CHTR - Earnings call transcript Q1 2024 | Charter Communications, Inc.

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Operator

Hello, and welcome to Charter Communications First Quarter Investor Call. [Operator Instructions] Also, as a reminder, this conference 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

Thanks, operator, and welcome, everyone. this be accompanies website, on that ir.charter.com. presentation call found can our The

forward-looking to there call in you of would we to remind I actual like remarks or forward-looking risks Various view that Charter and may update predictions, which Any cause encourage and that to plans anticipated cautionary read carefully. current which filings, on risk historical other uncertainties such are from subject results expectations, reflect are statements statements, differ only, SEC contained prospects this the make undertakes we constitute you to to concerning management's no factors statements. statements results. number revise that and obligation a or and

CEO; turn our With On today's call, call we the have and Jessica that, CFO. and Chris let's to President Winfrey, Chris. over Fischer, our

Christopher Winfrey

Stefan. Thanks,

We Internet and During Despite million Spectrum lines lost penetration and customers. close nearly customers still of X.X low lines lower mobile with Internet year-over-year. have the we X.X XXX,XXX first we added million total Mobile now Internet quarter, to mobile passings. more than XX,XXX sales, lines

have runway for customer nation's fastest and We mobile service a incredible value. growth with at financial long the

and in elevated And competition relatively by at least our continued the small adjusted was to the by move from while a and term discontinued X.X%. impact connects low availability. a due flat Revenue customer growth grew environment ACP activity during with coupled EBITDA quarter, first fewer challenged the quarter, Internet remained generally low-income short low in

confident expanded Telephone footprint. within its healthy to gross historically compete and Churn And in has for return ability our levels. growth. low to to market continues our long-term at remains we remain Internet addressable additions

more is faster product Internet is reliable. Our and

lower customer grows. and when bundled Our as will companies cell the face pricing bandwidth capacity challenges mobile, phone with is similarly

overbuilders. In rational the activity resisted offers some from of similar quarter, given less chasing wireline continued promotional products, value And first converged overbuild a pace. at our we the

our money EBITDA with our products utility forward a penetration, competitive flow believe grow free customers As key with connectivity we strategic a us customers to superior increasing significant over and differentiated with and product that move customers, to converged platform save we and advantages and with cash video that time. provide initiatives, speeds value

and data usage it. speeds for continues faster Internet, In to grow, grow demand with will

During not quarter, XXX the nearly traditional our And market. from gigabytes we gig use in speeds first split who now X per month. Internet meg, XXX customers do first buy offer meg high us and symmetrical XXX video

to ultimately, of wave rolls -- The architecture and markets upgraded Later we'll across second technology. second this ability and capable gigabit cost And these to be per X see product. both phase better next even XX per access in X of the network lower gigabit fiber be completed, lower performance. demand. these speed markets, by next of rates a year, with contact the we'll on markets by X distributed we'll will speeds superior upgraded When offer with and truck launching able begin we'll achieving markets be offering

-- evolution and project. just savings result that $XXX network our capital of the at in to XXXX, the complete to initiative expect operating all or benefit incremental We over cost from passing, excluding an per just

requirements. Plus Upgrade eliminating within phones want, they their existing improve. Our to also offering and our allows condition Unlimited Earlier customers Upgrade mobile Anytime and and wait customers times, continues to Plus offering upgrade new upgrade Unlimited to month, began evolve this Anytime fees we traditional offering. whenever

to first mobile include this a plan. level within the provider of rate freedom are We

Upgrade, are part and of We per our for also recently $X plan plan Plus, repair-and-replacement launched a just new profitable. Anytime each repair-and-replacement Unlimited month.

Spectrum speed boost Mobile continues offers network fastest features room to the the to and connectivity lot grow We a and like seamless well with business. of our anniversary differentiated mobile Android first still to One perform across iOS mobile devices. Spectrum connectivity its have beyond and

X% differentiated pricing and promotion take underpenetrated offering offering passings remain of superior with Today, mobile. a less retail. our at our than total and converged of market-leading having and despite Internet We

dollars perspective, we less a untapped of be overall still mobile forward customer today. share of footprint in dollars XX% residential spent what growth. Internet from an cash Mobile flow And captured relationship drive going to ability than with will meaningful driver a our is and and EBITDA

user and We now content to and pricing direct-to-consumer turning with linear our SVOD, Finally, services. and video combined offers with choice, evolution one offer utility that of modern packaging fast, options experience which across value Xumo, offer the product. apps and linear on video unique both device direct-to-consumer

packages. no In also be available select became to at January, Disney+ nationwide products ViX, to customers ESPN+ a Spectrum language and with DTC ETC additional customers TV launched all their regional at product will within respective select plus Spanish extra in cost sports cost available no March. to customers

year. hybrid to our la through services, we'll a packages, potentially be to next customers. fully services our and partners hybrid model be for selling DTC programming And value carte and broadband our DTC expect bundled DTC customers linear deployed We genre-based deliver to fully able bundle

