Altice USA(US:ATUS)2023-08-03 02:45Financial Data and Key Metrics Changes - Total revenues declined by 5.6% year-over-year, driven by declines in Residential and News and Advertising businesses [40] - Residential revenue was down 5.7% year-over-year, primarily due to cumulative video and broadband subscriber losses [40] - Business Services revenues declined by 1.9% year-over-year, with SMB and other segments down 2% [40] - Operating costs decreased sequentially from Q1 and from the peak in Q4 2022, contributing to improved margin trends [31][42] - Adjusted EBITDA margin increased by 180 basis points compared to the prior quarter, marking the first quarter of sequential margin expansion in 8 quarters [43] Business Line Data and Key Metrics Changes - For the first time in 5 quarters, broadband net adds improved year-over-year, with net losses of 37,000 compared to 39,000 in Q2 2022 [30][33] - Optimum Mobile added 16,000 lines in Q2, with a significant increase in mobile attachment rates for new broadband customers [36] - Fiber customer additions reached 40,000 in Q2, with a total of 250,000 fiber customers by the end of the quarter [37] Market Data and Key Metrics Changes - The company is experiencing increased competition from fixed wireless and fiber overbuilders, particularly in the West, where competition has grown to 30%-35% [54] - The housing market slowdown and low move environment continue to impact subscriber trends [34] Company Strategy and Development Direction - The company is focused on executing its strategy to enhance customer experience and operational efficiency, with a new regional market structure to drive local responsiveness [8][9] - The launch of Optimum Complete, a converged internet and mobile offer, aims to improve customer stickiness and lifetime value [10][12] - The company is pausing some capital expenditures to conduct an internal investigation related to procurement practices, which may impact fiber construction targets in the short term [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to sustainable broadband and cash flow growth, citing improvements in customer satisfaction metrics and operational efficiencies [6][26] - The company is committed to conducting business with integrity and is actively reviewing supplier relationships amid ongoing investigations [29] Other Important Information - The company launched ultrafast 8-Gig Symmetrical Fiber Internet, solidifying its position as the largest 8-Gig Internet provider in the U.S. [5] - The new My Optimum app was rolled out to enhance customer service and experience [19] Q&A Session Summary Question: Insights on CapEx during reevaluation phase - Management indicated that they anticipate completing at least 600,000 passings for fiscal 2023, with a potential reduction of $100 million to $200 million in capital intensity [50] Question: Competition from fixed wireless and fiber - Management noted aggressive competition from fixed wireless and increased fiber overbuilder competition, but expressed confidence in their competitive positioning with Optimum Complete [53][54] Question: Subscriber trends in East vs. West - Management reported some year-over-year improvement in subscriber trends in the East, while facing challenges in the West due to macroeconomic factors [78]