CHARTER COMMUNICATIONS, INC. /MO/ Q1 FY2025 earnings call

• Mobile Growth: Added over 500,000 Spectrum Mobile lines in Q1 and over 2.1 million lines in the last year, making Charter the fastest-growing mobile provider in the US.
• Network and Data Usage: The fully converged network is efficient for data demand; non-video Internet customers use ~825 GB per month, with over 30% using over 1 TB per month. CBRS deployment is going well, with launch in 23 markets by end of 2025.
• Customer Service and NPS: Investments in customer service led to cable billing and repair calls down 15% y/y and service truck rolls down 6% y/y; NPS improving.
• Pricing and Packaging: Launched the life unlimited brand refresh and new pricing/packaging, driving higher total products sold, with gig Internet attach rate close to double a year ago.
• Board Changes: Added two Liberty nominated members to the board, with two Liberty Broadband members rolling off.

Mobile: Added over 500,000 Spectrum Mobile lines in Q1, with over 2.1 million lines added in the last year, achieving over 25% line growth. Revenue contribution from mobile growth was strong. Internet: Lost 60,000 Internet customers in Q1, but monthly data usage by non-video Internet customers grew to approximately 825 gigabytes per month, with over 30% of these customers using over one terabyte of data per month. Video: Video customers declined by 181,000 in Q1, but improvement was driven by re-bundling and the life unlimited brand refresh. Commercial: Total commercial revenue grew 1.4% year over year, with mid-market and large business (formerly Spectrum Enterprise) revenue growing 3.9% driven by PSU growth of 5.4%. Small business revenue declined 0.2%. Advertising: Declined 12.9% primarily due to less political revenue; excluding political, it decreased by 5.1% due to a challenged advertising market. Other: Other revenue grew 13.4% primarily driven by higher mobile devices.

• Capital Expenditures: Expect total 2025 capital expenditures to reach approximately $12 billion, with the multiyear capital outlook unchanged.
• Free Cash Flow: First quarter free cash flow totaled $1.6 billion, an increase driven by lower capital expenditures, higher EBITDA, and lower cash interest.
• Leverage: Net debt to last twelve month adjusted EBITDA moved to 4.06 times, with expectation to gradually increase leverage to the middle of the 4 to 4.5 times range pro forma for the Liberty transaction over the next several quarters.

• Wildfire Impact: Approximately 9,000 disconnects related to LA wildfires, incurred incremental expenses but adjusted EBITDA not meaningfully impacted.
• Tariffs: Uncertainty around tariffs, but not expected to have significant impact on capital expenditures or the profit and loss statement.
• Competitive Environment: Competitive operating environment, with impact from fiber overlap expansion and other competitors' actions.

Q: Talk about differences in converged households with wireless, update attach rate; Jessica on tariffs impact on CAPEX.

A: Chris discussed churn differences in converged households, noting benefits of product and value convergence. Jessica stated tariffs not expected to meaningfully impact capital expenditures.

Q: Update on Seamless Entertainment rollout, impact on video and broadband KPIs.

A: Chris mentioned progress of direct-to-consumer apps, digital storefront launch, and video product improvements, with excitement about the value inside video products when combined with utility.

Q: Promotions and roll-offs, OPEX outlook.

A: Chris detailed promotions strategy, emphasizing value and low roll-offs, while Jessica provided OPEX outlook for marketing, programming, cost to service, and other expenses.

Q: Life unlimited pivot, NPS, impact on broadband subscriber growth.

A: Chris talked about NPS improvement, early tenure customer retention, and potential for broadband subscriber growth due to the new pricing and packaging.

Q: Consumer behavior, trade down, credit metrics.

A: Chris discussed consumer behavior, sales up, churn stable, and strategy to handle recessionary environment with focus on value and service.

Q: Fiber competition, broadband penetration in fiber-competed markets.

A: Chris addressed fiber competition impact, stating not seeing 50-50 split in markets where fiber has been rolled out