Earnings call transcript Q2 2023

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Operator

Hello, and welcome to Charter Communications' Second Quarter 2023 Investor Call. [Operator Instructions] Also, as a reminder, this conference call is being recorded today.

If you have any objections, please disconnect at this time.

I will now turn the call over to Stefan Anninger.

Stefan Anninger

Good morning, and welcome to Charter's second quarter 2023 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

to We call; however, this cautionary statements will on not review encourage those read you risk carefully. factors and other them we

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

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

our call, CFO. and today’s Executive Chris CEO; Jessica Winfrey, we our Fischer, Chairman; President On have Tom and Rutledge, our

the turn let’s call over to that, With Chris.

Chris Winfrey

Thanks, Stefan.

and benefit quarter, we During our to XX,XXX expansion One customers, continue our the second network offering initiatives. we Internet added Spectrum from and

of next have meaningfully mobile and total quarter, to mobile grow expect mobile our the XX% second of years. X.X At end penetration over million lines. had We XXX,XXX Over now we we the mobile customers Internet spectrum several also added service, the lines. over

convergence extension is the increasing and our we WiFi further of connectivity an mobile service. Mobile as expect service, see will our Internet nation's growth. capabilities contribute and seamless Spectrum lines to We mobile fastest

in start which the our second our the later of investments XXXX, year. maintained benefits EBITDA initiatives growth despite employee quarter, the with significant will pleased we generating growth through We're and performance and this progress made we

on each focused each and on remain remains and designed of grow business of strategic evolution, expansion We initiatives: much to which three help which our plan. very execution, our us is key

and evolution plan benefits. us is significant network Our progressing well offers

First, demand. it our will or with fastest and competitors everywhere our maintain operate, even and in allow service with front the per Internet us speeds XX, symmetrical via claims speeds to and ability on XX second customers WiFi XXX fiber provide X.X to multi-gig and we DOCSIS of gigabit

path evolution our spot years, cost, savings and low upgrading fallow downstream and amplifiers capital which actives over digital, future maintenance to from creates time. very by all and and operating nodes operating we at for lower upstream optics a expenses This converting of also was capacity driving capital. and node funded and analog much the lower And cost

the scaled companies tremendous who prioritize deployment software deployment home spectrum to create will for is developers new platform amount our their telco product ubiquitous for footprint. of to upgrades, low provide Unlike services. entire cable of latency, nearly footprints The across industry high is a more each compute attractive bandwidth-intensive, and our

our into what has always capabilities future. deployment is lead will approach competitiveness at has development network This the unique what our that done new of cable into And to of the uniform scale. technologies and is maintain networks

the for evolution and good serve, is it's Charter. for we network communities our So good

in capital execution So has of on are well, far, target. gone coming upgrade costs physical the large this and

benefit continue the savings, of to $XXX spend expect network Excluding per to any we passing.

marketplace. connectivity performing It differentiated offering well offers the in converged to fastest also Spectrum features evolve. is Our continues includes product and the One like

network, and Mobile WiFi on our product. which Boost run advanced each of Speed Spectrum Mobile

over at the product, with XX% their mobile customers offers homes, with which retail. significant unified for upcoming linear and our promotion We're market-leading Internet the savings content reliability lower of will the customers industry-leading Mobile excited XX% video outside attached Xumo with customers discovery. to for access now of over both speeds all pricing release I Today, an of and DTC to and have also more higher be Spectrum to and cost of One search WiFi of our for product, their providing Spectrum customers to advanced customers platform believe with network our Charter.

trials TV later linear currently this in Spectrum and We're the we MVPD field on year. our our service platform conducting viewed with in video Xumo streaming app, track be Together most will sales. the US, product, remain new the go-to-market deployment for for

expansion subsidized rural fastest-growing plan. passings with a continues is pace in Penetration rural construction in the initiative and subsidized also than at grow on planned. gains rural the largest to Charter Our nation. better is provider

funding. us Our positions for local significant infrastructure builder scale and reputation rural as funds, state hope well a BEAD winning and we additional and

rules NTIA BEAD on from Although recommendations the funding and

rules deployed by states which operate, government we'll stakeholders to with a the programs reach currently successful the conducive still place investment. from private differ in are to where work and key we officials

And of finally, our and growth. prioritizes we experience customer remain driving satisfaction, committed strategy, which customer core to operating faster the execution

sales better better transactions We of training the continue employee our see and retention, to investments service and benefits higher yields. including in tenure, quality

intelligence various Charter to a customer There's lot models. been the machine reduce what discussion and service network business learning in learning service increasing products machine of and already across improve forms platforms artificial uses advanced our about will and analytics can transactions. and stages and Additionally, digitization sales, of further do operations.