Discovery, month. January, late a compelling content Bros. like programmers an package TV A&E. at Disney, attractive Stream at entertainment launched Stream Spectrum from priced Fox In nonsports $XX we package, our offering provides XX-channel TV and Warner general Paramount, price per a

all distributors. programmers video and interface a our is more user video, the in within channels flexible clearly integrated modern priced environment across And options really frictionless attractively while under ecosystem pressure, value can we and in for a so forms customers, that packaging of recreate business the believe

the position sustainable So service at and and investments we're and We become through the In network short-term for capabilities, no in investment associated and unturned to better products, even challenges, value stone a we've clearly rapid an when our making packaging market our converged EBITDA term, some creation. operator, grow infrastructure product our opportunity back, the And today initiatives. unique go-to-market demand pace. leaving and competitive growing recognized in and growth we a embraced efficiency we cycle. long a can step we're customer pricing our Charter meantime,

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

Jessica Fischer

Chris. Thanks,

on Slide turn voice X. declined we Internet mobile first to and customers customers by declined XXX,XXX. added video wireline customer XX,XXX in Let's lines, residential and In the XXX,XXX lost SMB, by mobile, quarter, Including and customers results we XXX,XXX.

Our churn continued gross mobile gross we also mobile products to year-over-year saw to And additions, tied lower and well. saw mobile lower lower we although perform year-over-year overall adds sequentially. rate Internet

those One drive the Spectrum our incremental for Internet this roll-offs did XXXX their up of quarter. quarter, signed XX-month past in first quarter last reached product Similar promotional not to churn. anniversary Customers

churn rate In fact, declined year-over-year. our Internet also

One drives offering well, and our and performing mobile converged longer sales expected, lifetime. always we lines as Spectrum are higher So customer

passings with XXX,XXX as rural. XX over noted XX,XXX to the it Turning last ended from in our seasonality. the a given we would quarter. winter first quarter the last slowdown grew months those We of subsidized be call, QX And we on and passings. It's bit rural by a XXX,XXX construction

our Penetration growth growth increased in continues footprint customer expectations, exceed rural our with additions net and subsidized customer the XX,XXX in to quarter.

XX% rural activate than We continue to subsidized to XXXX. about in XXX,XXX passings more in XXXX, expect approximately new

in state's RDOF With are rules large-scale NTIA expect XXXX, through be and X continue our of successful to driving builds. also completed still BEAD, The the ahead private working have end the been to schedule. of review ARPA years to capital of by [indiscernible] the process. respect rules build RDOF We most

have with to appropriate environment not. a be investment we'll in states approach will available. some our some regulatory expect We conducive with while will continued expectation private be And ROIs that will disciplined others investment the opportunities

now I appears wanted program's financial Connectivity our to few nationwide regarding Internet for to results, million our for turning subsidy. unlikely X.X million comments the Affordable the Before ACP make a An XX receiving renewal recipients a customers and Program.

with ACP to to keep subsidy recipients, we preserve vast our everything do and of the expect the them will as relationship We can majority customers. we

subsidy, assist a lose number We're X all that and our line Internet have those program product. year. a Assist ACP to Internet customers of XXX offering including Spectrum for of We free mobile our also may ACP ways their

Spectrum even more are our dollars be or thousands subsidy currently benefit And mobile we customers offering save consumers the of than One their that equivalent these of $XX connectivity saving create on can customers able receiving. even to the has hundreds that ends, success period promotional shown by ACP will or long-term they The the initial converged after we bill. still

the The something pay Internet majority of of ACP the majority were before program. base pocket start also ACP of And for recipients service. the vast customers in Internet our customers customer ACP out our their of

and to will be onetime those debt bad mostly and to impact Ultimately, have provide the our we pressure, reporting. expect quarters quarterly Charter impacts And of for may lose expense this some in will third second and year. Internet limited our we the to ARPU we transparency customers, but

starting results, X. financial quarter Moving to the first Slide on

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

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

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

growth Enterprise by enterprise revenue of grew PSU X.X% year-over-year driven year-over-year. X.X%

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

core And grew revenue XX% in higher advertising. revenue grew device essentially revenue ad revenue advertising And Other sales. X.X% flat political down consolidated and year-over-year when growth. mobile was revenue primarily up first by quarter was year-over-year, excluding quarter First X.X% year-over-year year-over-year X.X% year-over-year. driven by by given total,

of programming video the include adjustments operating X.X% X% $XX due the first operating costs expenses quarter, $XX declined to a costs million and offset programming X. first versus in higher on to Slide factors by by million favorable and Programming These favorable of around by of year-over-year declined the decline X.X% video prior lighter period. packages. total quarter expenses Moving year adjusted year-over-year higher were rates. EBITDA adjustments year-over-year. customers in partly XXXX of mix And In

mobile of driven service to year-over-year for lower were Spectrum growth offset including and essentially serve mobile X.X% of flat investments. and increased by higher by revenue customers primarily productivity transactions sales. support Other expense, Cost additional customers, mostly direct the XX-year by with activity costs cost service from higher debt bad to device Mobile

tied partly by costs, lower to declined primarily by lower costs marketing and labor Sales volumes. connect driven X.X%

