CHTR - Earnings call transcript Q2 2020 | Charter Communications, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Charter's Second Quarter 2020 Investor call. [Operator Instructions]. I'd now like to hand the conference over to your speaker today, Stefan Anninger. Please go ahead, sir.

Stefan Anninger

Good morning and welcome to Charter's Second Quarter 2020 Investor Call. this the be Financial accompanies website, on that under ir.charter.com, Information presentation call found can our The section.

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

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

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

we as non-GAAP noted and in referring of to presentation course calculated be Please otherwise Chris to call to Winfrey, in a that, turn titles will this growth With are measures let's Tom unless on the defined with as Tom. measures, call, earnings measures non-GAAP not the specified. our other that Charter, over similar year-over-year by today's be During also and the basis we companies. today's by CEO; and all may on comparable reconciled On and materials. call, have used rates defined Chairman note call Rutledge, our CFO. These

Thomas Rutledge

have the students or our to days our June and the in connected XXX,XXX effort learning, of ended program, period Internet educators Americans Spectrum which of of Spectrum where broader communications our subscription. enabled subscriptions and a that mid-March, part things. services communities with difficult number operate already customers. communities. for on not for to for support committed economy we XX free through XX, serving during did we shelter-in-place focused remained of as These new a distant family have orders, a added to households of the keep and telehealth Internet do remote through we to pledged working, We We've welfare In customers Stefan. offer And who Thanks, services time. on the

due committed on collection also terminate XXX,XXX through suspend service COVID-XX-related economic residential who customers programs, not experiencing medium We small June economic for business helped to we and the and COVID-XX. activities XX, approximately Connected hardship also who to Keep are ended And which challenges. Americans or customers indicated

raise our opened we and footprint hotspots opened addition, news News access public to have local information, our we across for Spectrum high-quality use, rapidly connected website and WiFi ensure In up to our people our paid care and to million in time customer footprint wage our We've employees, hour subscribers. for donated XX upgraded fiber COVID-related our announcements to providers. field And services for increased of least to an back minimum to service full time weeks of at significant illnesses to committed X additional other $XX wages hourly and of next an service days additional center operations We to the February issues. to sick employees address our all hourly and COVID call $X.XX by for for XX going flex years. implemented public we X run health airtime and April workers over video

Internet second high-quality the by We quarter. demand SMB for added driven XXX,XXX We products. residential customers and continued the to perform well in our

and also sales quarter. the from the significant remained and self-installation Data at data result XX% gigabytes that the and quarter of ran quarter. XX% down June, our usage month, up to the connect we our of high-quality our for platforms systems Our April In during the automation, but been U.S.-based quarter. and in XXX customers created in-sourced network and elevated online years over Internet-only the made per about customers has and was last during ability in several digital peak, we've installations the which investments program, in nearly service workforce, and integration the usage fourth self-service our residential from traffic XX%

invest Our customers from the because recent Peak benefiting of to gigabyte. continually well created that because ahead decreasing DOCSIS remain price investments, significantly are per and that And stay X.X, continued perform and below our continue our all-digital well traffic maximum capacity. we including curve. a usage of levels network to to capacity

years, cost-efficient plan, our the XXg communities as in for invest and lower business provides customers. density lower to Over multi-gigabit rural speeds pursue we'll and us latency coming and a pathway which to our to in network we offer build consumers

we continue inside-out cells with throughput will in small for environments. and use together our by to with our mobile connect the powered MVNO to wireless fixed, nomadic customers beyond our develop and and in strategy, economics Additionally, home, our and delivering customers network

XXX,XXX We benefited XX,XXX voice which in added results. customers, significant sales both of back broadband quarter. from the QX and Moving video to

We mobile some the lines to channel mobile sales quarter. also in disruption added XXX,XXX despite our

from nonrecurring cover. grew second our quarter And also Chris X.X% adjusted free cash items a financial nearly by perspective. year-over-year. grew will performed We well XX% flow EBITDA We despite by some

currently including to year, unemployment continue we happens churn. expect products depends outlook mobile rest broadband demand. our transactions per expect impact such those customer both to long to does, serve the costs has develops. As to consumers. to may more new our for to has the and initiatives, for and formation better service relationship If to our in slow. we we and months, out factors it coming the income Household look drive we services how the have what and But for ability and on been again to continue to of due on and And government selling customers' business we pay lower than expect stimulus various support the and held to self-installation up SMB expected, for would activity sales we're slow. decline. and how In Enterprise, year-over-year, tied economy

struggled to until operations. growth premises. access and each business businesses gain it quarter, back are customers to fully the activity lower we to During to picking be normal back is Sales will up month, but second continue

