Altice USA chairman and CEO Dennis Mathew opened the company’s Q1 earnings call by reporting progress in operational performance, pointing to the company’s lower contact rates, decreased service visits, and higher Net Promoter Scores as evidence.
He also highlighted the company’s networks, reporting that it is positioned to keep up with increasing demands.
“In Q1,” he said, “the average monthly data usage of our broadband-only base was over 700 gigabytes of data, which has grown 13% since Q1 of last year. Additionally, the top 10% of our residential customer base uses more than two terabytes of data per month. This level of growing consumption, paired with our unmatched speeds and reliability, gives us confidence in our ability to compete long-term against competitors like fixed wireless.”
He reported that Altice expects to add 175,000 additional passings in 2024.
“We will deploy strong go-to-market strategies to all new homes passed with compelling promotional offers and ensure we are effectively attracting new customers and capturing material share,” he added.
Mathew also discussed the importance of customer satisfaction in Altice’s strategy.
“Our base management strategy, supported by advanced data analysis, allows us to better understand and anticipate customer needs, fostering deeper engagement and satisfaction,” he said. “In Q1, we introduced everyday pricing as our new rack rates, which reduces our back book pricing and creates a clear, simple, and transparent pricing journey for each customer. This strategy is enhancing our rate events and promotional roll-off process, leading to increased value and customer retention, and our customers are responding. We are seeing less ARPU erosion and stable customer churn trends, particularly at the time of promotional roll-offs.”
CFO Marc Sirota delved into the financial specifics of Q1, reporting total revenues of $2.3 billion, down 1.9% year-over-year.
“In Q1,” he said, “residential revenue declined 2.9%, driven by a lower subscriber base and an increase in video customer losses in the quarter. Business services revenue grew 0.3%, which is supported by growth in the Lightpath”
Sirota reported that total adjusted EBITDA in Q1 was $847 million—down 2.5%.
“This marks a significant improvement from Q1 of the previous year,” he said, “which declined over 12% year-over-year. The 2.5% decline in adjusted EBITDA for the first quarter is primarily attributable to a low single-digit revenue decline, incremental sales and marketing expenses associated with the launch of a new brand platform, and transformational expenses related to third-party consultants and partners.”
Subscriber trends
Combining new acquisitions and migrations of existing customers, Altice added 53,000 fiber customers in the first quarter, ending the quarter with 395,000. Of the new Q1 customers, migrations made up approximately 70%, which Sirota attributed to improvements in the migration process. He also noted that broadband net losses were 30,000.
Sirota also reported that Altice ended the quarter with 130,000 Affordable Connectivity Program (ACP) customers, less than 3% of the company’s base.
“As the program is likely to wind down,” he said, “we have implemented a strategy to retain ACP customers and have assigned dedicated and specialized retention agents. These teams are equipped with new AI-powered tools to provide customized offers and solutions to each customer based on usage and needs.”
Network strategy
Altice constructed an additional 45,000 fiber passings in the first quarter, bringing its total to 2.8 million.
“We said we would focus on driving more penetration to our fiber network, and we are doing just that,” said Sirota. “Our focus on fiber penetration will unlock additional benefits as we move more customers onto this incredible network. Better gross adds ARPU, faster speeds, better churn rates, and lower maintenance costs will enable us to realize faster returns on this best-in-class network investment.”
The company ended the first quarter with over 14% penetration of its fiber network and grew its fiber customer base by more than 90% year-over-year.
“We have identified and improved operations around order entry and provisioning, the quality of our field operations, and enhancing post-installation product experiences,” he said. “We are already seeing the benefits, with notable improvements in completion rates and customer satisfaction.”
He also described network enhancements and upgrades.
“We continue to make strategic investments across our entire footprint,” he said, “including edging out and enhancing our network performance and upgrading portions of the West footprint that were not yet on DOCSIS 3.1. We will have nearly 100% of the West upgraded to DOCSIS 3.1 by year-end.”
CFO Marc Sirota delved into the financial specifics of Q1, reporting total revenues of $2.3 billion, down 1.9% year-over-year.
“In Q1,” he said, “residential revenue declined 2.9%, driven by a lower subscriber base and an increase in video customer losses in the quarter. Business services revenue grew 0.3%, which is supported by growth in the Lightpath”
Sirota reported that total adjusted EBITDA in Q1 was $847 million—down 2.5%.
“This marks a significant improvement from Q1 of the previous year,” he said, “which declined over 12% year-over-year. The 2.5% decline in adjusted EBITDA for the first quarter is primarily attributable to a low single-digit revenue decline, incremental sales and marketing expenses associated with the launch of a new brand platform, and transformational expenses related to third-party consultants and partners.”
Subscriber trends
Combining new acquisitions and migrations of existing customers, Altice added 53,000 fiber customers in the first quarter, ending the quarter with 395,000. Of the new Q1 customers, migrations made up approximately 70%, which Sirota attributed to improvements in the migration process. He also noted that broadband net losses were 30,000.
Sirota also reported that Altice ended the quarter with 130,000 Affordable Connectivity Program (ACP) customers, less than 3% of the company’s base.
“As the program is likely to wind down,” he said, “we have implemented a strategy to retain ACP customers and have assigned dedicated and specialized retention agents. These teams are equipped with new AI-powered tools to provide customized offers and solutions to each customer based on usage and needs.”
Network strategy
Altice constructed an additional 45,000 fiber passings in the first quarter, bringing its total to 2.8 million.
“We said we would focus on driving more penetration to our fiber network, and we are doing just that,” said Sirota. “Our focus on fiber penetration will unlock additional benefits as we move more customers onto this incredible network. Better gross adds ARPU, faster speeds, better churn rates, and lower maintenance costs will enable us to realize faster returns on this best-in-class network investment.”
The company ended the first quarter with over 14% penetration of its fiber network and grew its fiber customer base by more than 90% year-over-year.
“We have identified and improved operations around order entry and provisioning, the quality of our field operations, and enhancing post-installation product experiences,” he said. “We are already seeing the benefits, with notable improvements in completion rates and customer satisfaction.”
He also described network enhancements and upgrades.
“We continue to make strategic investments across our entire footprint,” he said, “including edging out and enhancing our network performance and upgrading portions of the West footprint that were not yet on DOCSIS 3.1. We will have nearly 100% of the West upgraded to DOCSIS 3.1 by year-end.”
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