Altice USA(US:ATUS)2020-02-13 02:46Financial Data and Key Metrics Changes - Revenue growth for 2019 was 2% with adjusted EBITDA growth of 2.5%, or 3.4% excluding mobile launch costs [4][23] - Free cash flow generated in Q4 was $397 million, with annual free cash flow target slightly missed at $1.2 billion due to working capital outflows [23][24] - Adjusted EBITDA margin reached 43.7% in 2019, up 20 basis points year-over-year [25] Business Line Data and Key Metrics Changes - Residential business grew 1.6% in 2019, with broadband being the main driver of revenue growth [8][10] - Business services grew 4.8% in 2019, consistent with the prior year [10] - News and Advertising division declined 2.3% in 2019, but excluding political revenue, it grew by about 10% [10][21] Market Data and Key Metrics Changes - Broadband net additions were 72,000 in 2019, consistent with the previous year [12] - Video customer losses were 10,000, a decline of 3.3% year-over-year, which is better than industry performance [12] - Average household data usage grew over 20% year-over-year to over 300 gigabits per month [16] Company Strategy and Development Direction - Increased investment in fiber build and DOCSIS 3.1 deployment to enhance customer connectivity experience [7][18] - Anticipated acceleration in revenue growth for the core cable business and total revenue including a full year of mobile [7] - Acquisition of Service Electric of New Jersey for $150 million to expand broadband, video, mobile, and advertising services [7][10] Management's Comments on Operating Environment and Future Outlook - Management noted a stronger than expected operational performance turnaround in December, with normalized trends continuing into Q1 [5][6] - Management expressed cautious optimism regarding video losses and emphasized the importance of monitoring free cash flow despite potential revenue impacts from video [33] - The company expects revenue growth of 2% to 2.5% in 2020, with further adjusted EBITDA margin expansion [28][29] Other Important Information - The company plans to continue share repurchases, targeting $1.7 billion in buybacks for 2020 [24][29] - The average speeds taken by customers have increased about 3x in the past three years to over 200 megabits per second [17] Q&A Session Summary Question: Revenue guidance and video losses - Management acknowledged conservative revenue guidance due to mobile handsets and political advertising factors, but noted strong performance in early Q1 [31][32] Question: Wireless business and profitability - Management expressed relief over the T-Mobile/Sprint merger approval and highlighted the importance of balancing OpEx and profitability in the wireless business [37][38] Question: Price increase impact - Management indicated a slight uptick in price increases, with a range of 4% to 5%, and noted a normalized reaction from customers so far [41] Question: Fiber rollout and wireless losses - Management confirmed plans to drive fiber rollout in Q2 and emphasized the importance of managing OpEx in the wireless segment [46][47] Question: Broadband pricing and ARPU growth - Management stated that the majority of broadband ARPU growth is driven by up-tiering, with no significant resistance points observed in customer spending [62][73]