Altice Usa ((ATUS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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During Altice USA’s latest earnings call, the sentiment was a mix of optimism and caution. The company highlighted significant improvements in broadband subscriber trends and network recognition, alongside successful debt management strategies. However, these positives were tempered by declines in overall revenue and challenges in operational costs. Altice USA is strategically investing to drive future growth while navigating market headwinds.
Improved Broadband Subscriber Trends
In the second quarter, Altice USA reported a notable improvement in broadband subscriber net losses, which decreased to 35,000. This represents a year-over-year improvement of 16,000 or 31%. Additionally, broadband ARPU saw a modest increase of 0.9% year-over-year, signaling a positive trend in subscriber retention and revenue generation.
Enhanced Network Recognition
Altice USA’s Optimum Fiber received accolades for its internet services, being awarded by Ookla for the fastest and most reliable speeds in New York and New Jersey. Furthermore, PCMag named it the fastest ISP in New York, New Jersey, and Pennsylvania, underscoring the company’s commitment to delivering superior network performance.
Successful Debt Transaction
In a strategic financial move, Altice USA partnered with Goldman Sachs and TPG Angelo Gordon to secure a $1 billion asset-backed loan. This innovative transaction, primarily securitized by HFC assets, resulted in improved pricing compared to recent high-yield issuances, strengthening the company’s financial position.
Mobile Line Additions
The company experienced a positive trend in mobile services, with approximately 38,000 net additions in the second quarter. This marks a year-over-year acceleration in mobile line growth, reflecting Altice USA’s expanding footprint in the mobile market.
Video Subscriber and Margin Improvement
Altice USA reported a net loss of 58,000 video subscribers, which represents the best subscriber PSU trends in the last ten quarters. Moreover, the video gross margin expanded by over 300 basis points year-over-year, indicating improved profitability in this segment.
Overall Revenue Decline
Despite these positive trends, total revenue declined by 4.2% year-over-year. This decline was primarily driven by video cord-cutting, which accounted for about 85% of the total revenue decreases, highlighting ongoing challenges in the video segment.
Challenges in Gross Additions
Altice USA faces macro-economic pressures, low move activity, and increased competition from fiber and fixed wireless, which continue to impact gross additions. These challenges underscore the competitive environment in which the company operates.
Increased Operating Expenses
Operating expenses rose by approximately 4% year-over-year, driven mainly by consulting and professional fees related to the company’s transformation strategy, as well as higher sales and marketing investments.
Forward-Looking Guidance
Looking ahead, Altice USA aims to achieve approximately $3.4 billion in adjusted EBITDA for the full year 2025, reflecting a disciplined approach to enhancing investment returns and operational efficiency. The company is focused on capturing growth opportunities, optimizing its workforce, and integrating AI to streamline operations and improve customer experience. Altice USA is also enhancing its capital structure through strategic financial transactions.
In summary, Altice USA’s earnings call reflected a balanced view of optimism and caution. While the company is making strides in subscriber trends and network recognition, it continues to face revenue declines and operational challenges. The strategic investments and forward-looking guidance suggest a focus on sustainable growth and financial performance in the coming years.