TU · TELUS Corporation

TELUS Corporation reported its first quarter 2026 results, demonstrating resilient financial performance amid a dynamic operating environment. Consolidated service revenue grew 1% year-over-year, driven by TELUS Health's 11% revenue growth, subscriber base expansion across mobile, internet, and security, and higher residential internet ARPU. This was partially offset by lower mobile equipment revenue, a decline in TELUS Digital external revenues due to FX, lower B2B data services, and legacy voice declines. Consolidated Adjusted EBITDA remained stable at $1.8 billion, reflecting cost discipline and diversified segment performance. Net income fell 52% to $144 million, impacted by higher restructuring costs and lower operating income, while adjusted net income declined 8% to $356 million. Free Cash Flow grew 19% to $583 million, supported by lower income taxes paid. Management reaffirmed full-year 2026 targets: service revenue growth of 2-4%, Adjusted EBITDA growth of 2-4%, Free Cash Flow of approximately $2.45 billion, and capital expenditures of approximately $2.3 billion. The company highlighted industry-leading customer growth of 262,000 net additions, driven by mobile phone and connected devices. TELUS Health now covers ~170 million lives, and a strategic review for partnership opportunities is underway to support deleveraging. The Sovereign AI Factory in Rimouski is sold out, with a second facility launching in Kamloops. The company is progressing toward its net debt to EBITDA leverage target of 3.3x by year-end 2026 and 3.0x by 2027.