advertising business and been help and we sales is by to to expect and third also and advertising slow advertising. to quarter our businesses, small are Our return improving, political supported local meaningful, Ad will still primarily have which results. local inherently which be fourth medium

put and efficiently serving results feel our value under our trajectory. financial half we been services not scale first and growth communities current it to operating and The we cable demand well. together companies In long-term for is business strategy. But for Our and would about better were have operating good performance we're our our COVID-XX. X X clear, XXXX,

our services operating ability year our new Our the to customers testament several and our both the grow this and our last products significant a of over in years. quality is strategy, for systems investment people connectivity existing and to

to been challenging beyond call I'd Chris, Charter's asked their delivered, for like time. above work, and over families to of the in go for millions turning to hard their strain easing diligence regular Before duties, this and crisis. and they've thank dedication employees this They've throughout the

the to turn call Chris. I'll Now over

Christopher Winfrey

Tom. Thanks,

driven relationships over customers quarter. over than voice for COVID quarter the grew churn XXX,XXX the impact these grew our X.X% over million by by grew time we last X temporary XX by accelerated residential factors quarter on to Wireline was XX. turning of was on when customer benefits ended our customer retention the in we high by video XX million our of COVID-XX-related effect XXX,XXX. Slide of grew months XX,XXX, net of Mobile last offers X.X by XXX,XXX performance as from and months. the Video Now X pull-through XX,XXX programs, SMB Beginning customer we likely over second COVID-XX-related Including and the and and a at the by benefiting year's second in presentation. our in also X.X% The customers. XXX,XXX same of last residential offers Including positive Each by consumer better June video. the in introduced well demand as and by Internet total offers programs. to mid-March, or results or as X.X decline again adds the customers. and programs quarter, SMB,

showing had as second for quarter. the addendum quarter offers X of the each of these in we COVID-related customer As an materials, we of our counts end did first provided the

for in subscribed off traditional customers of end the first along internet acquisition either having during for quarter, reported XXX,XXX or which the was first paying much way. our with Offer, Internet customers the the products disconnects we additional customers The nearly Internet QX. offer, are to students and XX% speed Remote new like Education looked with household. or very XX educators in free on flagship days This tier which of channel of provided these or higher. At the our rolled as XX% Over customers paid

with XX, we some free For small XXX,XXX July XX% from remaining paying days. customers the as XX or customers added more free end still churn, QX, Internet net program, the on this to offer through offer connects the within XXX,XXX And all at of QX. QX the of the the on on roll-off either of in-quarter by the program cumulative QX remained way free XX-day

revenue in continued $XX an as collections to customer for second participated effort residential FCC. been were waived as reduction practices. reasons. the who balances, of over of COVID-XX-impacted program the indicated XXX,XXX the mentioned, XX. the protected, which collection are half and customers activity service reflects which June Keep peak, would These inability with COVID-XX-related we in pay approximately to XXX,XXX to in addendum Americans paid of full. assist or SMB who recorded something, for who disconnect were category our have receivables, these quarter. in from XX% customers there were pay customers In to overdue The Connected was customers disconnected their normal a second Pledge under offer and customers at This million our -- through of And Tom

become longer under overdue as however, believe were have customer normal line QX this QX category and Early or to anything with disconnect the a We these over don't requested compared seasonal is, report a operations or a to balance. service that most result, suspension The likely practices. of an typical who these in disconnection I closed effectively a expect delinquent service long-term diminished. retain in we've customers up. enterprise may have but given an As our in downgrade more base customers, trends while of SMB of isolated programs payment XXX,XXX as on some are QX our there we'll disproportionately of customers temporary late no or good. wrapped their be will addendum addendum final customers of very in

would that free in customer accelerating, In do COVID-XX we XXXX QX, the expectation beginning and in Well, think absorbed continue programs? service second connection our and and amount providing XXXX. given how various growth throughout about So our a new the quarter, relationship pre-COVID our we was and credits. was of relationship performance in volume, of tremendous customer service March

helping was to communities difficult goal in economic do our part in customers through our a Our period. local

us expect this to actions and growth have the packages. customers us. from a in third to that for will the last. services rate connectivity a customers quarter, unemployment of And of we be quarter and Charter, our connect long-term and clear As have during is It who in compared result the high-quality, protect customer and largely fourth any better-ending crisis attractively took performance priced we a economy, function relationships quarter we to stimulus lot of benefits higher will now year the third additional XXXX,

in measured we for last success and is half consistent with second a XX comparisons, manage the which quarter comparison, year-to-date particular fourth how be our not net XXXX business. third additions So months' the quarterly of on will

Turning to the financials.

