Core Insights - Altice USA Inc. reported disappointing third-quarter 2025 results, with both net income and revenues falling short of the Zacks Consensus Estimate, primarily due to weak demand in Residential, Business Services, and Wholesale segments [1] Financial Performance - The company recorded a net loss of $1.62 billion, equating to a loss of $3.47 per share, compared to a net loss of $42.9 million or 9 cents per share in the same quarter last year [2] - Total revenues for the quarter were $2.1 billion, down 5.4% year over year, missing the consensus estimate of $2.14 billion [3][10] - Adjusted earnings per share were reported as a loss of 12 cents, missing the Zacks Consensus Estimate by 8 cents [2] Revenue Breakdown - Residential revenues, which include Broadband, Video, and Telephony, decreased to $1.62 billion from $1.73 billion year over year, missing the estimate of $1.68 billion [7] - Business Services and Wholesale revenues fell to $361.9 million from $366.3 million in the prior year, but exceeded the revenue estimate of $339.6 million [6] - News and Advertising revenues declined to $105.9 million from $117.7 million year over year, missing the estimate of $106.7 million [6] Customer Metrics - Fiber broadband net additions exceeded 40,400 in the quarter, with total fiber broadband customers reaching 703,400 [5][10] - The company had 3.05 billion FTTH (Fiber to the Home) passings, with approximately 29,600 added during the quarter [4] - The average revenue per user (ARPU) for residential customers declined to $133.28 from $135.77 a year ago [5] Operational Highlights - The company reported an operating loss of $1.16 billion compared to a net income of $444.9 million in the prior year [8] - Adjusted EBITDA was $830.7 million, down from $861.9 million in the same quarter last year [8] - Mobile line net additions were 38,000 during the quarter, contributing to overall growth [8] Cash Flow and Debt - Altice generated $147.5 million in cash from operating activities, a significant decrease from $436 million a year ago [11] - As of September 30, 2025, the company's net debt stood at $25.3 billion [11]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $2.1 billion, a decline of 5.4% year-over-year, primarily driven by video cord cutting, which accounted for nearly 6% of total declines [15][16] - Adjusted EBITDA was $831 million, down 3.6% year-over-year, but showed a 3.3% sequential improvement compared to Q2 2025 [18][22] - Gross margin reached an all-time high of 69.7%, expanding by 160 basis points year-over-year, reflecting a shift away from video [17][24] - Adjusted EBITDA margin improved to 39.4%, the highest in two years, indicating progress in operational efficiency [18][22] Business Line Data and Key Metrics Changes - Video revenues declined close to 10%, contributing significantly to overall revenue declines, while mobile service revenue grew by 38% [7][15] - LightPath revenue increased by almost 6%, and underlying news and advertising revenue, excluding political ads, grew nearly 9% [7][15] - The company lost 58,000 broadband subscribers in Q3, reflecting ongoing competitive pressures [9][10] Market Data and Key Metrics Changes - Competitive intensity increased significantly in September, with competitors ramping up marketing spend and aggressive offers [5][30] - The market remains characterized by historically low growth and heightened competition, particularly from fixed wireless and fiber overbuilders [9][10] Company Strategy and Development Direction - The company is focused on evolving its go-to-market and base management strategies to improve broadband performance and revenue trajectory [6][10] - A disciplined approach prioritizing financial stability and margin protection over subscriber growth is being emphasized [5][30] - The company plans to enhance its product offerings and customer experience to rebuild trust and drive long-term growth [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by competitive pressures and macroeconomic conditions but expressed confidence in achieving the full-year adjusted EBITDA target of approximately $3.4 billion [4][22] - The company expects to see a path to slowing revenue decline in core residential and B2B businesses, with a focus on disciplined R2 management and value-added services [18][43] - Management highlighted the importance of maintaining discipline in subscriber acquisition costs and avoiding low-value gross ads [30][34] Other Important Information - The company announced a rebranding from Altice USA to Optimum Communications, effective November 7, 2025, with a new ticker symbol OPTU [28][29] - Capital expenditures for 2025 are projected to be approximately $1.3 billion, reflecting increased investment in LightPath and network upgrades [25][26] Q&A Session Summary Question: Broadband subscriber trends and competitive pressures - Management acknowledged the widening net losses in broadband subscribers due to increased competitive intensity and aggressive offers from competitors [30][31] Question: Cost structure and EBITDA guidance - Management provided insights on operating expense moderation and emphasized the importance of maintaining discipline in subscriber acquisition costs [31][37] Question: Pricing environment and competitive dynamics - Management discussed the need for a balanced approach to pricing and volume, emphasizing the importance of quality and value in their offerings [56][58] Question: Update on low-end product for rural areas - Management reported double-digit improvement in sales and connect rates for the income-constrained product and plans to scale it further [48][49] Question: 2027 debt maturity wall - Management refrained from discussing specific capital structure details but emphasized a disciplined approach to managing financials [52][53]

Summary of Altice USA Conference Call Company Overview - **Company**: Altice USA - **Industry**: Telecommunications Key Points and Arguments Vision and Transformation - Altice USA aims to be the connectivity provider of choice in every community served, focusing on stabilizing operations and improving customer experience [5][6][8] - Over the past two and a half years, the company has undergone significant transformation, including cultural changes and leadership restructuring, with over 150 new VPs hired [6][8] - The company has received awards for network performance, indicating progress in stabilization [7] Financial Goals - Altice USA targets approximately $3.4 billion in EBITDA by 2025, marking a return to year-over-year EBITDA growth for the first time since 2021 [10][12] - The company has implemented workforce efficiency measures, including a 5% reduction in workforce, to achieve financial objectives [13] Operational Efficiency and AI Utilization - The company is leveraging AI to enhance operational efficiency, improve customer service, and streamline processes [17][20] - Tools like AIVA have been introduced to assist frontline employees in providing better customer service and maximizing customer lifetime value [20][21] - AI is also being used to improve network management, reducing the need for truck rolls and manual troubleshooting [22] Broadband Strategy - Altice USA is adopting a tailored approach to broadband deployment, balancing fiber and hybrid fiber coax (HFC) based on regional market conditions [27][30] - The company has 3 million fiber passings and is building approximately 175,000 new fiber connections annually [30] - Competitive pressures from fixed wireless services are acknowledged, but the company is confident in its strategies to stabilize broadband performance [32][34] Customer Experience and Product Offerings - The company has simplified its broadband rate card and video packages to enhance customer understanding and satisfaction [44][45] - New video tiers have been introduced, allowing customers to choose content that aligns with their preferences [45][50] - Altice USA is focusing on integrating mobile services with broadband offerings to provide a comprehensive connectivity solution [60][66] Advertising and SMB Growth - The advertising segment is being enhanced through investments in agency services and digital platforms [73] - The SMB sector is seeing growth through the introduction of new products and solutions, aiming to provide comprehensive services to small businesses [69][71] Financial Management and Debt Strategy - Altice USA is addressing significant debt maturities approaching in 2027, totaling $7.3 billion, and is focused on creating a sustainable capital structure [75][76] - The company has entered into a $1 billion asset-backed loan to improve financial flexibility [75][78] - Capital expenditures have been optimized to drive efficiency while still investing in growth initiatives [82][83] Challenges and Market Dynamics - The competitive landscape remains intense, with pressures from both high-end fiber providers and low-end fixed wireless services [41][42] - The company is committed to innovation and quality to maintain a competitive edge in the market [41][40] Additional Important Insights - The company is focused on customer-centric strategies, ensuring that offerings align with customer needs and preferences [49][58] - There is an ongoing effort to improve customer trust and brand perception, which had been negatively impacted in the past [80][81] This summary encapsulates the key points discussed during the Altice USA conference call, highlighting the company's strategic direction, operational improvements, and financial objectives.