X.X%. Finally, other by grew expense

EBITDA when by Adjusted the by X.X% in excluding X.X% grew And grew advertising, quarter. EBITDA year-over-year. year-over-year

goal we in as deliver do the competitive can even environment growth, reach likely face believe EBITDA solid and and challenging our the that program. investments ahead, we to ACP a we significant business, make Looking is end of the

will mobile growing growth Internet revenue supported residential ARPU customer be and our Our by base.

related the the to as be we so that We've In continues us. in EBITDA improve lapped mostly should business also EBITDA to drag employee addition, mobile's behind our investments significant scales. the contribution made base,

And service capabilities, sales while finally, quarter's our our expense to across to continue manage business. expenses or do anything the that customers business. this impact demonstrate cost carefully to drive service we the And going not we're into sales results and to efficiencies and marketing ability our would

will as comparisons, some quarter, see tough ACP as In we second expense headwinds. other well in the expense particularly

our back while the in revenue. EBITDA clearly the roll-off is second expense quarter accelerate growth should So management be working, advertising process promotional will political our initiatives, muted, Spectrum year half expense our management One of growth given and and financial

EBITDA on on income up partly from and adjusted of in year last income by expenses. first $X income generated billion net to interest $X.X quarter, to by tax gain Charter of Slide the and towers, driven higher offset net sale billion X. higher the Turning shareholders a We attributable

billion, Turning about quarter increased higher $X.X first Line than rural million year's billion our last $XX above driven totaled extensions spend. in million $XXX commercial first quarter, to initiative greenfield opportunities. market by [indiscernible] and last X. Capital $X Slide expenditures subsidized residential construction and and totaled year the

compared to line Boxes. in network Stream excluding First billion quarter $X.X purchases by billion evolution, expenditures, quarter the Xumo and first on rebuild, CPE driven $X.X to upgrade spend of of capital extensions, XXXX higher due primarily spend higher totaled

spend $XX.X billion, For we continue the total spend $XX.X $X.X line to extension billion between of network of capital and including evolution XXXX, approximately and expect $X.X billion full billion. to expenditures approximately year

to decrease Turning last cash XX. cash adjusted in a offset $XXX payment The was year-over-year less compared free approximately to the primarily capital EBITDA. partly Slide a XXXX, in working expenditures first in The flow higher million decline first flow $XXX onetime increase year. million, quarter and of driven on quarter unfavorable the settlement in of by change capital a an and by totaled

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

Our current cash interest $X.X run rate is billion. annualized

interest all rates higher than less at rate $XXX sensitivity our impact long-dated to we debt our our would XX% of low. be million. Given refinanced rate If rates, XXXX to and structure, run XXXX and is debt fixed relatively expense in our the current due

As quarter, is debt to and first of the adjusted was net EBITDA of X.XXx, which end last our of the ratio sequentially XX-month year-over-year. lower

to of this closer middle the moving expect We X end year. through that of to trend the target leverage X.Xx to continue our range

We all debt to remain long-term trajectory making capital. we the We rated our strategy, the in continue will going of split in structure, drive including equity are confident fully of to committed including the buybacks, investments to significant And market to business maintaining given combined the our believe the investment-grade offers benefits levered forward. of share value business. that providers that be with we it the our access

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

the impact face With growth short-term temporary headwind the end the will ACP, potential and continue to continued headwinds. customer from competition of we Internet [indiscernible] from

Despite these competing short-term well. we challenges, are

structured sheet, growth XXXX have a healthy and through we're in on cycle. We very and attractively balance investment driving short-term focused competitive EBITDA a

and we're growth. well positioned for So future continued today

Q&A. that, the it operator I'll With over turn to for

Operator

come question from from Our first Instructions] UBS. will Hodulik [Operator John

John Hodulik

follow number second the third for all, of ACP program And commentary, on year. If over opportunities like any can impacts EBITDA down and given you additional grow just that still and first believe on in provide the the the it you winding sounds quarter. comments, cost-cutting subscriber up one. That's can color ARPU you I to could the the the and guys --

lineup? renewal trend add two, thought services I a about video you the over and your interesting. the number is DXC the roll on that you continue, of existing more especially expect Disney through the your sort side churn more commentary was or you from Chris, And to that renewals go to as

Christopher Winfrey

Sure.

