Altice USA(US:ATUS)2021-11-08 04:56Financial Data and Key Metrics Changes - Revenue growth in Q3 was 5.8% year over year, with a 2.3% growth after adjusting for regional sports network credits and an additional $69 million of AirStrand revenue [5][6] - Adjusted EBITDA grew 3.4% year over year with a margin of 45.2% [7][27] - Free cash flow for Q3 was $389 million, totaling over $1.3 billion year-to-date, with a target of approximately $1.6 billion for the year [7][29] Business Line Data and Key Metrics Changes - Residential revenue grew 2.2% in Q3 but declined 1.9% when adjusted for RSN credits [8] - Business services revenue grew 21.7% on a reported basis, but only 2% when excluding RSN credits and AirStrand revenue [9] - News and advertising revenue increased by 15.7% in Q3, supported by a strong recovery in local, regional, and national advertising [11] Market Data and Key Metrics Changes - Broadband customer net losses were 13,000 in Q3, with expectations to return to growth in Q4 [6][10] - SMB customer growth in business services was reported at 2.6% in Q3, indicating recovery towards pre-pandemic levels [10] - The company noted improvements in retail and commercial office space vacancy rates, contributing to business service recovery [10] Company Strategy and Development Direction - The company is accelerating its fiber network rollout to enhance broadband service and reduce churn [13][19] - New competitive offers have been rolled out to support customer growth, with a focus on improving customer experience [14][23] - Plans to rebrand Suddenlink to Optimum are in place to unify marketing and customer experience across the country [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unusual operating environment due to the pandemic and expressed confidence in returning to customer growth [6][10] - There is an expectation of increased operating costs and CapEx in 2022, which may negatively impact margins but is seen as necessary for long-term growth [28][33] - Management remains optimistic about operational performance improvements and customer experience enhancements [26][41] Other Important Information - The company has reduced the pace of share repurchases to $79 million in Q3, now targeting up to $1 billion for the year [7][33] - The updated financial outlook includes expectations for revenue and EBITDA growth, with a cash CapEx target for 2021 at the lower end of the prior guidance range [33] Q&A Session Summary Question: Can you discuss the ability to grow EBITDA next year given the spending? - Management indicated that there may be a decline in EBITDA due to increased expenses and one-off revenue impacts [35][37] Question: What are the thoughts on ARPU trends and pricing strategies? - Management noted that while ARPU levels have slightly declined, they expect to sustain existing ARPU levels through higher speed offerings and competitive pricing [35][38] Question: Can you provide insights on the fiber build aspirations beyond next year? - Management anticipates covering 3.5 to 4 million homes with fiber by the end of 2023, with a focus on strategic areas [45][46] Question: How is the company addressing competition in the broadband market? - Management acknowledged increased competition but expressed confidence in their ability to recover customer losses through improved product offerings and customer experience [58][60] Question: What is the status of the share repurchase program? - Management clarified that while they have a guidance of under $1 billion for share repurchases, they do not plan to spend the remaining amount in the near term [73][74]