Financial Data and Key Metrics Changes - Total revenue declined by 4.2% year over year, remaining relatively flat quarter over quarter, primarily impacted by video cord cutting, which accounted for about 85% of total revenue declines [28][29] - Adjusted EBITDA of $840 million declined 7.3% year over year but grew slightly sequentially, reflecting continued operating discipline and efficiency [31] - Adjusted EBITDA margin decreased by 130 basis points to 37.4%, but improved sequentially by 30 basis points [31] Business Line Data and Key Metrics Changes - Broadband subscriber net losses improved to 35,000, a year-over-year improvement of 16,000 or 31% [8][12] - Video business saw 58,000 subscriber net losses, marking the best subscriber trends in the last ten quarters [5][12] - Fiber network added approximately 56,000 customers, with a penetration rate of 22% across the fiber network [14] Market Data and Key Metrics Changes - In the East footprint, the company delivered its best net add trend in ten quarters, driven by stronger win share performance against ILECs and fixed wireless [9] - In the West, competition remained strong, but performance improved year over year, including fewer seasonal disconnects [9] - The company reported a 10% lift in sales volume in income-constrained markets compared to control markets [11] Company Strategy and Development Direction - The company is focused on unlocking revenue opportunities, driving operational efficiency, enhancing networks, and ensuring a sustainable capital structure [3][7] - The introduction of new product tiers in video and the expansion of value-added services are aimed at increasing customer stickiness and driving long-term ARPU growth [16][20] - The company is leveraging AI to enhance customer experience and operational efficiency, including the deployment of AI tools in sales and customer care [23][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver continued operational and financial improvements over time, despite headwinds from competition and macroeconomic factors [26][32] - The company anticipates that adjusted EBITDA will improve sequentially over the next two quarters, with significant impacts expected in the fourth quarter [33][92] - Management highlighted the importance of maintaining a balanced approach to subscriber growth and ARPU management [77][92] Other Important Information - The company completed a $1 billion asset-backed loan, marking a significant milestone in capital structure management [38][39] - The recent tax reform is expected to yield savings of $250 million to $350 million over the period of 2025 to 2027 [40] Q&A Session Summary Question: Can you expand on the trajectory and opportunity in mobile? - Management highlighted improvements in mobile line net adds, with a focus on quality sales and increased penetration, aiming for a million lines by 2027 [46][49] Question: What is the typical profile of a new mobility subscriber? - Approximately 50% of new mobility subscribers are new customers, with a strong focus on fiber subscribers due to better NPS and ARPU [52][53] Question: How is the company competing against larger, well-capitalized competitors? - The company is seeing improvements in win share against larger telcos and fiber overbuilders, particularly through hyper-local strategies [59][60] Question: What subscriber or ARPU results are needed in the back half of the year? - Management reaffirmed guidance for revenue and EBITDA, expecting improvements driven by subscriber performance and operational efficiencies [91][92]

Core Viewpoint - Altice USA, Inc. reported disappointing first-quarter 2025 results, with both net income and revenues falling short of expectations, primarily due to weak demand in key segments, although there were positive developments in mobile and fiber customer growth, network upgrades, and customer care improvements [1][2]. Financial Performance - The company recorded a net loss of $71.3 million, or 16 cents per share, compared to a loss of $12.3 million, or 5 cents per share, in the same quarter last year, indicating a wider loss due to declining revenues [2]. - Total revenues for the quarter were $2.15 billion, down from $2.25 billion year-over-year, missing the consensus estimate of $2.16 billion, primarily due to reduced net sales from broadband and video customers [2]. - Operating income decreased to $343.5 million from $393.2 million in the prior-year quarter, while adjusted EBITDA fell to $799.01 million from $846.5 million [7]. Customer Metrics - FTTH (Fiber to the Home) broadband net additions exceeded 68,500 in the quarter, with total fiber broadband customers reaching 606,700 [4]. - Residential average revenue per user (ARPU) declined to $133.93 from $135.67 a year ago, reflecting a loss of higher ARPU video customers [4][6]. Segment Performance - Residential revenues, which include Broadband, Video, and Telephony, were $1.66 billion, down from $1.76 billion year-over-year, missing the estimate of $1.71 billion [6]. - Business services and Wholesale revenues slightly declined to $363.5 million from $364.9 million in the prior-year quarter, but net sales exceeded the revenue estimate of $341.8 million [5]. Growth Strategies - The company is making progress in its growth strategies by enhancing network capabilities and improving customer experience, with 2.99 billion FTTH passings at the quarter-end [3]. - Altice is on track to achieve its goal of adding 1 million fiber customers by the end of 2026, supported by new offerings like Whole Home WiFi and Total Care [2]. Cash Flow and Outlook - In the first quarter, Altice generated $187.4 million in cash from operating activities, down from $399.6 million a year ago, with a net debt of $24.9 billion as of March 31, 2025 [8]. - For 2025, the company expects revenues in the range of $8.6-8.7 billion and adjusted EBITDA of approximately $3.4 billion, with capital expenditures projected at $1.2 billion [10].