slower given rate $XX the customers in ARPU quarter by Slide driven grew of seen which were Keep of in SMB there $XX COVID-related PSU some in Keep revenue credits parts in bundle growth Connected by COVID-related million and and accelerating write-down over Americans for seasonal growth we out the trends lot includes million several onetime X.X% various X items, temporary a residential customers the of presentation. expected, laid the by Americans Residential the be mix for growth relationship of pressure. negative similar we customer grew on quarter. impact and and of today's moving video Connected plan. That referencing write-downs As and I'll the we've This have X% program. revenue quarters. created primarily

the economies the continued So driven shut our SMB pressure by X.X% things definitely the has and early NaviSite far, third and And Spectrum net side better local change declined while performance. of with actually addition wholesale sale of we've down, pleased performance been SMB year-over-year sales Enterprise if been from business. can revenue back year-over-year. by quarter the

Enterprise million includes by to extended X.X%. and onetime That backhaul, customers extensions. $XX for certain which NaviSite return grew we contract in in credits, both Excluding tower cell

wholesale, comparability operations. While X%, excluding are or particular but normal be the NaviSite be $XX onetime revenue around in our when tower goes to credits, will is Enterprise, to after QX, difficult Retail cell million until sustaining for back accelerating away bill backhaul, growing growth that the of customers challenged. continues

April, pandemic, of was also the deal which prior was tried were in sales prior reduced COVID quarter. prior hotel driven XX% to year. which XX% We revenue segment, In we've second year. And by by have exposure about some second June the declined core XX% ad sales about growth. of year. about May advertising the Spectrum of to the XX% Reach quarter with

back until the but been has fully next to trend or the year our year. early normal be core in won't later So improving,

along Of year being And benefit Mobile year-over-year. million revenue $XXX will $XXX device help comparison. prior revenue. consolidated course, will way, we total, revenue from million the up X.X% of the second totaled which quarter was in with political that

Moving or medical any adjusted and Dodgers have rights fee mobile, million increases we've mix year-over-year any We a credit. of by meaningful for expenses, by decreased by rebate clear. have games or by Programming The year-over-year. year-over-year offset to partially million $XX lost or video In connectivity and COVID-XX volume X.X% from certainty, for a upgrades, operating lower excluding payments pushed roughly and on year-over-year benefits, recently than Bad sports debt and minimal amount expenses service. billing our declined the year-over-year, was in X.X% been Tom the seen grew costs the pass RSN levels driven later that and for when growth. yet we and Costs occurs, And service of to second the benefit based and ranging $XXX rate. what accelerated season. year-over-year and timing includes higher on NaviSite. of out depending onetime second tax the X.X% acquisition, timing quarter, increased expense higher If essentially expenses will any in our X.X% X.X%, X.X% unemployment hourly driven expenses expense which compared impact. second wage to customers which the reflecting that expense. customer to expense increased record customer XX.X% in our $XX quarter quarters. mentioned, rate, relationship not accrue counts and productivity of total COVID Lakers we growth but savings payroll prior by expected customers million that transaction programming level would by lower sport considerations RSNs, flat operating as same from with did some half the $XX not was to along EBITDA primarily million volume is with credits operating the by excluding no and produced Regulatory, content expected Cable and

This revenue due the any debt the who generally write-off from quarter, stimulus better Bad going CARES to of under package. the will significant stimulus the payment bad a package customers for protection in program Act. were the benefited new debt and economy trends forward be function and

travel X.X% $XXX mobile slower a when relationship device higher net rate net in and EBITDA service in to in of and by growth tied step-up due Excluding despite COVID Cable and expenses grow lower and total, customers insurance trends grew related shareholders $X.X sales rates which totaled lower credit. and growth customer were year-over-year transaction the $XXX EBITDA to billion attributable costs rate volume to cost, marketing We due year-over-year minimum comprised second than and to cost continue expense bad at Mobile to and $XXX tax expense expenses. totaled advertising primarily Other wages impact flextime. million in NaviSite, and by device given better both including X.X% costs MVNO debt the in the mobile operating adjusted million should quarter In quarter. costs. expenses was placement variability, grew to usage to generated onetime X.X%, capital X.X% negative customer income declined advertising X.X% our a self-service of the a periods. of million. expenditures by sold, payroll associated media of revenue, by quarter, from we Cable acquisition loss revenue, adjusted including second its EBITDA Charter cost declined

didn't national capital the in continued upgrades to ahead significantly in the of including higher rural of environment. quarter shows broadband local areas. despite new slow self-installation second router Our we expenditure capacity levels to modem kits. and and quarter purchases much the disruptive construction down on invested at stay and level through continued drove we invest We build, a and second contention, Obviously, installations

capital up cable expenditures now billion be the to to consolidated as plan We in original investment the significant And relative close to in revenue may a last that $X.X not of our much decline excluding XXXX as quarter. result the expect rates. under I quarter look We year-over-year, X.Xx as mentioned quarter, cash our underspend growth of X.Xx free in percentage and billion of $XXX flow a generated higher of quarter $X.X you $X.X was quarter. cable generated with our adjusted year's versus or the billion the XX-month about We only. we at cash end net debt-to-last finished revolver. billion free $X.X as and last second million And our of second cable availability of mobile, cash, if of the EBITDA

forma Pro is $X.X financing annualized a we billion our our billion. for QX. high-yield rate delevered run long-dated, cash of issued rates. $X attractive this at current month, bit we activities, very interest Earlier So debt in recent

