Release Date: November 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Altice USA Inc (ATUS, Financial) achieved a significant reduction in operating expenses and capital expenditures, delivering over $500 million in improvements.
- The company reported strong fiber net additions, with 47,000 new fiber customers in Q3, reaching a total of 482,000 fiber customers.
- Altice USA Inc (ATUS) achieved its strongest mobile performance in four years, adding 36,000 new mobile lines.
- The company demonstrated gross margin expansion of 50 basis points year over year and delivered free cash flow of approximately $100 million year-to-date.
- Altice USA Inc (ATUS) has made significant strides in strengthening its networks and operations, leading to marked improvements in service call and visit trends.
Negative Points
- Altice USA Inc (ATUS) reported a decline in total revenue of 3.9% year over year, driven by a 5.6% decline in residential revenue.
- The company experienced broadband subscriber net losses of 50,000 in the quarter, attributed to competitive pressure and the sunset of the ACP program.
- Residential ARPU declined 1.9% year over year, primarily due to video cord cutting and timing of rate actions.
- Altice USA Inc (ATUS) continues to face challenges from video declines, impacting overall revenue performance.
- The macroeconomic environment and increased competition from fixed wireless and overbuilders continue to weigh on the company's results.
Q & A Highlights
Q: Your larger peers saw some improvement in broadband. Did you see a similar trend, and do you think your broadband ARPU is now competitively priced for sustainable growth?
A: Dennis Mathew, CEO: We observed a decline in gross add activity and disconnects across the industry. Despite the expansion of fixed wireless and fiber overbuilders, we are improving our win-loss percentage with hyperlocal strategies. Our ARPU stabilization journey has been successful, and we are confident in continuing to stabilize and grow broadband ARPU with new products and value-added services.
Q: Can you discuss the impact of mobile on EBITDA and your margin targets for 2026?
A: Dennis Mathew, CEO: We are optimistic about optimizing efficiency and driving down operating expenses. Our focus on quality has reduced contact rates and service visits. We aim to become a digital-first company, reducing noise and optimizing operating expenses. Marc Sirota, CFO: We are leveraging AI to improve customer interactions and reduce costs. Mobile is a linchpin for reducing churn and increasing customer lifetime value.
Q: What are the embedded subscriber expectations for your margin targets and free cash flow improvements?
A: Dennis Mathew, CEO: We are seeing acceleration in mobile and fiber, with new products like total care and whole home Wi-Fi. We are confident in driving top-line opportunities and leveraging digital and AI for operational transformation. Marc Sirota, CFO: We are pleased with our churn profile and see opportunities in gross adds, especially in low-income segments.
Q: Can you address the CapEx reduction and its impact on subscriber growth goals?
A: Dennis Mathew, CEO: We have developed a multiyear network strategy to ensure efficient investments. We are addressing congestion issues cost-effectively and prioritizing CapEx for maximum return. Marc Sirota, CFO: We are focused on maximizing free cash flow growth, with a balanced approach to investments and operational efficiency.
Q: What are your future plans for fiber passings and migrations?
A: Dennis Mathew, CEO: We are focused on driving fiber penetration and solving operational issues. We aim to balance new builds and fiber migrations, investing in fast-growing cities with a fiber-rich approach. We will continue to build fiber opportunistically to compete effectively.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