and will simplify and to improve ways both lower they and continually our in driving receive And sales service to churn lower Ultimately, AI, for in enhance transactions, customer want customers how enhance our cost learning we service for AI tools efficiency employees and service service digital where continue to years their employee and physical that to fewer and satisfaction jobs. meet come. by operating and investments expect our machine

creates of most successful our that packaging very our difficult on network, household to And products, long-term put, value our with which Simply running focused the is that replicate competitors is the and strategy that includes for lowers in more industry's business for creation into across service, we which operating on acquire to for then strategy value operating customers drive great get having each and cable for combine high-quality pricing our investors. is founded more Our increases serve. customers. competitiveness investments to two and more which cost products penetration shareholders, our also so

serve team to value We the creation and execution for great long-term we're will drive significant at for good and this we is we investment Charter, employees shareholders. believe in have disciplined a which and operating customers, strategy, here committed and communities

I'll call With Jessica. that, over turn the to

Jessica Fischer

Chris. Thanks,

Let's second SMB, Video second year's XXX,XXX, turn to declined residential the quarter slide to and $XXX,XXX declined versus Internet XX,XXX in our lines. we in period Internet the X. disconnects and by the on from year transition and by wireline prior added when related customer in ACP. last XX,XXX customers EBB customers to quarter, the added excluding voice mobile results XXX,XXX Including we

fiber better from continued was churn improvement yields quarter. footprint quarter year-over-year. record success second a The Internet our Internet product, rural initiative, tenured Spectrum the remained employees additions slower net near the construction in overbuild Internet and during higher from lows for year-over-year and gross by sales our our of tailwinds One driven additions year-over-year. pace and in of the improved flat

Despite activity very well partly driven pre-COVID the low improvement rates. overall year-over-year remains market move adds, below net level, in by

competitors continue impact fixed also price-sensitive of access from residential some We SMB. customer see to wireless in segment the and

the in The of majority percentage the coming quarter. quarter. our higher what saw product from to than perform continued to mentioned, first of and existing Spectrum Mobile continue in lines well Chris new As customers, we from continued to increase though customers come the Internet new was lines

mobile portion usage as One the carriers sales. and promotional those same lines $XX a point, as expect additions as to customers. of from quality retail of a today value well gross were much essentially launch prior And other with good despite we and at lines Spectrum price to long-term perform the our on unbeatable Important they the are higher

and with accelerated expect continue subsidized passings XX,XXX subsidized passing the activated new rural, to growth XXX,XXX rural rural Turning year. this to passings quarter we in approximately

planned bills. costs our have coming to necessary are equipment supply as and and in execute we labor, Additionally, the

We continue additional on subsidies. to bid

RDOF, cost to passing now for over cost over won passings million of build $XXX a state net a and we've subsidies with in of addition per gross billion Charter XXX,XXX approximately to of In subsidies approximately $X.X $X,XXX.

to As conditions. bidding Chris mentioned, process, also the assuming look we regulatory forward right the

on Moving to financial X. results, starting slide

rate packages growth base, relationship accelerated non-video step-ups, Mobile. declined lower offset customer Over customers the priced by revenue growth per mix partly customers Internet, promotional partly customer within higher and a of churn. customer X.X% by by X.X%, grew driven new offset year-over-year video by residential given by of of and our last rate Residential adjustments with growth year, the video-only Spectrum

shows, X declined year-over-year. X.X% revenue residential Slide As by

Turning revenue customer lines grew customer. monthly SMB per of to of a number lower-priced X.X%, voice a to primarily revenue packages higher lower commercial. due customer, SMB offset growth SMB SMB X.X% of reflecting mix by partly video by year-over-year, and per lower

PSUs by X.X% year-over-year. Enterprise revenue by was grew revenue, excluding wholesale all X.X% by grew enterprise up year-over-year. Enterprise X.X%. And revenue

due Second revenue. political to XX.X% by less revenue quarter declined year-over-year advertising

up revenue X.X% year-over-year in down second mobile year-over-year when X.X% offset advertising sales. X.X% by capabilities. And excluding revenue driven advertising partly revenue year-over-year due higher grew advertising growing up market by was more consolidated Core and our XX.X% year-over-year a to Other quarter advanced was advertising. device challenged total,

video expense programming partly half to by Moving offset - quarter, the in packages, by programming lighter 'XX decline by operating or on Slide In due rates. mix the costs expenses a year-over-year, X.X% of year-over-year. total EBITDA declined year-over-year in a of $XX grew higher adjusted to million by customers and operating of X.X% Programming higher X. higher video second X.X% second rates

saw offset and primarily first higher sales, per driven of other revenue In XXXX, more in direct device costs. to the to ad sales mobile cost other the we expect increased growth XXXX. cost costs by lower by programming higher year-over-year of be growth partly Lakers of XX.X%, costs customer video in now we RSN games driven by the by mobile second similar half half

