Charter Communications, Inc. Q2 FY2025 earnings call

• Mobile remained the fastest-growing in US, added 500k lines in Q2. - Internet customer losses improved, video customer losses reduced. - Launched new pricing and packaging last Sept with good results. - Video product improved with Hulu inclusion, and plans for video marketplace. - Wireline network evolution and hybrid mobile network operator deployment. - Significant customer service investments in technology and employees, leading to improved service metrics. - Announced acquisition of Cox Communications, offering benefits for customers, employees, etc.

Internet: Lost 117,000 customers in Q2, with revenue declining. Wireline network evolution is ongoing. Mobile: Added 500,000 Spectrum Mobile lines in Q2, 2.1 million over 12 months for ~25% growth; mobile EBITDA less mobile CapEx is positive. Video: Video customer losses improved to 80,000 from 408,000 in Q2 2024; inclusion of Hulu and other programmers improved the video product. Commercial: Total commercial revenue grew 0.8%; mid-market and large business up 2.9% excluding wholesale; small business down 0.6%. Other: Other revenue grew 18.9% primarily due to mobile device sales and a $45 million one-time benefit.

• Expect EBITDA growth for full year 2025. - Q2 adjusted EBITDA grew 0.5% year-over-year. - Capital expenditures outlook adjusted to ~$11.5B in 2025. - New federal tax legislation improved cash tax outlook for 2025, saving several billion in cash taxes over 5 years.

• Competitive operating environment. - Non-pay Internet churn stepped up due to lack of ACP and newly acquired customers without ACP. - Impact of storm activity on expenses.

Q: Craig Moffett asks about T-Mobile deal for business and MVNO, including potential larger relationship and impact on Verizon.

A: Chris Winfrey says they have good agreements with T-Mobile and Verizon, excited about T-Mobile deal for business space, won't comment on pricing but sees it as strategic for future.

Q: John Hodulik asks about tax reform details for 2026 and non-pay churn color.

A: Jessica Fischer says tax savings expected similar to 2025 or larger, capital allocation to continue organic investments; Chris Winfrey says non-pay churn up due to former ACP customers and newly acquired customers without ACP, but not at dramatic levels.

Q: Jessica Reif Ehrlich asks about video offer evolution and attach rate with broadband.

A: Chris Winfrey says video strategy is to meet customer needs with various packages, including full-fledged and skinny bundles, and Xumo helps with content discovery; attach rate improved with new pricing and packaging.

Q: Peter Supino asks about tax share benefit and top-of-funnel customer acquisition.

A: Jessica Fischer talks about free cash flow impact; Chris Winfrey discusses market challenges for Internet, but network evolution and convergence are driving growth.

Q: Sebastiano Petti asks about EBITDA and cost to serve.

A: Jessica Fischer says $45M one-timer in other revenue, cost to serve benefits have legs; Chris Winfrey highlights long-term opportunity in cost to serve with AI and employee investments.

Q: Bryan Kraft asks about video subscriber trend drivers and mix shift.

A: Chris Winfrey says improvement due to higher sales, lower churn, and upgrades; shift towards full video packages expected with marketing and video store launch.

Q: Steven Cahall asks about Cox integration and CapEx intensity.

A: Chris Winfrey talks about experience in integrating acquisitions, ability to manage Cox transition with better product pricing; CapEx intensity to decline with Cox deal.

Q: Jim Schneider asks about CapEx outlook and rural build.

A: Chris Winfrey says no change to CapEx outlook; rural investment has some feed, but opportunity lower than before due to prior builds.