Charter 2025-26: Capex Inflection $11.4B, Cox Merger, FCF $4.42B

FY25 revenue $54.77B (-0.5%); op income $13.32B (+1%); NI $4.99B (-2%); EPS $36.21 (+4%). FCF $4.42B (+40%). Q4 lost 119K Internet customers (improved YoY); added 428K mobile lines; video customers grew 44K (vs -123K Q4 FY24); rural +46K net adds. Residential revenue -2.4%; commercial +0.3% (mid-market + large business +2.6%); advertising -20% (flat ex-political). Total opex -3.1%; programming costs -8.4%; cost to service customers -3.9%. Adj EBITDA Q4 -1.2%; FY25 +0.6%. Q4 FCF $773M. Q4 capex $3.3B; FY25 $11.66B; FY26 ~$11.4B; capex on downward trajectory after 2026; run rate <$8B/yr post-evolution. Total debt $97.12B; weighted avg cost of debt 5.2%. Buyback $5.13B FY25 (+323% from $1.21B FY24); Q4 buyback $760M. Cox merger pending; post-transaction target leverage low end 3.5-3.75x (3 years post-close). FY26 framework: EBITDA growth excluding transition costs; H1 more challenged than H2.

Key takeaways

• Capex inflection: FY26 ~$11.4B → run-rate <$8B/year post-evolution — multi-year FCF acceleration coming. Charter has been in a multi-year capex investment cycle ($11.66B FY25; $11.4B FY26) for (a) rural build-out (BEAD-funded), (b) network evolution to symmetrical multi-gig, (c) mobile network optionality. Management explicitly guided that capex is on a downward trajectory after 2026, with run-rate capex <$8B/year once evolution + expansion initiatives conclude. The $3-4B/year capex reduction translates directly into $3-4B+ incremental FCF post-2028. This is the cleanest multi-year FCF inflection in cable.

• Internet customer losses moderating: Q4 -119K vs higher prior-year losses — competitive stabilization. Q4 FY25 Internet customer losses improved YoY (-119K vs higher FY24 losses). Charter management explicitly highlighted "Internet customer losses improved year over year." This is the key cable thesis indicator — multi-year Internet sub losses to fixed wireless (T-Mobile, Verizon) and fiber overbuilders had been the dominant valuation pressure. Stabilization or return to growth = re-rating catalyst.

• Mobile +428K Q4 net adds, Verizon + T-Mobile MVNO partnerships — multi-year mobile growth pillar. Charter added 428K Spectrum Mobile lines in Q4 FY25 (slightly slower vs Q4 FY24 due to "big telco competition"). Management announced (a) structural + strategic mobile reselling agreement with Verizon, (b) additional MVNO launch for business with T-Mobile. Multi-MVNO partnerships create multi-year cost optionality + product flexibility. Mobile is now ~10M+ lines and growing — a meaningful business that's still a fraction of Verizon Wireless or T-Mobile sub bases.

• FY25 buyback $5.13B (+323% YoY); Cox merger pending — capital allocation reset. Charter's buyback stepped up dramatically in FY25 to $5.13B vs $1.21B FY24 — a +323% increase. Combined with the pending Cox Communications merger and post-transaction leverage target of 3.5-3.75x (low end of prior 4.0-4.5x range), this represents a meaningful capital allocation framework reset. Multi-year capex moderation + Cox synergies + ongoing buyback = multi-year EPS + FCF compounding through 2028+.

• Cost discipline: opex -3.1%; programming -8.4%; cost to service -3.9% — operating leverage. FY25 saw meaningful cost discipline: total opex -3.1% YoY; programming costs -8.4% (driven by video customer mix shift + carriage renegotiations); cost to service customers -3.9%. The cost reductions roughly offset the revenue softness (-0.5%), keeping EBITDA flat to slightly up (+0.6% FY). This is the cleanest evidence that Charter's operational efficiency program continues to generate productivity even in a slow-revenue-growth environment.

Business

Charter Communications, Inc. operates Spectrum-branded cable + Internet + mobile services across 41 states, with multi-segment portfolio:

• Internet (~50% of revenue): Spectrum Internet (cable broadband). ~30M+ residential customers. Q4 -119K net loss (improving). Symmetrical multi-gig upgrade in progress.
• Video (~25% of revenue): Spectrum Video (cable TV). Multi-quarter sub losses turning around: Q4 +44K net adds (vs -123K Q4 FY24). Mgmt characterized video product + platform as "killer app" with platform improvements.
• Mobile (~5% of revenue, fastest growing): Spectrum Mobile (MVNO via Verizon historically; now multi-MVNO with Verizon + T-Mobile). Q4 +428K net adds. ~10M+ lines.
• Voice + Wireline (~5%): Spectrum Voice (residential). Q4 -140K (declining as expected).
• Commercial / Spectrum Business (~10%): Mid-market + large business +2.6% Q4; small business -1.3% Q4.
• Advertising / Other (~5%): Spectrum Reach + advertising. Q4 -20% (flat ex-political).
• Rural Build-Out: BEAD-funded + private. ~46K Q4 net adds. Nearly complete.