to customers by is more compared year-over-year, service additional build employee lower increased and lower driven by skilled workforce, and adjustments Cost in lower accelerated which debt. transactions per resulting frontline customer benefits activity offset Spectrum and XXXX support structure, attrition partly job pay of to service improvements, longer productivity bad the a to to growth by to and Mobile, X.X% tenured

at declined quickly the In than we expected and the attrition last quarter, mentioned employee in overall our As discussed more we hiring now with half increasing year, given programs overall first our lowered of quality. this has we meeting. and is headcount our normal normalizing our investor December we tenure response,

tenure service to proactive and digital to as in of to additional see continue investments. continuing expect service we result efficiencies cost customers evolution a network term, transactions, investments, our and service Longer maintenance, lower service

and expenses X.X% Mobile by primarily the grew by and the expense, costs of offset accelerated grew year-over-year favorability sales and channels mostly Adjusted by costs. quarter. insurance by X.X%, labor across declined marketing X.X%, by other in driven Sales by driven higher in higher Spectrum EBITDA staffing growth

income We than net last on net year shareholders billion attributable quarter, billion in $X.X income interest to EBITDA X. more the additional from Turning with Slide Charter to $X.X offset generated by down expense. of second adjusted higher

in quarter Charter's second increase greenfield quarter construction residential driven Slide Capital year's $XXX billion spend increase the second the XXXX expansion initiative of expenditures line selling by in in The totaled which last driven compared spend in of continued across second of network XXXX. rural second extension and quarter, by opportunity. totaled $X.X to and The Turning and higher the was $X.X commercial $X.X XX. primarily and extensions, above on to billion. market subsidized line billion quarter million was

our expenditures, quarter upgrade extensions, quarter $X.X due Second the compared and higher capital primarily of excluding information network due primarily XXXX. initiative, spent billion system. to capital in rebuild more was support investments in to $X.X evolution second technology to We totaled line billion on

we For $X.X and continue line billion expect capital be to the full to billion. extensions between $X.X year, expenditures, excluding

expenditures as decline expenditures, capital XXXX completion thereafter. the should evolution approximately to initiative at our line we $X or of extensions reach percentage billion. end XXXX line below expected XXXX and capital of And expect revenue, a continue beginning the of Following the excluding levels XXXX, to extension to network decline of

we And outlook to win continue and at XXXX capital otherwise spending, for expenditure look We or to assume and to including extension extension line year. XXXX CapEx per XXXX billion $X our additional expect similar to XXXX line for approximately rural commit our XXXX BEAD. funding expectations

driven was we quarter cash by expansion generated The the initiatives As second our and network consolidated Slide million free of XX cash XXXX. higher versus decline higher full billion became in this $X.X a shows, we mostly taxes cash $XXX as driven by of evolution year. and last in taxpayer network and flow quarter CapEx federal

quarter the $XX.X billion finished principal. We in debt with

as X.XX times times. stay run current of at quarter, ratio cash to rate end $X.X of is below last XX-month interest our annualized to second of EBITDA was debt X.X the of leverage high net Our range. We X billion. just the And target or our intend to times adjusted end the

repurchased Charter Holdings Charter quarter, about the share. at units, in During we X.X an $XXX million average million shares totaling of $XXX price common per

quarter, the significant in step-up - While on growth take we business the you goal which execution in labor by operating when advertising, long-term, noise the even were our political onetime focus a now. grew that noise despite business is efficient When leverage you investments. to in means in is grow our year-over-year the take and from ads the from political mobile out more driving the EBITDA X.X%

And the XX-year we realize improve later we employees the will customer and lap mobile our last believe year's of labor as our we begin in benefits with as revenue QX year step in and lower financials service Internet in additional investment per that cost growth move up. showing will into and

maintenance. expect also the from to improvements, and like benefits operating programs benefits Longer-term, further We're we network future. see proactive in continuing of for poised well expenses digitization,

Operator, ready we're for now Q&A.

Operator

We'll Swinburne Stanley. from our Morgan take with [Operator question Instructions] first Ben

Your line is open.

Ben Swinburne

and will it think morning. one Spectrum start activity sort probably us Maybe indications guess for to later will externally the year, of Good the you questions. see first roll-off One be I this first, Thanks. all sort of the expectations go talk first lap what you that of are maybe to of how two sort guys I wave and if of guys roll be through off. if as impact promotional on could we you know your what just should expecting approaching don't about churn, I you any. of are or that or promotional

know I just there. guys wondering was new with we you about And you video on spend the minute going have but then, don't RSNs your of a Xumo talking changes sort sort these I strategy calls, and about talk also a you've lot on of if typically And could made?

should capital these Obviously, should of of we of et this the thinking be whether be revenues to coming in about the about we down, business don't of spend on. And terms just changes anything thinking that there's part financials, time on strategy or of your implications big intensity set-top kind tend box cetera. a to we lot are a

there. So Thank thoughts I get to wanted you very your much.

