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Altice USA, Inc. (ATUS)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $2.15B, down 4.2% YoY and roughly flat QoQ; Adjusted EBITDA was $803.8M with margin 37.4% (down 130 bps YoY, up 30 bps QoQ) .
  • EPS materially missed Street: GAAP diluted EPS was $(0.21) vs S&P Global consensus of $(0.016); revenue was modestly below consensus ($2.147B actual vs $2.152B estimate) *.
  • Operational trends improved: broadband net losses decreased to -35k (vs -51k YoY and -37k QoQ), mobile lines +37.8k, fiber customers +56.3k, and video losses improved to -56.1k (best PSU trend in 10 quarters) .
  • Guidance reaffirmed: management reconfirmed the Q1 outlook including FY 2025 Adjusted EBITDA ≈$3.4B, cash capex ≈$1.2B, and cost trajectory moderation in 2H with biggest step-up in Q4 .
  • Capital structure catalyst: closed a landmark $1.0B asset‑backed loan secured primarily by HFC assets (8.875% fixed coupon, Jan‑2031 maturity), improving pricing vs last high‑yield issuance and creating a scalable perimeter for future debt solutions .

What Went Well and What Went Wrong

What Went Well

  • Broadband stabilization: net losses improved to -35k (YoY -16k, -31%) with lowest Q2 churn in 3 years; East saw best net add trend in 10 quarters and improved win share vs ILECs/FWA .
  • Product and ARPU quality: broadband ARPU rose 0.9% YoY to $74.77; value‑added services scaling (Total Care 90k, Whole Home WiFi 31k) support stickier customers and ARPU accretion over time .
  • Video margin expansion and PSU improvement: video gross margin expanded >300 bps YoY; new tiers penetration reached 10% and net losses improved to -56.1k (best in ten quarters) .

What Went Wrong

  • EPS miss and revenue decline: diluted EPS was $(0.21) and total revenue declined 4.2% YoY, with video cord‑cutting driving ~85% of the revenue decline .
  • Higher other operating expenses: up ~4% YoY driven by ~$13M consulting/professional fees tied to transformation, increased sales/marketing and ~$12M higher employee health/wellness costs (expected to moderate in 2H) .
  • Residential ARPU pressure: declined 1.7% YoY to $133.68 with video contributing a $3.74 YoY decline, despite higher video rate, due to lower video penetration .

Financial Results

Consolidated Financials (Actuals)

MetricQ4 2024Q1 2025Q2 2025
Total Revenue ($USD)$2,235.0M $2,152.3M $2,147.2M
Net Income (Loss) Attributable to Stockholders ($USD)$(102.9)M $(75.7)M $(96.3)M
Diluted EPS ($USD)$(0.12) $(0.16) $(0.21)
Adjusted EBITDA ($USD)$837.5M $799.0M $803.8M
Adjusted EBITDA Margin (%)37.5% 37.1% 37.4%

Revenue by Category (Quarterly)

Revenue Category ($USD)Q2 2024Q1 2025Q2 2025
Broadband$915.0M $899.6M $885.1M
Video$739.4M $665.6M $660.5M
Telephony$71.7M $66.4M $64.6M
Mobile$27.5M $36.7M $37.6M
Business Services & Wholesale$369.3M $363.5M $361.8M
News & Advertising$105.3M $102.4M $118.8M
Other$12.6M $18.1M $18.7M
Total Revenue$2,240.8M $2,152.3M $2,147.2M

Key KPIs

KPIQ2 2024Q1 2025Q2 2025
Residential ARPU ($)$135.95 $133.93 $133.68
Broadband ARPU ($)$74.13 $75.31 $74.77
Broadband Net Adds (k)-51.0 -36.6 -35.0
Video Net Adds (k)-72.8 -87.7 -56.1
Mobile Line Net Adds (k)+33.0 +49.0 +37.8
FTTH Total Customer Net Adds (k)+39.5 +68.5 +56.3
FTTH Total Passings (k)2,842.0 2,995.0 3,023.4

Actual vs S&P Global Consensus (Quarterly)

