TELUS CORP (TU): Financial results for Q2 2026
TELUS CORP (TU) furnished an SEC Form 6-K — earnings release. Exhibit 99.1 News Release July 31, 2026 TELUS reports second quarter 2026 financial and operational results and resets quarterly dividend to support deleveraging and fuel long-term growth D ividend reset realigned with capital priorities with clear path to 3.0-times or lower leve
How this was made
The 30-second read
Why it matters
The earnings miss and dividend cut introduce short‑term risk, but the announced leverage reduction and asset monetization could support longer‑term valuation.
Market read
TELUS's earnings and guidance revision are the primary catalyst for its stock movement and may influence the broader Canadian telecom sector.
What to watch
Potential upside from TELUS Digital asset monetization and AI data centre investments not fully reflected in the release.
TELUS reports second quarter 2026 financial and operational results and resets quarterly dividend to support deleveraging and fuel long-term growth
Operating revenues declined, Adjusted EBITDA declined, TELUS recorded a $1.8 billion net loss driven by a $2.1 billion non-cash impairment, and full-year guidance was reduced across service revenue, Adjusted EBITDA and free cash flow.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Operating revenues (arising from contracts with customers)other | 4,920 (C$ millions) | – | (2%) |
| Operating revenues and other incomeother | 4,929 (C$ millions) | – | (3%) |
| Consolidated service revenueother | $4.4 billion | – | declined 1 per cent |
| Total operating expensesother | 6,501 (C$ millions) | – | 32% |
| Net income (loss)other | (1,830) (C$ millions) | – | n/m |
| Net income (loss) attributable to common sharesother | (1,840) (C$ millions) | – | n/m |
| Adjusted Net incomenon-GAAP | 254 (C$ millions) | – | (26%) |
| Basic EPSother | ($1.17) | – | n/m |
| Adjusted basic EPSnon-GAAP | $0.16 | – | (27%) |
| EBITDAnon-GAAP | 1,588 (C$ millions) | – | (5%) |
| Adjusted EBITDAnon-GAAP | 1,777 (C$ millions) | – | (2%) |
| Capital expendituresother | 678 (C$ millions) | – | – |
| Cash provided by operating activitiesother | 1,342 (C$ millions) | – | 15% |
| Free cash flownon-GAAP | 545 (C$ millions) | – | 2% |
| Telecom subscriber connectionsother | 17,946 (thousands) | – | 6% |
| Healthcare lives coveredother | 158.9 (millions) | – | 1% |
| TTech Adjusted EBITDAnon-GAAP | 1,639 (C$ millions) | – | relatively flat |
| TELUS Health Adjusted EBITDAnon-GAAP | 99 (C$ millions) | – | 1% |
| TELUS Digital Adjusted EBITDAnon-GAAP | 72 (C$ millions) | – | (20%) |
| Mobile network revenueother | 1,743 (C$ millions) | – | 1% |
| Mobile phone ARPUother | $56.36 | – | decrease of $0.22 or 0.4 per cent |
| Mobile phone net additionsother | 17,000 | – | decrease of 38,000 |
| Connected device net additionsother | 187,000 | – | increase of 75,000 |
| Internet net additionsother | 20,000 | – | decrease of 7,000 |
| Mobile phone churn rateother | 1.08 per cent | – | – |
| Non-cash impairment of intangible assets and goodwillother | $2.1 billion | – | – |
| Net debt to Adjusted EBITDAnon-GAAP | 3.5-times | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| TELUS technology solutions (TTech)TTech operating revenues declined primarily due to lower mobile equipment revenue. Adjusted EBITDA was relatively flat as subscriber growth, cost reductions, security and automation growth, TV growth and agriculture and consumer goods margin growth mostly offset lower Other income, ARPU pressure, lower B2B data services revenue, legacy voice decline, lower mobile equipment margins and higher licence and cloud costs. | 3,746 (C$ millions) | – | (2%) |
| TELUS HealthHealth services revenue increased with global business acquisitions and growth in payor and provider solutions, partly offset by an organic decline in employer solutions driven by prior-year churn and pricing pressure. | 536 (C$ millions) | – | 3% |
| TELUS DigitalOperating revenue declined due to trust and safety client ramp-downs, a comparative-period one-time receipt, AI and data solutions client ramp-downs, and an unfavourable foreign currency impact, partly offset by higher customer experience management service-line volume. | 774 (C$ millions) | – | (6%) |
Full year 2026 outlook
- RevenueConsolidated service revenue growth: Flat to (2%)
- NoteConsolidated Adjusted EBITDA growth: (2%) to (4%)
- NoteCapital expenditures: Approximately $2.6 billion
- NoteFree cash flow: Approximately $1.8 billion
- NoteTELUS remains committed to its 10 per cent capital intensity target.
