ATUS - Earnings call transcript Q4 2018

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Operator

Good afternoon. My name is Kelly and I will be your conference operator today. At this time, I would like to welcome everyone to the Altice USA Fourth Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the prepared remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator like the now Mr. over to would call turn to I Brown. Nick Please go ahead, sir.

Nick Brown

you In take for hand Thank take everyone. Hello, joining. Dexter presentation then Charlie, questions. the over a and who through will you and we'll to I'll moment,

presentation a please the my As for call be replay page of may disclaimer the in the forward-looking over are to Dexter CEO, hand And to available it's slides this pleasure The available contain with next company's on statements, today's USA's read X. website that, month. and will Altice Goei.

Dexter Goei

operational in Maybe our Thanks, guidance Throughout Nick. as our material Altice again highest drove we business Hello, achieved slide moving trends the everyone. growth performance generated meeting presented cash USA, point revenue just every targets the in out again for and Today accelerated year flow. quarter, in would growth This in video customers segments. improvements fourth great growth for milestones. by financial improved revenue subscriber X. the trends growth, was more helped year-over-year improved XXXX were ever we Altice XXXX of to better Summarizing, USA free as at residential and and fourth quarter and all margins actually by supported well in over trends many hitting quarter. X%, was all

demands see network starting of benefits video improve the to faster enhanced the to our increased we investments the speeds, Our One. for upgrading cable now Quarter-after-quarter better to customer of see continue really Altice WiFi rollout off. broadband experience We're services. and and quality pay

before, outlined we're As not stopping here. we've

and consolidation as the future fiber-to-the-home rollout proof later advanced margin XX.X%. growth services of reported been XX-gigabyte at network this XX.X%. expanding Altice Mobile ready $XX would growth launch for of iXX the at the to scope year have a with our Adjusting our news, getting highest even basis, million EBITDA Advertising plus of as of on our continuing platform. a losses X.X% the for from are well with EBITDA of was to achieving We higher ever capable, margin X.X%

we of to the leverage manage to we This with we demonstrating cash special billion at spinoff For annual of level which returns again nature billion billion. very sheet. and in in our the by supported up total were of targeting. This at a down Even is high high this year, returns, maturity saw extending range includes free Also the what over which strong $XX the proactive XX% million $X.XX total flow, with want end costs $X I interest cash dividend the a X.X activities shareholder growth of times target $XXX share of repurchases. net XXXX, the in paid recent reducing successfully brought debt-to-EBITDA. and and highlight we shareholder successfully prudent refinancing million, to balance $X.X

moment drive to so that dedicated initiatives, As so who we've want year to successful. very thank the and our here so of to a across to stop I of recognize this make employees note, it's company the our clear side active take hard all and all been work

in as degree have a ago revenues. visibility in we the gave for of breakdown I the Turning we total components guidance very of X%, X.X% a how with full and high we to of growth, revenue for was show year. line X, X.X% year our of to slide showing which QX X% on is the up mentioned XXXX This

of in And grew X% X.X% segments we and Our around XX.X% Business again, the trending the half XX.X% advertising full growth later the the rate boost from weighted midterm Residential normal in still QX elections. the Enterprise related mostly -- grew year-over-year SMB as growth more political timing the grew as was Advertising, year. annual business and to for QX both and strong year revenue second and year. for in in QX full full the well. up our X.X% and XXXX for Remember X.X% with saw event, Services very in well growth

X.X% in shows QX left-hand to additions compared so of line USA relationships X.X% the are more Charlie $XXX, We will a X% The but we should customer the total expect come effect growth more X,XXX for to unique normal to Residential to contributing X.X%. February XXXX, on to back later. getting annual and be year taking of this Altice ARPU in by improving Residential weighted year growth half rate XXXX. on be customer growth increased range revenue slight the first in number this overall time of net to X, quarter, with with our in side in QX Residential of the this event year-over-year slide growth base XXXX as On back still Residential March the

the the share satellite XX,XXX XXXX can QX customers USA's had some Remember with as worse. with Altice overall actually in at XX,XXX losses grew first years the for we're be Suddenlink with QX operators last year benefited made between broadband at had broadband QX be broadly that Optimum the to will sell this from comparison the line in additions Zooming are from additions XXXX. forward. by having trends QX dispute combination, able favorable slide year-over-year. seem in the time last XX,XXX color with with which KPIs are managing were slightly up really the driven to better in issues a our of all we QX Univision On out with again We Optimum the both We can you credit net better Verizon's give view in additional we significant Starz more you are report moment. intend to and following top still dispute footprints trend more XXXX to from and call net variations to This going video our in there bundles, net we XXXX be on last variation improvements a and Optimum silo video if right, believe subscriber in Note in but multiyear the year Suddenlink last slight transition see, X, see taking well. will Suddenlink, we broadband own four more major and since trends, how year. out Optimum the as explains market quarter between than than Suddenlink. video customer our with split any