Chris Winfrey

lot there's Hi actually there. Sure. Ben, a in

on we October beginning at So year. launched last One, One Spectrum of started the we Spectrum -

on these And think beginning you through Jessica's so then. comments you'll these start the customers. is good dates the really The remarks, usage if prepared And occurring anniversary are have in high.

to if get as a see and marketplace, look And at And that's when at difficulty even think WiFi going and quality you product marketplace. to anywhere that just retail that you put else And through the mobile can't stand-alone, inside that together, get $XX, you any I Internet fastest you get you that with to pricing unmatchable. can't can't have we're in the the don't product, roll-offs. managing mobile reason mobile those the it have pricing, at that take

I but have customer Now sure handle that to and doesn't that make to think that questions, poised you're and sticks. you'll address evaluate mean it

year, We'll through beginning did August. in in this some late testing. also quietly the do time We and have marketplace last July

have in reactions way. have the perfect we of through scale any small the quarter that we as the So from we'll this course customers go opportunity to along

do set think that up so I And well always have. to we're

a found material of good to but providing small we're potentially, I amount a think we so going quality position. that and think it's we're value sticks. the I in Could and don't be turn given I we have And in the something that think

I to a product replicate I value things because the but I we're that don't branding and stick, to customers. think seamless structure have marketplace. try be think really seamless tied capability in and our today, I think and One permanently connectivity And to end-state will is our know we well and and marketplace none working that of technology going the very Spectrum can a the convergence It's that and platform. competitors will connectivity, continue in

that in packaging hasn't of that tried video we losing amount we've wisely our use a that products, video to least the two we've there One On is have and that pricing change that video reasons. in fundamental that strategy, been The of way a to We're to our will to do is of any competitors. or able for strategy. customers peers reason is been and consumers stick. valuable create flexibility,

think think a high-quality I about have our you secondly, we as video And product capabilities.

want majority the live video if that And if TV, want is inside multiple across on basic, you across sell, your want want content level or outside you or DVR, If who the provide demand, Apple many box, home packages, of on iPad you which what we those Roku, expanded can no all want of DVR of marketplace. home, the there's you Cloud breadth that the if smaller not things devices, exist. set-top and TV providers functionality you of that

take for pricing. designed been The The fact that people good the price. issue And that time, watch in required customers majority or same may value vast and at the has necessarily the the and product have programmers is not provide marketplace. us the to and content of is increase

at so the that strategy environment. secure of they've priced in lower a programmers. talked the out around same at past, the a of through a about content customers sold as And time, gone by you've large that we've the marketplace number less And in same and price out

business. a for same content, the creates the that structural problem devalued they've So and

ability be the good, content in to security have and had more packages we of that we and better to to good that We've always programming customers. had the marketplace programmers of the sell would us. that be in But get thought video that is that these create that for if will we obviously, would leadership a the take it space ultimately program the could and amount for to It’d able fair for be better environment. be

achieved rolling of was prior that environment, that the packages. is select the already entering you the for and which Diamond significant to with we've a our majority versions restructuring into found the part had of to we in created we out asked that flexibility the And we're What RSNs, expanded space capacity RSN basic have with across the the country, of our vast and question

RSNs. We'll shortly, without doing which that be I exactly does just what described.

us And as And enables who lower to a think have those for RSNs have are packages Lakers we about just a And you video. flexibility. our in ourselves, ourselves deal we sell we'll the announced not I interested then did because cost video and the result, that we it more or RSN an that medicine. if own in as took with Dodgers think

we to app, We will the be And affiliate our affiliates, launch marketplace, available would in same we increased it a the flexibility and direct-to-consumer customers. own that at but including DIRECTV announced to not just but time, an eventually dramatically. the including to all

some that's both more flexibility to sell affiliates and to video. for DTC think access well allow the us the that could create We as are valuable packages consumers have having as to a model, going and actually forward legs that

of a TV without is an video already. other box, extension of doing Apple Two-thirds about set-top to that are they're Roku, been what going Samsung platforms. meaning on TV, sales today really or suggested we've Xumo our

have place DTC and which they services functionality venture to, concept a that all SVOD where their and for unified Xumo an entity, discovery ownership better today a around in remote. Xumo was customers Comcast, single exist independent the joint linear a search And with is can and with an voice integrate of with in through provides

subscriptions to over so as be our choice provide some expect ultimately, of to customers well. platform And us that time will And that broadband our video forward. to deliver I to going

customers the I And we customers but that Xumo think services through our can video level provide to our of independent will be platform, our an connectivity functionality to provides good for as and packages. it also connectivity

financial box result attractively set-top our change where of we've will expect I boxes well to don't capital any as been outlook been from implications and expenditure already revenue customers as has historically that the an of be a for path So material that on that. this had priced on for We've the a decline. through as equipment us.

kind of continues that So this path.

