Optimum Communications, Inc. Q1 FY2025 earnings call

• Broadband subscriber net losses improved sequentially, with broadband ARPU growing 2.4% YOY. - Fiber had all-time-high 69,000 net additions and over 600,000 fiber customers. - Mobile had 49,000 mobile line net additions. - Implemented competitive go-to-market efforts like hyper-local playbook, focusing on MDUs, and enhancing products like Whole Home WiFi and Total Care. - Successfully navigated programming negotiations, minimized customer inconvenience, and retained 99.8% of impacted customers. - Invested in people and technology, transitioning to digital platforms, using AI tools to reduce service calls, and expanding partnership with Google Cloud.

Total revenue was approximately $2.2 billion, declining 4.4% year-over-year. Residential revenue declined 5.7%, Business Services declined 0.4% but Lightpath revenue grew 7.3%, News and Advertising declined 3.1%, and Other revenue grew 52% primarily due to mobile equipment revenue. Broadband had net losses of 37,000, with ARPU growing 2.4% year-over-year. Fiber achieved 69,000 net additions, ending the quarter with over 600,000 fiber customers (20% penetration of fiber network). Mobile had 49,000 mobile line net additions, surpassing 500,000 mobile lines.

• Expect full year 2025 adjusted EBITDA of approximately $3.4 billion and revenue between $8.6 billion and $8.7 billion. - Aim to stabilize broadband subscriber trends and improve investment returns. - Anticipate programming cost savings, focus on optimizing OpEx and CapEx, with full year 2025 CapEx expected to be approximately $1.2 billion.

• Intense competition from fiber and fixed wireless providers. - Macroeconomic headwinds impacting customer affordability. - Potential impacts from programming negotiations and regulatory approvals for asset sales (e.g., tower asset sale and i24NEWS business sale).

Q: Provide additional context on the competitive landscape for broadband business, customer behavior, and potential to reduce broadband losses.

A: The competitive landscape is intense with fiber and fixed wireless competition. 75% of customers are challenged by monthly expenses. Launched a new low-income product and has strategies for MDUs. In mature overbuilder markets, saw improvement in gross adds and churn, but continues to sharpen playbooks for new entrant markets.

Q: Details on lower-end product and wireless insurance stats.

A: Recently launched a new low-income product, expanding to 0.5 million homes, with early days of rollout. Mobile device protection launched 6 months ago has 10% penetration into the mobile base.

Q: Perspective on bondholder discussions pause.

A: Negotiations with bondholders did not reach an agreement, but focusing on proactively managing debt maturities with a runway through 2027 and exploring all options for the debt portfolio.

Q: Talk about pricing competitiveness and West broadband trends.

A: Made progress in pricing with more science, leveraging AI, and local competition strategies. In West markets, while new entrants pose challenges, in mature overbuilder markets, saw improvement in gross adds and churn, with strategies like income-constrained products and MDU initiatives to improve trends.

Q: Percentage of low-income offer qualifiers who are existing customers and West trend improvement.

A: Disciplined in deploying low-income offers to minimize cannibalization, using tools like AVA. In West markets, in mature overbuilder markets, year-over-year improvement in gross adds and churn, with strategies like income-constrained products, MDU focus, and hyper-local playbooks to drive improvement in the future.