CHTR - Earnings call transcript Q1 2019 | Charter Communications, Inc.

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Operator

Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to Charter’s First Quarter 2019 Investor Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Instructions]. [Operator like call now Anninger. to turn to would over the Stefan I go Please ahead.

Stefan Anninger

welcome quarter found Charter’s The morning, Financial to Good and first site, under accompanies call Information section. Web presentation this XXXX can our be on ir.charter.com the that call. investor

of I in number our XX-K including most factors we SEC are proceed, you and there cautionary recent XX-Q morning. like filings, would Before and filed also remind other to that a risk contained this our statements our

review factors risk cautionary on not other will We this those statements and call.

However, historical reflect we These read plans them concerning forward-looking remarks may subject from statements additional Charter results. Various and results in on carefully. update revise and only and statements make predictions, forward-looking make this encourage future. to management’s you view risks expectations, statements. no to that statements that or to we statements forward-looking are obligation prospects undertakes to constitute forward-looking uncertainties the such call or differ Any anticipated to current or actual cause

Please similar rates note titles with in unless specified. comparable other calculated course and During defined referring non-GAAP Charter basis, be to otherwise companies. call, used defined on on by all These not are will measures growth this presentation that also measures noted we as the by may and be today’s earnings call as in measures a non-GAAP our reconciled of materials. to the year-over-year

the our over call are With to today’s on Chairman turn CEO; Chris me Rutledge, call CFO. Joining and and that, I’ll Tom Winfrey, Tom.

Thomas Rutledge

Stefan. Thanks,

on behind customer growing intensive us, focused now our most of capital integration and impacting the With our business. we’re developments

to well with marketing better and prices product is the the driving we’ve over high-quality first customer and deliver payoff high-quality months. with added We and created and XX unified in service three-year over value We operating XXX,XXX competitors in that a customers relationships and our products over quarter We’re XXX,XXX and doing our a beginning superiority results. customer single proposition entity at maintaining performed quarter with products X% Internet to last provide. with churn don’t and by effort infrastructure nearly new reducing in service product subscriptions, via our transactions creating first a of growth that the better

We the XX,XXX also lines quarter. added XXX,XXX over than more added mobile we in fourth

So Spectrum Mobile expected. ramping is as quickly

investments growth X% capital of EBITDA changes the intensity cash with free one-time and last quarter. Mobile that cable falling mentioned working year-over-year in Our our yielded Chris our in combined flow growth strong Spectrum despite capital

in customer We front have cash of excellent both growth path for us in flow. in an relationships and

in home network mobile customers was XX% per gigabytes When over in are XXX customers subscribe more megabits which and over now customers usage offer to median monthly as of of IP and per our connectivity devices customers Monthly core are and more businesses. our technologies and Internet packages in to under Our on that customer. XXX deliver our rising upgrade to or new speed monthly wireline demand both residential more. XX% or the in XXX month, allows products asset; speed data and growth And that to grow data look emerge. by by gigabytes our our video. That usage and usage driven will month. rapidly XX compares packages video powerful, is for to continue applications wireless and our us network throughput to XXX Internet gigabytes of usage for to both data-rich megabits to that demand Over flexible per an consumers easy the deliver average increase climbs at of product, you traditional and average well don’t continues usage

package gigabit product Despite that as service which seeing about view Internet also demand that, We regardless only strong XX% today. way of to the cost market and our of low we we the have and faster, multi-gigabit Ultra to our the that passings fact have our offer available near speeds conditions product given our XXX everywhere. we and a the and importance them, with connectivity and better relative services of for price in wireless We’re efficient our potential delivers we pathway wireline future. and penetrate megabits

months a up only our across to example, receive X.X XX For launched to took at just speeds our per million entire passings passing $X this X enabling cost DOCSIS in gigabit which of we XX footprint service.

product as cost our our call deployed product and connectivity set We connectivity incremental through bandwidth to network MVNO and is product expand sold the we agreement years also being Verizon our Today, drive low what our and customer coming rich, powered. Spectrum is fully ability that in existing with will through we Mobile help have at services our XXG believe growth. fully

a development combination potentially Any of and our a home, funded to goal deliver unlicensed further currently broaden and our a business incremental deployed clear unique and mobile and technology our more efficiently SIM will of than our possibility We’re through passings. capabilities competitors. products on be quickly converged testing with on of that licensed future million the Dual using more truly XX the payback to fully economics connectivity in to in network business, with strand mobile Spectrum across

other beginning footprint drive on-box In upgrade Spectrum products. DVR of products. Choice all Cloud new Essentials and out over Guide now in to we’re rolled video TV fully recently just set-top a in-app, We we capabilities. streaming our investing Stream those offer video, of our with XX% connects in to also is our box growth new and functionality for launched continue launched We’re and Spectrum package products. to

on product products We’re better selling to we customers. will we’ll detail recently And also which launched quarters. a accompany in privacy control in coming which developing SD-WAN and core product multisite the in security, Internet our help working nationally more discuss into enterprise drive

with opportunities. continues sell services and So to we expand strong growth a the offer them our connectivity and product penetration set

deployed and grow two to have a we the Over years, need we customer tools the new quickly. relationships half last

fall Our which packaging we their simple, Spectrum our modified pricing Spectrum are effectiveness improving and sales in to last easy Mobile. channels include understand selling to

