CHTR - Earnings call 3 2023 | Charter Communications, Inc.

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Operator

Hello, and welcome to the Charter Communications Q3 conference call. [Operator Instructions] Also, as a reminder, this conference is being recorded today.

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

I'll now pass you over to Stefan Anninger.

Stefan Anninger

Thanks, operator, and welcome, everyone.

this be accompanies website on that ir.charter.com. at presentation call found can our The to that contained remind number like you would I you carefully. factors filings, we other to SEC read of there and cautionary our statements in which encourage risk a are

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

today's On have CFO. President our and Winfrey, CEO; call, Jessica our we and Fischer, Chris

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

Christopher Winfrey

Stefan. Thanks,

we footprint benefit our During in both new growth and continue to we the customers, third quarter, existing from rural added subsidized footprint. XX,XXX as Internet

also from nearly benefiting We our Spectrum Spectrum lines, XXX,XXX offering. added mobile One

over and customers At we quarter, the total had mobile our Internet million of of lines, the end now XX% X mobile service. have third over

We converged penetration quality of years value several and wider the over as our grow expect the to service the gains recognition. mobile connectivity next meaningfully

low at Revenue year-over-year, the quarter. grew flat headwinds moving temporary within was adjusted EBITDA past year-over-year, essentially And quarter. with some point the last X.X%

as that upward trend realize We expect of to we operating benefit investments. continue our the

making importantly, year. we initiatives last we're significant late More progress against strategic the outlined multiyear

track. on remains initiative expansion footprint Our

accelerate that XXXX. to new in in XXX,XXX subsidized and approximately pace We to add passings expect rural XXXX

initial Our continues are our rural XX% builds than penetration, nearly better-than-expected penetration grow mark, expectations. gains XX-month subsidized the pace. in rural passings our At a to achieving at faster

prioritizing progress, and the also continues customer remain we execution to committed initiative to experience. Our

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

both employees of all is our our track. quality. satisfaction evolution of of which our the driving and project, increasing on our further service initiative, employee product driving transactions, and which levels comprised convergence and evolution remain of and transformation, And customers will finally, customer reduce higher efforts platforms for satisfaction, digitization our Additionally, tenure network video

progress operate. footprint. us fastest Our to we of claims competitors multi-gig be continues prioritize for and the speed the everywhere service entire our will our attractive which Internet network customers telcos, in footprints evolution available and maintain project Unlike to front will and our most well WiFi across upgrades, offerings allow

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

$XXX managing speed chain build finish result where supply distributed the continue And than the more that network architecture evolution capital RDOF, originally from or really evolution passings excluding expected, growth expect much spend, and requirements per target. XXXX passing. opportunity Whether given on we of low customer mid-XXXX of components annual larger we will for of grants very to the benefit any the and to beat of our the passings. depend initiative access construction and savings project, end hopefully We're ahead a we're we'll on end and by very the network with cost state our up

private and reiterate will conducive state those where clear be to want rules very not are investment, states. I However, to that participate in BEAD not we

offers with Mobile both Network. One also customers, promotion retail. market-leading fastest Spectrum Spectrum One with the like significant evolve pricing the product succeed. and for to differentiated well Boost and converged is performing at savings Speed offers continues Our and mobile connectivity, Spectrum offering also and features

go-to-market Spectrum easy-to-use in one content across our VPD launched industry-leading video platform the platform most the evolution U.S., Earlier is footprint. search direct-to-consumer turning allows streaming our and interface. and Xumo their linear TV customers sales. Combined month, video the This Finally, our entire Xumo this platform product. our unified our service video to and now to with our video app, viewed for of with within new we discovery linear access

carry we a September, customers. significant This for for direct-to-consumer the video step and is forward networks new our believe announced hybrid ecosystem. consumers, services to Disney's good linear an we for agreement and In distribution model

aligns to Charter, will value free the apps, our for For video in video adds packages agreement and and content linear our products. better included be DTC which

with linear We Xumo to linear via also products revenues and upgrade distribution gets lower including ad from we to customers, Internet growth glide with to sell maintained our its into services. offer free. to and Together DTC Disney both a our flexibility cost We'll created DTC Disney, customers over subscriptions of apps bridge from DTC time. ad video path broader video also packages. with Disney's new

