Altice USA(US:ATUS)2021-04-29 01:30Financial Data and Key Metrics Changes - Reported revenue grew 1.2% year-over-year in Q1 2021, with adjusted EBITDA increasing by 4.2% and achieving an adjusted EBITDA margin of 43.4% [6][26] - Free cash flow performance reached over $0.5 billion, growing 82% year-over-year, marking the highest level of Q1 free cash flow [7][28] - Adjusted EBITDA margin excluding mobile losses was 44.1%, up from 43.1% a year ago, indicating improved profitability [26] Business Line Data and Key Metrics Changes - Residential revenue grew 1.3% year-over-year, supported by strong customer growth [8] - Business services revenue increased by 0.7%, showing early signs of recovery from the pandemic [24] - News and advertising revenue remained flat year-over-year, a notable achievement given the tough comparison to the previous year [25] Market Data and Key Metrics Changes - The company passed over one million homes with fiber-to-the-home, representing about 20% of its footprint [8][18] - Average monthly data usage per customer increased by 39% year-over-year, with broadband customers averaging over 600 gigabytes per month [15] - The penetration of 1-gigabit broadband customers increased to 9.8%, up from 2.4% a year ago, indicating strong demand for higher-speed services [17] Company Strategy and Development Direction - The company is focused on expanding its fiber network and anticipates passing an additional 0.5 million homes this year [18][20] - Recent acquisitions, including Morris Broadband, are expected to enhance growth opportunities and improve margins [21][23] - The company aims to continue its strategy of upselling higher-speed broadband services to improve customer satisfaction and reduce churn [19][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving customer growth in the second half of the year, despite a seasonally weaker second quarter [12] - The company is optimistic about the impact of federal stimulus programs on customer payments and overall growth [39][75] - Management noted that competitive dynamics remain stable, with no significant changes in market share despite aggressive promotions from competitors [68] Other Important Information - The company has received an upgrade from S&P to a corporate issuer rating of BB with a stable outlook, reflecting improved operational execution [30] - Cash taxes are expected to increase later in the year, but the Morris Broadband acquisition may provide some tax benefits [29][66] Q&A Session Summary Question: Confidence on full-year adds and homes available for sale - Management is on track to upgrade 400,000 Suddenlink homes and expects to see increased penetration opportunities [35] Question: Expectations for federal stimulus - Management is prepared to leverage federal stimulus funds for broadband subsidies but is cautious about predicting specific impacts [42][75] Question: Competition from fixed wireless services - Management does not anticipate significant challenges from fixed wireless in their footprint, citing strong customer demand for their broadband services [62] Question: Impact of regulatory proposals on business - Management noted that low-income broadband products are already in place and that most customers tend to upgrade to higher tiers [63] Question: Insights on fiber penetration and financial benefits of upgrades - Management indicated that customer satisfaction is significantly higher for fiber customers, and upgrades to higher tiers provide attractive financial benefits [70][72]