Strategic moves FY25:

• Cox Communications merger announcement
• Multi-MVNO mobile partnerships (Verizon + T-Mobile business)
• Rural build-out near completion
• Spectrum network upgrade to symmetrical multi-gig
• Working with Silicon Valley content owners
• Invincible Wi-Fi product (Internet service guarantee)
• Spectrum pricing + packaging refresh planned
• AI technology investment
• $5.13B buyback (+323% YoY)
• Internet customer losses improving YoY
• Video net adds turning positive

FY25 financial performance

The earnings progression: revenue trajectory has been roughly flat from FY22-25 ($54-55B range). Op margin expanded modestly from 22.7% (FY22) to 24.3% (FY25). EPS growth ($30.74 → $36.21 over 3 years, +18%) primarily from share count reduction via aggressive buyback (despite reduced FY24 buyback).

FCF $4.42B FY25 (+40% YoY) reflecting better working capital + cash tax timing. Total debt $97.12B (+1% YoY). Buyback $5.13B FY25 reset higher after FY24 trough.

Capital allocation

• Capex: $-11.66B FY25 (+3% YoY); FY26 ~$11.4B; run-rate <$8B/year post-evolution.
• Dividends: $0 (no dividend; capital return via buyback only).
• Buybacks: $-5.13B FY25 (+323% from $1.21B FY24); Q4 $760M.
• Total debt: $97.12B (+1% YoY); weighted avg cost of debt 5.2%.
• FCF: $4.42B FY25 (+40% YoY).
• Post-Cox leverage target: 3.5-3.75x (low end of prior range), achieve within 3 years post-close.

FY26 outlook (per Q4 2025 call, 2026-01-30)

Management noted operating plan to deliver EBITDA growth in 2026 (excluding transition costs), continued network upgrades + rural completion + Cox synergies + multi-MVNO mobile + AI investment.

Key risks

Internet customer losses to fixed wireless + fiber overbuilders. T-Mobile + Verizon fixed wireless + fiber overbuilders (Frontier, AT&T, Lumen, etc.) continue competitive pressure. While Q4 FY25 losses moderated, multi-year competitive pressure persists.

Cox merger execution + regulatory approval. Multi-billion-dollar Cox merger requires regulatory approval (DOJ + FCC + state). Synergy capture + integration execution + leverage management all matter. Antitrust scrutiny possible.

Cable video secular decline. Despite Q4 FY25 video net add improvement, multi-year secular decline continues. Programming cost negotiations + content owner relationships + bundling pricing all matter.

Spectrum network capex investment cycle execution. Multi-billion-dollar network upgrade to symmetrical multi-gig requires execution. Any delays or cost overruns affect FCF trajectory.

Mobile competitive landscape. Verizon + T-Mobile + AT&T compete in MVNO + retail wireless. Multi-MVNO strategy provides cost optionality but doesn't change competitive intensity.

Leverage management. Total debt $97B (~5x EBITDA) is meaningful; post-Cox leverage target 3.5-3.75x = multi-year deleveraging required.

Interest rate environment. Refinancing of $97B debt sensitive to rate environment. Weighted avg cost of debt 5.2% — meaningful cost.

Programming cost negotiations. Content owner contracts + carriage renewals + sports rights + streaming dynamics all affect programming cost.

Regulatory landscape. FCC + Title II + net neutrality + privacy + state-level regulations all create compliance.

Rural build-out completion. BEAD funding + state grants + multi-year rural buildout requires ongoing investment.

Advertising revenue volatility. Political advertising + macro advertising cycle creates revenue lumpiness.

M&A integration costs (Cox). Integration costs FY26 (transition costs); multi-year synergy capture timeline.

Spectrum 5G mobile expansion. Future moves into facilities-based wireless (CBRS spectrum + macro towers + mid-band) require ongoing capex + spectrum strategy.

Streaming / OTT competition. Direct-to-consumer streaming (Netflix, Disney+, Max, Paramount+, Peacock) bypassing cable bundles puts ongoing pressure on video.