We’re an sales growing our seeing increase program our our self-installation applications. service also frictionless and and online delivery portals, sales self-service to in

Our product it better operating from and the reduce customer and transaction in we’re are is field. to each we’re designed being infrastructure call or centers our also seeing volume and model the activity metrics. delivering better in integration churn improvements The those less driven whether of be by and and service pricing, declines

produce and Our customer care and to field higher continues service. initiative is nearly complete quality operations in-sourcing

already few first-time infrastructure deployed this time fully developing we’ve and IT internal These a better in churn. years less the realize by but and take with transactions, own service efforts end are of be the which Our resolution built fully will quality service platform decline year is self-care last on terms schedule. witnessing we’re the to over on customer’s

our employees, way with improvement and model that we’re is customers, we communities our our works drive to for pleased So shareholders. and continuous growth in our designed progress operating serve a and long-term

Now it I’ll turn over to Chris.

Christopher Winfrey

Thanks, Tom.

results Internet, benefits. we’re and XXXX last acquired packaging wireline the with XXX,XXX seeing SMB, and already last packaging quarter. by year, we at product, we total billing, in first in our spending, on service was as pricing which the residential In XXX,XXX by and X. XXX,XXX XXX,XXX residential declined the Pricing XX CPE million by customer slowing Internet over service were voice improved. the end grew of XXX,XXX, X a network and by relationships year. of the residential XX,XXX in first months. by customers are the means decline and mobile SMB migration to Turning driven in and Spectrum added a calls quarter fewer ARPU that last year-over-year and the improvement Including customers meaningful collection our Total upgrades transactions by first quarter. the term relationships versus XXX,XXX added together over grew in quarter completion residential churn higher and of lines. declined of Video The activities primarily in our XX% lower Slide

last customers residential or X.X%. XX X.X our Over we’ve the million base months, customer Internet total grown by

customers by residential we video Internet, additions. our grow healthy flow benefitted EBITDA year-over-year to Despite X%. cash our to and churn expect year, loss, Similar video by some last the a from declined at lower total Over video continue gross but offset video was decline in rates. we to that

an As remains of part connectivity services and less of a standalone business bundle, for strategy churn integral video drives it part Internet profit time. and sales it as reduces drives over our even

video profitability focused the on when it customer passing We’re returns includes which matters. full the or and to

as new can, mobile lower fixed cost our We dollar revenue value connected passing transition substitution wireline the a services revenue adding loss significant network. versus sell-in as in our our to voice, year inside and we and many per XXX,XXX In by our our fixed increase add XX,XXX residential in customers continued continue generally. and lost selling driven by network the following mobile per and lower we the quarter to to bundle to customers of last market to

to Turning mobile.

from I lines. XXX,XXX of both Gig which healthy As lines came By the a added in and quarter mentioned, the mix we Unlimited mobile

packages be have opportunities profitable once to so further we launch easier and and of Over our and an this the business the sales results and our including March rather and standalone remain we sell we connectivity fees with a than reaches of our economics be As is to the will And mobile the Unlimited product meaningful promising. it to of it early retention, become also XXX,XXX as XX, driver Gig began services. basis a not improve we connectivity scale. we existing Mobile service. there expect product time, offer to associated month, Last lines, believe pricing Spectrum expect add-on and of only unique mobile now making our mobile By nicely ramping even our within taxes on

expanding launched essentially is BYOD the by second and and expect on most devices. to we popular end the be channels program bring-your-own-device all quarter, Our of the schedule across

within X.X%. year in both grow migration in of a EBITDA by and ARPU promotional voice stream subs and last and revenue partially by off Residential residential video higher as with total X% or rate choice were we revenue customer no we offset lower expense the video mix we mix impact XXX,XXX past the customers campaign to quarter given grew per last taxes relationship the wireline customers And benefits adjustments. of our Internet-only the grew higher of roll base. now. SPP and a year-over-year or did and rate Over by and did Those in

with X As combined our ARPU any our cable of cable growth our revenue. in X.X%. does shows, year-over-year reflect that ARPU mind growth Slide not resulted in mobile growth customer revenue Keep residential

about in X.X% faster than Legacy X% TWC from revenue by we with SMB House we’ve our growth flat as revenue products year-over-year. the was Total to combined Sequentially, to revenue revenue relationship of PSU And up SMB grew customer rate by Turning and grew the in was and in and with ARPU and commercial. SMB Bright X.X% last grew SMB grown backhaul the excluding slowed. effect by last and enterprise SMB Enterprise by growth enterprise converge year. X.X% cell by our quarter. relationships quarter time XX% essentially has SMB revenue repricing expect our first Navisite, SMB the growth over customer rate. XX%

at Our the in is moving last enterprise ARPU our pricing to process beginning ultimately as to the in pricing The similar in SMB. the the do it’s its SMB over an follow earlier will own residential what to enterprise term, of more competitive growth and stage growth two done and years. of unit but customers revenue near pressures group businesses we’ve packaging

of revenue totaled declined being revenue year-over-year X% EIP revenue Mobile over due device that $XXX million political less quarter. advertising revenue little quarter with by in the million $XXX a First revenue. to

