Altice, Inc. (ATUS) recently announced that its subsidiary Lightpath is constructing high-density AI-grade network infrastructure in Colombus, OH. The underground high-fiber count network deployment project spanning 102 route miles is supported by a prominent hyperscaler partner. With a 1.8 GW of operational capacity, the Columbus region is the third largest data center ecosystem in the Americas. Moreover, an additional 3 GW capacity is under construction.Growing usage of high bandwidth-intensive applicatio ...

Constructing 102-Route Miles of High-Density Network Anchored by Major Hyperscaler In January, Lightpath announced $110 million of AI-related bookings in 2024 with a remaining demand pipeline of approximately $1 billion. Also this year, Lightpath announced the acquisition of the United Fiber and Data and assets. About Lightpath Lightpath is revolutionizing how customers connect to their digital destinations by combining our next- generation network with our next-generation customer service. Lightpath's adva ...

Group 1 - Altice USA, Inc. (NYSE: ATUS) reported a 57% increase in FTTH customer relationships in 2024 [1] - The Fiber To The Home market is projected to grow at a compound annual growth rate (CAGR) of approximately 12.6% [1] Group 2 - The analyst has a beneficial long position in the shares of ATUS through stock ownership, options, or other derivatives [2] - The article expresses the author's own opinions and is not receiving compensation other than from Seeking Alpha [2]

Core Insights - Lightpath has acquired WANRack's fiber assets and customers in the Phoenix metropolitan market, adding 133 route miles to its network [1] - The integration of WANRack's assets increases Lightpath's total network footprint in Phoenix to 363 route miles, connecting 10 key data centers [2] - The network will be strategically positioned near over 30 additional data center campuses, with full network completion targeted by the end of 2026 [3] Company Strategy - The acquisition aligns with Lightpath's strategy to provide critical fiber infrastructure to customers with high bandwidth requirements in the growing Phoenix market [4] - Lightpath aims to enhance customer relationships and connectivity solutions through this acquisition, demonstrating a commitment to innovative problem-solving [4] Infrastructure Development - Lightpath is already service-ready on 133 miles of the acquired fiber, with additional high-priority network segments planned for construction in Q2 2025 [3] - The infrastructure will utilize underground, multi-duct conduit systems to link emerging data center hubs to Phoenix's primary carrier exchange ecosystems [2]

Core Insights - Lightpath has announced its entry into the Phoenix market with a new 230-route mile high-fiber count network, supported by multiple hyperscaler customers [1][2] - The network will connect 8 data center campuses and carrier hotel locations, with additional connectivity to over 30 data center campuses in the region [2] - Construction has begun, with priority routes expected to be completed by Q2 2025 and overall completion anticipated in 2026 [3] Network Specifications - The Phoenix network will feature underground multi-conduit systems with a capacity for 20,000 fibers [2] - Lightpath will provide a full range of services including high-count dark fiber, conduit services, wavelengths up to 800 Gbps, Ethernet, and Internet [4] - The network is designed to support massive AI-driven connectivity requirements, reflecting the increasing demand from hyperscalers [5][6] Market Context - Phoenix is the fifth largest data center ecosystem globally, with 1.6 GW of operational capacity and an additional 1+ GW planned by 2027 [5] - Lightpath has previously announced $110 million in AI-related bookings for 2024, with a remaining demand pipeline of approximately $1 billion [5] - The fiber density in the Phoenix network is designed to support AI workload requirements estimated to be 10 times those needed for current multi-cloud network architectures [6]