Charter average an shares survey to QX we at wanted totaling a completed as share. offensive Holdings we than buybacks both about units did billion in repurchased in per X.X $X.X price opportunities amount We in the During and unique million common quarter, of climate. $XXX and a of lower Charter QX we defensive

various has visibility scenarios improved. Our obviously surrounding COVID-XX to

of for long-term terms evaluate edge-outs, our our And or shares of in best remain leverage always we of capital middle generate or in probably end that the our or range. organic the such return shareholders someone use and else's purchasing investments, mobile order target will preference. to network launch We the in of it high own our as comfortable be

As I across people asset that communities, our we've employees our our a we years. dedicated network mentioned quarter, significantly local and we and last have resilient with high-quality, know invested over in the

know times more also high product demand a there's for that broadband homes footprint in invested, our our aggressively across build good continue and which opportunities. both is is out and for and ensure We in in and bad, part network ready our well to we every passings why future of businesses working

we where ready continues across environment climates the works strategy stay goal is what Operator, employees across we're states a the As well create and questions. do and economic to value. we to various our and for to operate, customers that now evolve execute shareholder focused XX operating regulatory on for proven

Operator

[Operator Chaplin Instructions]. And from our New Jonathan first question line of Street. the comes with

Jonathan Chaplin

Chris. quick may, I if Two ones,

on really Firstly, there like just it costs little benefits and quarter saw? the relates So you the specifically, subs think you on more the still you COVID-related offers. third various Do unfold particular year can color as it will think are you to but about a bit you consideration And debt how seen XXX,XXX give that us not we rest And some from of of then sounds will -- the economy see initiatives or anticipate the into that the there into interested we've for to RDOF write-offs in with you the so macro more that happens were translate anything is subsidies. registered and the environment? for churn XQ? any revenues impacts negative could guys taking that bad far, higher then in

it been recently. You've close growing close or households X% at passing to to

could successful auctions, to? If that potentially you're those in what increase

Christopher Winfrey

the in we last so RDOF, period as quiet already any and with start in first? be we've the I further one than it said to commenting a X-K. don't relates won't We're what Why the

the we and The as a and mentioned is in shot I'll place those the as the first of here vast along June all we additions then Remote And are wrapped them programs came Education those XX. through, XX% to quarter remarks, chime Tom in of and as us, that way. give were and want taken in the had at and end up the Offer, the one, them second are from of created through net may the all us and still customers the -- had so whom prepared quarter gross that actually XX% I that first with the it well, of products have additional of paying paying altogether on majority

So looks Over while risk look as ball. of acquisitions. it they flagship regular-way to Offer. put, I far don't it. them on us. that putting so attached any programs package just a the that from so And not have we've because watching good We're in see They're there's of it bit don't But are Education it of so a good and we low-tier the we're XX% then Remote product. out far crystal very far, every the as there

Thomas Rutledge

XX% process our from the profile I base, a perspective, they or voice add all through customer check are regular go like video would our that base. that mobile customers And went us the just bought they normal look customer through. like credit that just and from or

all ways So promotional it as benefit with a they X in behaving -- customers a offer of we that associated brought with that that real lot And but it in at much new create. look months, customers offer a existing are new like subscribe very and like look I customers. conventional for broadband

Christopher Winfrey

off we an anybody the We've customer. point disconnected balance. At beyond written have had normally would who balance then peak, who had we customers Yes. Keep And where the for had the gone Americans program other XXX,XXX the extended Connected. was the

million $XX So the was that I that mentioned.

the of paying those in along July, by them standing So partly had customers the because were off. way and to partly wrote because of time we some got all we been good

those off paying cycle, Now at cycled and we a sit at we revenue, paying the today, as those and were through looked they're rate. here good written that they're June that billing very

sit the so in environment, been put forward, how there And that's we COVID it in like that's economic caveat going obviously, -- amount out a We to federal we don't normally will would is of been stimulus as and going had to looks The the today, what how here going know very regular is it. continue customer and customer that fair we'd develop. there's know a it And that's we've if with don't say churn. stimulus how like. nonpay to stimulus to develop goes with look and economy goes much along

