TELUS announced a 55 percent dividend cut, termination of its dividend reinvestment discount, and revised deleveraging t
TELUS Corporation reported its second quarter 2026 results on July 31, 2026, concurrent with announcing three strategic priorities, a dividend reset, and revised financial guidance. The company's dividend has been cut 55 percent to an annualized amount of $0.75 per share, down from the prior $1.6736 per share. The dividend reinvestment plan discount will be removed effective October 1, 2026, reducing shareholder dilution. These measures are expected to generate approximately $2.7 billion in cumulative cash savings through 2028 directed toward debt reduction.
President and Chief Executive Officer Victor Dodig stated, "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." He emphasized the company's focus on disciplined execution and maximum returns on capital deployment, working alongside the experienced leadership team and 100,000 team members.
Chief Financial Officer Gopi Chande noted, "The actions we are taking establish the financial conditions for strong, profitable growth and durable, compounding free cash flow growth." He highlighted that the combination of dividend reset, termination of the DRIP discount, and proceeds from monetization initiatives provide a path to achieve leverage and free cash flow objectives.
The company revised its net debt to Adjusted EBITDA target to 3.0-times or lower by year-end 2028, pushed back one year from the prior year-end 2027 target due to competitive pricing pressure and reduced subscriber demand amid lower population growth. TELUS expects leverage to decline sequentially in 2027 and 2028 supported by organic free cash flow growth, declining capital intensity, and the dividend reset.
TELUS also updated its free cash flow dividend payout ratio to 45 to 60 percent of trailing 12-month free cash flow, from the prior range of 60 to 75 percent. The company is conducting a comprehensive strategic portfolio review to optimize capital allocation, with proceeds directed toward debt reduction, including ongoing monetization of TELUS Health non-core assets and non-core real estate.
In the second quarter, consolidated operating revenues were $4.9 billion versus $5.1 billion in the prior year, reflecting a one percent consolidated service revenue decline. This decline was largely due to lower external revenues in TELUS Digital, mobile phone average revenue per user declining at a slower rate, and decreased fixed legacy voice revenue, partially offset by mobile subscriber base growth, higher TELUS Health service revenues, and increased fixed data services revenue.
TELUS recognized a non-cash impairment of $2.1 billion relating to TELUS Digital, resulting in a net loss of $1.8 billion and basic loss per share of $1.17. Adjusted net income of $254 million decreased 26 percent year-over-year, while adjusted basic earnings per share of $0.16 declined 27 percent. Consolidated EBITDA decreased five percent to $1.6 billion, while Adjusted EBITDA declined two percent to $1.8 billion. The TELUS TTech subscriber base reached 17.9 million connections, up six percent over the past 12 months, with mobile phone subscribers increasing one percent to 10.3 million.