So I are implications think the not that material. financial

Jessica Fischer

the Yes. sort video And in we're said, to that lose I been And money of product been time. has our not - that video. being willing mean, position margin from has has over shrunk the

way still is to of some so financial we in that's And sort that business. believe or that our do we margin the whether generating customers. provide overall, in the can want, continuing the we're but ways to for having of to valuable return and seek to we the products those the to in product package it ultimately, product We're that box continue way try people in out set-top revenue continuing form defend while that

Chris Winfrey

And accelerate the video can our adds path the the the cord video it's because good customers. or adds us. have customers to for think it ultimately, programmers stand-alone product. at of But good price package find at for way, much trying we a to point it and good Look, pace basis. time it's indifference. values opposed on it's We the we're cutting if connectivity value to we think as a right a And going. to committed continue over and better flexibility platform to services having for for think it's it's forward near the we to We're to

Ben Swinburne

you. Thank

Stefan Anninger

we Operator, will take Thanks. next please. question our

Operator

Thank question Cusick take you. next We'll JPMorgan. from Phil with our

open. Your line is

Phil Cusick

of Jessica, of line the and in business? you. the way of into all-encompassing the be CapEx that by rural extensions margin normalizing? initiatives the will the Can can and XXXX, the costs you headcount. Thanks you about those quarter. that sort impacted regular XXXX? of and us of into the headcount Thank cadence in And in for How so guys. and trend A then year expected year talk half remind mentioned couple. Nice balance second you

Jessica Fischer

Yes.

regarding side, call So to outlook that really the and first the expense expense outlook hasn't changed. the during sales in first, expense some that gave growth marketing cost - Q&A on I and quarter service investor and

have third aside in about costs in other corporate we'll side. from But we the trajectory to I think QX already there quarter. I be that, think comp expense on because lower expense the a in difficult have said continues true were the what

In capital initiative across expenditures the business. year, terms of than would and our pace I consistent construction is say, the rural now, has timing history spending at of more a the been

more I would so you front for the year And somewhat loaded of than saw our year. see entire think the you was outlook year half a year it CapEx the to in into often relative what this

I that seasonal network of and in sort overall had I have what seen because a other the sort in that see you've in back-end that CapEx previously. just QX that what greater would loading pace that might level keep the rural would of business year. continue less we a The the on across have continue do time might past. pace base than the to you evolution level over has - the of into expect CapEx in expect build trend of quarters, at that into seen of been And a next consistency you've activity, as we'll more with than build of will maybe us the well as

Phil Cusick

Jessica Thanks,

Stefan Anninger

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

Operator

from UBS. take Thank Hodulik, you. our question We'll John next

John Hodulik

questions Thanks. you. for Two

data. price the think increase increase? it's I comment recent you could First, on on $X high-speed

is previous back base? get the that if you sort price do of enough sort it black. could per First, to whole into the to Maybe you increases? revenue across of compare customer think And the it's

one. number of sort that's So

ACP number And guys the any way there program. over-indexed Is to two, you you

could size large of as within potentially time, you become for does sort Thanks. we the about through a guys that how little base And go process, growth? in the bit. terms that over strategy headwind us of broadband terms for talk in of that a it is

Jessica Fischer

$X, increase in opt who retail overall or is flagship change Pay a customers, Pay August discount coupled into in currently their Auto new see above on Internet for are adjustment price Internet. the it's and customers auto a who Auto of with $X pay but a for price won't So so

lot in we rate a April XXXX QX, video expenses. programming lap If move fully on of There's going which into we'll the adjustment, included ARPU. pass-through

there a headwind You'll have recent price on continues that's that mean driving obviously, the per I reduction video about going you trends, I It's that lower-priced similar being from to customer the customers And forward. mix non-video basis. ARPU lighter think, tiers August talk the and in when really adjustment that. and of

November And see be roll adjustment. If of offset the But into move QX, by the factors start other to Spectrum you'll continuance I promotional talked you on that sort about. off. have will the Internet-only lapping the XXXX of partially that rate

So I in think that we've had fairly consistent growth ARPU.

it's in immune business we've inflation way tried We take is prices never mean penetration good have and our to have because If of the and you on to look impact to do, sort ultimately, price. doesn't try on aim But strategy where competitive that at think, to the we're based market, the sort Internet I footprint. just our ARPU I what that grow growth. but a it And of prudent is do in the adjustments appropriate, of that we that think don't to which that's and to

consistent strategy. overall with our

Chris Winfrey

that promotion, the anybody somebody on and pass Jessica or John, through. it think only who's on is auto said won't a $X would pay, that extent already to be to I it the would not comes apply it it, retail but

and on end. to using material House ACP, strategy that On respond is White to - the of this Congress our in it's program. the the not So the from ACP FCC governmental request

providing in stay times of coming at as of And existing in through that successful for the - market to nonpay local the be into customers we've issues, well broadband broadband the new and customers affordability the or space been meaning through doing I as space to churn. most income think, able way a to for the of get in out

very government, of request been we've and successful at that the the And doing

around questions well I for it's being there's support. worked customers. some it has do bipartisan those very that renewed. It think

it And so renewed. will hopeful be we're that

good I think very and been it's successful program. a

customers, brought in in and customers new went existing customers EBB customers from away, early so were broadband both plus of staying and And benefit on we've the to been through particularly many customers it's through that have you. able existing also and broadband some new these ACP, existing and it for program. To extent that

existing and The - for new customers.