X.X% of in cable revenue advertising. was So growth X.X% consolidated or first total, quarter revenue when X.X% up excluding year-over-year with

$XXX operating by expenses Moving In total to year-over-year. first Slide on operating million or quarter, the X.X% X. expenses grew

And Regulatory expenses by a a first versus rate quarter, mobile, of same probably and growth in service X.X% of for driven gross revenue, operating X.X% is year-over-year sold customers down growth. by to XXXX year-over-year excluding video CPE partly first improvement, the content fee debt declined increased increased and cost service we the X.X% benefit to in even quarter. content the up last digit customer decline Lakers cost given quarter devices compared growth. fewer tax cost to in baseline XXXX. X%. the in year-over-year. a Excluding small by X% as good programming quarter some a to year-over-year XXXX grew I when produced mid-single connectivity offset Cost by first games bad customers mentioned video had programming by were Programming as slightly relationship customers and And voice

were strategy. structure business promotion with including So $XXX the by time cost our grew EBITDA Comcast. Whether process expenses million, And with we’re of Mobile to JV startup insurance system and adjusted $XXX our grew overhead through market is these of the training, quarter. momentum. tied mobile a cost packaging mobile business, million but X.X% operating changes, costs small core stand driven our by all revenue, meaningfully launch and expenses to and our loss series cable and adjusted other take and total per-relationship declined are EBITDA generates personnel portion by marketing Cable first own in of EIP in-sourcing, X% drive comprised by improvements of when pricing together costs and which service the and up lowering which Cable totaled X% X.X%. up improvements expenses costs. software device to ultimately year-over-year which and and were our operate the expenses including device the EBITDA

same look we our estimating the we call. mobile to quarter losses our XXXX mobile XXXX place the laid subject assumptions EBITDA annualizing As starting on loss out a XXXX, good for fourth last to is EBITDA

in investment expense adjusted and Legacy higher and and X. lower Turning generated EBITDA, $XXX amortization primarily that’s tax shareholders of write-down higher The non-cash offset We expense. partly by by interest versus lower income the GAAP and on income restructuring million driven to depreciation to was net charges of year. TWC million increase year-over-year Slide first $XXX net higher expense last a quarter and Charter's merger and

by under Turning just to cable billion CPE with less our in all driven $X.X Slide quarter. lower about quarter with declining by migration X. expenditures the million $XXX totaled Capital that digital as last first SPP we CapEx year-over-year and finished was

our our lower higher X.X spend year mobile-related CapEx and software, completion related and had $XX spent for this mobile footprint spending driven quarter on scalable in by for of quarter figures our capital upgrades mobile is the line cable. lower as extensions by our partly remains a retail to XXXX quarter to our in DOCSIS JV which upgrade also XXXX simple some and which on is continue CapEx the support conditions. That driven was we mostly merger CapEx. with mobile Annualizing accounted by fourth support million full within primarily and to way out build We was infrastructure we estimate Comcast. fourth of offset fulfill And

We of expect will the for MVNO mobile our footprint. CapEx launch service retail our of decline following upgrade the

XXXX in our to drive billion As example we the XXXX, existing first seasonality. we’ll a about we would usual of event, year evaluate we the internal full Slide accelerated reminder, as An outlined. cash quarter, find the this roughly $XXX not new despite XXXX the projects while that would calls the mobile of mobile cable of plan high quarter clear on develops of own a onto investment so. in moving for ROI capabilities total projects would is launch for be of in shows free it XX during network the course Tom faster and million a our spend on generated probably year growth, flow $XXX network our $X payback continue million or that’s If mobile. consolidated traffic CapEx including do something

CapEx and million the to negative cable year’s nearly in accruals flow, and cable by had growth quarter primarily capital first of we cable working $XXX a up decline generated Excluding driven EBITDA meaningful we year-over-year billion our expected, higher CapEx. was versus payables. first change due cable $X adjusted as last mobile, during in And free The a lower cash quarter.

to primarily to we Although full quarterly working cable seasonality. our business expect change full I year cable our typical our to working QX, of should be capital cable to move year in through cash the capital results. free negative flow to I because year expect working in as move as would neutral we And the capital XXXX, changes more beneficial be exhibit

growth to we continue On add and future. expect which the that handset-related foreseeable we to mobile see capital we for as accelerate side, working continue the drives rates needs trend customers, mobile should

finished billion principal. in balance we the debt On the sheet, with $XX.X quarter

rate $X.X including TWC billion X.XX% is notes of run cash on that impact current annualized Our $X billion. April Xst repaying the of interest now

the investment leverage upfront be at quarter, to our declining. end XX the X.Xx the include of Xx it’s end As and or X.XXx. and of to looking of first cable-only end the cable-only we that range stay to net our more high was mobile last X.XXx and at of conservative debt leverage adjusted was leverage of EBITDA to We months intend the at QX below than

and a We naturally per EBITDA long-dated cash much absent have delever attractive half growth strong to average as we maturities tax assets, accelerating churn visibility cost buybacks. and and debt on flow weighted growth, as year

All and of efficiently. we increase our business costs, and refinancing reduce or in a prudent total a opportunities, is in our leverage can leverage outlook that suggest our investment see if permanent change current we quickly

quarter, During $XXX units XXXX, September since at per the equity price of repurchased we Holdings repurchased Charter price per shares at an XX% about share. common X.X $X and average we’ve billion of million And Charter Charter’s totaling an of of also share. $XXX average

for advantaged to services service flow Operator, returns. use core with we’re ready good tax ancillary customers cash top to and on now with for connectivity value together model equity products balance over capabilities future with in asset lot infrastructure growing operating a sheet strategy now to the and reflect periods our results network a we long time and sell grow our levered and our all So our of to of our of work expect Q&A.

