Quick Read
Telus (TU) targets $2B AI revenue by 2028 from $800M, Q4 up 44% to $229M, free cash flow $2.2B up 11%, partnering with NVIDIA (NVDA). BCE (BCE) up 9.4% YTD, TU up 4%. Outgoing CEO Darren Entwistle used his final earnings call to reframe Telus around AI infrastructure and TELUS Health monetization as growth drivers beyond traditional telecom.
Darren Entwistle spent 26 years building TELUS (NYSE:TU) into something more than a phone company. His final earnings call as CEO, on February 12, 2026, made one thing crystal clear: he’s handing over an organization that has quietly become a serious AI business.
The AI Revenue Story Nobody Is Talking About
The headline number from Entwistle’s call wasn’t the revenue miss. It was this:
“AI-enabling capabilities revenue targeted to grow from circa $800 million in 2025 to approximately $2 billion in 2028 across both TELUS Digital and TELUS Business Solutions, including important contributions from our sovereign AI factories.”
That’s not a vague aspiration. In Q4 2025 alone, AI-enabling capabilities revenue increased 44% to $229 million, and grew 35% for the full year. The engine is real and accelerating.
The “sovereign AI factories” angle is genuinely interesting. Entwistle noted that TELUS held onto legacy data centers in Rimouski and Kamloops that peers sold off, and has since converted them into sovereign AI infrastructure with “a minimum amount of capital investment.” Add an NVIDIA partnership that gives TELUS advantaged access to chips and pricing, and you have a differentiated position most telecom investors haven’t priced in.
TELUS Health: The Hidden Asset Getting Louder
Entwistle was equally direct about TELUS Health. Revenue grew 13% and Adjusted EBITDA grew 10% in Q4, with 161.2 million healthcare lives covered globally. The LifeWorks integration delivered $431 million in annualized synergies, nearly three times the original $150 million target set at acquisition in September 2022.
More importantly, TELUS is now actively exploring a strategic partnership for the unit. Entwistle framed it plainly: the investments made historically “are going to yield significant multiples over the capital that we’ve invested.” This is a monetization setup, not just an operational update.
The Financials Behind the Story
TELUS reported Q4 revenue of $5.261 billion, missing estimates, but the miss was partly deliberate. The company pulled back on promotional device offers, trimming $159 million in mobile equipment revenue to protect margins. TTech adjusted EBITDA margin expanded 2.4 percentage points to 40.9%, and full-year free cash flow hit $2.2 billion, up 11%.
For 2026, guidance calls for free cash flow of approximately $2.45 billion and capital expenditures of approximately $2.3 billion, a 10% decrease. That combination of growing cash and falling capex reflects a deleveraging trend. Leverage is targeted at 3.3x or lower by year-end 2026 and approximately 3.0x by year-end 2027.
Peer BCE (NYSE:BCE) is up 9.4% year-to-date while TU has gained 4% year-to-date, reflecting the market’s warmer reception to BCE’s Ziply Fiber U.S. expansion story. But TELUS’s AI revenue trajectory and TELUS Health monetization potential reflect a different growth narrative, one that Entwistle spent his final call making sure investors understood before handing the keys to incoming CEO Victor Dodig on July 1, 2026.