Financial Data and Key Metrics Changes - In Q1 2025, total revenue was approximately $2.2 billion, a decline of 4.4% year over year, driven by a 5.7% decrease in residential revenue [32] - Adjusted EBITDA for Q1 was $799 million, down 5.6% year over year, impacted by revenue decline but offset by programming savings [33] - Total gross margin expanded by 180 basis points year over year to 68.8%, reflecting a positive trend despite some non-recurring items [34] - Residential ARPU declined by 1.3% to $133.93, while broadband ARPU grew by 2.4% to $75.31, indicating stabilization efforts are taking effect [35][36] Business Line Data and Key Metrics Changes - Broadband subscriber net losses improved to 37,000 in Q1, with churn reaching the lowest levels in three years, showing effective base management [4][6] - Fiber net additions reached an all-time high of 69,000, with over 600,000 fiber customers and 20% penetration of the fiber network [5] - Mobile line net additions were 49,000, surpassing 500,000 mobile lines, indicating strong growth in mobile services [5] Market Data and Key Metrics Changes - The competitive landscape remains intense, particularly in the East with competition from established telcos and fixed wireless solutions [45] - In the West, gross additions remain challenged due to elevated competition from fiber overbuilders, but churn has improved year over year [31][49] - The company is focusing on income-constrained segments, with 75% of surveyed customers indicating challenges with monthly expenses [46] Company Strategy and Development Direction - The company aims to unlock revenue opportunities, drive operational efficiency, and enhance network capabilities while aligning capital structure with long-term goals [7] - A new income-constrained product was launched to address affordability challenges, targeting specific demographics in both East and West markets [46] - The company is enhancing its go-to-market strategies, particularly in multi-dwelling units (MDUs), to improve penetration and customer engagement [12][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in stabilizing broadband subscriber trends and achieving approximately $3.4 billion in adjusted EBITDA for 2025 [7][26] - The company is optimistic about the impact of new product offerings and improved customer experience on future performance [19][25] - Management acknowledged the challenges posed by macroeconomic factors but emphasized the effectiveness of their strategic initiatives [46][70] Other Important Information - The company is focused on optimizing programming agreements and has achieved nearly 69% gross margin in Q1 [6][27] - A partnership with Google Cloud was announced to enhance customer experience through AI technologies [23] - The company is actively managing its debt profile, with no maturities until 2027 and a liquidity of approximately $700 million [41] Q&A Session Summary Question: Can you provide context on the competitive landscape for your broadband business? - Management noted intense competition from established telcos and fixed wireless solutions, with a focus on addressing affordability challenges for customers [45][46] Question: What updates can you provide on the low-end product and insurance statistics for wireless subscribers? - The low-end product is being rolled out to 500,000 homes, with early data being monitored for effectiveness. Mobile device protection has achieved 10% penetration in the mobile base [54][56] Question: What drove the pause in discussions with bondholders? - Management indicated that negotiations concluded without an agreement, but they remain proactive in managing debt maturities [60][62] Question: How competitive is your pricing, and have you fully optimized your broadband pricing? - Management expressed confidence in their pricing strategies, leveraging AI for better local competition and product offerings [67][70]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue was approximately $2.2 billion, a decline of 4.4% year over year, driven by a 5.7% decrease in residential revenue [32] - Adjusted EBITDA for Q1 was $799 million, down 5.6% year over year, with a total gross margin expanding by 180 basis points to 68.8% [33][34] - Residential ARPU declined by 1.3% to $133.93, while broadband ARPU grew by 2.4% to $75.31 [35][36] Business Line Data and Key Metrics Changes - Broadband subscriber net losses improved to 37,000, with churn reaching the lowest levels in three years [4][6] - Fiber net additions reached an all-time high of 69,000, with over 600,000 fiber customers and 20% penetration of the fiber network [5] - Mobile line net additions were 49,000, surpassing 500,000 mobile lines [5] Market Data and Key Metrics Changes - The competitive landscape remains intense, particularly in the East with competition from Verizon and fixed wireless providers [46] - In the West, gross additions faced challenges due to elevated competition from fiber overbuilders, but churn improved year over year [30][51] Company Strategy and Development Direction - The company aims to unlock revenue opportunities, drive operational efficiency, and enhance network quality while aligning capital structure with