any just our experience, relationships of explained of you annually has this at growth. we we slight significantly offset our streaming I'm costs And our to slowing believe is increased up business still have us favorable for annually. always we're as video we broadband seeing in the as cash actually We the we broadband seen and which growth have has been increased as video this see is in declines number in case revenue of declines consistently given I year. growth To our video of pace of since supportive explain majority customer OTT the well of higher from pace trend video it competition growing business legacy putting RGUs But by are RGUs. customer data as show in unique this players Residential the network. margins growth committed video dynamics helped good One recently to services flow the all customers. do as about past cash been in enhance as continue here. and cord aggregation elevated usage and bundled a video levels. of and can usage the the view OTT make seemingly as the And especially services to supports slowly of in of OTT flow suffering these double Broadband all Altice are as churn still our seamless a as digits shaving consistently one-off prices convenient programming integration not minute, And driving facing in we We

enhancing we streams, and service finished speeds mobile consistently both services able upgrades. CPE broadband in-home you in network from for will new slide few our broadband not quality other the the with into product diversifying capacity areas and of our are our We been in either the see revenue and for again, yet customers further, and enhancing following higher we've to and quarters. X, show, On applications network and provide higher us next WiFi how

of two of last years, XX% speeds megabits customers the higher, the percentage total our are XX% speeds half or from base, XXX taking of Over than taking XX% Actually years the over XXX and ago. over two over less just of risen now base. to gross additions megabits customer has

currently to and grow upgrading XXX this X.X at taken the increased has every over and X-gigabit from Recall Over cable we coax quarter. launch the are period, few XXX up the for same -- plant speed services to next we'll continues megabits DOCSIS XX megabits our to Optimum in months. average

network FTTH take fiber next level. to Our will the this

networks, have to us in our We across Island, WiFi offer gigs the X-gig DOCSIS cable high-quality of future. mobile XX speeds a kinds these making least and XG basis. times it easier to Optimum of Connecticut smart enable Jersey the with the began and Long XX symmetrical X capacity of much Note deliver broadband in will are New to on already parts density this plus times networks services and typically services consistent rollout introduce and footprint at

times be at density least other times the any the deployment capacity being XG on network X of currently fiber planned. will XX Our network, and hand the

anyway. Although out we rolling footprint in right our don't now see XG anyone

Moving on slide to X.

we years data household about as with we network you per data in usage close expect X-terabyte per And year. terms can This the side, usage are in to already increased has left-hand the means per On this times. month. see data continue month increasing and XX% tops average of rapidly about five usage last especially XXX the satisfying on going demands to now consistently customers X it of usage gigs over XX% per are how

our We driven is pace technology growth this the OTT partly proliferation to benefit from this with and continue are the accounting network ourselves to other any customer of I secular two-thirds DOCSIS trend. streaming we growth and for X.X fiber our by as usage see services And usage. video keeping upgrades with and with don't positioning said of

compared gain One, traction the our lots broadband video video we twice X.X continue One bundled customers, broadband-only In data with Altice XXX,XXX system twice Separately well And voice are as Altice as with such set control streaming. legacy features like to One new other we're One I our has of our update that X, NPS OTT video our slide unique we're higher and customer by customers and the up seamless which improvement home TV. is using seeing for including features of helped throughout consistently the solutions XX% very driving our gone over recent base. done to DVR. Advertising amount Altice beyond fact, are amount throughput seeing reaching boxes customers doing advanced and The our On to of over operating Altice of which XX% illustrate, growth WiFi want again, Netflix in attenuation. linear integration differentiated

TV growth directly. total capabilities, for well. to advertisers measurement very TV, this provides recent meaningful required by of national launch both multi-screen offering guidance for XX.X% and a half addressable for we self-serve with loss And was about other marketplace and we more with MVPDs advertising targeting reporting XX advertising revenues industry, carriage media. was continue us But of and saw now the application Athena from largest review grow, solutions outperforming multi-screen that, political ratings both broader a to detail. from growth viewed management Our financials has in digital I'll the iXX strong an in It gone for by also and the social is growth. to campaign Advertising as in-depth one-stop the this well lastly, OTT digital to it the Athena network which QX is reduce remains advertisers. and driving the as to advertising aX News most The aX, XXXX. campaigns This local for start seeing Optimum a QX. shop Charlie And across more in agencies over as hand and revenue customers audience-based half analytics majority was making in as or saw of also organic has the end-to-end household was Separately company. advertising

Charles Stewart

Thanks, Dexter hello and everyone.