Operator

[Operator Instructions].

from first Evercore. Vijay Your Jayant question from comes

Your open. line is

Vijay Jayant

on interest in be your se, XQ spectrum becoming traffic get a quickly network. what per given and you for forward Chris, are front opportunities about capital. going talk something be? you just about seeing talk working and what mid-band this talked XXXX event would about opportunity the then start don’t Thank we some Is it’s capital that strategic XQ Can massive in that tailwind? mobile you’ve getting in but can on investment very think and Tom, working And you talked about the I is trying of in anything the shift Thanks. to a the helpful. And a use should you. firstly

Thomas Rutledge

probably issue. it said in any time As remarks, my I isn’t

the with efficient experiments – doing that be are by than we by which capital viable make in MVNO therefore We MVNO of economically we do would do just we would offset so, means to whatever spending where cost an it’s would traffic way capability in moving a get investment higher and be would return a reduction cost. would

really least it’s at build by analysis. So

will technical And point at opportunities, a from and and be experimenting some spectrum we’re available CBRS to least multiple WiFi there are what free of So of and some are capabilities. will which that we WiFi develop are of to in which continue part of also at it licensed. is view no cost, us be.

of maybe our opportunity. that but licensed macro-tower and so decided strand, the We can type yet different but deploy one is physical spectrum be we locations. the and that’s We to of other used on look any they there and physical mix the of is And home, a haven’t and opportunities three zones; in unlicensed is plant the think capital, are experiments really completed WiFi the one potentially the at any on significant we haven’t infrastructure most sort capabilities. opportunity

Christopher Winfrey

it capital. on should business question because step taking the longer cable DPO DSO actually growing cash a a Vijay, working contribute capital to back and than has working

related That we’re a big from longer as actually step business, had our case And the to in in capital. expenditure, step our year over payables generate QX we flow the full that. cable expect term wasn’t in and down working big in cash accruals so since and the capital down we cycles a to

cycle. with that hit have And the so you one-time associated CapEx unwinding

like the of due do. generated we’re windup back look of has which large one-time little will that done working cable stepping capital to start you from was seasonality. it management $X had sheet capital to expenditure level seasonality balance of now some up past practices, flow They and by of but the quarters actually through the billion on the was simply also benefit the permanent if that beginning have bit that, it integration. XXXX, QX. the we in just in We But some look cash inside There’s seasonality a won’t doesn’t through the quarters, into more mean it in normal XXXX

inside collecting I’ll a example. business well some this we’re making receipt. still over We’re day of business one a million minor the have size In $XXX that give impacts. small you could for customer changes

only capital not QX should creating the whether mobile year that BYOD side it makes and going be So it that get you’re easier load seasonality on in And to include how how how flow. not to it the also can on you’re you’re the and much function a And XXXX makes your when into actually of free these customer. we’re weekend a you payments it’s a But we’re to a bit extent cash receiving devices normal from that impact taking not or that is us to have forward. of That on bring-your-own-device function one but growing same flow have cable the for end also for the reduces all mobile’s to start working the financing to neutral that doesn’t device devices. finance easier another. you if the business, faster really aside, quarter, for of consumers growing of or Clearly actually the on. go the sale, amount should point cash look of

value. going if working introduced. financing, device being be EIP additions mobile. there’s to that to relates on including question pressure is BYOD and not the you’re up short-term pretty which amount But And gross It’s so of we’re some of a of stepping capital excited a about type

You just question over money a get timing. back of It’s the time.

Vijay Jayant

both. you Thank

Thomas Rutledge

welcome. You’re

Christopher Winfrey

Yes.

Stefan Anninger

we’ll our Operator, next please. take question

Operator

Moffett Craig from MoffettNathanson. comes from question next The

Your is line open.

Craig Moffett

if Two Thank hi. could. you. I Yes, questions

will comment talk under given that profitable to the want the that current current wireless margin if trajectory the your wireless the earlier have moving traffic the also you’ve for year and be only go might own with guidance that longer-term last assume of scale. just what think reaches that thought Should this your business where describing just a can CapEx those the the means is think longer it lower ago you Chris? and or minutes? do And bit can I about some to network business, few for a CapEx term? or and been expand, being we once I enhancements in then network months obviously than people couple onto clarify quite the with margins First, deal of continuing you

Christopher Winfrey

comments be So about really would opportunities. of ability the the business we’re economics the that the to improve mobile making

without Mobile on the profitable We with expect quite to Spectrum Verizon and standalone considering any which cable benefits like. that be we basis the to a have we existing of under arrangement

add on to profitable to basis be standalone value and to all that cable. a expect We

product about So mentioned, would exist it’s opportunities some event. make talking not across of more and Spectrum; versions faster it the there create of We’ve country we’re as et of the probably to cetera. trials maybe we’re SIM. that opportunities XXXX unique we’ve Tom a even And a be profitable, But Dual working doesn’t to today. that all out traveling been But all mobile, with different got that. fixed, trialing with even

we that’s the of well. we agreement it’s of profitability sort relationship business, extremely I the the talk when have about have, So

opportunities. a standalone with any be or basis on to mobile profitable expect of We without those

