate global growth in key verticals including financial technology, gaming, communications and media, and health, while enhancing AI and SaaS transformation capabilities. TELUS maintains available liquidity of more than $4.2 billion. Cash income tax payments guidance was revised downward to approximately $420-$500 million from $500-$580 million due to higher refunds received. The company continues to face macroeconomic uncertainty including potential tariffs and geopolitical risks that may affect consumer spending patterns.
TU YoY Financials
TU Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.