Thomas Rutledge

the And a in had we business would is big created in going describe base. the the quarter, we the they macroeconomic the see apply created base risk that way this customer they quarter to factors customer the we forward to difference like I in apply and average and that customers just the don't entire that

Christopher Winfrey

difficult. the environment And any that the you stimulus, where in rate would nonpay is but higher in business. see you if we more any write-off just of talked for later result revenue was same we that none be which programs. the No, that that'd about any a bad is extent Jonathan, do this debt? would us debt have question more for exceptional in environment the difficult economy final bad any would To what expect asked, or that Yes, and there to same isn't which these we economy year. the The be attached

Operator

line comes question the Phil with from of Our JPMorgan. Cusick next

Philip Cusick

And Or us us to then your after you second, planning? in and Can forward? into With that was inflection think the you First, video video assume return video update running Chris, on keep company strength? some can done, kind as succession coming program to going I the you taking that Tom, you we well. assume any give of trends Well, how give Board should promotion expires on year. about customers pull-through from the next and idea? dig that? normal for Do broadband contract the an plan

Thomas Rutledge

Sure. All questions. going of answer right, to your well, I'm both

if to Overall, that still small it's we grow and we're in it our and -- I several a some like would growth. So think than you relationships here, high But declined to many a changed. video regard intend would happened I faster because that's was be satellite we've video was of ratio faster. it you always happened has I thought that screens than could in enough over of would result that me, grow that to faster changed we enough video of secular with decline, Nothing me video less would we fast it the trend and -- customers enough growth Board growth growth. was share, the years, thought than All create in because we haven't trend, is grew as was to were customer front and what's said the to overall happened the you What it's video trends of that changed a changed. rate we that simple. rate of -- that And customers, grew but little -- the shift -- is but secular although have is we the I home. -- stay. the to past, relationships. of it's to -- video fast possible overall -- relationship are has overall And that really said the grow the for still if there that that continue is to decline, overall we say overall continuing downgrading last our decline at growth really rate video if just so And decline, then faster during stuck probably trend changed. here. that, accelerated people grow the In the a there period don't has our video thought not What

Operator

question Suisse. from comes of with Crédit the The Doug Mitchelson next line

Douglas Mitchelson

a So question for Chris.

I English think our reviewed opportunities else's You the on comments, on to you order: clarification with ask I'm plain versus purchasing purchase in said your used and I this a still you're shares someone being and in comments for know own. offensive but XQ, going specific

set? company's that in then we for a previously? stated? mentioned than suggesting reviewing investing different previously is CapEx at networks that you've Or in remarks should in read So And networks. and a the prepared M&A level in his the within the Tom interested the profile as just outlook emphasis previously than that that on investing higher Is

Christopher Winfrey

And thanks, Doug.

way So flow there's inside Tom said to in the since to flow. prioritization no there's the opportunities is always attractive your cash really been both I here, and most in of further free invest growth our have cash business. -- We've excess change deploy

is than would companies a second third acquire the stock. back other and buy be And that -- going, I for because that back reason which you The if rate return have it's X own And would to the first that your actually you own do, get buybacks stock. the buying the too. mentioned of of the quality enhances better be it can your order return to the

intend in -- the Tom's networks. major there views always that front our benefit It's of so. needs We of about just were I amount reiterating trying Our to in signaling inside continue having And said in don't very, well than major that well you type to on we're this in how subscribers. changed, to of capital networks. has we any position and of to And put our been a change think we us philosophy that's we of think We've that capacity comments add invest other no gotten can done see was our I haven't so very invest there's it. in advance to foreshadow increase. just

Thomas Rutledge

investing well. saying wasn't and we've upgrades I infrastructure have upgrades, whole high-quality And communications of very we the results in I in merely well, they that those States, investment capacity commenting that the market a profile serve in and and competitive and products. changing country it been us you facilities-based United was served very our high-quality it capacity have result products, strategy. Yes. were in will future the

Operator

line the Brett from comes Feldman question next Goldman Sachs. of Our with

Brett Feldman

and it demographic, the which for like look of was made is you at is you with your year came students and been that half first growth, this in it seems success a may teachers, broadband and have promo we the particularly When where one moment, the of the underpenetrated worked. the subscriber you up identified you reasons had with really

outlook You so ultimately demographics to you an other that just very that it's REO wondering a where still wondering think gap promos bit more back because then that there's there maybe same the be, with on uniquely going if adds opportunity on low to are we had the have very the also I'm with rate be broadband the broadband very you believe there to broadband is wireless and ads if the moderate whether to moderate a the have other come wider. as And wireless. to high up Obviously, relative appealing ad I the in was more were that's think I'm a for you attach going program should of are strong. what net and, result, penetration ads. half, heels