- NoteNet debt to Adjusted EBITDA: approximately 3.0-times or lower by year-end 2028.
- NoteRestructuring and other costs assumption: approximately $900 million.
- NoteTotal cash restructuring and other disbursements: approximately $650 million.
- NoteCash income tax payments assumption: approximately $240 million to $340 million.
Capital returns
- Quarterly dividend of $0.1875 per common share payable on October 1, 2026, to holders of record at the close of business on September 10, 2026.
- Annualized dividend amount of $0.75 per share.
- Prior annualized dividend amount was $1.6736 per share.
- The revised dividend is expected to generate approximately $2.7 billion in cumulative cash savings through 2028, directed toward deleveraging.
- Dividend reinvestment plan discount will be removed effective October 1, 2026.
- Free cash flow dividend payout ratio updated to 45 to 60 per cent of trailing 12-month free cash flow, from 60 to 75 per cent of free cash flow on a prospective basis.
What drove it
- Consolidated service revenue declined largely because of lower external revenues in TELUS Digital, decelerating but declining mobile phone ARPU, and fixed legacy voice revenue declines.
- Mobile network revenue growth was supported by mobile phone subscriber-base growth and ARPU declining at a decelerating rate.
- Fixed data services revenue increased with internet subscriber growth and TV and security and automation revenues, partly offset by lower B2B data services revenue and lower residential internet revenue per customer.
- TELUS Health revenue grew with global business acquisitions and payor and provider solutions.
- Cash provided by operating activities increased primarily from other working-capital changes, lower income taxes paid, and lower restructuring and other costs disbursements.
Concerns
- TELUS recorded a $2.1 billion pre-tax, non-cash intangible asset and goodwill impairment relating to TELUS Digital.
- The company recorded a net loss of $1.8 billion and basic loss per share of $1.17.
- TELUS Digital operating revenues declined by $75 million and Adjusted EBITDA declined by $17 million or 20 per cent.
- Mobile phone churn was 1.08 per cent, compared with 1.06 per cent in the same period last year, amid marketing and promotional price competition.
- Full-year guidance was revised downward for consolidated service revenue growth, Consolidated Adjusted EBITDA growth and free cash flow, while capital expenditures were increased.
- The timeline for the approximately 3.0-times or lower net debt to Adjusted EBITDA target moved to year-end 2028 from year-end 2027.
What to watch
- Progress of the cost transformation program and the revised restructuring and other costs assumption of approximately $900 million.
- Progress toward full-year free cash flow of approximately $1.8 billion amid lower Adjusted EBITDA, higher capital expenditures and incremental cash restructuring charges of $100 million.
- The strategic portfolio review, including TELUS Health-related non-core assets and non-core real estate monetization processes.
- The update on capital intensity and the next step-down expected with third quarter 2026 results.
- The more detailed capital returns framework and corporate strategy expected with third quarter 2026 results in November.
- TELUS Digital client ramp-downs, foreign currency impacts and recovery in its revenue and Adjusted EBITDA.
Balance sheet and cash flow
- Cash provided by operating activities: 1,342 (C$ millions), compared with 1,166 (C$ millions).
- Free cash flow: 545 (C$ millions), compared with 535 (C$ millions).
- Capital expenditures: 678 (C$ millions), compared with 678 (C$ millions).
- Net debt to Adjusted EBITDA: 3.5-times at June 30, 2026.
- TELUS is targeting net debt to Adjusted EBITDA of approximately 3.0-times or lower by year-end 2028.
- Interest paid: (450) (C$ millions), compared with (308) (C$ millions).
- Income taxes paid, net of refunds: (12) (C$ millions), compared with (143) (C$ millions).
Analysis
TELUS reported a weaker second quarter, with operating revenues and other income of 4,929 (C$ millions), down 3%, and consolidated service revenue of $4.4 billion, down 1 per cent. Adjusted EBITDA declined 2% to 1,777 (C$ millions), while EBITDA declined 5% to 1,588 (C$ millions). The company recorded a net loss of 1,830 (C$ millions), reflecting a $2.1 billion non-cash impairment relating to the TELUS Digital cash-generating unit. Adjusted Net income declined 26% to 254 (C$ millions), and adjusted basic EPS declined 27% to $0.16.