Jessica as want Let me to try and well. here to those, may in tackle chime

there's first today. us. what on estimate. million have but XX for everyone, is have impact going one certainly and including ACP, The customers customer Internet ACP John, [indiscernible] it the unfortunate, to we it's a nonrenewal of It's growth

And that's the likely going work as seasonal probably through we to QX happen what's quarter already nonpay a and activity. third

as really, to about those extent losses, depend of going things. it's on think so you the And few a

customers. save basis offered on money to being first, not our retention allows That line stickiness subsidy much, well EBV customers That if some One, ACP. cases, even as be of more. offers. the all free In doing a us to mobile by includes the or for as already ACP monthly it than more as can maybe we closer a much

And we Spectrum Assist. do have a Internet

XXX. Internet have We

So that we move to can people have products needed. we as

going of And well that really so to nonpay going then on managing likely say is the best benefit that those tactics And manage an way to thirdly, on retention customers. thing the I depend for really it's we second of we and the the be our execute how what's to would environment ability matters. that elevated

haven't almost XX unprecedented. is events In before. this years terms seen In of like specifics, this something of cable, I

the But be suppression not and successfully. going we're event, I'm potential. maybe to really going through it a to on our It growth So manage short-term both predict. impact impact, ARPU, will long-term it's end, onetime subscribers in of the it's but difficult initial to confident

Jessica Fischer

Yes.

comps you there to highlight well across EBITDA the in there QX is of and out as impact, of as As just some as debt some last we it, are inside the there pressure QX could likely, EBITDA because think I well. year, pointed pressures year if on bad be about would nonpay

of be Mobile, year rest across consider our expect for in our the continued of see EBITDA ability the as advertising pressured business when initiatives the we But expense you more Spectrum would QX. the well. political and to it to I in So roll-off accelerate the growth

because of at, continue growth And so year. all that, that the scenarios EBITDA we've looked expect we in of in the to

Christopher Winfrey

Yes.

going what's quarter underlying for difficult. have quarter. growth EBITDA, provide the to estimate transparency But can ability isolate. so on is subscriber we're they And people Giving that I the by along we're the very to that. see that We'll rate. all hard so mentioned a reasons We'll for outline confident on impact

Your quarter, our other out Select which and churn. the we to to Disney+ Select above is the rolled want question, understand, beginning sure John, more at on Spectrum sports-oriented Plus make rolled all was I We the customers out -- top. to I video and on customers, package of

rotation We rolled on out ESPN+ there. there of base the inside take-up that nothing way. in March. Very was early subscriber on, a product good that along But was our

contributing negative a not was to adding there those in. factor So

sales in Internet I would days an to video. have really that rate highlight Internet, an has coming video attach where in lower impact opportunities an environment on these is we as

the So do video for inside therefore, lower the opportunities combined rates the of QX combination did rate for increase having that the loss stays Internet quarter. fact cost consistent. But we the both pass-through selling programming contributed video lower a relatively churn with attach and inside video of to

new I we value more the hybrid think back and which we that stem to to also increases programming potentially we lot through. DTCs attach ability to the have cost over a linear answer coming do a time, pass Internet bundling in in, get to? to addition think the the where gross that as forced add we've calls model offsets of rate I these as the actually add churn both provide you're our trying been Does coming side package, more significant to that into from but of primarily

John Hodulik

perfect. that's Yes,

Operator

The from Morgan Benjamin next Stanley. comes with question Swinburne

Benjamin Swinburne

few gave more. some on outlook the unpacking items the Jessica, a line you EBITDA for helpful bit year. maybe guidance little a Just last us expense quarter,

of you I if just I check the had I given to and cost to service updates to know that. wanted any programming, come of pieces. any on on some think mind. those don't moving marketing

on a competing piece brand the or wireline for lot could minute because level at lighter than either you wireless, you in or expecting. competition, least of of year-on-year to everywhere we you your markets bit or secondly, just and broadband product a overbuild Internet now down both just stay cell is on sort this which quarter adds the here sort about you, at right And with industry of how fixed fixed wireless of then net spend were talking were phone of and a see then

pricing out also of wireline does here. seem as is So well. mature But market it that starting like sort in product called overbuild the to you discount

So on the updated this framework competitive about love thoughts sort you're to your I'd thinking of hear year.

Jessica Fischer

in the in on earlier I expense Ben, guidance update doing around I that begin lower we're possible don't we of to don't the So we because line have that an gave we business, I what a on guided any item to, think specific it's would vision, have it's is tell that think we year, the items. that expenses But to of come the I of I some than the you low possible across with. those come in [indiscernible] side. work but what

Benjamin Swinburne

Okay. comment you the Even made debt earlier? bad with

Jessica Fischer

out. it's the because fair customers exact contact ACP other will that's matter a debt you to call way. that predict some a is hard in go the of and So nonpay to bad The between mix is related amount of what customers that

that do I call better. think out. than On So that's fair that, other we possibility the items is

Christopher Winfrey

competition, as more significant operating got doing, sales will and a step results and about all serve maybe take lower to the back a impact and in and and cost environment the as context. broadband You've that activity the well. transaction well as bit The a have environment just management that marketing competitive that detail expense little talk plus to we're

