Altice USA(US:ATUS)2022-11-03 01:41Financial Data and Key Metrics Changes - Revenue declined 7% year-over-year, primarily due to pressures in residential and advertising businesses, and the loss of air strand revenue from the previous year [6][12] - Adjusted EBITDA decreased by 18.1% year-over-year, with a margin of 39.9%, or down 12.7% excluding air strand revenue [6][23] - Free cash flow was $136 million for Q3 and $535 million year-to-date, reflecting solid performance despite elevated fiber investments [7][25] Business Line Data and Key Metrics Changes - Residential broadband customer net losses were 43,000 for Q3, consistent with Q2 losses, impacted by competitive pressures and lower market activity [6][13] - Business Services revenue declined 16.8% year-over-year, but was flat when excluding air strand revenue [12][14] - News and Advertising revenue fell 16.1% in Q3, influenced by a shift in political ad spending and cancellations in the ad market [16] Market Data and Key Metrics Changes - The company added 321,000 new fiber passings in Q3, reaching a total of 1.9 million passings, the highest quarterly pace to date [7][17] - Fiber customer net additions accelerated to 31,000 in Q3, with a total of 135,000 fiber customers by the end of September [18] - The average download speeds for broadband customers were 391 megabits per second, with fiber customers averaging double those speeds [21] Company Strategy and Development Direction - The company aims to position itself as a best-in-class broadband provider, focusing on operational excellence and customer experience [10][11] - Investments in fiber infrastructure and multi-gig speed launches are central to the company's long-term strategy [11][19] - The company is exploring strategic opportunities, including potential divestitures, while maintaining a focus on debt paydown [32][44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged competitive pressures from fixed wireless broadband and fiber overbuilders, particularly in certain geographic areas [13][47] - There is optimism about returning to broadband growth through investments in fiber deployment and customer experience improvements [13][52] - Management noted stabilization in customer trends and expressed confidence in the company's strategic direction moving into 2023 [48][52] Other Important Information - The company is experiencing higher churn in areas with increased competition from fiber overbuilders [70] - Capital intensity increased to 20.6% in Q3, driven by fiber investments, with expectations for reduced CapEx in the future [24] - The company has a well-positioned debt maturity profile, with no significant maturities before 2025 [26] Q&A Session Summary Question: What are the opportunities and threats in the Optimum versus Suddenlink markets? - Management highlighted the progress made in broadband quality through fiber deployment and emphasized the need for disciplined execution and customer experience to maximize investments [29] Question: Any thoughts on the process of selling Suddenlink? - Management indicated that a decision regarding Suddenlink is imminent but did not provide further details [32] Question: What is the early thinking about broadband pricing? - Management is assessing pricing strategies and opportunities to grow ARPU as part of the budget process [36] Question: What is the strategic importance of smaller markets versus larger markets? - Management noted the need to address the unique needs of both small and large markets in their go-to-market strategy [42] Question: How does the company view the competition from fixed wireless? - Management acknowledged the competitive landscape and emphasized the advantages of fiber technology in combating fixed wireless competition [67] Question: What are the capital allocation priorities currently? - The company is focused on fiber investments and using excess free cash flow for debt reduction [81]