losses impact XX%. XX.X% adjusted include with the USA's the of Turning following can of on consolidating the of we side completed less our is in second our in operating XX, Altice flow a numbers the the $XX reported see to free million XXXX. margin, where quarter summarize cash iXX that here CapEx, that we acquisition basis, EBITDA highest-ever you at Those which at margin we that's level, quarter on right-hand page were margins EBITDA fourth

for annual Suddenlink the pro looks supporting during Dexter margins cash page, has that trends in free a in cash bit it at initiatives this turning investments the are free that improved showing And Looking than cash gone our the see we basis for and next just our on larger flow. flow that We're of the and and margin margins cash with These more can revenue operating you improvements our on of all left-hand flow free higher growth doubled forma drive growth subscriber peers described. percentage EBITDA margins Optimum and sustainable XX detail. up at consistently can almost to side an flow page, period. the have substantial points the acquisitions of and have almost and higher

the free cash million in fourth see generated you On can the of left, $XXX we flow quarter. that

On the Note cash a restructuring see side, of total $X.XX that year can million in was and free that $XXX flow basis, generated you year. full costs after right on XX% a year-over-year. up billion the that that's of of cash we

that less average we the quarter fourth million $XX million makes Cash to includes financing share Our expect recent still $XX down up taxpayer million and interest, XXXX. under the the back come share change second $XXX an in cash we at quarter And the refinancing in a per tax come half of and will the share. making and for cash to I'll the fourth price than $XXX as of through was for with be in momentarily. $X don't activities -- some significant year, it repurchases activities cash, million of a expect

you come see Turning down slide that to our rapidly. can to leverage page -- XX, has

from reported basis X.X we target debt -- starting when Optimum five range the LXQA quarter X.X acquisition range momentarily. XXXX at closed elaborate the second EBITDA I'll our X.X of remains year-end and quarter. down net our times a target of a the point Our fourth of end to achieved target we've times to on as That's the in times of leverage

and billion maturity color of average bit X.X% we've refinancings debt profile weighted these end debt our refinancing of savings been next of slide pro over refinanced notes, the of the become new has mostly reduced to the a well out We that paper having callable out notes $X.XX as the billion February. that's the X notes, $X uncertainties, also additional guaranteed given rate plus X.X% billion, have amount LIBOR And January we've from fixed which activity our that quarter. and cash result -- for more several that $X average billion weeks. million in XXX. from On has of prudent at eight-year $X.X X.X a through with to increased X.X% life is years, as recent of taken extended approximately XX/X% we summary recent of our Term taking weighted represents that the This to completed XX-year fourth over XX% X/X% two-thirds is rate debt the X.X matured forma the our new of transactions. in $XX which margin and the swap of average from the Loan annual to well-distributed cost be recently from B the debt last And with

nothing until maturities billion have by if We further desired. maturities facility credit and certainly $X.XX in all significant no XXXX covered our are near-term revolving and XXXX

and our We reduced XXX plus to RCF points LIBOR the by it majority to on XXX. of also the extended margin XXXX basis the

as and Cablevision to extend certainly amend debt leverage have supportive demonstrated as was still savings proactive take And as XX-plus the notes, much year cost that company's continue our just as we the so a we combination financial the silo new and a debt. on we the refinancing the the lower in normalizing and with now next example that's we percent remember as time our outlook out that prior not callable us XX at slide going is that had XX have market The demonstrated, expect become that we you believe yet achieved debt X/X% was continued place we'll have as environment credit today. and less of be is as a positive closer to delivery given X.X we've at opportunistic lower structure. an ratings on should in to recent financial proven to that which which simplification the possible opportunity results, to our an we've times, that to was when at announced way great the level. leverage credit forward with always continue time delivered our way of well our is and debt momentum. in notes have operational we lastly just guidance, a And the recap efficiency XXXX be As put acquisition XXXX And to as of on organizational well

with again expect and we One builds, Dexter outlined in in basis. to margin X.X EBITDA medium-term And accelerated XXXX. ex-mobile $X.X fiber, our to margin $X.X we billion points as in same the accommodate prior XXXX. CapEx X.X% to of for mobile We expect X.X% Altice revenue EBITDA And Firstly, again expect for percentage home range in XXXX, That's we the on expansion our adjusted guidance XXXX, to by new that's range investment we X%. consistent grow grew in of grew strategy. billion.

any this our that activity. EBITDA acquisition billion off free for to expect of XXXX, and XXXX or very We billion share merger mobile-related any in asset target cash of of doesn't free growth sale account in the $X.X including flow base from comfortable XXXX buyback supports $X.XX grow feel We costs. flow new our take that into approximately potential cash growth level and

the of times for X.X to five And back consistent with a LXQA I operator target and questions. is the to it of open that any net in mentioned times that, year-end leverage now up you. it range All turn once over again. we'll with for Thank debt-to-EBITDA

Operator

Your the open. line Citi. of from Please Certainly your [Operator line go Jason is from Instructions] first question comes ahead, Bazinet

Jason Bazinet

one I maybe just had Yes. question. longer-term

future for about a coax fiber the words, using maybe can how mobile? talk retaking proofing? and market data? Iowa, early about is just first I've the heard in you for in early lessons that? about New and spend video it Is you to facilities-based minutes In about then roll-out it it any the Connecticut. you're and lessons? Is that Are share you other this pursuing any guys started and fiber video build small Regarding about I among And time Jersey and are few there data thinking ultimately using guess areas is that certain