"Well, important our a switching keep I we or versus think performed first with that bear lows, to the year, in better which is And continues then that so work?" but actually to mind a good. at churn, second, The it very in below me, little historic first said, just thing somebody is how does last quarter be in competitive wait

pre-pandemic selling lower the continued in been past much for household some by broadband opportunities has to move the is that's actually lower formation rates. driven issue reversion levels real in were mobile-only marketplace the year-over-year and quarters. There X year-over-year, And

time, as lower what same mentioned, opportunity for still there's cell Internet some phone the competing at and you that's And a much is set. expansion,

from So if of just in to loss connects removal that what a ACP of the February, us bit XX,XXX you then add of early really roughly impact Internet. to that's drove the that, started

shifts an Ben, been case, gross hasn't in as churn, net this outsized which really adds, even you know, particular, has in it in environment, just the adds. impact small on

going QX definitely, so going which seasonal in of nature. case And the end that's all of as it's is in to to temporary with before, I mentioned the also the ACP, be

have you're a which bigger is competing what question and the think price, combining have are And as cases, still And the I against. of and best we everybody know we all-in mentioned, the products. we what is, best agrees think particularly I doing? at lot in I broadband we we're when it mobile,

and multi-gig I wireline and broadband capabilities, Our that to the network as passing. no expansion network evolution and homes we're to per and low cost And best-in-class wireless then symmetrical today. with a at products $XXX mentioned, of we doing that converged of have

increasing it return essence, what we in together means in we're still growth to that competitive, is with when of very customers with you And products. doing what in-house data, do a the And service over is customer continued saving money structure. mentioned prepared remarks we're time. for sustainable onshore XXX% that So positioned lots very demand to fastest put with I well we're

It And don't the doesn't execution. that opportunities. unturned mean heads no key for We're down stone us we're meantime, in on short-term really leaving go-to-market. the have is we on

and new package assets think and innovative. and price are in ability to I that great ways have We

disciplined very our trying of overbuild we the we're do particular, value on still know in And you the what the products. as meantime wireline because mentioned pricing around in well, be to

quarter. term. downstream And services value there saw just and bring the we the go know bit few overbuilders And we we've temptation can customers wireless during long so we to value the resisted that and wireline our a because little to of go a both the

Operator

question New from at Chaplin Street. comes next The Jonathan

Jonathan Chaplin

midpoint for the that. the change I just more thinking leverage the on towards your of context some love to first just guess in the navigating on Would one target get range. the Jessica behind

script You mentioned a sort earlier risk the isn't the that material concern. higher of in rates of

And the the in the leverage navigating just environment? the competitive range down sort cash the so this generation given confidence in cash of reflect in -- the business lower

Jessica Fischer

Yes.

would in Jonathan, the little X appropriate. confidence with the outlook our remain hasn't at sort But think say the being have. So thought We to business based changed. I height investment comfortable on the our we we range was of that cycle, bit of I X.Xx of a that creating headroom

our we leverage We'll continue to and we're deliver constantly long-term reevaluate to levels in overall, of to do think drive continue returns. including equity that we the investments that. business. buybacks making We value. important strong continuing trajectory strategy, sort levered believe position. And the is the maintaining We know to of will But that

Christopher Winfrey

add just I confidence. of to -- would said just on add, it, X Jessica lack a

as important flow and our cash making flow have much really well. us, important our about free ensure equity important more that's that onetime it's growing strong even to so the -- And it's has It's we structure have through get today, holders have. as Jessica cash we to investment-grade it's said, to debt free sure We and we investments. as holders, already good these

Jonathan Chaplin

back that asking to you the you could we Were are comfortable the agencies of And that just over a that. that quarters? bring for Chris, sort rating lower the would go range? feel course in look to in the you the And look the next the of few to -- make there range business could high of end leverage on follow-up things

Jessica Fischer

Jonathan, additional across rating higher given I some pressure business there that and CapEx the on the of puts been we regular free that in the we're cash X that, the holders flow. that all sort Certainly, debt and agencies. think in with conversation contact have agencies, has ratings of short-term the

they of issued of you week holders, tone in their of those of And there a concerns equity even don't somewhat. their the market, at that ACP ratings in broader seen noted competitive are environment. triggers the might sort tearsheet to I they given though think adjust And last S&P to the though the addressed expect similar change end that have our they might

family if ratings our change, didn't corporate to And were the expect rating. any impact even investment-grade to they

constantly with them. So we communicate

for where I headroom. made we are, of create little think that us sense it bit to given a

some think As free certainly could growth we coming we you up winds reevaluate. flow the in about back time, as at the move particularly down. constantly point back sort as of I cash said, in range It's that possible investment

Christopher Winfrey

[indiscernible] do being we same responsiveness. that want current at given to as we and the time, can the much responsive as within stock price,

Jessica Fischer

Yes.

Stefan Anninger

Thanks, Jonathan.

