Altice USA(US:ATUS)2021-07-29 05:42Financial Data and Key Metrics Changes - Revenue growth accelerated to 1.7% year-over-year, with broadband revenue up about 8% year-over-year [7][9] - Adjusted EBITDA was flat year-over-year, with an EBITDA margin of 43.9% [8][22] - Free cash flow was reported at $406 million for Q2 and just under $1 billion for the first half of the year [9][14] Business Line Data and Key Metrics Changes - Residential revenue was flat year-over-year, while business services growth accelerated to 1.8% [9][10] - News and advertising revenue grew significantly by 36.4% year-over-year [9][21] - Organic net loss of 12,000 residential customer relationships was reported, excluding the acquisition of Morris Broadband [10][11] Market Data and Key Metrics Changes - Average monthly data usage per customer was 445 gigabits, with broadband-only customers close to 600 gigabits [14] - 1 gig customer penetration increased to 11.3% in Q2, up from 3.7% a year ago [15] - Fiber homes passed reached 1.1 million, with a penetration of fiber optics now at 4.3% [17] Company Strategy and Development Direction - The company aims to achieve faster broadband customer and revenue growth through accelerated new builds and network upgrades, including fiber rollout [13][16] - The launch of the Optimum Stream device is part of the strategy to offer alternatives to traditional cable TV bundles [18] - The rebranding of Altice Mobile to Optimum Mobile aligns with the strategy to unify connectivity brands under one national brand [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial outlook for 2021, expecting revenue and adjusted EBITDA growth while reducing leverage [25][26] - Elevated levels of move churn and regulatory impacts were noted as challenges affecting customer growth expectations [29][30] - The company anticipates a significant increase in broadband net adds in 2022 and beyond due to ongoing network expansion [39] Other Important Information - The company is on track for at least 150,000 new home builds and aims to pass 0.5 million homes this year [16][17] - Cash taxes are expected to increase, with total cash taxes projected at about $300 million to $350 million for the year [24] - The company has completed $726 million in share repurchases year-to-date, targeting $1.5 billion for the full year [24][26] Q&A Session All Questions and Answers Question: Can you help us think about EBITDA in the back half? - Management is confident in growing EBITDA in the second half based on internal projections and easing OpEx comparisons [28] Question: What has changed regarding consumer broadband growth expectations? - Elevated levels of move churn and regulatory impacts have made it tougher to hit historical growth levels [29][30] Question: Are you losing share on churn now? - The company is not experiencing a share issue but is seeing a reversal in move churn as people return to urban areas [33][34] Question: Any changes in competition or marketing strategy for broadband? - The competitive environment remains stable, and the company expects to see elevated levels of broadband net adds in 2022 [37][39] Question: What is the timing for fiber rollout benefits? - The bulk of fiber CapEx will come in 2022 and 2023, with meaningful impacts expected in 2023 [57][58] Question: What are the expectations for news and advertising in the second half? - Expectations are cautious, aiming to match 2020's medium advertising numbers due to tough political comps [74]