We have had always programs. programs We've

case like it's Spectrum because accommodate can do and and I we hopeful at successful that's low-income the program. it renewed a back think with Assist that that in the not I'm end. Internet programs dealing that gets

John Hodulik

Thank you.

Stefan Anninger

take We'll shall next please. our question, we John. Thanks,

Operator

Thank next Chaplin New you. our Jonathan We'll with from take question Street.

open. is line Your

Jonathan Chaplin

we you Great, said, there's allocated from discount the thought can the lower thanks, would we is the or didn't as if you benefit how a guys. expected get ARPU a of wonder a November it's function Jessica a in - going lot stick in price the a with was increase than as on just different Spectrum much ARPU. the It bit theme as - across little second. One maybe looks Maybe for of you again, like bundled XQ ARPU I products. for

in ARPU really of give some of XQ, that some insight can If helpful. into us sort drivers would be you

Spectrum. your you during call But prepared benefit think comment. just missed And during then the I you're from Jessica, broadband that seeing mentioned in remarks, I the the

market, progresses us in as Spectrum is that think give can would you're helpful the and that seeing context that on well. you. pull-through effect how longer you the Thank be you If the really One some more

Jessica Fischer

made in you offsetting I ARPU is in the impact that gap adjustments on of the which that we year's by adjustments had talked you year-over-year, with the we price guess, the continue, some and the did last rate having year, lapped earlier offset point, you Jonathan, what about, have

One allocation related to of the Spectrum the offer. discount

components, the I happening this And right? the all in think of in That you have what's does is that ARPU sum it quarter.

Chris Winfrey

goes in a I also and it, There's taken in retention, the bundle amount rate there's there. too. think of in fallacy place activity acquisition, increases in with course complicated that the rate past, oversimplify course tremendous a the period, allocations, trying a more very the increases to current the year there's of the quarter that's model of

and accelerate fact think, despite - of differences. of in the the parts we're be allocation get X.X%, with of end, that - And we was in think later in I if with as some the it And can our all through we're In that. the both given share particularly ARPU growth that growth, Internet I I we pleased year, year-over-year part footprint, and outcome. taking think this growing happy we'd mix really the that very

is Mobile is - that, from - Spectrum was through customer that your Jonathan, Spectrum point made to connects new the majority is connects in the which Mobile is of existing portion One new is our effect being but marketplace. the of that coming second One, means and Still very portion through coming the increasing, of and which On coming was higher it's promising. and an a extra through customers, tied our having that pull-through that question,

One category, be essence resonate, and in wireless said, for to I for for The connectivity, about connectivity for a And think it what takes why which our it's us convergence customers that to bodes first and it gigabit well And new educate overtime. It's Convergence going to I real us can what that well for provide. Internet. seamless in bodes is and is key Spectrum time bodes iteration able well seems is, and I well. is of Mobile, think

Jonathan Chaplin

continue of think? building broadband momentum of that And to Chris, benefit sort the terms do Is percentage to increase? in do subs, this for has you you it expect

Chris Winfrey

to because too, not existing just attach for resonating Yes. existing But the for expect to increase I customers, also rate customers it's new but our Mobile Internet customers.

have so all benefits around. And you

Jonathan Chaplin

guys. Great. Thanks,

Stefan Anninger

Operator, Jonathan. we'll please. take next Thanks, question, our

Operator

take Feldman with question Brett next Sachs. from you. Goldman our Thank We'll

line is open. Your

Brett Feldman

two questions. Thanks. Yes,

lot of in earnings that how dynamics One and muted is more appears remainder season business significance of curious as of the far much a take the the topics to be this thinking than for seasonality have discussed you your about it look broadband previously. been you're so that on seen year. the seasonal we've I'm the into

as the insight year. year-on-year, you to think the being taxes taxes hoping given that lot to trend full up as cash was could And transitioned us a give maybe how likely course you you've to over any I a are of to some taxpayer. then, noted just way cash about cash were

expecting if not be are to a tends there Thank we but be terms I'm should you. XQ watermark, historically, of high what in for think nuances I sure, Charter?