Operator

Moffett next MoffettNathanson. at question Craig from comes The

Craig Moffett

One maybe X of I Chris, want just Jessica. to -- question questions. broader one sort more strategic from clarification then and

of not first as the while category. said an product new the but really something about you offer, one, that One think On been about, I've me a sort way about thinking a offer you you to back convergence, and as characterized the Spectrum

wonder of their searching around yesterday, market Lumos the if converged of actually particularly in in have of in could little portion a you now How frequently about with their footprint bit they offering. context that a that the their quite the sort about and of talk I converged much talking just deal where going T-Mobile for direction? it. offering is AT&T

And then, rate you start might nonwholesale business? Jessica, we services just us Could so start the is growth overall to that wholesale just one when more how business your minor the clarification. left like understand of of see to can we part let look know the market in much

Christopher Winfrey

were I I ago, here is convergence. You first if think Internet as you Then years would best my on computer lot to the WiFi have way that start do And it the I about kitchen. connected the your on spend asked I'll one Craig, on So XX and this what's of is in ago, years a the is tariffs. of the well time on talking of have might it connection? and XX been your -- the speed to back it [indiscernible] been internally

connectivity know, I and if your today, and out provider don't just the and work, it right You'd don't connectivity has uniform the care. driveway in Internet I if say, has we're our you're a broadband pulling of definition, to can It be footprint way. what now?" broadband increasingly Internet And "I fast." provider ubiquitous seamless out people's only to that's provide that in And "Who's then driving say, that

we have Internet. so And the

WiFi. the have We

XG a XX% when And was going increasingly and Internet [indiscernible]. of available. is isn't WiFi over was service Our and reported our -- our WiFi we cellular last over traffic backup

it's uniquely in our interestingly, put ability we slowest the of together you offer XG, doing, to have of capable a portion when backup And the So all the in It's something way think that marketplace. we're I radio. network. the that

Now is the way not of it not that purchase today that they it's It's the the in explicitly been terms sold. way think about service. customers that's challenge how

in So market that's and package, education We'll along meaningful have that we there's the that challenge way. price the way impact. a an there

it just service just a argue, because mobile a And would it's connection. is Is the broadband product? Another going way a is was wireline mobile been is XX and a in Internet that tower, really an extending and even extension ago, years always about to Or I of it thinking fact, is that of an just connection. has really an today, extension in product? it

way the doing have home, ubiquitous we're inside from the competitive. that service in today, And we strand. that a is to out ability And WiFi provide on that

in to way. do And how so try and Spectrum One, the to is get the idea change different market educate purchase a the habits you

and product really market. pushing time, limits the over a in testing And and mobile the is

we're have flush a on backhaul service I and today. WiFi it almost are service advantage, the but and more ourselves, competitive think may bit cellular routers that devices we actually that here little all just of its time backhaul a we to we fully to cellular of take And are the backbone to way today, provider only But traffic. out. that's not our something providing

just it unique for So capitalize that the opportunity in a future. puts to on us

Jessica Fischer

on a is little of Craig, other less revenues. overall the side, than wholesale XX% enterprise

Christopher Winfrey

that's the really pulling that, And of that the is cell piece tower backhaul. piece

Jessica Fischer

than little really half less that. that's and Yes, of a

Christopher Winfrey

Right.

and the steady, So the will. in decline, traditional you cell wholesale systemic is that's backhaul relatively if it's tower

Stefan Anninger

Thanks, Craig.

Operator

with Bryan from comes question Deutsche next The Kraft Bank.

Bryan Kraft

I I X had if could.

us the onetime payment thinking this could was first also impacted you First, in usage how flow, could wondering to size Jessica, if quarter us and the you help free about capital that I cash related working free understand if you're year? cash for flow.

you just the I network Chris, Do impact or mobile of neutrality Any if thoughts your any could was rules. on net on the way, it's share broadband SEC's way with recent the you're running concerns home reinstituting the whether on they then, wondering neutrality. the in side? rules? And business

Jessica Fischer

Yes.

excluding is always capital So $XXX the or $XXX to us flow million negative the negative the in capital payment continue. expect course the expect from because a of year quarter. Obviously, device the device close that sales, that to cash had, in we'll excluding the should order working a to side piece fully free so capital the mobile we that of that then flat first impacted perspective, to And I working on to quarter. you capital mobile working over And for continues be the capital, working of drag and Bryan, of range. working make a that QX million the onetime back sort mobile on

Christopher Winfrey

I'd the do concern we the We We've we key don't net the don't don't throttle, The We -- and [indiscernible]. caps. Title is We have start Bryan, from don't don't concern on block. even -- isn't paid net regime. prioritization. data II the neutrality, neutrality.

service that a regulation for where couple very now. consumers is on decades paying We over has brings, rate consequences really additional regulation question usage delivering that of Title the value customers of they're for things the forbearance around a that unintended been for. regulation that The tremendous believe and that what to on been of has regulation, around to of that lead unlimited II without successful should have type can product

we're all. doing regulate over already like say hopefully, that can don't That's the hope. standard X to as But well. back debate we're Title set to time, way a there's where this to II works that continue It's Unfortunately, is it FCC, would to many process. years court Title the everybody always going then for where II through been with a the get the we stage. that the this and in we by things over surprise. probably puts that Congress would kind at go be, right to bed and we're I exactly once at way this its I of thought seems think And