Thomas Rutledge

it promotion only that ways that result ability we find we self-installation. to to successful to our install reasons to could not just actually able but convenient time in way and the yes, And were using was for the be growth, a short order very with in the implication, take of segment of was to one those execute of faster it we if we promotion in promotional did a do will activity your customers advantage that opportunities. to will Well,

ability to to going acceleration. perspective, to to And so continually from date has to that feel dissuaded a perspective. continue pretty grow our And explore accelerate yes, successful happened from nothing -- and was and opportunities result. and accelerate there's marketing that and forward particularly that for to But -- continued we a will us continually that has growth, we about opportunity but growth good

Christopher Winfrey

to nothing the And who diminish can a to very a prowess our claim -- a pretty somebody has of household to create new... was or the think about where in their segment either, just that if who not at to It good but a student time needed you be it's claim offer an it was and it, to be demographics people attractive in out opportunity was point a broad educator, of population. own

Thomas Rutledge

of not sales was by means. any It majority our the

Christopher Winfrey

shift. a market created additional new share still drove it's and But No.

Thomas Rutledge

-- fit It it and was a the moment. nice

Brett Feldman

the broadband created of The wireless quarter second in other wireless could half net the adds as we the year, video question indicate tied had that voice also that the second a was growth. adds this if or broadband And that function we were whether less to would similar growth? of be less

Thomas Rutledge

think no. I Oh,

Christopher Winfrey

either. don't I

Thomas Rutledge

and with mobile of and customers chance get often attach we we a for we And and to mobile continues really about new improve opportunity, to at And week tactics activity improve. how communicate results. and it's terms what a rate continuing our that business look way in to function us, our the that every rate The business the growth levels our get at a is. improvement that it's we're continuing of are relatively to of

that have And so growth expectations high for we area. continued in

Operator

Swinburne Our Morgan next question of Stanley. Ben comes from with the line

Benjamin Swinburne

-- third know maybe but you shift canceled. the I mentioned any some You a was give think have been there the games Lakers? but Chris, I that in impact on us do now, sports front around uncertainty, expect you or if it don't and quarter been do benefit in can color have delayed, rights the or Dodgers a year-over-year

Tom. Are you thinking your noticed, So then general. time? talked infrastructure, thinking up. be maybe of scalable ticked if about you changing sort I over should evolution accelerating just that. I know And your about not we about But curious profile in network CapEx for

ahead of contention. getting about talked You

the Are you all bring trying wireless I'm about thinking where over do has? company XXG. time? mentioned be want flow. free to you about take the think of advantage that think the if just of throwing you is wired off I tons business wondering network opportunities forward to The cash -- just and you to

Thomas Rutledge

broad the we sort -- technological upgrade to do. a yes, of our to to on we network continue was take think and It of basis way us want the advantage to relative can the Yes. in cost-efficient what the competitors provides network terms, that opportunity

lot new for can created or upgrade be take with at the demand new associated to exists to that for extent we that the network moment, a products, capacity. of And want And we products of so those to demand advantage revenue have that. new products our drive and

upgrade a relative capacity, reflection a platform that a a It's get that XXG at is don't else. more notion, And our and we general And cost-efficient we changing. very a capital that moment, than so to high upgrade basis But latency investments, of low think I efficient the anyone as our efficiently profile can description opportunity. to time. network through with allows to see, relatively us continue on

Christopher Winfrey

the season. delayed on been on and the the they've and costs Ben, for adjusted the cash, Lakers second first will contract. this life and the varying to for first from and the driver question, the is Dodgers But your the the pushed of of the unplayed games depending RSN recognition out quarter, sport over degrees the biggest paid Dodgers be of year we've the P&L but the half first remaining amortized expense the where

year. there'll So half it's the be a catch-up in back unlikely large of this

cost receive time programming to Now extent any from programming for the extent we along customers. the to some canceled that programming to know in and applies complex. side. very between what have -- pass rebates The or are on the the on cases, to back due for to COVID-XX the programming the programming we'll networks to receive most are programming going rebates leagues. that credits same so if is do those or credits any we there cost or And extra not we're rights those the games expense we'll said line, But pandemic, rebates,

a see credit it impact, expense material put credit don't I offsetting an although could and materializes. EBITDA to it the revenue So extent

Operator

Moffett comes with from Our next question line of MoffettNathanson. the Craig

Craig Moffett

if could. Two I quick questions,

And but you to First, growth us about came now those how current benefit onto to auction, monthly with of the that RDOF footprint you absent update that profitability broadband be X.X% any footprint and from then wireless think much the offload I'll seeing much that second, footprint able business us not facilities go? the think the And the expansion to business the just context the way reduce Can of auction you how just back then the contract share traffic be go own and how variable maybe your profitable do your path of expansion, you're current expansion might on question the you with to from in in could a RDOF you can view costs? in could year-over-year? general. for how fast

Thomas Rutledge

construction of that that Craig, Well, this And growth bulk meaning to new well, we're X% regard -- as at in home RDOF, is a and our with in quiet but period new point passings includes also, rate the time. creation.