Jessica Fischer

because it's be On the to seasonality of terms continues quite difficult And what of side, activity forward. market going in see that, really low. activity, including predict we move to seasonality might

yields of of We we higher success the continued pace inside Spectrum One, saw. drivers sales really construction that think and some from other factors, of of the particularly force, initiative, which the overall slower sales this QX the overbuild that fiber of or performance include our the tailwinds

results. patterns And the interpret about our less so I seasonal more you of those would what QX sort as with happened and think try to about

Your second question was.

Brett Feldman

Cash taxes.

Jessica Fischer

QX. Cash you. there of Thank taxes, cash taxes. payments inside are On two

QX are payments high you There's for spread don't those and think we've the cash phenomenon anticipate - in two are total QX should and our payments, remaining I that QX. watermark payments quarter. same you that previously cash - are so consistent with payments between of the the taxes is tax have tax given, guidance that those And that and natural other the cash any

Brett Feldman

you. Thank

Stefan Anninger

We'll question Thanks, our please. Brett. take Operator. next

Operator

our you. with take Craig MoffettNathanson. We'll Thank Moffett from question next

Craig Moffett

that subscribers can a whether Hi. guys talk norm. kids, acquiring, they be do to would Thank the coming than heard that be net kind the younger into you of I where you share your you're insight industry sure some customers them predominantly, I'm your adds from are prepaid meaning coming of are that more you anything they're new whether wireless lot to just wonder, wireless, could of non-port of you. from? about kind T-Mobile's if have And could tend discussion

particularly the about that anything you profitability reporting can discuss discuss profitability always my obviously, and business? can you from topic, anymore. margins you're favorite wireless then, towards trajectory that now that Anything And not

Chris Winfrey

Sure.

by So your on competitors that you any you compliment. take a saying I'd their about have I look, to as that time start call, earnings that continue talk

data, thing clearly, accurate. second is they're good it, of I not and really would that’s some their not producing The at say

launch. that to Jessica's prepared prior is say One even thing in at/or mentioned remarks, she the I would The is than third Spectrum the activity it level was better port of

So feel today. which not are customers we're these of high-quality are only and good broadband - the that very majority customers, we good

selling to resembled next well, over well. attractive, seeing So very and it's is the very And quarters. in the very stick product few it's we that going marketplace forward they've and to look the develop

the let was some margin, at had have conference, we your work know. mobile done your work On you we you wrong, I if mentioned thought that would

And And as disclosure some ours. so off that the changed. of Verizon's opposed that was of based to hasn't

significant October just occur the so attached we customer and those don't operating grow to of cost a we that and always just full those will customers now, yet, and of have the have have Right to And acquiring there. those beginning have we customers and acquisition, from of in start amount cost we customers. revenue the

broadband connectivity broadband to It's product competitors and can seamless the mobile be that careful product It's which their thought is product, good. same but overall never ubiquitously if that an also it want our the dragged profitability footprint. of I a the into time, really we So a is And not to product, our not, were - It's at deploy and very not across of about how it's none product. it's - of extension stand-alone good. it. be

were profitability. our the have standalone expectations to so a think the it if continued in broader is move and direction. about that product, you And got to good, But profitability

Jessica Fischer

Yes.

in showed progress some we acquisition The other pointed profitability, costs. had that Investor made of I would of out the then point that thing December the because progress was I that we Day, out excluding And was progress mobile on our made customer on in still dependent do customers. serve to side, that that driving paying and that we you in to the that and we were what were had work our doing - MVNO not costs cost down our

for through year. thinking about of serve been coming think terms is the to. as mobile I internal we'll expected in gain way think additional there to improve what a as first well. continue it efficiency to And And up part successful has of actually to service our side customer and have that the activity continue mobile as the we we're that drive cost to to business, very that way customers our expenses expense actually longer-tenured we that in I on down business profitability And scale the in well as this per that

Craig Moffett

Thank you.

Chris Winfrey

Thanks, Greg.

Stefan Anninger

Thanks, please. next take Greg. Operator, question we'll our

Operator

We'll take Jayant next Vijay with question our Evercore. from

Your line open. is

Vijay Jayant

see in to we I of the talk sort Chris seasonality, didn't of college snowbirds so sort in about Thanks. of and/or same terms suggesting and XQ impact obviously, just forth. want seasonal

pronounced? and And really - think us Thank of is XQ help So XQ may be we that that can reversals you. that you see that sort as about changed? not does mean

Chris Winfrey

I guess, course, and The of it. let me just had is Florida. activity I some Let compared before, effect me disconnects, add, we Jessica so and college - It's it out a still the answered this snowbirds what muted bit just of more - to as well color had additional level coming pre-COVID. we was of to

and QX past visibility And appears in than years everybody, for what around lot QX seen the for us of been has seasonals it it is over the pre-pandemic. and less couple a we've was

far say out careful of pre-pandemic. people and that how letting So ahead to our they'll about I skis to the look QX be we get think be we and want

the trends good through the think to very trying is a I the One through rural Jessica slower our back I'll And pace. to make seasonality the Spectrum competitiveness. was build come point are that overbuild that's underlying aside, fiber construction at

even performing the the been But amount did have ago. year that than those which fiber, areas markets in is larger sense, just had of than fiber better a we're in in a it some we past, in even

still everybody already, goal to hear And than year. good net its feel it trends. point, since if to have underlying we're on we our last so And guess it wants adds aside higher haven't year is I we about the this seasonality was said

trajectory trend and so of long-term And focusing the instead good. the and overall focus on on like just we'd quarters, to it's

Vijay Jayant

Thanks Chris.

