TELUS Digital declares Q2 2025 financial outcomes, showcasing a rise in revenue expansion
In a recent financial report, TELUS Corporation announced its Q2 2025 results, revealing a mixed picture of growth and challenges for its digital arm, TELUS Digital.
Revenue Growth for TELUS Digital
TELUS Digital reported a revenue of $699 million for Q2 2025, marking a 7% increase year-over-year (YoY). This growth was driven primarily by the company's existing client base, including TELUS Corporation, and expansion in their AI & Data Solutions service line.
Goodwill Impairment Charge
However, TELUS Digital also recorded a non-cash goodwill impairment charge of $224 million in Q2 2025. This impairment, specifically related to TELUS Digital, contributed to a total net loss of $500 million for the digital arm.
TELUS Corporation's Net Loss
As a result, TELUS Corporation experienced a net loss of $245 million in Q2 2025, a significant decrease from the net income of $221 million in Q2 2024.
Adjusted EBITDA Growth
Despite the goodwill impairment, the TTech segment, which includes TELUS Digital and TELUS Health, saw a 4% adjusted EBITDA growth overall. However, specific adjusted EBITDA figures for TELUS Digital alone were not directly disclosed.
Leverage Outlook
TELUS Corporation reaffirmed its overall leverage target, aiming to achieve approximately 3.55-times net debt to Adjusted EBITDA by the end of 2025, demonstrating the company's focus on managing financial leverage despite current impairments.
Cash Flows and Operating Activities
Cash provided by operating activities for Q2 2025 was $63 million, a decrease from $124 million in Q2 2024. The company's free cash flow for Q2 2025 was $33 million, a significant drop from $95 million in Q2 2024.
Looking Ahead
TELUS Digital expects revenue growth of approximately 2% on an organic basis, Adjusted EBITDA of approximately $400 million, and Adjusted Diluted EPS of approximately $0.32 for the full-year 2025.
However, the financial outlook provides management's best judgement of how trends will impact the business and may not be appropriate for other purposes. A quantitative reconciliation of the full-year 2025 outlook for Adjusted EBITDA and Adjusted Diluted EPS to the full-year 2025 outlook for net income and diluted EPS has not been provided due to uncertainty in calculating certain reconciling items.
In summary, TELUS Digital is achieving incremental revenue growth, but faces significant goodwill impairment impacting the parent company's reported net income. TELUS Corporation is maintaining its financial targets with a focus on leverage reduction.
Cloud-based solutions are a key component of TELUS Digital's expansion in AI & Data Solutions, driving the 7% year-over-year (YoY) revenue growth.
The goodwill impairment charge of $224 million, specific to TELUS Digital, not only contributed to Q2 2025's net loss for the digital arm but also impacted TELUS Corporation's net loss.
To ensure security and performance, TELUS Corporation is maintaining its focus on financial leverage, aiming to achieve a ratio of approximately 3.55-times net debt to Adjusted EBITDA by the end of 2025.
In the upcoming fiscal year, TELUS Digital anticipates compliance with finance regulations, projecting revenue growth, Adjusted EBITDA, and Adjusted Diluted EPS, but with a caveat that the outlook may not be suitable for all purposes.