So...

Christopher Winfrey

it, just count those as -- what maybe to are on you passed to homes And add marketable. including are

about So up building year. you're even without picking construction, maybe we're a extent XXX,XXX, that the additional XXX,XXX homes

broadband time, to it driver quarter, cumulative of been snowballs. enough from that's so our penetrate over of driver overall what we've adds what a think obviously if but net it's big as -- about a It's should a for of do over the been vintages it's our And past being a a the hasn't you prolonged net those over effect year builds construction added time, you hasn't not up you inside done material standpoint. it and period to But add construction. as start it growth. of as But

Thomas Rutledge

activity capital were first in the spending on the planned -- over second investment good were what similar it's they And It's time. were and quarter the to for what quarter. in returns levels they

didn't actually down. construction in And home the construction quarter. So talking I'm slow new about

Christopher Winfrey

always marketing subscriber on so profitability our under that it be already model, our Craig, on if that wireless, even cost above where to marketing. the we're breakeven, growth, offload acquisition, be you and going beyond around We're of even. that utilize. provisioning cost, new going academic of sense And lines. absent no be million changed. limited would continues would to a expectation we're point scenario because to a the no business, the views break-even WiFi always dependent That's customers, of our you that any no not and had rather bit it, be a additional that the X sales additional hasn't fictitious we selling But break or of gives

Thomas Rutledge

We're rapidly approaching.

Christopher Winfrey

approaching. Which we're rapidly

acquire payback customers, and single it that good. you But any money and acquire. business, economics are positive we of them to on costs have the they start-up going a every So get of subscription like one wireless

in profitability hasn't ton we've the past, which way, don't the along so a that To we're And our changed. even that extensively to able but rely extent the would improve that. that on on about views the better, make economics talked the we

Operator

comes question Bryan Bank. of next our from the And Deutsche Kraft with line

Bryan Kraft

us What's and motivation for Time the X had Cable the FCC one caps Charter Tom conditions peering. the related Warner the XXXX. the request? of one future? behind then, how I on deal granted, if could the requested thinking wondering give And if usage the color updated and about you Chris, it in on to waive just paid you're capital data of recently approval how for business I And working some impact was Chris. that was Tom, that would

Thomas Rutledge

the the did we when was a agreement with FCC, had it agreement. Bryan, X-year it So --

the change no because the marketplace away go my to in as indicated terminate market in automatically would field just wanted in or of marketing did, conditions the provisions -- was it ourselves from perspective there -- didn't it's or any goal a -- X but an that in we as never strategy have view were And on caveat strategy those relevant. get require that strategy request. same put opportunity all playing our to we product we as a years, years if because to housekeeping, wanted us But even those So our describe of allowed conditions X that agreement and there I and business after result longer competitors. those our don't

Christopher Winfrey

a XXXX, of project, if standardization down taking place, which or of were unique capital. years, And meaning some year billing had Bryan, that the and all-digital big were the about XXXX the we last think working was -- the which items -- on you on hinted past whether both wind it pretty impacts capital, working X there

have seasonality. abnormal been year. springs the inside large due We quarter had do that. this We like haven't anything That's to

are standardization when positive by You that To that of then. where collections. was in working a million saw magnitude, there had about driven days you negative to an which we year, that we had inside QX cash billing $XXX day we one Last talked give we order X of of contribution of a capital. collect

quarter little the move inside of of collections. your both a full to a And around timing your year payments, programming a and the timing on based so for of it's going bit

ourselves abnormal. give say don't us and flow capital a own driver be no here this positive -- on And to to negative a expectation. by forecast should to million, us I hoist whether that year cash or to material it's want cause our a major is few petard to cause going free this there's change than be our so And working other not hundred my it's year current could

Operator

Partners. Our next line McCormack Guggenheim question Mike of comes with from the

Michael McCormack

if disconnects? And don't out process come just a the look Enterprise. you on different strategy. are last going months any decision-making? behavior ecosystem. own the those X.X that then thought seeing pushing programmers? delayed of Tom, at comment in mind, Or And programming at X quick a the are, customers last different XX Chris, on your that subs I one maybe behaviors or just there is guess, for about then cohorts? versus When the I customer We're are maybe Is million forward, against actually between on seeing you content guess, the it, that does SMB there risk. change How you cost weakness And thoughts maybe one video the about of side. consumer back obviously, Enterprise the piece your in just