Bottom line

Charter Communications FY25 is the multi-quarter cost discipline + capex peak + capital allocation reset year: revenue $54.77B (-0.5%); op income $13.32B (+1%); NI $4.99B (-2%); EPS $36.21 (+4%). FCF $4.42B (+40%). Q4 Internet -119K (improved YoY); Mobile +428K; Video +44K (vs -123K Q4 FY24); Rural +46K. Residential -2.4%; commercial +0.3% (mid-market + large +2.6%); advertising -20% (flat ex-political). Opex -3.1%; programming -8.4%; cost to service customers -3.9%. Adj EBITDA Q4 -1.2%; FY +0.6%. FY25 buyback $5.13B (+323%). Cox merger pending. Multi-MVNO Verizon + T-Mobile partnerships.

FY26 guide: EBITDA growth excluding transition costs; capex ~$11.4B; H1 more challenged than H2; cash taxes $500-$800M; downward capex trajectory after 2026; run-rate <$8B/year post-evolution. Post-Cox leverage target 3.5-3.75x (low end), 3 years post-close.

The risks are real — Internet customer losses to fixed wireless + fiber overbuilders, Cox merger execution + regulatory approval, cable video secular decline, network capex investment cycle execution, mobile competitive landscape, leverage management ($97B), interest rate environment, programming cost negotiations, regulatory landscape, rural build-out completion, advertising revenue volatility, M&A integration costs, Spectrum 5G mobile expansion, streaming / OTT competition.

But the structural thesis (largest US cable + Internet + mobile platform + ~30M+ residential customers + 41 states + Spectrum-branded multi-segment + Internet customer losses moderating + Mobile +428K Q4 + multi-MVNO Verizon + T-Mobile partnerships + video net adds turned positive + rural build-out near completion + symmetrical multi-gig network upgrade + Cox merger optionality + cost discipline (opex -3.1%) + FY25 buyback $5.13B (+323%) + capex inflection coming post-2026 + run-rate <$8B/year FCF inflection lever) is intact and FY25 confirms.

Quality US cable + connectivity compounder mid-capex-cycle, with multi-segment platform + capex inflection coming + Cox merger optionality + multi-MVNO mobile growth + Internet stabilization + cost discipline + multi-year FCF + buyback acceleration. The FY25 $4.42B FCF (+40%) + Internet losses moderating + Mobile +428K + Video +44K + cost reductions across opex + programming + cost-to-service + $5.13B buyback (+323%) + Cox merger pending + capex peak FY26 + run-rate <$8B post-evolution creates one of the cleaner US cable / connectivity compounding setups for investors seeking exposure to capex inflection + Cox synergy capture + Mobile growth + Internet stabilization + multi-year FCF compounding. The conservative FY26 framework + multi-year capex moderation + Cox synergies + multi-MVNO mobile + Internet stabilization + cost discipline track record + buyback acceleration provides multiple paths to outperformance over a multi-year horizon. Internet competitive dynamics + Cox regulatory approval + leverage management + video secular decline remain ongoing risks, but the multi-segment diversification + capex inflection + Cox optionality + cost discipline + capital return support continued compounding through cycles.

Citations

• Charter Communications, Inc. FY25 Form 10-K (filed February 2026, SEC EDGAR).
• CHTR Q4 2025 earnings call, 2026-01-30 — FY revenue down 0.5% (customer losses + political advertising comp); FY EBITDA +0.6%; Q4 lost 119K Internet customers (improved YoY); added 428K mobile lines; video customers +44K (vs -123K Q4 FY24); wireline voice -140K; Rural +46K net adds; Residential -2.4%; commercial +0.3%; mid-market + large +2.6%; small business -1.3%; advertising -20% (flat ex-political); other +7.3%; total opex -3.1%; programming -8.4%; other costs +2.4%; cost to service customers -3.9%; marketing flat; transition expenses Cox $15M; adj EBITDA Q4 -1.2%; FY25 EBITDA +0.6%; Q4 capex $3.3B; FY25 capex $11.66B; FY26 capex ~$11.4B; Q4 FCF $773M; Q4 cash taxes $139M; FY26 cash taxes $500M-$800M; debt principal Q4 $95B; weighted avg cost of debt 5.2%; Q4 buyback $760M (2.9M shares); FY26 plan: EBITDA growth ex-transition costs; H1 more challenged than H2; capex downward trajectory after 2026; run-rate capex <$8B/year post-evolution; capex 2025-2028 in line with Jan 2025; 2029 similar to 2028; post-Cox leverage target 3.5-3.75x (low end), achieve within 3 years post-close; ongoing capital returns.
• CHTR Q3 / Q2 / Q1 2025 earnings calls — supporting customer trajectory + Mobile growth + Cox merger + cost discipline progression.
• Internal financial_statements view (consolidated annual + cash flow + capital structure).