Thomas Rutledge

profitable as to And well. Verizon

Christopher Winfrey

accretive we it’s and Verizon to Yes, over think well. time as very

expenditure for tell percentage But is intensity would that to longer-term CapEx I As anything see revenue, of continue cable it we either. and decline the doesn’t that not in a cause as on as capital any it guidance, to given percentage a that relates you doing haven’t of to capital what the revenue. don’t known horizon we’re we for

is the which video has lower just comes to the particularly meaning have CPE CPE about of A has behind set-top because largely environment more need household that of it that because traditional new lot the on is integration boxes video. in less of capital video All we has gotten is because product that of brand base us products entire we means we that efficient, much new and of going that our the with populated capabilities for and intensity decline. DOCSIS streaming customers and now

For internally think get and what you, the plans sure I to you to our will contemplate. I ability So that’s about think could digits? continue new a it Craig, this lot, low-double into tell invent has the cable products.

don’t on today that of work so that that’s plans own in way been there opportunity decades cable cable streams modeling nobody’s that’s really is away And for we’ll intensity, I the revenue there’s but today probably and today out nobody thought our that aren’t down think their and goes business in either.

Craig Moffett

peak peak more for XXXX? be peak is Thank at likely All to right. the for year losses spending that this you. wireless the the And or just – Is probably least one clarification. year or

Christopher Winfrey

a you’re on is question how fast losses depends trickier growing. The because it

the And so standing business any subscription to to that you’re growing in EBITDA going more have you’re extent from fast the that’s coming losses. start,

be XXXX sales and don’t I which the an want yes. and Then and put throwing. year. from forecast actually So ability will standstill, a we customers. your the sat a answer standpoint. faster we economic grow to [ph] pressure at If we on that may question have go better would to marketing sit so But be today here acquire were to could weren’t and to I more

should comes base capital and bulk have plan. be That’s with To our on this to wireless get build into the move year maybe year we’ll to from Verizon. CapEx, have investment tied you cost WiFi a small we extent payback that expenditure unique just footprint. you and through bleeding have line a there to may be up opportunities synergies there retail on that a then revenue about agreement extent well And as network as doing the into cells, relates of clear As fixed and articulate ROI the that the it the little well. as as network, extent there expand to really ROI an That’s it an next the clear to our side. to end that are an we a bit product, clearly to the payback our to we our to be if finish

Craig Moffett

Thank helpful. that’s right, you. All

Stefan Anninger

We’ll Michelle. question, Craig. our Thanks, next take

Operator

from Hodulik next question UBS. comes John from Your

Your is line open.

Stefan Anninger

John. Hi,

Operator

Mr. open. is line Moffett, your

Thomas Rutledge

it maybe I come If to was John to on there, back think move please. not the and next John Hodulik. John’s one we’ll

Stefan Anninger

Michelle. think the move I please, to we’ll question next

Operator

moment please. Okay. One

Chaplin from next will New Jonathan Your come question from Street.

line Your is open.

Jonathan Chaplin

Thank you.

the speak we’re expected with for context wireless business. thread I’d non-video more So the for usage better results gave love and than the in I on themselves wireless I think enterprise EBITDA people. residential seeing to the context think a fixed just little helps bit broadband really broadband, acceleration the focus for around substitution into you put really subs the and

Chris, business, then it? is for margins of a or should that that are you So, are then growth towards? with subscribers think of And similar and you should growing to happen? cost acceleration similar sort subscriber growth residential with growth expect And course we XX% on see converge incremental to that quickly at year how SME? that can I profile Is revenue subscriber said of over business more finally the accelerate guess achieve growth the that business XX% I SME enterprise kind the And as Is growth. enterprise revenue in sustainable? associated this where there Thanks. the

Christopher Winfrey

that SMB, In a SMB of at type there. us for our think digit by the market percentage rates gets larger, a to bit lot we’ve view the of in But continue lot as is I to lot or clearly a converted that high-single that little business harder whether it’s just means to there. those value a goal is digit, There’s grow underpenetrated is of do. our and it’s SMB low-double

Thomas Rutledge

It’s too therefore clearly in to has front you relative underpenetrated that residential and number a of years would growth of it. of think it

Christopher Winfrey

if it business residential at fast in the fast growth now the space. and accelerating. accelerating. when happening are rate doesn’t to timing take when how a as as clear way be growth And back the and the look think rates, growth – out the and agree. XXXX, that. like it’s it work same rates Do unit even But that. I probably starts over probably as as pretty in Difficulty] up to our to got not the it well your is opportunities rate, terms rate by another of business you’ve you migrate we that space but as it’s the bottomed year-over-year more unlike the is revenue And longer business, closer. of of into pricing the then Enterprise the grasp and maybe look in These will have may that [Technical way It’s residential of year through a all growth and revenue as then revenue this customer growth growth your you look end extension is you time. move it