long-term goals [7][9] - A focus on hyper-local strategies and tailored offers is being implemented to address customer affordability challenges and competitive intensity [8][12] - The company is enhancing its product offerings, including Whole Home WiFi and new video packages, to strengthen its competitive profile [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in stabilizing broadband subscriber trends and achieving approximately $3.4 billion of adjusted EBITDA in 2025 [7][26] - The company is proactively managing debt maturities and exploring options to support long-term sustainability [42][43] Other Important Information - The company has entered into agreements to sell certain tower assets for approximately $60 million and the i24 news business to NEXT Alt [9][10] - Significant investments in technology and automation are being made to enhance operational efficiency and customer experience [21][23] Q&A Session Summary Question: Competitive landscape for broadband business - Management noted intense competition from telcos and fixed wireless providers, with a focus on new income-constrained products to address customer needs [45][46] Question: Updates on low-end product and insurance statistics - The low-end product is being rolled out to 500,000 homes, with mobile device protection achieving 10% penetration in the mobile base [56][58] Question: Status of bondholder discussions - Management confirmed that discussions with bondholders concluded without an agreement, but they are proactively managing debt maturities [63][65] Question: Competitiveness of pricing and broadband bundles - Management highlighted progress in pricing strategies and the ability to compete locally, with a focus on new hyper-local playbooks and income-constrained products [70][72]

Financial Data and Key Metrics Changes - Total revenue for 2024 was $9 billion, a decline of 3.1% year over year, an improvement from prior year declines [27] - Adjusted EBITDA for 2024 was $3.4 billion, down 5.4% year over year, with a normalized adjusted EBITDA margin of 38.7% [28][29] - Free cash flow grew by 23% year over year to $149 million despite increased cash interest [31] Business Line Data and Key Metrics Changes - Mobile service revenue grew by 52%, while residential revenue declined by 4.6% [27] - Fiber net additions reached 57,000 in Q4, a 22% increase year over year, with mobile line net additions of 40,000, the best performance in five years [8] - LightPath's revenue grew to $414 million, a 5.5% increase year over year, driven by footprint expansion and increased net bookings [32] Market Data and Key Metrics Changes - Broadband subscriber net losses were 39,000 in Q4, influenced by external factors such as hurricanes and low home sales [9] - Churn improved year over year in the East footprint, while the West faced challenges from increased competition [10] - The West market has seen a 45% overbuild, while the East remains around 70% [41] Company Strategy and Development Direction - The company is focused on a Phase two transformation aimed at business acceleration and maximizing customer value [8] - Plans include expanding fiber networks, enhancing customer experience, and launching new income-constrained programs [10][18] - The company aims to achieve a gross margin target of 70% by 2026 [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to compete effectively in both East and West markets despite competitive pressures [42] - The company anticipates continued improvements in EBITDA trends and free cash flow growth in 2025 [52][75] - Management highlighted the importance of customer-centric strategies and the need for flexibility in pricing and offerings [80][94] Other Important Information - The company reduced capital expenditures to $1.4 billion in 2024, a 16% improvement year over year [29] - The total footprint grew by over 2%, adding 210,000 passings, with a focus on fiber expansion [14][36] - The company has a strong liquidity position with approximately $1 billion in undrawn revolver capacity [37] Q&A Session Summary Question: Can you discuss broadband performance in different regions and the competitive environment? - Management noted increased competition in the West, with a 45% overbuild, and emphasized improvements in the East due to better go-to-market strategies [41][42] Question: Can you elaborate on the pressure on EBITDA in Q4? - Management acknowledged one-time costs related to storms and transformation efforts but expressed optimism about future EBITDA stabilization [49][52] Question: What are the plans for improving the capital structure? - Management is actively exploring options to address debt maturity profiles while focusing on operational and financial metrics [56][58] Question: How do you expect CapEx to trend after 2025? - Management indicated that while they expect to maintain a capital target of $1.3 billion, they are optimistic about driving efficiency [60][61] Question: Can you comment on the competitive dynamics in the West and East? - Management highlighted the need for tailored strategies in the West due to low pricing from competitors and emphasized the importance of customer-centric approaches [92][94]