Telus noted that it reports TIXT's results through its Telus DLCX operating segment, which in Q1 2023 represented 10% of Telus' consolidated Adjusted EBITDA. T is optimistic that TIXT will turn things around by optimizing its own cost structure and deploying automation to drive down its cost to serve. T reported strong growth numbers for its phones and connected devices, but investors remain wary on the name due to its reduced guidance.
T reported strong mobile phone additions for the quarter, strong connected device net additions, and strong internet, TV and security net additions. It continues to anticipate sales and earnings growth for this year, however, TIXT is acting as a drag on its performance.
We expect TIXT's execution on minimizing costs and an eventual favourable macro landscape will benefit T in the future, but it may take a few years to materialize. Currently, TIXT is acting as a drag on T's results, but management is optimistic on its ability to sustain this downturn.