If Disney is in to first our goal We to ecosystem, to that programming. is video that were sell our to linear insist way customers pay key we're do. they to a step channels. have similar twice, modernize renewal a the proud but sell. same for those us still of means to we'd just and and or carry customers upon happy DTC That ESPN asking be packaging distribution content as a product plan for in not that an paying app, valuable customers. and all twice agreements carte works value programmers won't we But a their on flexibility, repairing and la way

these mutual agreements to customer Our seamlessly quietly our modernize and base. for goal is

and solve search content Our forward distribution DTC clear Xumo's and interface, a in functionality. utility, linear and advanced of with seamless to path provides new issues customer key SVOD value integration combined discovery with model, hybrid choice,

distribution, path more choice this a programmers, by our to video we and Charter supported broader For scaled marketplace, service everyone. and and for a state-of-the-art economics sales believe distribution, and better creates glide infrastructure,

the and we laid in network strategy we December. convergence, last investing quality, transformation out are video expansion, executing Through evolution, successfully

highest footprint. of progress. we drive to high-quality significant long-term our in execution will to with value acquire strategy to increases remains packaged continued the good and more Ultimately, provide our which then penetration and service, investments ways priced that for customer-friendly Our also across competitiveness products, then make which strategy quality to shareholders, drive combined our our customers. We of services higher we in continue

retirement, as including and New we earlier Director their for full Chairman Ton Rutledge's that for pleased Jessica? Before smooth I'm announced at the successful I Board, plan remain want Liberty call two Emeritus, of House, Advanced our Eric role the Tom, Charter. to non-Executive cable a and week, Tom achieve note handing is Eric Charter. and to of most and to the over Zinterhofer grateful CEO transition will to investors that in Media reassuming Jessica, this work that

Jessica Fischer

Thanks, Chris.

third were we temporary driven our third approximately the ESPN loss customers in Internet by Internet results to on X. September. added customer quarter. turn quarter of Including disconnects XX,XXX the and estimate in that SMB, XX,XXX residential Let's Slide We

programming The Video over-the-top in driven customer overall the third to customers quarter, availability less about the impact alternative. dispute. declined was relationships wide by than with disconnects by expected, of the XXX,XXX Disney facilitated we part by video in XXX,XXX

customer handled October, the normal and Disney until billing both AutoPay Disney of of in not the Internet. football loss the quarter. season dispute and incentive discount Nonetheless, cost of back occurred programming was and very midst the The fourth there were early operationally, well. at But early fully our add impact net lingering of centers retention launch so the in we programming on new beginning pass-through our to a call

churn XXX,XXX Turning well levels, declined Overall by lines third quarter. market rates. in We pre-COVID activity, adds, move XXX,XXX persistently added partly below quarter. gross mobile to in third the the low Wireline mobile. remained by driven voice customers

slower access We less price-sensitive compete in consumers from continue we demand the impact our will we residential customer is businesses. that can in a reliable of constrained be some but and portion competitors to That see by data. footprint wireless fixed also than well more to more usage fiber, additionally our lower and overlapped what remains segments continue of and deliver, product and and SMB as

service. to In wireless a our switched residential data third Despite dispute, high to usage record quarter. a quarter for third fact, to that Internet new customers churn our at Disney propensity have the return higher was low Internet fixed

continued Internet lines customers majority our to lines additions Our new other despite percentage coming in The continued of quarter. sales. much though from carriers the of portion well higher grew to the year-over-year, [indiscernible] product also has from increase. a of Spectrum customers, from existing as new mobile perform to continue come gross Mobile

healthy to remain usage data lines lines well continue perform confident as should on our see and that long-term Spectrum One promotional these also We customers.

In the in small those programs and launched pilot markets. Spectrum less last program customers we even and One of third during handful pilot was this quarter churn XX-month incremental their the expected. than third on a anniversary of lines The of year, reached year, we quarter

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

in our as not want, yield will adjacent we have our build. we our groups As that network constructed these along XXX,XXX that Because slot has progressed, of of complete to sense RDOF RDOF period. the expect be but RDOF passings the way multiyear initiative passings over are now passings, to million identified will a build we X.X of a adjacent we total we add roughly the

per while to we original have net average begin And until labor to passings potential passing BEAD to equipment expect of Chris cost expect passing build, per our the similar cost XXXX. increased, any subject million We these costs and RDOF be both to mentioned, net what estimate. don't X.X

financial results, X. to Moving Slide starting on

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

flat revenue year-over-year. relationship Excluding per customer Disney-related credits, was residential

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

residential grew X.X% year-over-year. Disney-related revenue credits, by Excluding