PSU longer-term don’t And if trough contracts. And think know – even XX% but than at XX%. the growing will so I a enterprise, then that pace of now go is a fiber business we faster Those that much growing is core trough that and growth we’re – fiber or our the it the connectivity the cycle. are the actual approaching similar customers at through rate, at business in in right

recurring or a space. term the cost, but economics model a your It about rate, and is just lower ARPUs it question a like has the It’s of has which it high kind payback ROI a transaction payback SMB you when lower lot means all economics, higher has upfront looks about a think Your cost in put business. residential the has the revenue fiber. cost, much one operating it to than extent the metrics. higher it many brand of upfront Enterprise, to -- new the accretive multiyear of But because of upfront construction payback you’re inflated a cases margin having a business in and on highly every and a has single and

Thomas Rutledge

Higher capital, higher margin. operating

Christopher Winfrey

That’s right.

And that is you multiyear so what payback end to opposed up months payback. means a with XX that as

a network As of better at you next ROI allows and up acquired end building into to result, a be a physical going that payback. infrastructure the the higher acquisition with customer

Jonathan Chaplin

you. great. Thank That’s

Stefan Anninger

Thanks, take we’ll our John. Michelle, question next please.

Operator

to line Hodulik open try the going of I’m again. to John

open. Your line is

John Hodulik

hear guys Thanks. Great. you me? Can

Thomas Rutledge

John. Yes,

John Hodulik

Okay, the on great. side. cost Maybe another question

some have for guidance programming growth. guys there You cost out

little a terms monetize I guys is growth, then to it’s look small, of in more you that that On on center a provide the of come other Thanks. Navisite us of digital noticed And you although is towards growth lot headwind granularity line data that any some their revenue that a item? on to there transactions. side the sort else bit providing non-programming that down? sold seen moving Anything could opportunities? Can give of carriers can about some Any have us you’ve asset? can of talked You operations. chance declines. continue And cost you

Christopher Winfrey

mentioned and cost bad to is remarks. – you that going several the have in we on. debt about service things prior the lower talked well, I One On

in down, and the coming customer-facing those behind innings of business. are momentum that service is coming down, is online we coming talked cost out installation integration truck rolls that are take the our down that where the there. second The think can self early often Tom’s towards of creating that of terms us still our integration we’re calls are is churn – the move and amount about and

productivity a brand caveat continued you’re sales And separate. see rate close think well. to to that productivity, relationship the by X% I’d start much of our you I accelerated growth, going have X%. to But we long very customer marketing on to the as that continue say can marketing have have to and have but better it’s and is have sales going in growth And get wage costs only that to basis. think Clearly rate? you to when service which continue move give I going new to I And cost has a keep It’s there’s know the impact to serve. runway you large cost So your customers down a you customers mind of customers, to extent X.X%, acquired on a the that cost that environment the extent of is fact of newly size so provision and don’t – new have I it’s base higher growth business. cost in in it for your same negative productivity. that existing those the to move pretty service, are a the we relationship per customer over to And when increases. better that at despite

that’s see our taking adds to acceleration going some that gross extent of cost to you’re serve So to on place. based the

at second Navisite I don’t was the know as all Your at that have. what it was do. we look really different on assets to [indiscernible] enterprise. relates we an different asset opportunities by We question But around of that to don’t acquired M&A comment least. TWC, was

John Hodulik

Okay. Thanks, guys.

Thomas Rutledge

I improving by actually would tools spend was every transaction serve, a little lower that have we life higher might customer to skills people the satisfaction. years result in had the cost we cost that have think and the business. transaction make opportunity reduces transaction. than to business. is A improving service wages, quality so a more get have churn to the do they our higher and the less the serve equipment extended And way churn per always improving a it’s few through [ph] bigger that operate And and in the to the business there itself customer on the of we activity Just plan to cost do than And quality of ago. a thought transaction – a the to a

declining is customer virtuous satisfaction. and transaction we it’s because also we itself better And declining volume activity because that rapidly and are both less also improves operate so has because our in service is but is having improved satisfaction which

all and the economy is self-install But it planning that it. why wasn’t digital was that ship operating in in sort guy self really way well that fortuitous getting good upside we So customers’ we integration provision in equipment, of always of and to we’re our terms in the that model. really did from our sense that ability a in them of did our equipment, as self-service planning equipment, a capabilities, the have digital direct our perspective for us thinking

Stefan Anninger

Thanks, please. our Michelle, Good. next John. take question we’ll

Operator

Your from Stanley. next Morgan question comes from Ben Swinburne

open. line Your is

Ben Swinburne

you Thank doing I I Chris. in a XX broadband a question growth think on X% and then broadband you. have months. customer the Tom Tom, last question for growth you are said for guys

business out, of see ahead as today? being a You that drive out to the that continue services. growth When referred talk called churn think to something you And you about are you where from of driver can out you look called keep runway or XXG down the growth. to rate to churn I least at going you you

more remind about Could to we roadmap? it term, near in customer Chris us more compared both see you you. system we the QX stuff wanted on lapping product adds I think Since your prepared color which then how the debt. impacted bad just right in got I think help that just for so remarks, tied just year’s mentioned I QX I quarter and had coming last connectivity. up? versus the to year what’s you And to you’re billing impact think can saw Thank you last if