Dexter Goei

future this math about. fall small by impetus cash Hey, we relatively the make there's and able or between customer infrastructure here and driver to and forward CapEx the the going was experience in services and kind savings experience cells internally, customer for the for fiber-to-the-home much was we're the it CapEx consistent really the networks investment. upgrade Jason. annual the enable any fiber-to-the-home free the thinking may going in at eventually and investment the as required to materially investment enhancing to Listen, the we existing not of CapEx a to and we going fiber OpEx our be that for at coax network. in for scale. lot drive revenue opportunities think, of driven for improved flow look really growth. make the the the bifurcate monetize a We our flow of of then on of we're -- the larger decision whether down maintenance don't future or I us benefits providing things opportunities We as additional the fiber-to-the-home use are as just run -- it and of been to we've to characteristics But look revenue as as reduction the real services number maintenance rollout and very cash very throughput driven on decision and would OpEx be that the future to little that about network will complete Be to our all those very, our free additional clearly of services There's the today.

Jason Bazinet

one if ask follow-up. can I just And

and As this does savings it investment, from in of in Or of the X, that you come in of comes OpEx savings fiber it X piecemeal? CapEx happened that or is sort sort year know... more tsunami

Dexter Goei

incidence days CapEx, incidence service. piecemeal, starts as I we fiber-to-the-home it's still and creeping up get maintenance savings. really in rates the Clearly reduction would CapEx Very No, volume-based for just the little say. the volumes maintenance capital deploy the and and and you infrastructure subscribers of you As of early and It's right? the accelerating come more ready have boarded rates larger more you on get of as reduction those will the on immediate.

reduction So the that of more and network our start to related network coax to the network. it our event the as the on or build subscribers CapEx coax will more longer-term off they a fiber question of -- of start proactively of to is really moving medium- follow we migrating maintenance-related out. the trends Then

Jason Bazinet

you. Thank Very helpful.

Operator

JPMorgan. comes Cusick open. from question from go Philip next the is of line your Please Your line ahead,

Philip Cusick

free shareholder I'm is drag year returns trying would the EBITDA returns, X.X be this? given think wireless. why of impact in talk entering that cash enough and And Thanks. you're guys. significant times? the shareholder it to flow Can you else about XXXX down Hi, about at to

Dexter Goei

revenue to that guidance over revenue and if which to before as EBITDA slight a mean the with -- a revenue a we guidance that marginal toward that EBITDA be you in is guide way done of with to said we've out me our impact impact would mobile our a expect effective decide the discuss somewhat may extent we and little I and model of to suspect. too trying To what do we that to gate. listen, very is as would been of some different we've a of our conservative type Yes. cable run it's as benign guidance and very end to It cash were maybe model positive mobile. we've flow EBITDA. you our our free margin And backward variations would we performance do have friends on with see look-alike clear better

And so just being with ourselves around to our hopefully we're our model returns. we share able flexibility would guidance to buyback the and prudent beat allow be business

point it As would you rightly out be lower than last year.

as lots and you deleveraging have right? know about also our keeping the share We Phil between we're had So of as leveraging, questions flexibility potential buybacks well.

Philip Cusick

thoughts Okay. changing on evolution And I new can of fiber the you if follow the Are question. testing XXG? pace out? up any DOCSIS build the your Thanks. And Jason's on

Dexter Goei

question. and we're part CableLabs. secondly obviously No, on -- And first of

on sorry? we're So your focused CableLabs question technology. part than on X.X second And are we coax that. XX-Q of I'm part as of fiber-to-the-home are But experience, GPON whole more we on our technology

Philip Cusick

No that of it. kind was Thanks Dexter.

Dexter Goei

accelerating are we accelerating we Are Yes, fiber-to-the-home? fiber-to-the-home.

Philip Cusick

you. Thank Great.

Operator

question from line Sachs. the ahead, go line open. next Please Your comes Goldman Feldman from your is of Brett

Brett Feldman

a question. the dig revenue the to for into like Thanks would more. taking guidance, I bit just

down basically your to revenues. in one of noted parts go XXXX. said that other political range. the And You're closer implies tailwinds of same same you're ad -- you ultimately last targeting your be growth they will got and previously experienced necessarily to just I this there That XX% year achieved wasn't to in the you'd because wouldn't key I they business still as you year and yet are imagine you think flat accelerating. that that range the guiding was

I do you just that us where So clear, guidance it any your that's into year? have help the was of from? right understand, the revenue And be then come you you. interpretation hoping would can factored if Thank to mobile for maybe

Dexter Goei

Yes.

good that of price Brett, mean whereas we're March. is remember this you a year I doing and a out. key last had increase in increase call here in we the February year price as So July

political the the advertising. specific to be what impact success platform. expect more and offsets the the Athena to To because of XXXX from and on we seeing again grow of that platform than our So of we're aX Advertising reiterate, in loss

our mechanisms in I once And the some So it's in there. case business relative mobile to a bit peers type of part assumptions But and our put we've as a to the our then revenue growth with if of around we've play of launch very think revenue. business question. that So the we run Advertising it a see on our does people little range. Phil's any previously launch. differentiated consistently But this place guidance will of overall giving include mentioned mobile changes model benign our on mobile and before to with materially we update we as us flexibility right? change impact

Brett Feldman

currently the the when you expect what's mobile And to line time have for in market?