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

wholesale by grew all enterprise X.X%. revenue Excluding revenue,

sales. impact consolidated a Other Third $XX partly growing political In quarter revenue million mobile the offset down up Disney-related by driven X.X% was by less market, capabilities. revenue. advertising advertising advertising million our and to grew was X.X% revenue customer due declined revenue due or challenged total, by advertising more year-over-year, quarter to credits. device year-over-year X.X%, and in third year-over-year excluding revenue by advanced total ad when year-over-year, $XX up higher Core of XX.X% the XX.X%

video expenses on to due packages year-over-year and X% year-over-year. a flat September. to operating lighter operating year-over-year, related Moving temporary and early of to Slide higher loss expenses million third in the by $XX Programming of decline adjusted X. quarter, the customers X.X% in benefit Disney a declined In mix approximately were EBITDA total a costs of video programming

for These sales XX.X%, costs. Other direct programming higher increased other factors partly now approximately XXXX, mobile that video fees primarily were regulatory costs, and per X% of device We by cost offset partly higher by offset rates. year programming full and franchise the customer year-over-year. will by by decline lower by sales revenue driven expect mobile cost and lower ad

service customers frontline and growth lower service by marketing. lower costs employee in by in to Spectrum employee by primarily our to were workforce, investments, driven adjustments partly costs, skilled and the lapped by marketing XXXX support driven debt. improvements, customer and lower and lower build previous a to per by benefits of and job Cost Mobile. including investments pay activity to sales compared offset longer year-over-year, accelerated structure, increased tenured Those to more we've as declined attrition transactions XX-year bad X.X%, and year labor additional productivity Sales X.X% resulting prior from

quarter. some while expense additional the it we material was dispute, our certainly centers, this in not call Overall, had Disney a given overtime driver

Finally, grew X.X% Adjusted X.X%, labor EBITDA by driven grew by quarter. year-over-year costs. other in the by expenses

other in $X.X Turning operating third from expense, generated expense. billion interest by Slide income year, partly attributable and to of EBITDA higher offset quarter, up billion We by higher last adjusted on to $X.X the net shareholders lower driven X. Charter net income

purchase by totaled higher X. in on quarter, driven Capital to network billion. quarter billion expenditures spend evolution year's last due The subsidized commercial initiative driven higher market driven of $X.X $X third and residential spend higher our to on and the network primarily rural initiative, rebuild this our extensions Charter's earlier above expansion selling increase third spend upgrade continued devices construction and Slide of month. for across greenfield Turning the launch was opportunities, CPE, and by Xumo by line

line extensions, total previous to Xumo reflects XXXX, additional billion. Capital expenditures, year spend network higher expenditures total markets, approximately boxes. capital acceleration DTAs full design CPE our The now of an accumulation billion, swap-outs purchases should expect and the than approximately For we proactive other and excluding and $XX.X and increase expectation. including related activities both inventory high like and preparation future split equipment walk-out to MPEGX of $X.X

noted, we evolution to multiple There offer passing our to per no approximately $XXX network network longer-term CapEx change Chris spend outlook. has As to continue expect evolve to to been gigabit the speeds.

We to total line capital extension expenditures approximately also billion. continue to XXXX expect $X

XXXX We are working operating through right our plan now.

January. the slowing we subsidized on our outlook our complete XXXX our construction provide partially And may greater quarter and mentioned. as fourth more currently evolution we modestly that Given plan, opportunity passings we XXXX opportunity in rural fund we detailed network plans, by a see, very Chris will call as

as excluding have our network the expenditures, below as of percentage level, has excluding to that capital implications. evolution capital of extensions important to line XXXX. a evolution initiative, consistent revenue, want of I remained percentage And since network long-term flow line following extensions XXXX revenue, and decline cash total should completion highlight a expenditures, which

shows, decline driven was and billion $X.X versus quarter Slide in quarter initiatives. last driven by network mostly XX cash The flow billion we this evolution third primarily generated of of higher year. expansion As free the CapEx, by our $X.X

before brief of cash turning working and taxes comments the sheet. couple balance A capital on to

timing change at full a of capital accrued be devices, programming given impact the to year-end. lower-than-expected now Excluding working year mobile and hundred expenditures by expect capital million we dollars, our the XXXX few negative in of

just cash taxes, did we year lower the have still stand. timing which cash The cash call, payment full fourth provided XXXX during which is in quarter third tax a a outlook, quarter, difference. On tax I our

