Altice USA(US:ATUS)2020-10-31 23:39Financial Data and Key Metrics Changes - Total revenue was flat year over year, with an adjustment for anticipated regional sports network credits; without this adjustment, revenue would have grown by 3% in Q3 [6][8] - Adjusted EPS growth accelerated to 5.5% year over year, or 6.3% excluding mobile, and up to 7.7% for the year when adjusting for storm impacts [7][18] - Free cash flow reached $458 million, a 176% increase year over year, contributing to $1.46 billion in free cash flow year to date, surpassing the $1.2 billion generated for the full year of 2019 [7][21] Business Line Data and Key Metrics Changes - Broadband revenue grew by 15.6% year over year, with 26,000 new broadband customers added, despite storm disruptions [6][9] - Business services revenue grew by 1.3% year over year, with a stronger performance in SMB and enterprise segments [15][16] - News and advertising revenue increased by 5.2% year over year, showing recovery from previous declines [17] Market Data and Key Metrics Changes - Residential revenue declined by 1.6% year over year, but would have grown by 2.3% when adjusted for sports credits [8] - The company added 8,000 residential customers in the quarter, with a total of 32,000 broadband additions when excluding storm impacts [9][10] - The average monthly data usage per customer increased by 44% year over year, indicating higher demand for broadband services [11] Company Strategy and Development Direction - The company completed its one-gig rollout, making the service available across the entire New York Tri-State area, which is expected to drive further customer growth [12][13] - Focus remains on upgrading existing networks and expanding footprint, with plans to pass over 900,000 homes for fiber service [13][14] - The company is exploring M&A opportunities to expand its cable footprint and has filed for the upcoming FCC auction to invest in rural network builds [14][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of the core business and anticipated revenue and adjusted EPS growth for the year [7][25] - The impact of hurricanes on operations was acknowledged, but the company remains focused on recovery and growth [6][18] - Management indicated that they expect to maintain guidance for revenue and adjusted EBITDA growth, with a target for cash capex of less than $1.3 billion [24][25] Other Important Information - The company raised its share repurchase target to at least $2 billion for the full year, up from $1.7 billion previously [7][25] - Adjusted EBITDA margin improved to 46.3%, up 200 basis points year over year, reflecting operational efficiencies [18][19] - The company is managing its balance sheet proactively, with a focus on reducing capital spending in the long term [20][24] Q&A Session Summary Question: Guidance for revenue and EBITDA growth in Q4 and 2021 - Management anticipates accelerated growth in Q4, despite some headwinds from adjustments related to regional sports network credits [27][28] Question: Breakdown of broadband ARPU and margin expectations - Broadband revenue growth was approximately 15.5%, with expectations for continued margin improvement as the focus shifts from video to broadband [32][33] Question: Competitive dynamics in the fiber market - Management noted strong performance against competitors, with no significant changes in competitive behavior observed [35][36] Question: Fiber rollout costs and operational efficiencies - The company is still in the early stages of fiber rollout, with ongoing efforts to improve connection efficiencies and customer adoption [38][39] Question: Use of proceeds from recent transactions and M&A landscape - Management indicated a favorable environment for potential M&A opportunities among smaller cable companies, focusing on contiguous regions and under-penetrated assets [52][53]