Dexter Goei

all go channels sure XXX% and we'll in business our we rather through we e-commerce our of We've beta our site we're in discussions testing launch. in But are right? XXXX. terms all been continue the and other our So our of about when make model test to test bi-flow than sooner -- on ready handset elements it to with beta phase just and partners the in that's Obviously do we'd distribution now to later. everything like BSS/OSS right

Brett Feldman

Thank you.

Operator

Kannan Your next comes line from question ahead. from the Venkateshwar Barclays. of go Please

line Your is open.

Kannan Venkateshwar

Thank couple. just a you,

First on Altice One.

this historical is the have affect in in XX% trying of so less kind right could business more base far in the to overall intensity in you the rollout plan And of than to done that had XX% talk over the had as the is you sample some about that at what of course if you capital And I kind or you secondly -- that fair of that Thanks. a widely? small range this have market a then intensity is of of number? just as it about think could historical churn XX% have? Now what the you benchmarks more the numbers guys terms fiber side, the if look to it once year the CapEx more

Dexter Goei

we want are because start seeing commentary. Altice we relative the that on very think it than we're tell NPS be Listen Altice We the our in question broadly on platform still scores did we early haven't to proactive highlighting One boxes. Sure. to about set-top it's One legacy seeing to too talked better to

to You've don't Altice improvement that the to also RGUs quarter-over-quarter XXXX. video We in One. yet seen attribute want throughout

happening to that are there whether trends. early momentum whether I our there out are tell is we are video helping positive too think video a it's other things But see or that technologies do that impact churn One. So that in in Altice

there Altice all we see more going Altice right may there So are couple One, positive the of maybe to that a today bundled One pointing box quarters, direction. continue receiving the growth detail to momentum are talk some our all of about. We the trends to we ads right? But in receive to in have the expect as continue can deliver

to the we mean On I could hopefully than correct. CapEx think post I side, think improve directionally range XX% XX% we even the you're more fiber-to-the-home.

Kannan Venkateshwar

you. Thank

Operator

question next MoffettNathanson. Moffett go Your ahead. comes Please Craig line from the from of

open. Your line is

Craig Moffett

the and or of what's accelerate services small decelerate is of commercial small segment your than business would sell footprint? Dexter, if to Lightpath the selling I even in the strategic is, of that? you rate growing options Could Lightpath. possibility were than growth in segment you update respect slower on the to Lightpath past faster either left or about that business Hi. or its in you've the entirety, commercial And medium IRUs talked mean, with us

Dexter Goei

are makes your continuous and first of to the do asset open Craig basically our see been with internally on asset work question a I we doing that we've reviewing sense basis. all Lightpath on So anything we that pretty do as assets strategically to whether with think

It's of course a just asked that's it base. that lots that by normal are being not you out part but review. of that there about questions clear So business asset were are being interested just of third-parties in that there

growing In terms on top currently further business services would our not Lightpath of your X.X%. grow question overall growth, at line is because

Craig Moffett

Got it. Thank That you. helps.

Operator

Doug go line Your of from next comes Please from Mitchelson question ahead. the Suisse. Credit

open. line Your is

Doug Mitchelson

flow so for cash XXXX. doing simple math the outlook Thanks some I free much. was Charlie on

Is million. don't cash versus So should swing million restructuring any million there's have $XXX factors there other for you $XX we savings about? thinking of $X,XXX be interest the that

Charles Stewart

that well so not But out capital -- cost meaningful -- some commitments as and mean, either. made be cost the lower we certainly because past fluctuations, a out. think change there had there's are call already refinancings suggested -- associated those And played particular nothing will play got -- there We're It will no do to be then I've in as still meaningful clear than just XXXX. I out. is cost I in to we've our financing with XXXX. just taxpayer working Well restructuring have we we but

I -- on you've there. track the are So right think you

Doug Mitchelson

And follow-up for then a Dexter.

us a percentage obviously you're with on of on I think share interest you spent Is fiber or share? fiber-to-the-home lot of target or the CapEx dates there's home-marketed any willing of year-end to there in percentage helps a metrics other year call some anything been the this build-out. on that's by this future

Dexter Goei

No, our I think very we've think. Listen clear intentions. I about been

the came of lower than we hope in expectation. which XXXX XXXX of were in we blocks than CapEx for you see why there because the that also permitting probably out the called process is could slower numbers We out would

I think is public we and to that to in in for higher be earnings. our to guiding accelerate else terms looking statement and forums. homes kind fiber-to-the-home which that we we of numbers because flagged flagged XXXX you we're in of new are something public And build see QX that the

So that's pretty much...