MetricQ4 2024Q1 2025Q2 2025
Revenue Estimate ($USD)$2,239.7M*$2,156.8M*$2,152.7M*
Revenue Actual ($USD)$2,235.0M $2,152.3M $2,147.2M
Primary EPS Estimate ($USD)$0.0410*$(0.0759)*$(0.0157)*
Diluted EPS Actual ($USD)$(0.12) $(0.16) $(0.21)

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
RevenueFY 2025$8.6B–$8.7B Reaffirmed Maintained
Programming & Other Direct CostsFY 2025≈$2.6B Reaffirmed Maintained
Other Operating ExpenseFY 2025≈$2.6B Reaffirmed; moderation in 2H as transformation costs ebb Maintained (with timing detail)
Adjusted EBITDAFY 2025≈$3.4B Reaffirmed; sequential improvement with biggest step‑up in Q4 Maintained
Cash Capital ExpendituresFY 2025≈$1.2B Reaffirmed Maintained
Cash TaxesFY 2025N/A< $200M; tax reform savings $250–$350M over 2025–2027 New disclosure
Passings AdditionsFY 2025175k total (primarily fiber new builds) Reaffirmed Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI / Technology InitiativesBegan embedding AI and digital tools; Google Cloud partnership; focus on operational efficiency Scaling AIVA for smarter offers; ANA for network fault detection; rolling out next‑gen omnichannel CX with Google AI; improved NPS +8 pts YoY Expanding scope and measurable impact
Broadband Subscriber TrendsQ4: -39k net losses; Q1: -37k; best churn in 3 years -35k net losses; lowest Q2 churn in 3 years; East best net add trend in 10 quarters Stabilizing
Mobile ConvergenceQ4: 5.7% converged base; Q1: +49k lines +37.8k lines; improved quality (ports 57%, device financing 31%, unlimited plans 74%); churn -600 bps YoY Higher‑quality growth
Video Strategy & MarginsNew tiers launched; attachment improved; programming cost inflation moderation >300 bps YoY gross margin expansion; 10% penetration of new tiers; best video PSU trend in ten quarters Margin expansion continues
Capital StructureOngoing refinancing activity in 2024 $1.0B ABS loan secured by HFC assets; better pricing vs prior HY; scalable perimeter, 8.875% coupon, Jan‑2031 maturity Innovative, incremental flexibility
Regional / Competitive DynamicsEmphasis on hyper‑local strategies Improved win share vs ILECs/FWA; hyper‑local deployed across ~600k homes with 13% connect lift; Texas/Northeast pockets turning positive Execution gaining traction
Regulatory / LegalN/AExternal law firm announced an investigation (PR outside company) Potential overhang (no company comment)

Management Commentary

  • “Our second quarter results reflect continued momentum… We delivered sequential and year over year improvement in broadband subscriber trends and grew broadband ARPU year over year…” — Dennis Mathew, CEO .
  • “These priorities are enabling us to… drive toward approximately $3.4 billion of adjusted EBITDA in full year 2025.” — Dennis Mathew .
  • “Gross margin expanded by 120 bps to 69.1%, reaching our highest level in recent history, driven by a continued shift in product mix towards broadband and our focus on optimizing video margins.” — Marc Sirota, CFO .
  • “We are reconfirming our outlook… most improvement will step up in the fourth quarter.” — Marc Sirota .
  • “This first‑of‑its‑kind securitized transaction… provides an opportunity to unlock leverage value in our HFC assets.” — Marc Sirota (capital structure) .

Q&A Highlights

  • Mobile strategy: Management emphasized higher‑quality gross adds (ports 57%, device financing 31%, unlimited 74%), improved churn (-600 bps YoY), and a path to 1M lines by 2027; satisfied with MVNO partner (T‑Mobile) .
  • Competitive posture: Hyper‑local and income‑constrained strategies delivering 10–13% lifts; improved win share vs fiber overbuilders and mature telcos; willingness to invest surgically in marketing with AI‑enabled efficiency .
  • Capital structure / maturities: New ABS structure diversifies funding, improves pricing vs last HY issuance, adds capacity; management will explore options to address 2027–2028 maturities and target 4.5–5.0x sustainable leverage over time .
  • Broadband trajectory & ARPU: Stabilization amid macro headwinds (low moves, housing formation); ARPU supported by new add‑ons (Total Care, Whole Home WiFi, B2B services) and disciplined offer management .
  • FY 2025 trajectory: Reaffirmed revenue/direct cost/OpEx outlook; sequential EBITDA improvement expected, with largest impact in Q4 from workforce actions and lower third‑party transformation costs .

