Corus Entertainment Q1 Earnings Call Highlights

Corus Entertainment (TSE:CJR.B) used its fiscal 2026 first-quarter earnings call to emphasize progress toward a proposed recapitalization plan while outlining audience and advertising trends that management said continued to pressure results. Executives also pointed to ongoing regulatory uncertainty and disputes with certain distributors as key factors shaping near-term visibility.

Recapitalization plan moves toward security holder vote

CEO John Gossling opened the call with an update on the recapitalization transaction Corus announced in November. He said the company received an interim court order on Dec. 17 authorizing concurrent special meetings of noteholders and shareholders to seek approval of the plan of arrangement.

Gossling said the board’s decision followed a strategic review launched in early 2024 with financial and legal advisors, and that the board “unanimously determined” the transaction was the “best viable option” for the company and stakeholders. He described the proposal’s expected benefits as:

• Reducing total debt by more than CAD 500 million
• Generating annual cash interest savings of up to CAD 40 million
• Providing continued increased access to Corus’s secured lending facility
• Extending debt maturities by five years

Management said the deal already had strong support, citing backing from more than 74% of senior noteholders and more than 86% of Class A voting shareholders. Meeting materials were filed and mailed to security holders of record as of Dec. 24, with meetings scheduled for Jan. 30 and a proxy deadline of Jan. 28.

Later in the call, Gossling stressed the importance of the transaction, warning that if the plan is not completed on the contemplated terms and timeline, the company “could be forced to look at alternatives that likely offer no consideration for many of the stakeholders.”

Programming performance and streaming trends

Gossling said sports viewing, particularly the Blue Jays playoff run in September and October, temporarily shifted audience behavior and advertising buying patterns, impacting specialty audiences in a manner similar to what occurs during the Olympics. He said momentum improved after the World Series ended.

Corus highlighted Global’s primetime performance after the baseball season, saying the network ranked number one in core primetime and had 11 of the top 20 most-watched programs. Gossling cited titles including Survivor, 9-1-1, NCIS, and FBI, and said franchise extension Sheriff Country ranked in the top 20 during its freshman run.

Within specialty, management said W Network remained the top specialty entertainment destination in the fall, supported by Hallmark Channel’s “Countdown to Christmas.” History was described as the number one factual network, while Home Network and Flavour Network were said to hold the number one and number two lifestyle brand positions. Gossling also said rationalization of the kids’ specialty portfolio led to audience consolidation into remaining brands, and that YTV and, for the first time, Boomerang placed within the top 20 networks during the fall.

On streaming, Gossling said combined hours streamed and monthly hours per monthly active subscriber user reached an all-time high in Q1 across Stack TV and the Global TV app. He said Stack TV tuning grew 5% during the fall 2025 season, driven primarily by video on demand, which increased 23% year over year.

Q1 financial results reflect advertising and subscriber pressure

Senior finance executive Doug Spence said results were consistent with the company’s prior outlook for television advertising, reflecting continued pressure from linear TV demand trends, an oversupply of digital inventory, and macroeconomic conditions. He added that lower subscriber revenue reflected the discontinuation of seven specialty channels since Q1 of the prior year, declines in the linear business, and disputes with certain distributors.

For the quarter, Corus reported consolidated revenue of CAD 268 million and consolidated segment profit of CAD 57 million. Spence said cost reduction initiatives helped offset some of the revenue decline, including a 16% reduction in general and administrative expenses (at the top end of the company’s outlook of 10% to 15%) and a 10% decrease in employee costs. He also cited an 11% decrease in direct cost of sales due to lower amortization of program rights and film investments. Total expenses decreased by CAD 32 million, or 13%, and the consolidated segment profit margin was 21%, down from 26% a year earlier.

Free cash flow was negative CAD 54 million in Q1, which Spence attributed to lower segment profit, higher net investment in program rights and film investments, and proceeds from a property sale in the prior year period. He said program rights were affected by the timing of billings and premieres, partially offset by the prior-year discontinuation of certain program rights tied to TV portfolio changes.

Corus ended the quarter in compliance with all covenants, with approximately CAD 45 million of cash and cash equivalents and CAD 35 million available under its revolving credit facility. Net debt to segment profit increased to 7.39 times from 6.01 times at year-end, driven by lower segment profit and higher debt balances.

Segment details: TV declines, radio margin improvement

In television, segment revenue was CAD 245 million, down 19% year over year. TV advertising revenue declined 23% to CAD 135 million, while subscriber revenue fell 15% to CAD 99 million. Spence said that when normalizing for the sunset of two specialty channels in December 2024 and five additional channel closures at the start of the quarter, as well as distributor disputes, subscriber revenue was down 3% compared with last year.

Distribution, production, and other revenue decreased 2%, which Spence said reflected a pause in production in the company’s animation studio as part of cost containment efforts. TV segment expenses fell 13% to CAD 189 million. TV segment profit declined 35%, and margin was 23% compared with 28% a year earlier.

In radio, revenue was CAD 22 million, down 4%, driven by lower advertising demand. Spence said the quarter saw declines in government or political spending and professional services, while pharmaceutical advertising increased, and retail, entertainment, and automotive categories remained resilient. Radio segment profit increased to CAD 5 million, up 38%, with margin improving to 24% from 16% on cost containment.

Regulatory uncertainty and distributor disputes remain in focus

Chief Administrative and Legal Officer Jennifer Lee said Corus is “in a wait mode” as it looks to the CRTC to finalize key parts of the regulatory framework tied to implementation of the Online Streaming Act. She also said the company is awaiting a final judicial decision that would allow it to receive its full amount of independent local news funding. Lee said Corus needs “final, refreshed rules” governing broadcasting, distribution, and spending on Canadian programs, arguing that slow progress has deepened competitive imbalances for independent broadcasters.

During the Q&A, Gossling said the timing of a potential CRTC review related to the recapitalization was “very hard to predict,” though the company is seeking an expedited process and is working to provide requested information. On the independent local news funding matter, Lee said the decision is pending with the courts and Corus has no insight into timing. She added that the CRTC confirmed eligibility in June and the company is waiting for the “streamer portion” to come through.

Asked about Q2 advertising, Gossling said the company’s goal is to improve the trajectory, but noted the Olympics as a headwind and referenced lapping election-related advertising in the prior year. Regarding distributor disputes, he confirmed there are major distributors involved but declined to provide details, saying the matter is before the regulator and could involve courts as well.

Management also addressed working capital and cash flow dynamics. Spence said the working capital outflow in Q1 included higher cash taxes versus last year and the timing of certain payments that arrived early in Q2, which he said should reverse as the year progresses.

About Corus Entertainment (TSE:CJR.B)

Corus Entertainment Inc is a media and content company that operates in the diversified media industry. The company has two business segments, which includes television, and radio. The television business segment has a portfolio of television channels. The radio business segment controls a number of stations that cater to both the music, news, and talk radio markets. The company generates the vast majority of its revenue in Canada.