Doug Mitchelson

better good going post try forward? of me run a fiber rate you're in this -- about permits let this way we spending of -- terms at sort let now sort like should that year it this run me think But of that a on rate is sort sorry try this of

Dexter Goei

year-over-year on think is continuously roll-out process of we growing the stability fiber we hit a based until and execution. accelerating I timing -- resources, Listen on and

range So it time that unless we reason probably push on managing that a decide to to to better roll-out X to talked X to XXXX to larger or accelerate consistently will and that run maintain because the find we of accelerator materially frame. than rate. try decide year about are X.X But we the accelerate able for plateau resources a we're and whatever we'll to XXXX do X.X our we've XXXX terms in be flow much fiber-to-the-home to on in materially hopefully again CapEx

Douglas Mitchelson

Great.

Okay. Thank you.

Operator

Evercore Ratcliffe from Please ahead, ISI. next Your line of the James open. line from your question comes go is

James Ratcliffe

Thanks the for taking question.

I the expansion high that imagine incremental XXXX you would that very so -- XXXX margin little million was revenue the bit. to a advertising into advertising or digging $XX Just revenue. had margin

So Thanks. the mix XXXX? if more be margin to to how you flattish that's XXXX the expansion change first going about this year, can of from talk

Dexter Goei

XXXX lower-margin inventory product. your was are just third-party that's reselling you The are highlight when incremental reselling margin very margin the slightly to no. you -- a actually a that's -- When advertising there for to inventory dilutive own out Actually, product. high-margin

in overall, incremental revenue. did expected we be our not we telecoms-only to So have probably that higher advertising XXXX margins if have would

to XXXX our a your guiding higher-margin point for product growth is dilutive existing ex-mobile relative we're which to is to So margin.

should clarity which to more we And the just I give business, think you expect so that on grow. some advertising

James Ratcliffe

growth to Give organic how on was XXXX color sources us of of in any other XXXX much ad adding the mobile? versus

Dexter Goei

inventory? third-party existing buying us inventory versus our Meaning

James Ratcliffe

Yes.

Dexter Goei

that's we're No we're clarity giving -- something on. not of a lot just

James Ratcliffe

Great. Thank you.

Operator

question of comes ahead, Deutsche your line open. next Please from the Bank. Bryan from Kraft go Your line

Bryan Kraft

Hi, guys. things. to want I you two Good ask afternoon.

do changing is has do Penetration in seen very competes be it XX%? I of you that that of obviously of going only float subs? market footprint because Suddenlink of does you Suddenlink about And to another percentage former ask think investors that a haven't fiber. back? forward? holding telco been with that a the about First, Why see this on broadband think it's close you What Suddenlink wanted portion guidance I you broadband do XX%. you some threw in growth then topic, up think has the sellers repurchase And the faster share purchases. I ask pretty to public large in Thanks. could entirely or assume or limited

Dexter Goei

regarding we're broadband XX% XX% there's, to question there's overbuild. believe than We're -- closer XX% we your -- penetrated penetrated. on pretty to On about Suddenlink

plus where market out right? that we think share. take of footprint poor, kind you're areas DSL-related small that that you And wealth from to the if there continue XX%, talking kind terms XX% the population I about good in demographics So demographics are or take -- in so of of more without XX% penetration

our grow And footprint. the spend broadband kind of to to continue misallocated RGUs you on Suddenlink XXXX numbers in our had very historical We marketing RGUs those numbers, in growth XXXX broadband at our areas. look when we're nicely back if we in

don't our to see in slowdown So power any and we pricing footprint. see there Suddenlink we good continue

was overall of share make didn't assumptions our they we source but sellers the -- count of from guidance, shares. very source are on know we're whether are what any assuming terms where we're and equity Don't repurchase focused the the private In unclear. share the shareholders could shrinking not,

Bryan Kraft

of should you regular on more the continue being to a we opportunistic expect deployed? be amount Will Or systematic repurchases? share

Dexter Goei

very as target. and Well, on in managing systematic been we've QX also And focused as on much target. QX we we to leverage know our focused year-end were you leverage

So intra-quarter above always will leverage targets, year-end. by targets or within we the intra-year, our we maybe leverage but be

this any would a I we'll out volume one think at going maximize very value. opportunity to be So I systematic We rule shareholder like are don't attractive about go we of I we're transaction about get in to it. If just an there's type price, at stage. think, think thoughtful to it.

Bryan Kraft

you. Thank Okay.

Operator

question Stanley. go comes ahead. Please Morgan from line the from Ben next Your of Swinburne

line Your open. is

Ben Swinburne

the think it. Dexter Thank all know or philosophy I your of maybe own with contracts Thanks, adjustment just quantified March yield piece heard Charlie side, do a on know, type but think last you July look got base. a it's viewership content your on it, on Is options. how in if One just And Altice of on the was in informing the XX% the you But then base, other you And and you. behavior sub, I is it other I'm for I I expect and relationship guidance. rate similar curious the content? I but I in and adjustment, of February, again, your those of you content Netflix X% programming you year? apologize, the to it's are the bringing early the think you small sort highlighted impacting the networks? your what about at when I wondering at programming costs don't dealing guys.