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

EBITDA just current below of ratio At is leverage $X.X our Our rate the X X.XXx, the to end third high stay to of end of intend debt run adjusted target and quarter, to X.Xx last net annualized or we was the cash billion. of our interest XX-month range. at

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

in growth significant we've business. EBITDA has investments by pressured been of future our XXXX growth the Our made

to of XXXX, now on abate, transaction move growing tenure EBITDA benefit we employee pressure As easier we investments. toward have we lapped building begin with the as from efficiency our employee growth will impact those and as comps

our as positive drove acceleration our our we -- in transactions Lower down mobile which free cost year, revenue customer from mobile of business, next and move offers building service down from which into political advertising. and drive per impact of growth the line roll-off

rural In net positive addition, additions of customer faster additional pacing impact to bring year. next our build should

network generate changes set business. In our will make connectivity broadband and drive business are to the to Convergence of the going making our video the forward. to will our value will been investments efficiencies from momentum we have both business and product can drive for evolution for growth of in growth term, our impact customers. and continue our enhance churn the The the operational a stronger financial competitive transformational and improve longer mobile, broadband

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

Operator

first from Jonathan question Research. Our New with Instructions] will [Operator Chaplin come Street

Jonathan Chaplin

a questions. broadband, it like quick the little is your XX-month markets -- the progress pushing that But core slowly Starting into new looks fantastic. expected. the are more is progressing markets is with in Two you there seems markets, the great. you're which accelerating, than rural penetration like The it bit

slower something can from be of you Spectrum One else? us what wireless broadband pull-through in give different or function markets core what greater if from sort Chris, pressures of wondering, the fixed or I'm And as from for you context expecting some was may just

give where line? X wondering video a looks view you sort much it sort an us what And fee, becomes customers, can a you're imagine of you -- I -- back, whether ultimately business the sort business ARPU, and a down -- step you the like that a of margin platform years think then your world the can from a taking business I'm of environment a you It's this the very high of collecting large for of today. but valuable than distribution your number have from more lower

And But sort would that we get as a it opposed on your starts love for the to thoughts hit on I you like when evolves? of where a growth drag become growth? to business how point driver to

Christopher Winfrey

you Sure. And broadband. a lot in asked, just what

mentioned, subsidized you are as and terminal higher getting going rural our So construction very is well faster we well. We're penetration for penetration. it's probably used than pacing anticipated,

have already construction into the not do tailwind we QX accelerated and but year, we've year, as mentioned, that also Jessica we pace As construction next of completed. only of then the get that into get next we the into

So around high. actually as a pretty is the transparency stand-alone investment, that

markets, disconnect from similar to where as core second others, both at well to think back-to-school not dynamics, quarter. years probably and and I in quarter both back heard has that was what QX it ago. The the in reconnect as The you've several third in QX, gotten

that of market access. tie fixed wireless some where you could incremental end the into of have low the Some

I fiber appears competing be where markets. fixed not a product, together. really even it think, we're access, that that's quality, to increment, it And have But on mobile wireless lower when for you in the combine lower to way. and throughput, lower importantly Internet lower us, you well the priced relates as capacity

that that we've good that pretty past. the given in about capacity feel just We time usage spoken natural about increases the and the all space, of amount over bandwidth constraints

Disney drove Jessica think XX,XXX we small mentioned, that, a some I on additional as but impact combination units. modest, of programming which the an So had well relatively as dispute,

existing are where we step well. both you footprint reasons just stunted that the so as pieces rural subsidized has in market if our know, for are. for providing can evaluate that we're as people well broadband But growing temporarily as we And in the But all footprint the back, both growth. been

stickiness video, exists. a now, years of with it library it content we evolve of and a the renovated DTCs, business that bundled the way find to deeper programmers, combination terms still there'll creates these business, availability agreements Xumo I could the to. utility in of that with content. of a In can that with linear little a about the bit the additional video And do and business in traditional our of that then be through way X to in, value where think easier benefit customers from that an video a is talk I'll and programmers exists, for traditional hopefully in But just have [indiscernible] increases that

linear as think, in do state-of-the-art for and I integrated SVOD value. something have a we we prepared DTC that, product afford a an video that can evolve it's It's marketplace valuable can to be and you and of the traditional I mentioned where very you mentioned who it's of. provide that when it. type as product, get customers But a opportunity proud remarks, to we'd

the us, of driven of and And be are by that's with for availability in la as the been for affordability, of to coming provide wherever because sell different market who and carte, really a going packages products, customers Xumo, those that can well customers programmers the more video because a out of of go. gives DTC's programmers the to for again, good they and want those marketplace benefit options the to

in an have to by perspective, we the of we from the joint point, monetize, Xumo. venture the Spectrum, to only through investment And video have our not advertising revenue equity your also XX-XX traditional but platform business the do ability delivered

remains to nobody relationships. it is still I here do important think So to connectivity going But that traditional linear sitting forecasting our video very grow.