Operator

Rollins The next comes Michael at Citi. question from

Michael Rollins

questions. Two

maybe performance, the the rate start broadband course year Spectrum ARPU quarter customers benefit more One And to the levels? terms residential the how promotions the to the with in potential First, can of normal unpack through you off? benefit from the in getting rolling as respect this of can back size move

there have release I'm now, I of for suspension in customers, noted some those customer I'm hope our insight other secondly, just this time press and churn curious some broadband program And then any to to do for on where services. risk quite quantify subscribers may you been And disclosures provide collections risk is is that right, framing discontinued? potential ACP customers Charter or this happens if what discontinued? And if the how those

Jessica Fischer

Yes.

the on the drag XX net The of Spectrum our starting on Internet on So in was allocation the One first basis one ARPU. quarter. growth year-over-year points ARPU

been by GAAP have X.X%. the excluding lines. mobile X.X% increased allocation So It would the ARPU free for Internet

expect would I those narrow the should of becomes of base the given roll-off. rates the X more over promotional lines the free course Generally, because in gap that year stable growth

of we our mobile offering However, ACP line free talked customers that about are a all I year. for a

and X have Talking a we the widen in we between the if save customers into inside see what gap had about aging, again. on And of of lines, things could reacceleration depending success program, ACP. of of a you we see over number footnote free that the time did those process where the level so the

an into took status paying and who business, eligible and went then for multiple customer they a nonpay were lines and they were say but a were was they video there Internet ACP. if us of So customer,

Christopher Winfrey

most in Or in it cases.

Jessica Fischer

do Internet were already covered ACP, the services whatever would longer would was be But were to additional the by subsidy, would them customer service. we in that what no the fully enabled ACP which product they Or an Internet-only have continue to then to their downgrade that on their accounts.

those they're though balances have We fully reserved. held

then fully in at had base bad the in the by So reserve inside sitting nonpay also point you who you're process. subsidized can they're ACP of time. of went some already receivables, that period sort footnote, see into fully some correct written a in past customers of bill have the debt the they're for their But of process numerically but but off

Christopher Winfrey

as right to And their be trying connectivity. or didn't if And example cycle you they receive these think to time, about to it's to the sure it somehow -- phone customers we there. just on the that customers going to those sure from from entering request, to make and government cycle video can collection Internet a to receive thing customers to to how continue wanted responsive we talked collection everything to work about ability classic the benefit customer suppress perspective continue of through, over that that's into make were and we the do base do of a I that a there's for stay but challenges and we're connected ACP

Michael Rollins

with are go mid-May are your choosing at the Or wind the customers? April? through ACP planning implement down to to of you you And end

Christopher Winfrey

agreed with it to make credit to a the outlined. it $XX, We'll and partial partial It's clear and just go to and to ACP the month round what a going accordance through make of to $XX of customers. fair in be it we've with government -- May

we'll May. what do of that's So inside

Stefan Anninger

Thanks, Mike.

Operator

question comes Jayant with from Evercore. The Vijay next

Vijay Jayant

coming consumer Chris, channels? your Disney have substantial agreement costs portfolio the you what [indiscernible] focus think a resize sort associated programming of programming very given there pretty [indiscernible] your on is up contract with of to a shortly. [indiscernible] that big And improving sort video of with proposition, I the

authorization And Is second, the million. that that's around I re-upped? is something that going somewhere buyback be saw your $XXX to

Christopher Winfrey

was little off. the first So on a the connection question,

here. after going this question liberty of so take the to And asked. -- answering the so we're the going to sell I'm think want you But to you call a Spectrum I Mobile

Look, getting detail individual years. always successful at on we don't renewals, and programming we've That's generally the our into throughout been very get renewals goal.

really to had and is that value so that twice that That for historically same first we've make starts set customers. is where goal, though, change them model. once we and again for product, pay we not to model sure create debate foremost, asking which we a that, new the with Our the really the

in of for "Look, But just to the a they lower saying, deal all to have equivalent means get And customer." or got our selling a it in better a fight that's approaching we price, if for path product product. also some and cases, the be marketplace renewals that should we've even

a we and go hybrid. We to can sell traditional that market, linear to can bundle. that sell do in way the should we them We have DTCs. ability that's can And

representatives XX,XXX retention. have and in-house We and sales sales

we that's we very of a being have DTC. And engine that workforce way broadband that to a of large [indiscernible] do use that's And a have we we creates can distribution hybrid, so value consumers. and that for And base unique. customers linear on capable in want for a

and in as because to something ways our video is package works is But for the a our that on providing think different in I customers resume it through utilities create goal needs again, value creates a we've ability customers' approached here fair that very consternation at it's what different. different to ecosystem the marketplace really utility way, a value and meets price.

for it may and while again ecosystem and be value along that creates a programmers creates painful actually ultimately, for the works everybody. And way, distributors

to them programmers, to takes saving bit or just little not actually from they worth by a can just that we and so so way in that the adding to approaching is trying more anyway. We're a package wanted customers through. pay this value way churn And price of a create just to either for money. we're the that because money the get of it save And for they trying environment lower product do in benefit