Dexter Goei

Ben. Hey,

been we've analytics in question, first data the business. active very On the

the Altice very So apps I seeing a is degradation, been it, boxes pattern think our of our usage call an there because have legacy of informative access to customers. are let's viewership format. we don't on set-top in One OTT easier and linear

way, question better not a X direct-to-consumer you're options to experience your aggregated are all HDMI a on a much between very the much, switching in a in your and on being a access easy really way X regular it's of television set. user very basis there and out able think that I X,

as On of it, So, the we it's -- I you've think Altice on guidance WiFi whole about were it's the better the customer well were And performance a enhancement modems our One material as really XX% deployed individual had that experience. the seen Charlie? we've platform. think previously I that and been what customers, for to Ben, our has

Charles Stewart

Yeah, terms with process both is in I'll very we what our it how did we're what managed. just see with -- last -- this expect in increase, and line on to Ben it's of we year to your out year, much the price question going

Ben Swinburne

if follow-up a Got become default quick that ask what it. every At point I already just box can Dexter, does One? there? Altice on not the connect gross for video

Dexter Goei

to It It's single taking of on every is actually have our where is X% subscriber all majority are deliver less for not It's upgraded of in ads. Suddenlink ad. bundled we just available platform. Since XX% the footprint of XX% be gross Altice able footprint. or it's not over enough the less the than than footprint product. areas really already. to It's the there which gross The is our One available they video XX% our network of the

Ben Swinburne

guys. you, Thank

Operator

go Research. Please from comes line ahead, is question line Beale Arete Andrew your the next from open. Your of

Andrew Beale

Hi.

about a few SEC merger, T-Mobile/Sprint made your You've -- findings the particularly MVNO. on with around the

you getting returning And get think with to from learnings fiber then if how European on itself asset keep own so protect maybe asset? any got your you've if new just to And your valuations T-Mobile the And and wondering the yours wondering is a viable approved? business should just question, others that that transfers authorities? antitrust cousins color your the there and MVNO multiple. into petitions on to Sprint fiber versus from secondly just MVNOs cable Lightpath you've Just Lightpath reception the the option got any full to

Dexter Goei

we've your I So, been any that entity. public think contract MVNO question, to the full surviving transfers on

to see expect don't contract. MVNO we So that to from any occurs not transaction whether the or impact

not I don't In to we're terms position that. comment -- from of we're various in think agencies on reception a that

business our European thinking obviously all I of which and less the side, trends the Lightpath today. it Lightpath cousins shareholder is core reasons On monetizing open or call-it And it for becomes have We look because are attractive one in pricing clearly some very our network eyes assets. is of creation. job of as are to value an valuations about and the if we overall that on their people how capital exceptional ears their of think that were assets -- to some done it's the asset is, at monetizing that keeping an to space,

Andrew Beale

Thank you.

Operator

Buckingham of go Harrigan Please next the comes from ahead. Research. line from Matthew Your question

line Your is open.

Matthew Harrigan

will of law consumption with much the launches terms year little to versus You commercial data kind XX% burn how the still then accelerate characteristics, a secondly, of -- not when the at using? get And in more norm? really to are recently which And when when more Nielsen's broadband more at power you spike compatriots that on in the just the even to and given something Altice of you out it's Law above you. physics enlightened the Moore's feels when Comcast later spread MVNOs the certainly burn XXXX? some OSS, thin move usage it that to Verizon. kind a like is Would translates the One, to consumption? of the you Charter your larger you And further mean larger do engineering have you MVNO a cash what us is the you you about and look broadband are and be characteristics you doing? might expect actually even out talked Laws much people not burn just behavioral approach Thank a your it's different and empirical of WiFi. pricing But like have all thick BSS fiber, hardening be in not bit And cash the advancements, than I Recognizing thing. economics that expect like how a on given look that

Dexter Goei

yes, our not very do cash business. on be -- on heavy to see I So burn. price not mobile, want want drive to more in points, we significant a think expect cash aggressive are we've if been burn that clear we Even to we any

the point into XXXX that to we what to on in some see do extent going to expect your don't burn So cash that XXXX type we business have we XXXX. depending Yes of model launch.

larger deploy is don't is much it about out it big but hope it customers. today how -- Altice it to and the larger sample talking we continue more more have there, we because a enough One, consumption think is we as data significantly we of terms I are for -- and base don't yes In larger.