distribution relationships and to capabilities of have we a with the package think marketplace that we a have video scaled broadband a ability advantage with platform the the in because provider I programming strategic for our as value together and either a these standalone model for customers engine and a programmers bundled future. customers that is hybrid DTC apps, basis, a for the on in a creates also or

now for either years, growth, first have see back the in we're and ourselves value for value through but I of seamless One, not what that been the again, ultimately create services time, step as perspective about, we video the if beginning can very which And for distributor. where provide we customer or utility, from a our perspective, I past because there's to connectivity a a and be done XX So the I'm path Xumo. create connectivity as part programmers little will enhance market that of forecasting optimistic customers of the to a from Spectrum

Operator

come will from question with Craig next Our Moffett MoffettNathanson.

Craig Moffett

the wonder, off, for Spectrum bit maybe -- should those down could of we One? expect the ARPU the first drill and see broadband how expect on track as to And cohorts? we so, a how Jessica, I little ARPU next cohorts as you the next if you a both to or impact start for should start just bit roll we wireless, guess, maybe but to for roll not I quarter term over off longer little

Jessica Fischer

Sure. Thanks, Craig.

then back to hit and going come I'm wireless I'll the start So and on side, Internet side. the

in wireless fairly our perfectly with place. One the the of net quarters but On been additions, steady, Spectrum X not side, steady last it's rate now, over

have And it the the create in fourth so free lines you of free ceases and on in fourth were say ARPU. of year, year, would lines you free that this is and quarter on quarter a impact pressure roll-off lines ARPU, what overall last as lap the those of to new the I that the have that become

of have a them portion sort bit lines free think bit over little make on time, as total remaining or could because of pressure a you growing of as of I base ARPU. a percentage smaller lines and the little and And have the the smaller positive -- of the number free stabilizes, underneath do lines, you up that is a

in the that to pricing off. that, still some The other mix side of roll have do we has legacy

year. So next stabilized more wireless, probably on

X.X%. the growth it if at allocation about sort ARPU impact it's having ARPU it been GAAP is look you there, on a of If growth, X.X%. One at so Internet in Without that Spectrum would was you have what level, the think Internet, the in mobile product year-over-year

relates have allocation the line from you that in product X.X% that ARPU fee about line. growth a So to difference

year-over-year. I actually, As start to become in lines total system off, the roll The free free dynamic the is the same. in steady of those the lines think sort

So that steady becomes you allocation get mobile QX. into as

So of the that ARPU not just better Internet but product. that you GAAP the then there component, perspective the what having allocation growth is on it's of GAAP inside of a to building see the reporting is potential from sort related Internet

Operator

next question Swinburne Stanley. Our comes with from Morgan Ben

Benjamin Swinburne

I'm evolution, a hoping more three talking outlook around guess, the sort the you digital and extensions and buckets: spend time about line the could video. little of CapEx strategy then Xumo or, I

should of sounds like but help that network like timing could the you us next It there. about maybe this more $X.X I maybe couple sounds we year, evolution continue for but if more to spend, 'XX. may billion in then maybe less it some wonder of moved, less years, the assume and have --

of much guess, billion there at higher Is I been a about? I think all, given cetera. spending video from And et don't of you've year would the a in that then line $X you change recycling on the extensions set-tops, RDOF opportunity talked CPE,

from can about So look new of a time like you equipment sort understand trying a going slowly that your fill video to little plan? view. point I'm fleet, think to bit in and a Xumo of to sub so on CapEx moving might whether the you're speak, base to over trying whole be what Because to us

I'd but know you but So lot, a on, guys ask us some help. that's for chew to a I give lot