Customer Base and Services - Altice USA serves approximately 4.6 million residential and business customers across 21 states, with a total of 9.8 million passings as of December 31, 2024[9]. - Total residential customer relationships decreased to 4,173.7 thousand in 2024 from 4,363.1 thousand in 2023[16]. - Broadband revenue for 2024 was $3,645,460, down from $3,824,472 in 2023, while mobile revenue increased to $117,084 from $77,012[17]. - The FTTH network passed approximately 3.0 million homes and businesses, offering symmetrical speeds up to 8 Gbps[18]. - In 2024, Altice USA launched three new video offerings: Entertainment TV, Extra TV, and Everything TV, aimed at modernizing its video service[26]. - As of December 31, 2024, Lightpath had approximately 16,800 locations connected to its fiber network, covering about 11,300 unique route miles[31]. - Altice USA's mobile service includes a full infrastructure MVNO agreement with T-Mobile, providing enhanced control over its mobile offerings[28]. Financial Performance - Revenue for 2024 was $8,954,417, a decrease of 3.1% from $9,237,064 in 2023[11]. - Adjusted EBITDA for 2024 was $3,413,181, representing 38.1% of revenue, down from 39.1% in 2023[11]. - The company has substantial indebtedness and may incur additional debt, which could affect its financial condition and results of operations[140]. - The company has a total aggregate indebtedness of approximately $25.1 billion as of December 31, 2024, which poses significant risks in the event of downturns in business or the economy[171]. - Capital expenditures were $1,433.0 million, $1,704.8 million, and $1,914.3 million in 2024, 2023, and 2022, respectively, primarily for customer premise equipment and network infrastructure[184]. Competition - The competitive landscape includes major players like AT&T, Verizon, and Frontier, with ongoing competition from both fixed and wireless broadband services[69]. - Verizon and other fiber-based service providers can sell fiber services to approximately two-thirds of households in the New York metropolitan area[70]. - The company faces intense competition in video services from cable providers and direct broadcast satellite providers like DirecTV and DISH Network[71]. - Competition in video services also includes streaming platforms such as Netflix, Hulu, Disney+, and others, which deliver extensive on-demand and live content[72]. - The business telecommunications market is highly competitive, with local incumbent telephone companies and various national and regional competitors[76]. Regulatory Environment - The FCC regulates utility company rates for pole and conduit space, which could significantly increase annual costs for the company if adverse changes occur[98]. - The company is subject to program access rules that prohibit unfair discrimination against unaffiliated distributors, which could impact competitive dynamics[99]. - The FCC's program carriage rules prevent the company from requiring unaffiliated programmers to grant financial interests or exclusive rights, affecting programming negotiations[100]. - The company must comply with various FCC regulations regarding access for persons with disabilities, ensuring closed captions and audio accessibility[107]. - The company is subject to various federal, state, and local laws regarding subscriber privacy, data security, and data protection, including the California Consumer Privacy Act (CCPA) which took effect on January 1, 2020[133]. Operational Challenges - Programming costs have increased beyond customary inflation rates, particularly for broadcast and sports programming, with expectations for continued increases[47]. - The company faces challenges in negotiating favorable programming contracts, with disputes potentially leading to customer dissatisfaction and loss[161]. - The expiration of retransmission agreements may result in increased costs that cannot be passed on to customers, adversely affecting the company's financial condition[162]. - Rapid technological changes and evolving consumer preferences necessitate continuous investment in new technologies to remain competitive[156]. - The company relies on a limited number of vendors for customer premise equipment, which poses risks related to third-party dependencies[63]. Employee and Labor Relations - As of December 31, 2024, the company had approximately 10,900 employees, with about 89% based in the U.S.[78]. - The company is committed to providing a competitive total incentive program to attract and retain talent, including performance-based compensation and comprehensive benefits[79]. - Approximately 400 employees are represented by unions, and collective bargaining agreements may increase expenses and affect operational changes[205]. - Labor disruptions could adversely affect the company's financial condition and operational efficiency[206]. Environmental and Technological Risks - The company may face increased costs and operational impacts due to environmental regulations and compliance obligations[136]. - Severe weather events and climate change may lead to significant business disruptions and increased costs[198]. - Cybersecurity incidents could harm operations and reputation, with past incidents resulting in exposure of sensitive information[202]. - The use of AI technology presents risks that could lead to legal or regulatory challenges, impacting the company's reputation[204].

Financial Data and Key Metrics Changes - Total revenue for 2024 was $9 billion, a decline of 3.1% year-over-year, which is an improvement from prior year declines [41] - Adjusted EBITDA for 2024 was $3.4 billion, down 5.4% year-over-year, with a gross margin of 67.7%, an increase of approximately 50 basis points [42][43] - Free cash flow grew by 23% year-over-year to $149 million despite increased cash interest [25][47] Business Line Data and Key Metrics Changes - Mobile service revenue grew by 52% year-over-year, while residential revenue declined by 4.6% [41] - Fiber net additions reached 57,000 in Q4, a 22% increase year-over-year, with mobile line net additions of 40,000, marking a 70% growth in mobile line net additions for the year [11][41] - Residential ARPU for 2024 was reported at $135.44, with a decline of less than 1% when excluding customer credits related to Hurricane Helene [23][24] Market Data and Key Metrics Changes - The East market has a penetration rate of nearly 70%, while the West is facing increased competition with a penetration rate of about 45% [63] - Churn improved year-over-year in the East, contributing to better performance in Q4 [13] - The West market remains challenged by fiber overbuilders and fixed wireless competition, with a higher proportion of income-constrained households [14][15] Company Strategy and Development Direction - The company is focused on Phase 2 of its transformation, which includes executing business acceleration opportunities and enhancing customer value [10][26] - A strategic network roadmap includes fiber expansion and a multi-gig rollout, with a disciplined approach to operational and capital efficiency [8][31] - The company plans to launch new income-constrained programs to attract and retain customers [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to stabilize adjusted EBITDA and improve broadband subscriber trends in 2025 [26][79] - The company is optimistic about the growth trajectory of its LightPath Fiber Infrastructure business, which saw revenue growth of 5.5% year-over-year [49] - Management highlighted the importance of customer-centric strategies and the need to adapt to changing market dynamics [112] Other Important Information - The company achieved a total of 538,000 fiber customers, representing over 18% penetration of its fiber network [21] - Cash capital expenditures for 2024 were $1.4 billion, a 16% improvement year-over-year [44] - The company maintains a strong liquidity position with approximately $1 billion in undrawn revolver capacity and cash balances [58] Q&A Session Summary Question: Can you talk about broadband performance in different regions? - Management noted that the West is experiencing increased overbuild competition, with a penetration rate of about 45%, while the East remains around 70% [63][64] Question: Can you unpack the pressure on EBITDA in Q4? - Management acknowledged onetime storm-related costs and investments in transformation, but expressed optimism for continued improvement in EBITDA trends [72][78] Question: Can you expand on efforts to improve the capital structure? - Management stated they are exploring all options to address debt maturity profiles and maintain a strong capital structure [81][84] Question: How do you expect CapEx to trend after 2025? - Management is optimistic about capital deployment efficiency but did not provide specific guidance beyond the current targets [87][89] Question: Are you seeing any video churn pressure from MSG network drop? - Management indicated they are focused on customer engagement and providing value through new video packages, which are resonating well with customers [110][113] Question: Can you comment on competitive trends in the West and East? - Management highlighted that the West faces pressure from low-priced overbuilders, while the East has seen improvements in customer satisfaction and ARPU [127][129]