Matthew Harrigan

Dexter. Thanks

Operator

ahead. go Your Please of line McCormack from from Mike next question comes Guggenheim Partners. the

open. is Your line

Mike McCormack

around that comment the thanks. Then $XX spectrum thoughts in at Charter talked streaming guys skinny being thoughts is product past you that? low-band Dexter updated for the guys, launched on Hey might entertain also some interest. a around service, point? you by something it about Any any

Dexter Goei

OTT think So, the we listen I Charter very -- it's interesting. offering, on I think

is there. that trying whether that, regularly for of products a size develop them already all we makes done or for worth are whether the have product pretty think the spending already I or that not look-alike it's resources line regularly our a sense there. out And do DTC review discussions done. in and a think is there versus to something we fine with there's programming to lot allocation when someone of ourselves But versus their services product lot to our a something think me own of services it of terms there too of of And capital our products the out new partners. what really existing we they've cluttered think continue so have time is lineup allocate like out I doing that We ask should I already right? lot

spectrum of success the On question success think the it of not business. a our mobile -- low-band really of or side, is our I

be expect start reach enhance volume We can target to point it our certain economics. how extent to And the thinking successful. some we about we at we'll then

Mike McCormack

you, Got thanks.

Operator

Research. the from Please Wolfe go of line comes question Ryvicker from ahead. next Your Marci

line Your open, is

Marci Ryvicker

little side to more cadence? the of a we XXXX? the you given talk just quarterly half? is the rate on margin for be in bit half expansion than talk a to can terms the the Should expansion there second anything you about first there expense can expect And In that corollary about in the programming increase then guide

Dexter Goei

Yes don't I been feel a I think those free I -- think and the on night guiding on -- we've basis. quarterly to the think throughout questions. call And Nick asking

pretty quarter programming any On the with significant done programming any contracts programming large guidance, of much renew. of I think large we've been in clear our the have We last all size that contracts. we're don't to

that of cost And terms need for And terms right? you that have you in the digits cost RGU of then video of any in the decline in per perspective terms the single so cadence growth subscriber. is in to high adjust growth or

Marci Ryvicker

Thank you.

Operator

from from ahead. go Carlier comes question Please of Your line Kempen. next Emmanuel the

Your line is open.

Emmanuel Carlier

how a offer pack? as a or on look play percent triple taking how I broadband a product. my profitability Yes, stand-alone do a currently at on your play customers broadband-only broadband-only versus And much secondly, was double for one of just thanks customers you have between I are broadband hi, quantify you thinking bundle? taking question. Could

Dexter Goei

broadband-only it forward but and think not disclose any Suddenlink don't both granularity. going in one on I Optimum, different our assets the each and question, going we're depends between that to of On we that have disclosed each

In is versus us. video terms believe bundled, the a business broadband-only the for of profitable that still we RGU

Broadband. the the And of continues so of profitability profitability bundle the stand-alone to just exceed

Emmanuel Carlier

set-top And there also you you it free look flow big on have don't is for a the gap if example at costs? because cash box a basis

Dexter Goei

no. Yes,

approximately breakeven one that out the RGU you've question free to to basis, cash But break to on multiple X.X the video is margin We flow basis believe pieces. in business. day think on contributor a is that I got -- it there's EBITDA-positive a So years.

So depends it of want on at. metrics what you look just type to

Emmanuel Carlier

customers, provide want very that but is don't understand tiny customer a I And can the base? the Okay. you of to it broadband-only part still

Dexter Goei

about No, take XX% And Optimum footprint, our product, a the of our for So to let's are versus bit bundle and to subscribers of We've you Optimum little XX% XX% reverse ads a at our data-only it's where footprint. you. – a are call right? amount well, me rest single try subscribers that the XX% this at XX% product. let about XX% bundle take look of a subscribers if bundled In product bundled. seeing spoken of growth that's data and Suddenlink in Optimum you at larger a Suddenlink the take it the

So it's into back can you numbers. math of just question a those

Emmanuel Carlier

Thank you. Okay.

Operator

Securities. Please Cross Bentley of the And line from your ahead. TD last from go question comes

open. line is Your

Bentley Cross

Dexter, I called I get thoughts just out M&A. wanted to target buyback your on release the know the updated M&A. ex as

your the what with wondering level? Just capital are the current thoughts allocation at stock

Dexter Goei

opportunistic a M&A really through don't a and anything of because budget whether question on the being really there it is of other the or aisle. allocate side -- we process to Well, is our not partner

it that share and do prudent certain clear. proceeds get repurchase guidance are share ways. from not the we sales some And, guidance can also we being in we bites. may to or things asset do, Obviously or change may think that obviously, we there know does is pretty I we the highlighted increase that deleverage that any do do both. back include in buyback use could which large we that small could M&A obviously, our because We, are any

Bentley Cross

Thank you.

Operator

And I there questions for closing further no back comments. turn management time. at to now this will are the call

Nick Brown

with in look few up Thank you, Thank catching you everyone forward we for weeks. you. the joining next and to

Dexter Goei

you. Thank

Operator

This conference concludes today's call.

may now You disconnect.

Altice USA (ATUS) 21 Feb 192018 Q4 Earnings call transcript