Christopher Winfrey

start take video that with or take those, fault, missed network of -- two our off evolution expansion Jessica let Why don't two being network That's Ben. any on was evolution the It of and true. two. CPE, first I gaps and I those

the our today. material I And evolution, it's it, well fiber claims competing that is. -- competing. in we wait network not I that time by, to we're that difference. months. slow standpoint, is call And second, our obviously, a flag is we operate that, improving this everywhere at X competitive And a across we're I a then down superior mentioned But potentially thought to we two, goal could On counter remains your One, against have footprint. speed would it

there some we'll we've we continue trade-off investments of gains. showing envelope shareholders to discipline recognize can. of to and both capital quickly. the accelerate we deploy also terms which in investments, to They And these the to said, That being size always expand that said immediate and that our value is wherever overall produce in rural terms capabilities is in

you balance when think capital if step fast trying as time traditional line, that to go going expectations time, overall long you which back ROI much can, be the at terms X-month it's make a our the returns, both balance has there's investor in that approach, and as show about there So and to of envelope, great not discipline capital that can same is difference term. deployed

at X.X full to can so that some an eventually with latest which DOCSIS catch implementation. part is the scale an split is line suppliers There extended DAA DOCSIS most gear this of high and we that wave benefit technology additional time operationally, architecture advanced allows deploy of as our or the up -- access of distributed

can on Jessica missed So clean up and that's my second if something. in evolution. thoughts come on a that, I network back

-- we it's able inventory capital. on less CPE, captured time, initial beginning we Xumo video CPE and because recycle video to of starting Box over needed Boxes, we've deployment state been of the in spent a that's at On to have, for World get Xumo,

what expensive boxes traditional decline have now cost over been -- boxes the in Xumo deployment CPE, than that's using more very to boxes we well because continue expect And are now. we increment, less right past, for of new the and be and essentially the go-to-market our significantly. the have video will going deploying those to we as the boxes than we're past On

of combination and lower channels price well by have of inventory point volume, lower time to as you'll the all a throughout determined through country. our up will a success, So our need which over and build as be

there. a be term, But -- it to long step-up it's I expect there's don't So material. that

Jessica Fischer

Yes.

I'll plan our maybe and year. to working So around that it with evolution try I'm we're some going to numbers rural. for operating still help through you caveat network next

give XXXX to going guide. not So a I'm

But just issue. to frame you help the

you you in that actually our rate QX XXX,XXX think our we meet. have to QX, reach passings confident will where passings run will pretty If be rural to which we're XXX,XXX, have for about in

that is what sort passing, and would XXX,XXX take of build into run of you If year, next patents we built this XXX,XXX rural rate year. than we X push which it the more quarters

aligned you told true and timing it's that passings before, perfectly isn't spend. We've with

So inside would order about next it's talked on guide. are this issue net $X,XXX year it year, per $XXX there. of extensions variability than about the at that to the for overall. put of it's million a think the there we've higher we of all a a little the you same, components But way other not put think RDOF, assuming passing, that rate if I is cost the which where perfect the remain But that the good line run of

have understanding to construction, you building a done think do with to side, that other be split an equipment. front that rural actually I it work loaded. inventory before network field spend, is that and needs to replace or preparation into to you couple like our high evolution sort make the of on of costly There's the lot the

substantial high we a of over a little current spend pace amount a next and XXXX in if our project of year. spend hit to in split, going of we're $X a leaves billion portion would on substantial that expect year the this at We inside which large continue which

in we are offset fully against appropriate be capital we And sit. of extension said, probably So Chris expense but timing help. of business to a where of say, context to put given sort at the split it as total of the an it additional to what's high package line adjusting looking the load spend, can won't enough amount the

No, one about thing right. to say want it, more you're I though.

this I rural, think investments in making sort we that probably additional about onetime it's visibility investment all need as of -- having like So to sort that's value we of that. we're drive the unique to related of think capital around

a consider the about share to We I We've at we look it a a strong. lot different taking don't them. a could considered want of We're we but think are returns tracking stock. that. think JV, ways so

and of about do as way you it but kind like to really of think CapEx. acquiring the of on trying about I about what instead does more thinking on think would sort passing it create structurally, it's focus is M&A, rural thinking I'm that spending the complicated,

of I one to more things, create transparency. am doing Absent at disclosures looking those additional

to way look to created. of of to built, been should mind disclosures easier wrap is around think you next your And bring I already those be for think year. I the which other can trying what with been to us what's it so as early sort some value has think about you And that

in sort a Jonathan the value of of good not at about built. number with going it's because $X,XXX. a laid His what's once it's to to nice New space think about passing argue around Street him think actually I overall way it. came out to I'm And think

$X.X so per built At passings we $X,XXX passing, XXX,XXX rural billion. far. it's So around

Our average net is cost the build per passing subsidized on rural $X,XXX. around

So you can of those assume against has spent capital been completed $X.X billion something passings. like

spent. versus billion the value, billion we've to the at created those And billion passings. what passings billion we've already value $X.X that of value building We've the that or of related means $X.X $X.X $X.X is current the of created that

pace we as that value the the business which continue will pace add accelerate increase. to we of build, And the to our at

we valuation good we that a the and get to you like from so there our it looking those adding next as are value that pair as help and disclosure sort think about total see trying So to them additional also sure capital the business perspective at making of are can spend might we transparency we for what with help look year, that built.