Thomas Rutledge

CableLabs a of connected The going question. So, relatively gig level accomplished the wireless broadband talk plant whole that upgrade and a capability Ben, a at allow technical reasonable what I’ll XXG to pathway infrastructure is physical specifications traditional to And provide is of comps. really our service. completed to the to ultimately costs XX notion whole just And it’s XXG actually year-over-year industry service. to Chris us service. set we’ve the it of have XXG XX TV our do creates will new for a that we and about symmetrical in cable to inexpensive gigs gig can at X to upgrade

the devices wireless fact future network In to being in we likely connected the all be will products. anticipate our most

our actually that being developed to whole expand a XG been XXG incrementally capability through of realistically to to network is build take to or us go can are by platform. Xx. time set And we And and or so a new platform XXG to set we’ve and XX a and to capacity going gig able specifications the through new specs specifications of that XG testing

infrastructure. see capability but So of to available megahertz X breadth capacity platforms ourselves gigabit we we’re in in can today terms spectrum our XXX going

create new top platform and at have So notion it’s have already costs low a we industries. platform show as what build really designed great can on that to capabilities a that incremental new we of we infrastructure infrastructure

I capacity today, probably very gig means of high the that don’t in choice low are immersive. that products. who for have of education new And that are entertainment require And know services that network. XX development what but compute of we high very Now are symmetrical needs future that that a gaining forms new we immersive platform are think medicine the the very those of and forms we latency,

Ben Swinburne

keep churn, level comment going? of this to on just driving and down broadband that runway And Tom, on growth any keep

Thomas Rutledge

think grow with and Well, yes. and superior impacting primary our service and of underpenetrated superior share in to we both those products. And high upside. quality residential commercial there’s in we’re of market pricing quality lots and there’s objective through we products that opportunity We still and growth and products lot think for a think of

Ben Swinburne

Thanks.

Christopher Winfrey

integration have as disruption you mentioned adds. of by meaningfully They improved net activity we we take So, and look strong past Ben, momentum in planned we level and and for that was that had of quarters, a Internet part we of customer in at that you the if longer-term much the have In couple the relationship driven results was and a the XXXX. and quarter high clearly outlook which in year-over-year.

integration is accelerate relationships by the activity and progressed. XXXX. the of goal think year year, financial were keep mind about shorter our in quarters But as term, in the rest growth the impacted in as that you to So less the XXXX

over that a we our Tom so all better goals get changes longer momentum throughout mentioned. Yes, that slightly but a the term we made, creating also the benefit year for becomes more in difficult the and reasons have your that mean QX clearly strong had continue that that the it we’re to to the the have quarter does point, And of to year? comp we

Stefan Anninger

our please. question take next we’ll Michelle,

Operator

Deutsche Kraft comes next question from from Bank. The Bryan

Your is line open.

Bryan Kraft

Thanks. Good morning.

change you as competitive large any promotional a I are to behavior in just margins. pretty far wanted intensity or ask much first environment quarter You on a growth. up competitive on from any just things strong as then or of comment sub And Can broadband obviously are had you competitors broadly, also seeing follow your a stable?

of was or numbers EBITDA by about there the points year? that XXX to relative quarter basis anything how Excluding rest Was mobile, you. the margin the unusual thinking quarter’s in cable temporary year-over-year. you’re improved Thank this about in

Thomas Rutledge

operate. the Bryan, we we’re competitive of year of So, the And primarily the is I the our improving is products way our is changed marketplace it’s doing This very think think hasn’t doing And still that we’re behaving. what growth the significantly. way change competitive. because rate because things I and environment in own not

Christopher Winfrey

there’s margin, connects. on And of inside seasonality each on business quarterly based the year cable

we quarter; we disconnect this year-over-year. of that had we you think I the about future the about but we QX would wasn’t small think in respect. would that’s cost is that primarily. be comments reasons more margins, as impacting for only serve mentioned It’s inside year that programming getting benefit And it’s had The same but unique is heavy our this year, The been thing in quarter. programming. about the QX that’s the quarter that benefit for to was large costs, quarters pretty to a small I X%. if a efficient mid-single So those difference of a expectations programming particularly digits about that or business in made that heavy inside but small the all close the I a QX, a Both for only connect earlier thing have talked on that was highlight

Bryan Kraft

much. very Thanks

Thomas Rutledge

you. Thank

Stefan Anninger

please. we’ll Michelle, take next question our

Operator

JPMorgan. from Cusick Philip from comes question next Your

line Your is open.