Core Insights - Altice USA, Inc. reported $2.24 billion in revenue for Q4 2024, reflecting a year-over-year decline of 2.9% and an EPS of -$0.12 compared to -$0.26 a year ago, with revenue matching the Zacks Consensus Estimate but an EPS surprise of -500.00% [1] Financial Performance - Revenue from Residential Video was $686.44 million, below the estimated $704.62 million, marking an 8.5% year-over-year decline [4] - Residential Broadband revenue was $900.06 million, slightly above the estimate of $898.86 million, with a year-over-year decline of 4.2% [4] - Residential Telephony revenue was $65.39 million, compared to the average estimate of $66.73 million, representing a 10.2% year-over-year decline [4] - Total Residential revenue was $1.69 billion, slightly below the estimated $1.70 billion, reflecting a 5.6% year-over-year decline [4] - Revenue from News and Advertising was $157.49 million, exceeding the estimate of $152.90 million, with a year-over-year increase of 23% [4] - Other revenue reached $20.24 million, surpassing the estimate of $14.97 million, showing a year-over-year increase of 30.5% [4] - Mobile revenue was $34.15 million, above the estimate of $31.91 million, with a significant year-over-year increase of 48.4% [4] - Business services and wholesale revenue was $371.26 million, slightly above the estimate of $368.17 million, with a year-over-year change of -0.2% [4] Customer Metrics - Residential Unique Customer Relationships totaled 4.17 million, slightly below the estimated 4.2 million [4] - SMB Unique Customer Relationships were 376.6 thousand, compared to the estimated 377.59 thousand [4] - Pay TV/Video Subscribers stood at 1.88 million, matching the three-analyst average estimate [4] - Broadband Subscribers totaled 4 million, slightly below the estimate of 4.02 million [4] Stock Performance - Altice USA shares returned +1.9% over the past month, while the Zacks S&P 500 composite increased by +3.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

NON-GAAP FINANCIAL MEASURES We define Adjusted EBITDA, which is a non-GAAP financial measure, as net income (loss) excluding income taxes, non-operating income or expenses, gain (loss) on extinguishment of debt and write-off of deferred financing costs, gain (loss) on interest rate swap contracts, gain (loss) on derivative contracts, gain (loss) on investments and sale of affiliate interests, interest expense, net, depreciation and amortization, share-based compensation, restructuring, impairments and other ...

Core Insights - Altice USA reported a quarterly loss of $0.12 per share, significantly worse than the Zacks Consensus Estimate of $0.03, marking an earnings surprise of -500% [1] - The company's revenues for the quarter ended December 2024 were $2.24 billion, slightly missing the Zacks Consensus Estimate by 0.10% and down from $2.3 billion a year ago [2] - Altice USA has not surpassed consensus EPS estimates over the last four quarters, with only one instance of topping revenue estimates during the same period [2] Financial Performance - The company experienced a loss of $0.26 per share in the same quarter last year, indicating an improvement in loss figures year-over-year [1] - The current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $2.17 billion, and for the current fiscal year, it is -$0.05 on revenues of $8.65 billion [7] Market Position - Altice USA shares have increased by approximately 12.5% since the beginning of the year, outperforming the S&P 500's gain of 2.9% [3] - The Zacks Industry Rank places the Communication - Components sector in the top 27% of over 250 Zacks industries, suggesting a favorable outlook for the industry [8] Future Outlook - The sustainability of Altice USA's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The estimate revisions trend for Altice USA is currently mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6]