Christopher Winfrey

got was a that the company shareholder long-term Ben, -- step I step if it's think reiterate very this important along strong more Jessica you back creation. for. So it just focus level to value shareholder probably capital I up one the asked talking also you long-term on from that, confidence of has you we understand But than But and value allocation, way.

transparency, go here what I really to and and some of that got allocators disclosure full of and the that sure provide of going operating we're so demonstrate been, our of outside always we've finish capital. comfort our we the zone make good buy-in way we've shareholders along And try our additional before think, to plan, is

Operator

with come Vijay will next question Our Evercore. from Jayant

Vijay Jayant

cost cost talked Obviously, sales marketing you items, sort about should serve close cost where of sort and I if And given to Two, cost against to sort sort cycle, you elevated and this means Jessica, in X. increases? could. comping exiting year what Can you on labor of of of we the it are be just some cost talk your XXXX? quarter. about previously into services of the of

and really X how are thing. process the optimistic about out Chris, over the about is and year? may still the BEAD talk sort quarters then not there? you issues that a you if years, a case, of may the are started about think play of in billion the kind you is And Can I few And next state on and extension that participate your process now row, I of spend which $X line think sort what we too mentioned,

Jessica Fischer

Yes.

exiting in any the on cost that change X. my expectation to and talked I to we've those as made close to first sales as we've expectation And think we remarks, tenure and related don't of that Vijay, the lapped the So the serve as relative is our QX, items, the have the our as because marketing, investments cost increase in I really in onetime and in it year at to of side. we now, employee mature, our areas the on end -- --

Christopher Winfrey

For sales and marketing.

Jessica Fischer

most cost the also the as quarter, in part. think serve you Well, for end the of of to I lapped

going be that's increase areas of of to should rate forward, whether the say every we so I'd that? So efficient across why And more quarter -- those expect sort mix.

efficiency year drive overall we'll from I in going inside not think be to those our do But specific this the next expectation and of be quarters. spaces. where point, is I'm that we about

Christopher Winfrey

pipeline, will time It's has on difficult be near for the working Vijay, to forecast is We're talked you long footprint. to been how going exactly BEAD, it all that but about our of state a through what always very that. of that. much take now, allocations BEAD there's because

RDOF BEAD. the -- absent very they're about, the grants, large but in and and meantime, state -- as So going a we've well. talked pipeline, there's And

trying think too detail, issues we from states all getting I'm were I to are the that to aware we say, the say And that NTIA. disappointed came without NTIA that guidelines in much potential all in of have. somewhat it's the fair out

that as us adopt the But Internet to guidelines states pricing, bid proposed be things be states NTIA's Internet labor on such tiers, dictating clear, practices, to dictating for tiers, the those in. just won't attractive

we and business, to market to properly And earn on healthy respond will a us we'll allow our focus do so flexibility that demand run the what retain return. ultimately, the to investments states is

So our focus. that's

think, that And forecast it's stage. investments some so if for I well as what, very else everybody difficult to out any, this will to And that bad us as time, going to figure occur it's at matter. take

unique. So we're not

Jessica Fischer

have we're rural, passing financial including bidding extremely and that along the into all perspective that under and the disciplined have we the in financial on looking as from And been generate regulatory will make said a factor you it we're that that to we've things specific returns limitations comfortable sure all that, at environment.

Operator

Cusick Phil JPMorgan. next will with from Our come question

Philip Cusick

on for this think Jessica, And I year I think of not, couple drag, heard do year-over-year? guidance. customer for year? do add you your last goal it's subs comment, to follow-ups. love October if you XQ proxy is a a guess of XXXX a broadband I more reasonable reasonable you know still addition

up, the We've outlook thinking -- going what acceleration commentary accelerating for for here? I'm EBITDA to as your Disney do second half, well the your as about some in talked are maybe also then back the is costs as about And EBITDA cost thinking content but what about revenue fourth pick quarter. I'm from

that Just we from think should about here? how

Christopher Winfrey

goal for year-over-year. take The -- Phil, on to the the customer has been increase me net one. -- our let adds Internet

that the think for successful November before, we've very a require about seen and talked just given December. what I some I would of we think it in early reasons October,

we're think hit I So that. to hard-pressed to be going

I XXXX. in business up for the think the talked about we've where sets trends that us underlying