TTech remained comparatively resilient but showed underlying revenue and pricing pressure. Mobile network revenue increased 1% to 1,743 (C$ millions), supported by subscriber-base growth, while mobile phone ARPU was $56.36 and declined $0.22 or 0.4 per cent. Mobile phone net additions were 17,000, down 38,000, as TELUS prioritized value-accretive growth. Connected device net additions of 187,000 increased 75,000, while internet net additions of 20,000 declined 7,000. TTech Adjusted EBITDA was relatively flat at 1,639 (C$ millions), as cost reductions and subscriber growth offset legacy voice, B2B data, equipment-margin and cloud-cost pressure.
TELUS Health was the principal growth segment, with segment operating revenues and other income of 536 (C$ millions), up 3%, and Adjusted EBITDA of 99 (C$ millions), up 1%. Health-services growth reflected business acquisitions and payor and provider solutions, though the release cited an organic employer-solutions decline from prior-year churn and pricing pressure. TELUS Digital was the principal drag, with segment operating revenues and other income of 774 (C$ millions), down 6%, and Adjusted EBITDA of 72 (C$ millions), down 20%. Client ramp-downs in trust and safety and AI and data solutions, along with foreign currency effects, were cited as key revenue headwinds.
Cash generation improved modestly in the quarter despite lower EBITDA. Cash provided by operating activities increased 15% to 1,342 (C$ millions), and free cash flow increased 2% to 545 (C$ millions), supported by lower net income taxes paid and lower lease payments. Capital expenditures were flat at 678 (C$ millions), but TELUS raised its full-year capital-expenditure outlook to approximately $2.6 billion. Net debt to Adjusted EBITDA was 3.5-times at quarter-end, and the company now targets approximately 3.0-times or lower by year-end 2028.
Capital allocation was reset around deleveraging. The Board declared a quarterly dividend of $0.1875 per common share, representing an annualized amount of $0.75 per share versus the prior annualized amount of $1.6736 per share, and TELUS will remove the DRIP discount effective October 1, 2026. Management expects approximately $2.7 billion in cumulative cash savings through 2028 from the revised dividend. Full-year guidance was reduced to consolidated service revenue growth of flat to (2%), Consolidated Adjusted EBITDA growth of (2%) to (4%), and free cash flow of approximately $1.8 billion. The revision reflects pressure in fixed data, TELUS Digital and TELUS Health growth, as well as higher capital expenditures and incremental cash restructuring charges.
Management, verbatim
TELUS is built on a foundation of genuine strength – leading networks, sustained customer loyalty and growing expertise in health and AI-enabling capabilities that are increasingly central to how Canadians live and work. The macro environment has shifted and we are responding with clarity and discipline. Today we are announcing three strategic priorities that will strengthen our financial foundation, sharpen our operational focus and concentrate our resources on the opportunities where TELUS is best positioned to win – all in service of delivering long-term, profitable and sustainable growth.
Victor Dodig, President and Chief Executive Officer
The actions we are taking establish the financial conditions for strong, profitable growth and durable, compounding free cash flow growth.
Gopi Chande, Chief Financial Officer
Not in the filing
stated, not guessed- Gross profit and gross margin
- Operating income
- Diluted EPS
- Prior-quarter comparisons for reported financial and operating metrics
- Cash balance
- Total debt balance
- Net debt balance
- Share repurchases during the quarter
- Full-year gross-margin guidance
- Full-year operating-expense guidance
- Full-year tax-rate guidance
- Previous-release outlook for formal actual-versus-prior-guidance comparison
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
TELUS Corp, a major Canadian telecom and digital services provider, filed a Form 6‑K reporting its Q2 2026 results and strategic priorities.
Ticker impact
TELUS Corp released its Q2 2026 earnings with a net loss, dividend reset and revised full-year guidance.
Potential short-term downside pressure; medium-term upside if leverage targets are met.
The loss and lowered guidance signal near‑term weakness, but the dividend reset and leverage reduction plan provide a catalyst for longer‑term investors.
Market effects
Telecom sector may see pressure as TELUS signals weaker revenue and earnings growth.
Canadian market could be weighed down by TELUS's results, affecting TSX telecom index.
Limited; primarily impacts North American telecom investors.
Counterpoint
If the dividend reset improves balance sheet flexibility, the stock could rebound on the back of lower leverage.
Key entities
- ExecutiveVictor Dodig
President and CEO of TELUS, provided commentary on strategic priorities.
- ExecutiveGopi Chande
Chief Financial Officer, discussed dividend reset and balance sheet goals.