Thomas Rutledge

question, last decision-making. it's The Okay. delayed

Christopher Winfrey

most office. money get to Spectrum. sales, getting hasn't and in change more to businesses a depressed, it's amount to take... been looking People making I'll -- save until still where a going the Maybe normal to back the the they're be people of picking and We're enterprise providers probably not it's to And large and environment. they're aggressively move fair their back every been enterprise, extent in are, IT time Yes. it just But normalized and operations. businesses it's up month, to

Thomas Rutledge

There's there... opportunity

Christopher Winfrey

is. there Yes,

Thomas Rutledge

enterprise use and telecommunications forward. in going services -- products a potentially enterprise different will that their and In infrastructure creating way, new for

long in think run, So the I there's more opportunity.

Christopher Winfrey

Yes.

Thomas Rutledge

around think, for a or the thought whether the of question. not stance aggressive on programming argues the I of and ecosystem whole question is implication process not, or The sort more your

at there'll that's some the point, bounds some occur. reason be of And think and somebody I oversteps breakage coming. of that will sort

Christopher Winfrey

You to SMB. residential asked for between as customers and had difference at-risk the about also relates it nonpay

because I product we of we On it. high It's side, attractively and of high do that -- to demand, -- And just the have there's And product environment be And to going that mentioned, we residential of go. stimulus, value way there's paid in the priced. It's don't we of for have where bad if because pay. some to the tend is amount demand environment that economy significant a ability get an we even in the that's provide. It's operate, the we around all quickly competitive. question of attractively in a where as uncertainty people's of economy very highly that the does that's a you packaged.

in that are people front. flow space you open better along their an the faster So for economy they're that's business not or it's environment, open and market for that argue would on Otherwise, they're to in long really of SMB looking they of perspective about the how residential we really our think sustain stimulus. face if not we the liquidity for us ability own from way. in that how -- the that's could actually the for quality and whether can gain And business, share at the if business. being uncertainty our question share SMB, environment not a products is of the prices, how the products level and go increase of -- where

Thomas Rutledge

our last function shift products. underpenetrated in than that is and in are said function. Chris -- And sorry, residential we also over businesses used Yes. we're share a SMB, to continues not Chris just best upside it the have there and And And from that's perspective working, a it's and SMB bigger that back is but so share accelerate a our year. market

Michael McCormack

were is percentages residential-only a And that Chris, as that number that as out laid you you those that far to? those referring are paying,

Christopher Winfrey

percentages of I remember today. lot a to gave because trying which I'm

I So the... gave

Michael McCormack

paying XX% like are something. figured I

Christopher Winfrey

the both. both. unit and at -- residential of it's look space, we was SMB. the you a residential. That vast heavily take weighted was if No. vast, residential It was provided, those those in the vast it majority majority the in so But were towards addendum of But customers

have making making And been full XX% some so XX% the SMB. -- included payments, those half stats of and or included that which base about total partial of payment, customers been payment, had and -- including residential both of

Operator

line question comes of our Nollen last from the And Tim with Macquarie.

Timothy Nollen

what to just like numbers. of services, that come some doing. you bit as somewhat to skinny more are I'd to OTT back of bundles think a rather your a to video competitors offer appears strategy some more the bundle helped if I numbers than by you wanted are be OTT offering ask your

Thomas Rutledge

are in have a including yes. traditional Yes, run, and the minimums that deals our The of what -- video answer with skinny the programming long required in of required because some the penetrate a products, contract is can way range the we language And bundle. have in in the we extent, of distribution a to bundle. the the works, big packages minimum limits terms

not But successful and the challenge in is all of we've balancing that far there's us gone that in answer So been a yes, so away. video challenges dealing the for with. in have

Timothy Nollen

is you that offering? be or away OTT do going offering you're stay something types of within from? at looking might to Or And some your bundles video one-offs think you

Thomas Rutledge

additional I do mean to fully are understand You willing question. mean packaging? we you I'm -- your not sure But

Timothy Nollen

skinny but than offering OTT Yes. traditional terms bundle. offering an a bundles, skinny I'm bundles linear things about an or in linear rather from bundle talking of a not like or skinny OTT service network

Thomas Rutledge

packages or see Oh, even more consignment we don't necessarily OTT but absolutely. I us on that you'll packaging more a basis more own potentially a Yes, Yes. on selling a And -- product think and basis. of

Stefan Anninger

Thanks, Tim.

Christopher Winfrey

Thanks, Tim.

Stefan Anninger

completes that our Operator, call.

Christopher Winfrey

Thank everyone. you,

Operator

this does Ladies and call. conclude gentlemen, conference today's

disconnect. now may You

Charter Communications (CHTR) 31 Jul 202020 Q2 Earnings call transcript