And But our December requires a think order original so I healthy November in what it achieve we're really very a pretty optimistic about to and goal. that. was --

Jessica Fischer

of in On thinking significant components advertising headwind the still because as the an advertising you go into EBITDA QX, and year, you the most next what and political do of so are, about QX headwind advertising. year the side, actually have

that as around political you a next you're turns advertising. where benefit and But you have the of go political year, in into then back year

the the as said of I XXXX earlier, of we've at As last end of QX. sort labor our adjustments lapped

you of next going cost a growing -- sort comps I and easier perspective marketing So serve have year. think you on into cost and and the trajectory to from -- is gives sales it efficiencies have

It's of go impact quarter, fourth builds mobile the the small revenue from start roll-off. In free through you we'll but year. inside line the as gaining QX, relatively next

business. from we to expect to continue tailwind that. expect just good efficiency have So to overall we across our have from XX-year a then And investments the

headwind XXXX, position. that as going get making, of our is that I next both a into and recognized in in QX that we're think pushed investments So we we into better EBITDA that most a the through we that nonpolitical as said, year. was we've year, expectation that But challenged and be by in doing it we'll

Operator

Cahall will question Steve come with next Fargo. from Our Wells

Steven Cahall

One have you in how about we might what And better your mind roll-to-pay mobile could rates? tools employing some grabs? Could you're about of just think that to lines than expected. it's expand results kind drive per retention targets look on right those for are initial you roll-to-pay One to the that as said were little Spectrum XXX,XXX retention that Spectrum of You forward? a quarter for assume going And up that it the is

outlook a think frame require you see set? Do And any lot maybe Charter. customer means there's for then to lot of between in customers that? additionally, that contingency for Spectrum customers? any there is case different ACP a plans program quite you and Or Could is And the on political and help us changes it One overlap just we've questions how exposure? the of you you ACP that received a what

Christopher Winfrey

rate. device because I'll -- as The mobile purchase elsewhere. I in do are can. at used. nearly as my retention, similar we having best we're rates much of much have similar They of similar have all, also lines not being port They to have what actively these that to anything to simply do answer

are line, any customer. real roll existing looking paying first for are They're a price much a second of they for line. many they them customers. $X very other from When point tier like So the

the to mobile product speed. is the providing at country, rate the and line that But first product it's they $X at relative go lowest from fastest to a $XX, in that and it

country at you So else replicate the anywhere product that's that $XX, can't in that speed. mobile producing

And structural in, a for else to a advantage convergence it you replicate. product from about has that's then when standpoint, a all that difficult think it's anyone

edge circumstances, around simply tactics but retain used it's So we being have this because some customers small do sticking. that's heavily not point, the different that to we at under can do

benefit in federal the access the to issues, it's customers have affordable audience, broader existing On ACP, who the Internet have and of -- been who connected the also program. program, program, coming it's marketplace, brought This connectivity to broadband broadband really consistently. wouldn't customers connectivity for affordability allow that's of otherwise. And would given out to the remain really

the largest a been program. the provider to effective really We're country. it's think we think I in be So proud ACP

out will I Congress more year. I Just the asked it hope earlier. this money before White week, next understand to House has that running And fund authorize ACP for Congress

founded. asked to funded? extent happens I these as the that was customers received support program question, you Just receive mentioned, most what ACP before -- the were customers of today it's Now not Internet the

broadband programs existed low-income have ACP began. We that before

that of the these provide we'll continue value to to because I think customers. retain do we And

thousands customers them disappeared even of to home, by simply even every ACP hundreds ways moving their to these importantly, moving into them you build or vast products speed we inside the mobile. that if them We over have of lower we can think mobile have they're more be our about the where dollars majority though save the the year, have to save able money

that of and them us still been hope is down we to they can which that gets for to successful, the need One. stay. has save I we hopeful So tools money I renewed. by sure that Spectrum we lot Mobile that them very that available these I'm to customers to have go kind that of program, path. Spectrum on is successfully hope getting a But make don't

Operator

much, very Thanks call. our concludes everybody. that And

Christopher Winfrey

it. Appreciate all. you Thank

Jessica Fischer

Thank you.

Charter Communications (CHTR) 27 Oct 232023 Q3 Earnings call transcript