But I a where think put X on And bill works proud our really been Today, at something to point do we're we everybody. Internet ecosystem video broken we for decades broken, we had recreate here a while. in it goals are It's time that doesn't. to our for soon. can and that have it's product that maybe the first where a some been

And is our on we last hand, year it less. talked that of, about the really bundled when churn customers is one balance

to the when and asset. bill. becomes and has the high-quality rate to goes But customers twice, value liability pay being product been continues down a broadband and ask go video an it sold a the around then so always up Internet them And it's on

we're video or the not. that need and And way what for creates then I rethink selling for we think actually value customers it to how

confident we've So to And been. progress I'm that's in continue this space. we're make going where to

Stefan Anninger

Vijay. Thanks,

Jessica Fischer

authorization would as quarter, buyback you the On you of as side, authorization to lower of The we're answer what pointed question. typically out, little make than is end we the sure the bit a that going see.

readthrough we be There buyback since to want which And because the really able time. we year the are multiple the expect I as the that, clear just of our that mechanisms increased of be buybacks we that to to have delever. even point authorization that to and in renewed, by gets maintain over course

sign you through as should of about of that the So the program. not any sort read direction

Stefan Anninger

Thanks, Vijay.

Operator

The from last Cahall come will question Wells Steven with Fargo.

Steven Cahall

you're seeing. a said So lot in about Chris, you're returning overbuilding confident earlier, spoke the growth, and you activity long-term you that to

passings have penetration tough your we as I penetration just see then is think things to growth and on to well, look ex the when pencil us of think the maybe out about of subscriber it's challenge return rural. side, we when about think and at that growth kind of fiber many and

and to a So you start I us timing was subscriber wondering give growth to color your if reaccelerate any we see positive to level. could just might as when thinking

up then just Jessica, Bryan's on question. And picking

capital about a year. bit working maybe drag mobile being of in talked You this

the So on that acquiring ACP as lines for for Or expect you necessarily mobile accelerate you be start not capital to handsets? could working the to customers do new the drag do mobile, handsets?

Christopher Winfrey

ACP space. have be the and to it's be very mean, hit. for So timeline is a I just on right I going onetime to timing going which fluid that because conservative we clearly, I'm to a now, detailed want recognize going a not to reaccelerate provide

the will where capacity, isn't that of clear. timing entirely Internet and they reach have cell You phone

along which And then was and what there's announced. are fiber pretty far upgrades, been have announced from actually

and back, Internet see you're So decline. well, get that though, already Cell to and flip the time relatively to it fiber and all together, if start put ACP, I of of well. is capacity, of phone upgrades over should and bodes stable, [indiscernible] will say, some you and signs actually run past I that starting think paring think which out pace of all

product mobile to to actually save simply and because now but that's our a we many look product, mobile more the gigabit and about then on wireless ability combine rides on with infrastructure, which that dollars. a of customers come, that attractively unique quality fact priced half have a not quality, have and those of you so very even our in -- years Internet only the gig of largely you fastest in And to the particularly even that product structural business is at that provide it overlap, the advantage our with hundreds the when XXX% in the you ability market, the for just don't then combine thousands and

back just at that's of as And it that and question of pressures a sit start to when when. It's some a I pare so you'll back, these short-term if. and it question turn. of And look say, see isn't

the at the been haven't best we timing Honestly, that. predicting of exact

And quarter, owned that. last we I so said

overextending ourselves I'm careful not And here either. so I that want be to

only and we It's think the important back we more But just have. take a step I what product it's have, getting what's better. at to network the look capabilities is

I I rural. if so did of the just on subsidized the that still very that passings tack the back that then that investment, passings you terms rural, penetration, add you net very, But the bright If mentioned Charter. you the think where additions on future's the to to math going for ex on rural rural that to we're ex in of get that it's

Jessica Fischer

that mobile other you driven so by working notes. out, number point subject EIP you working doubt, the side, the or capital of on a without On devices capital the to phones drag is mobile sell

some we Upgrade additional ACP the drag. devices because additional that devices our as in if end if so mobile Anytime to with up a possible, also of be which on acceleration is work some we with program, of And were because having up or result customers additional of end there could

side those that available EIP wide taken haven't a the of having I building it related sense would on you that just the notes like as we for some asset make been options business, hasn't that of part a we've What including for for of yet building of as to our to of made sort us reasons, are scale overall advantage mobile of other program stack. our variety financing the tell is And sense.

building, we some drag mechanisms. And option. could which at a as becomes also that we're financing viable I in possible a some that we've through more of by So I size working working think offset certainly, think capital those been reaching it's of that

Christopher Winfrey

forward the the one. Good. Well, again to thank next on talking call. you, everyone, for And look you joining to

Stefan Anninger

Thanks, operator.

Charter Communications (CHTR) 26 Apr 242024 Q1 Earnings call transcript