Philip Cusick

great see has little despite number’s a from launch, TV on Thanks. a in video were And that video gross year-over-year. Hi, there in you follow company some guys. been softer Essentials sub play were the I way this bit the away Obviously deemphasizing shift up. results the the fourth down broadband double we but video as video or the you mentioned of adds broadband Should a quarter? year-over-year. were focused the guess

Thomas Rutledge

price drive we’re go believe an the its last issues has and in buy we all think and the on and bundle continue video the challenges. whole over we to product that to customers but is integral that as core to that are what’s hard with trying of from we video marketplace video be for the of are big said the helps to for We’ve to video on service our our want security and we the new business knocking video still been easy lot high us. to The get video a that quality growth attractive sharing product the easy get have we’re a and should and the going and should still indifferent several bundle off. priced, sell and service that be to provider service high in it thing going password is to products of years a that integrated the video about financially develop that business, down the a we’ve it’s sort continue on it to big video with sell trends and And relationships. available free All talked serve

our our how are our making us to I trends think they video So rate general but customers. and fast. I question of opportunities probably do issues what customers going the declining as convert is customers broadband along have things where we decline those we satellite for at effects but there on into it the think that operational them to are And with is our and with stand our those the in is macro company Yes, the on the continuum and performance mobile are emphasize begin video small to the in packaging? game,

our is operational said. appropriately a of so for based I And just But internal we in everything think creation. it’s tactics prioritized us that video driver still on terms in customer

Philip Cusick

sell first. obviously So a new broadband customer, you to a product as

precedent taken versus have to some seems process mobile in Now video. that selling

Thomas Rutledge

a mobile overall of nature as individual the And but of I takes has ramping operation. changing our mobile’s whole is play price our mobile. our and components. really it us video important mobile play relationship value of it we’re the the triple we’re of But relationship. wouldn’t And triple the – say precedent own and they’re to drivers still as its performance important us. the to But a impacts result important of into

I prioritize one the And wouldn’t so other. over

Philip Cusick

Tom. Thanks, Got it.

Stefan Anninger

Michelle, take please. Phil. question our next Thanks, we’ll

Operator

Guggenheim Partners. from comes question Mike from McCormack next Your

open. is line Your

Mike McCormack

And just Hi. could not walk on much year? included you impact sort where on that’s presume you XQ is comment. How I taxes contra-revenue plans. accounted the for? does that And we have quick expect and the the buyback, if something balance secondly mobile line? in to the the fees noticed in of Maybe should I this of for Great. through then a said being profitability? pace Chris, just just just of guess, are I Thanks, an staying Thanks. continue it’s guys.

Christopher Winfrey

Sorry, what was the that second you question had?

Thomas Rutledge

Buyback pace.

Mike McCormack

The XQ buyback pace correct the staying in rate. run is

Christopher Winfrey

so So on our operation new always to was really profitability, was idea all-in a [indiscernible] It objective here, it had of implement that the be taxes it. part and plan. wasn’t fees been to able always something

you’re be at $XX thinking gig in and $XX that our would it new existing rolled our ultimately been out pricing had thinking customers always outlined. if So and per unlimited, about both that for to as

today. that voice our voice, plans. quarter have most of similar contra reflected about $XXX voice to So up wireline we a similar was strategy from it’s the for our to line well mobile part mobile we think runs always as of $XXX with our been our had financial is product, as revenue, million inside in total our revenue. the It which other does if counted you million as products be device It revenue – today, of And type revenue. all a fixed a

the the always to So And from plans. had relative what basis material to impact go-forward was a base a just our think it subscribers, of helpful and run existing on implemented we it’s particularly ourselves in actually rate not from we marketplace to distinguish others.

as becomes we On just use along on the value us gave don’t then think for guidance profile that artificial be is target. a we shareholders. most want way had tough that you bleeds about importantly on don’t value tell working creating cable the of put better did if a target cash the of would the overall the out in particular we quarter, give the it’s the it’s then that an guidance first better inside quarter I and around side on more quarter. that the we’re place there that turn inside and to buybacks. in place give both enhancing the you to a But lack we in. the yourself the that’s to those well buybacks, provided, that buybacks is We the by And to an investment guidance we business to the investment we’ve capital drove leverage and and that number making really mobile capital to you amount comes that put guidance because factors of a first And buybacks the reason don’t extent don’t QX think suddenly the that for opportunity

Mike McCormack

Makes sense. Thanks, Chris.

Christopher Winfrey

Yes.

Stefan Anninger

Mike. last Thanks, question Michelle, take we’ll our please.

Operator

question is last for from Citi. Your Bazinet Jason today from

is line Your open.

Jason Bazinet

do to on Is is This you? us do video mind us you’ve so, on question XX? maybe licensing and unappealing is little you given your a that just strange philosophy behind you your if what of about mind box in your investment just a but still the thinking bit sort just that of that? Thanks. reminding active something And updating completed side,

Thomas Rutledge

our there. and that Comcast discussions to strategy think a video platform UI want they’d IP do to and different to down certainly it but we have haven’t at to new be be for else user if continue we’re out platform our the with that the we Comcast to about we we the us, extent had UI And want we We Well, able make marketing willing that the it XX licensing our and have we Jason, be great their them reflect to change own our own we’re best ability make interface like having relationship their we’d than can to we’ve To-date, and anyone capability. good road provider. with to and consistent platform. change we a that pace with or like and

that. flexibility sort terms So haven’t vendor check we having in boxes could To-date, platform. in of of do a of to and of been if low cost, the all we we complete Comcast terms able can become our

Jason Bazinet

Understood.

So right. it’s All more flexibility. about Thank you.

Stefan Anninger

Thanks, Jason. our call. ends that Michelle,

Operator

everyone for in Thank the conference call. you participating

You now may disconnect.

Thomas Rutledge

everyone. Thank you Thanks very much.

Charter Communications (CHTR) 30 Apr 192019 Q1 Earnings call transcript