Altice USA(ATUS) - 2025 Q1 - Quarterly Results

Q1 2025 Performance Overview Altice USA's Q1 2025 saw a decline in financial metrics, including revenue and net loss, alongside strong fiber and mobile growth but continued broadband subscriber losses Financial Overview In Q1 2025, Altice USA experienced a decline in financial performance, with total revenue decreasing 4.4% year-over-year to $2.2 billion, a net loss attributable to stockholders of $75.7 million, and a Free Cash Flow deficit of $168.6 million Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $2.2 billion | $2.25 billion | -4.4% | | Residential Revenue | $1.7 billion | $1.77 billion | -5.7% | | Net Loss Attributable to Stockholders | ($75.7) million | ($21.2) million | Increased Loss | | Diluted EPS | ($0.16) | ($0.05) | Increased Loss | | Adjusted EBITDA | $799.0 million | $846.6 million | -5.6% | | Free Cash Flow (Deficit) | ($168.6) million | $63.6 million | Decreased | - Broadband ARPU was a bright spot, increasing 2.4% year-over-year to $75.31, while overall Residential ARPU declined by 1.3% to $133.93[4] - Cash capital expenditures rose 6.0% year-over-year to $356.1 million, reflecting continued investment in network upgrades, particularly FTTH and new builds[4] Key Operational Highlights Operationally, Q1 2025 was a quarter of mixed results, achieving record fiber and mobile growth while experiencing core broadband subscriber losses, supported by strategic network enhancements and AI integration - Achieved record fiber customer growth with +69k net additions, bringing total fiber customers to 607k, a 54% increase YoY[7] - Recorded the best mobile line performance in five years with +49k net additions, surpassing 500k total mobile lines[1][7] - Total broadband net losses were -37k, a sequential improvement from -39k in Q4 2024 but worse than -30k in Q1 2024[7] - The company achieved its lowest quarterly customer and broadband churn in three years, with annualized broadband churn improving by 90bps YoY[1][7] - Strategic initiatives include embedding AI and digital tools through a new partnership with Google Cloud to transform operations and drive efficiency[1][7] Full Year 2025 Outlook Altice USA provided its full-year 2025 guidance, projecting approximately $3.4 billion in Adjusted EBITDA, anticipating revenues between $8.6 billion and $8.7 billion, and cash capital expenditures of approximately $1.2 billion Full Year 2025 Guidance | Metric | FY 2025 Outlook | | :--- | :--- | | Revenue | $8.6 billion - $8.7 billion | | Adjusted EBITDA | ~$3.4 billion | | Cash Capital Expenditures | ~$1.2 billion | | Programming & Other Direct Costs | ~$2.6 billion | | Other Operating Expense | ~$2.6 billion | - The company expects to deliver approximately $3.4 billion of Adjusted EBITDA, representing a meaningful improvement from prior year trends[2] - The company is targeting approximately 175k total additional passings in FY 2025[7] Financial Statements and Key Metrics This section details Altice USA's financial position, including its $24.9 billion net debt, customer trends with fiber growth offsetting broadband losses, and consolidated operating results showing revenue decline and increased net loss Balance Sheet and Debt Profile As of March 31, 2025, Altice USA's consolidated net debt stood at $24.9 billion, resulting in a consolidated net leverage ratio of 7.6x L2QA EBITDA, with the majority held within the CSC Holdings, LLC Restricted Group Consolidated Debt Summary (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Consolidated Net Debt | $24,907 million | | Consolidated Net Leverage (L2QA) | 7.6x | | Weighted Average Cost of Debt | 6.8% | | Weighted Average Life of Debt | 3.8 years | - Net debt for the CSC Holdings, LLC Restricted Group was $23.5 billion with a net leverage of 7.8x L2QA[10] - As of March 31, 2025, the company had 467,726,018 combined shares of Class A and Class B common stock outstanding[9] Customer and Fiber (FTTH) Metrics In Q1 2025, Altice USA saw a continued decline in total unique customer relationships, driven by losses in residential broadband, video, and telephony, but showed strong momentum in record FTTH and mobile line net additions Q1 2025 Net Additions / (Losses) (in thousands) | Category | Q1 2025 Net Adds/(Losses) | | :--- | :--- | | Total Customer Relationships | (44.4) | | Broadband (Residential) | (36.6) | | Video (Residential) | (87.7) | | FTTH Total Customers | +68.5 | | Mobile Lines | +49.0 | - Total FTTH customers reached 606.7k, an increase from 394.6k in Q1 2024, with network penetration reaching 20.3%[7][12] - Total mobile lines grew to 508.6k, a 45% increase from 351.6k in Q1 2024[7][11] Consolidated Operating Results (Income Statement) The consolidated income statement for Q1 2025 shows a total revenue of $2.15 billion, down 4.4% from Q1 2024, primarily due to lower Video and Broadband revenue, resulting in a wider net loss of $71.3 million Consolidated Operating Results Comparison (in thousands) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $2,152,282 | $2,250,935 | | Operating Income | $343,458 | $393,154 | | Interest Expense, net | ($428,016) | ($437,141) | | Net Loss | ($71,271) | ($12,896) | | Net Loss Attributable to Stockholders | ($75,676) | ($21,193) | - Revenue from the Video segment saw the largest decline, falling from $755.6 million in Q1 2024 to $665.6 million in Q1 2025[13] - Mobile revenue showed strong growth, increasing from $24.9 million in Q1 2024 to $36.7 million in Q1 2025[13] Consolidated Statements of Cash Flows For the three months ended March 31, 2025, Altice USA's net cash provided by operating activities significantly decreased to $187.5 million, leading to a Free Cash Flow deficit of $168.6 million after capital expenditures Cash Flow Comparison (in thousands) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $187,483 | $399,661 | | Capital expenditures | ($356,124) | ($336,095) | | Net cash used in investing activities | ($363,549) | ($335,777) | | Net cash provided by (used in) financing activities | $198,727 | ($80,876) | - The decrease in operating cash flow was partly due to changes in working capital, including a $120.9 million use of cash for interest payable, compared to a $29.9 million source of cash in the prior year[14] Reconciliation of Non-GAAP Financial Measures This section provides reconciliations of Altice USA's GAAP net loss to Adjusted EBITDA and net cash flow from operating activities to Free Cash Flow, detailing adjustments for non-cash and non-operating items Reconciliation of Net Loss to Adjusted EBITDA This section provides a reconciliation from the GAAP measure of Net Loss to the non-GAAP measure of Adjusted EBITDA, which for Q1 2025 was $799.0 million after various adjustments Q1 2025 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Description | Amount | | :--- | :--- | | Net loss | $(71,271) | | Add: Interest expense, net | 428,016 | | Add: Depreciation and amortization | 418,485 | | Add: Restructuring, impairments, etc. | 21,622 | | Add: Share-based compensation | 15,449 | | Other adjustments | (14,287) | | Adjusted EBITDA | $799,014 | - Adjusted EBITDA decreased to $799.0 million in Q1 2025 from $846.6 million in Q1 2024[20] - The Adjusted EBITDA margin slightly compressed to 37.1% in Q1 2025 from 37.6% in Q1 2024[20] Reconciliation of Net Cash Flow to Free Cash Flow This section reconciles Net Cash Flows from Operating Activities to Free Cash Flow, showing a Q1 2025 deficit of $168.6 million, a significant downturn from the prior year's positive cash flow Q1 Free Cash Flow Reconciliation (in thousands) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash flows from operating activities | $187,483 | $399,661 | | Less: Capital expenditures (cash) | (356,124) | (336,095) | | Free Cash Flow (Deficit) | $(168,641) | $63,566 |