Stefan Anninger

next please. our Thanks we'll question Vijay. take Shelby,

Operator

next you. our take Thank Bank. Bryan question Kraft from We'll with Deutsche

open. line Your is

Bryan Kraft

if I two questions, could. Hi, I had good morning.

mid CBRS efforts? could And your us giving this ask First, an would or Charter talk just point as said extensions I something on you I and also secondly, And through thank I either the line to still apologize the low wondering at through the question. to part high fallow it, mind consider would auction then if were or if Or the was Is strategy? net much wanted a but from course that broadband with of portfolio and is current either If missed available this alone from that spectrum and I that, acquisition. you update the adds preferred about you. you hypothetical rural of partner? and contribution RDOFs? bands a band

Chris Winfrey

inside quarter. that launch Hi times Bryan, the and of today, which at rural in a sure handover are on net well working inside the CBRS, like very a was continue is construction basis adds it commercial to well On and the it right that Internet are XX,XXX market and making scale. is going full subsidized materials at we now, that perform

high next want basis Then going fast and year that we'll CBRS It's - that to are spook the for ROI. broader rollout. people deploying either we're don't very the a I on our where set there's to CBRS focused be

projects network right accretive and through other We a have going of number evolution on now are that expansion.

fully overall deployed build and so we're our the that And in going across way cognizant a measured very CapEx CBRS build. the to But we're of footprint,

we've But very targeted to it do over in generates a time. acquired markets way the that's it fast we're returns. and that going

have a that means Your very knows, talking third we MVNO very before. But economics perpetual And combine - good. that with Verizon. portfolio And I relationship the imagine asking that. was as were question around we about and strategic, are with can't forecasting. you're spectrum. why good everybody But what just

through the be that means we better CBRS and vast continue increasingly our speeds, through and the and of the with ability traffic The majority faster to time WiFi have have better densify and network ability over over directly towers, to rate in additional those be business attractive towers and macro lease having towers continue the spectrum. an build those acquire the of cell not at to to

us. Verizon, it's as that, model a well I for it's And a has And really I think model partner very can worked see, think for capital-light our you well. well that as works

cell to think they as We'll but tower always felt come the And haven't look I symbiotic. things would construction at we never the a acquisition macro need densification Spectrum it's take So never. be up, in say I and

business scale. at

Bryan Kraft

thank Chris. Great, you,

Stefan Anninger

take our Brian. from Michael We'll last Go ahead, Thanks, Rollins. question

operator, sorry.

Operator

our next Michael with take Thank from Citi. question you. Rollins We'll

Your line open. is

Michael Rollins

I morning. on was mobile Good a questions some on the discussion to up curious couple of and with just follow Thanks the segments. just of

taking that per one So internet XX% is the which almost of are would comments of lines account. infer customers mobile, two in -

if family starting you're of see and shift curious more Just to a to multiline

are if about been there and on opportunity the XX,XXX your where mobile plan And take some over up adoption they've lines SMB gains the mobile running there's a side, then to of Thanks. at there of accelerate significant services time. per account opportunities to XX,XXX the number quarter. to per

Chris Winfrey

continue us So high. Michael, for right. is The to opportunity the per to increase you're customer lines

As the inside on you lines know, certain customers household have multiple that time lines. EIP are and different plans

household. high we the acquire has high value the that have as lines using product the mobile many in so to our success upfront and And in been speeds

cascading then opportunities those And that EIP time the lines time, to are over different lines. on upgrade other

spectrum also working the add continue customers, time. product is increase the but to penetration because just to to It but not over the the opportunity customers So you and new seamless broadband over of increases as per know, on of that's value grow, through that significant number to provide household, the of lines stickiness mobile of connectivity we increases which, the savings. well

but there, same in to days can is and that residential do I we The it's I you in SMB a attack time. second there early job even I do And way the the space, continue question value we we we're still the space. think but asked over on doing think can better add SMB, and good think

Michael Rolls

Thanks.

Stefan Anninger

our concludes back Michael. Thanks, Operator, to you. That call.

Chris Winfrey

much. very you Thank

Operator

Thank Thank teleconference. concludes for participation. today's you. you That your

You may disconnect. now

Charter Communications (CHTR) 28 Jul 232023 Q2 Earnings call transcript