Altice USA(US:ATUS)2022-08-04 01:20Financial Data and Key Metrics Changes - Revenue declined 2.1% year-over-year, primarily due to the residential business [6][9] - Adjusted EBITDA decreased 8.8% year-over-year, with a margin of 40.9% [6][22] - Free cash flow generated was $191 million in Q2 and approximately $400 million year-to-date [6][24] Business Line Data and Key Metrics Changes - Residential broadband customer net losses were 40,000 for Q2, with a total residential business decline of 3% [6][9] - Business Services revenue was flat, down 1.1% year-over-year, but grew 1.3% excluding air strand revenue [9][20] - News and advertising revenue grew 1.1% in Q2, with expectations of political benefits in the second half of the year [9][21] Market Data and Key Metrics Changes - The company reported a net loss of 48,000 residential customer relationships, with a broadband net loss of 40,000 [10] - The average download speeds for customers were just under 400 megabits per second, with fiber customers averaging significantly higher speeds [17][18] - The Optimum mobile business reached 231,000 customers, representing 5.1% penetration of the residential customer base [10][19] Company Strategy and Development Direction - The company is focused on accelerating fiber network deployment, targeting 6.5 million fiber to the home passings by the end of 2025 [12][16] - A rebranding effort from Suddenlink to Optimum aims to unify telecommunications brands and enhance customer experience [8][11] - The company is expanding sales distribution channels and has opened seven more Optimum stores [8][20] Management's Comments on Operating Environment and Future Outlook - Management remains confident in returning to broadband customer growth in the second half of the year, despite current challenges [29][30] - There are ongoing discussions regarding asset sales, but no further details were provided [30] - Management noted mild pressure from inflationary costs but indicated that operational costs are not significantly impacted [36][37] Other Important Information - The company has received $35 million in subsidy grants for broadband expansion, focusing on underserved areas [16] - Capital expenditures are expected to remain between $1.7 billion to $1.8 billion for 2022, with a significant portion allocated to fiber investments [23][24] - The company has a well-structured debt profile with no annual bond maturities greater than $1 billion before 2025 [25][26] Q&A Session Summary Question: Is there still a potential return to growth in broadband subscribers this year? - Management is confident in returning to growth, expecting improvements in the second half of the year [29] Question: Can you provide details on the number of subscribers at Suddenlink versus Optimum? - Management refrained from discussing specific subscriber numbers but confirmed interest in Suddenlink assets [32][33] Question: How are inflationary cost pressures affecting the company? - Mild pressure is noted, particularly in utilities, but overall operational costs remain stable [36][37] Question: What is the impact of wireless on broadband and churn? - Wireless is seen as a churn enhancer, with ongoing efforts to improve mobile offerings [39] Question: How does the company view the competitive threat from fixed wireless? - Management believes fiber will outperform fixed wireless in the long term, reinforcing their investment strategy [60][61] Question: What are the expectations for fiber rollout and customer penetration? - The company aims to exceed initial targets for fiber passings and expects continued strong penetration rates [72][74]