Charter Communications(US:CHTR)2023-01-27 17:02Financial Data and Key Metrics Changes - For the full year 2022, consolidated revenue grew by 4.5% and adjusted EBITDA increased by close to 5% [11][36] - In Q4 2022, total consolidated revenue was up 3.5% year-over-year [56] - Net income attributable to Charter shareholders in Q4 was $1.2 billion, down from $1.6 billion in the same quarter last year [58] - Free cash flow for Q4 was $1.1 billion, a decline from $2.3 billion in Q4 2021, while full year free cash flow was $6.1 billion compared to $8.7 billion in 2021 [61] Business Line Data and Key Metrics Changes - Internet customers increased by 105,000 in Q4 and 344,000 over the last 12 months, while video customers declined by 144,000 [52] - Mobile lines grew by a record 615,000 in Q4, totaling 5.3 million lines by the end of 2022, with full year net additions of over 1.7 million [10][25] - SMB revenue grew by 2.4% year-over-year, and enterprise revenue was up by 4.9% year-over-year [55] Market Data and Key Metrics Changes - The company noted a slight increase in fiber overbuild and a small market share return to mobile-only services [53] - The overall market activity remains low, impacting gross additions across the footprint [31] Company Strategy and Development Direction - The company is focused on three broadband initiatives: evolution, expansion, and execution, aimed at driving customer growth and long-term cash flow [11][28] - The rural construction initiative has shown promising results, with over 200,000 new rural passings constructed in 2022 and a penetration rate of about 40% [14][41] - The company plans to evolve its network to offer symmetrical and multi-gigabit speeds at a lower cost than competitors [26][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the industry's future despite a challenging market backdrop, citing strong mobile line growth and customer acquisition opportunities [10][11] - The company anticipates that the market volume will be the biggest variable affecting broadband net adds in 2023 [134] - Management noted that while bad debt has increased, it remains below pre-COVID levels [57] Other Important Information - The company repurchased 3.6 million shares in Q4, totaling about $1.3 billion, and 23.8 million shares for the full year, totaling approximately $11.7 billion [62][63] - Capital expenditures for Q4 totaled $2.9 billion, with a full year total of $9.4 billion, reflecting higher spending on rural construction initiatives [37][38] Q&A Session Summary Question: What is the penetration of accounts with wireless currently? - Management indicated that approximately 3 million relationships have mobile services, with a significant portion of new connects attaching mobile as well [65][66] Question: Can you provide context around the strength in wireless this quarter? - The majority of wireless net additions were driven by existing Internet customers upgrading, with the potential for Spectrum One to significantly impact Internet net additions over time [45][46] Question: What gives confidence that broadband net adds could be better in 2023? - Management highlighted targeted investments in personnel and a focus on reducing churn through improved service and sales capabilities as key factors for expected growth [134][135] Question: How are programming costs expected to trend? - Programming costs per subscriber are expected to remain flat year-over-year, influenced by customer mix rather than changes in programming rates [123][132] Question: What is the outlook for the BEAD program and rural builds? - The company expects to participate in the BEAD program, with line extension capital expenditures projected at approximately $4 billion for 2024 and 2025, contingent on winning funding [40][72]