BCE · BCE Inc.

BCE’s Q1 2026 results reflect disciplined execution amid strategic transformation: revenue growth was broad-based but uneven across segments—Bell CTS U.S. (driven by Ziply Fiber) and Bell Media delivered strong contributions, while Bell CTS Canada declined. The 4.0% consolidated revenue increase included a 3.4% rise in service revenue and a 7.9% jump in product revenue, underscoring continued hardware monetization alongside connectivity. Adjusted EBITDA growth of 2.9% to $2,631 million was achieved despite a 0.4 percentage-point margin decline to 42.7%, primarily due to higher operating costs—including Ziply Fiber’s expenses, elevated content spending at Bell Media, commission costs tied to record postpaid activations (+26,545 YoY), and Olympic Winter Games-related advertising. Net earnings fell 2.3% to $667 million, largely attributable to the absence of $266 million in net early debt redemption gains recorded in Q1 2025 and higher depreciation/amortization ($1,356 million vs. $1,272 million), partially offset by lower severance and acquisition costs. Free cash flow edged up 0.8% to $804 million, supported by solid underlying operating performance despite a $422 million YoY drop in operating cash flow—driven mainly by $542 million in higher income taxes paid related to strategic divestitures. Notably, Bell Business Markets emerged as a key growth vector: its 9.7% revenue increase was powered by 113% growth in AI-powered solutions (Ateko, Bell Cyber, Bell AI Fabric), validating BCE’s pivot toward sovereign AI infrastructure. The announced $675 million sale of Bell Mobility’s land mobile radio business signals ongoing portfolio rationalization to sharpen focus on higher-return opportunities like fibre and AI. Management reaffirmed its capital allocation discipline, citing progress on simplifying the business and strengthening the balance sheet per Investor Day 2025 commitments.