Estimates Context

  • Q2 2025 revenue modestly missed consensus: $2,147.2M actual vs $2,152.7M estimate* .
  • Q2 2025 EPS materially missed: $(0.21) actual vs $(0.0157) estimate*; Q1 2025 also missed (actual $(0.16) vs $(0.0759) estimate*) *.
  • Prior quarter revenue was slightly below estimates (Q1 2025 actual $2,152.3M vs $2,156.8M estimate*), while Q4 2024 was just below ($2,235.0M actual vs $2,239.7M estimate*) *.

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceCommentary
Adjusted EBITDAFY 2025≈$3.4B Reaffirmed Sequential improvement, biggest step‑up in Q4
Cash CapExFY 2025≈$1.2B Reaffirmed Front‑weighted; efficiencies expected in 2H
RevenueFY 2025$8.6B–$8.7B Reaffirmed Mix shift toward broadband; News & Ads strength
Direct Costs / OpExFY 2025≈$2.6B / ≈$2.6B Reaffirmed; OpEx moderation in 2H Workforce optimization and AI tools
Cash TaxesFY 2025N/A< $200M $250–$350M savings over 2025–2027
PassingsFY 2025175k total Reaffirmed Majority from fiber builds

Financial Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current PeriodTrend
AI & AutomationDigital/AI capabilities initiated AIVA sales assist, ANA network automation, Google AI omnichannel; measurable NPS gains Scaling impact
FiberRecord net adds and passings growth +56k fiber net adds; 663k fiber customers; 21.9% penetration Accelerating penetration
MobileBest five‑year net adds +37.8k lines; improved quality metrics; churn down ~600 bps YoY Quality over volume
VideoNew tiers introduced >300 bps GM expansion; 10% new tier penetration; attachment rate rising Margin expansion
Capital StructureRefinancing actions $1.0B ABS HFC loan; better pricing vs HY; scalable perimeter Innovative financing

Management Commentary

  • “We remain focused on capturing new growth opportunities… improve broadband subscriber trends… broadband ARPU increased 0.9% YoY.” — Dennis Mathew .
  • “Adjusted EBITDA margin of 37.4%… slightly sequentially higher; other operating expenses increased ~4% YoY… expected to moderate in the second half.” — Marc Sirota .
  • “Liquidity ≈$1.5B; leverage 7.8x L2QA… weighted average cost of debt 6.9% (pro forma ABS).” — Marc Sirota .
  • “We estimate $250–$350M of tax savings over 2025–2027; 2025 cash tax under $200M.” — Marc Sirota .

Q&A Highlights

  • Mobile runway and MVNO: Penetration ~7% with path to 1M lines by 2027; management “very happy” with T‑Mobile MVNO; expanding sales channels within care/retention .
  • Competitive dynamics: Hyper‑local deployment (~600k homes) driving 13% connect lift and 20–40% win‑share improvements; balancing rate/volume in income‑constrained markets .
  • Debt maturities wall: ABS structure adds flexibility; company evaluating timing and conditions to term out 2027 maturities; sustained leverage target 4.5–5.0x .
  • ARPU and product add‑ons: ARPU supported by Total Care ($15–$30 tiers), Whole Home WiFi ($10), and SMB services; tighter control of offer/pricing and promo rolls in 2H .

Estimates Context

  • Q2 2025: revenue slight miss; EPS significant miss versus S&P Global consensus; Q1 2025 also modest revenue miss and EPS miss* *.
  • Given reaffirmed FY guide and expected Q4 step‑up in EBITDA, Street models may need to shift mix toward 2H cost moderation and News/Advertising/Lightpath contributions .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • EPS miss versus consensus and continued revenue pressure from video cord‑cutting are near‑term negatives; however, KPIs (broadband churn, mobile/fiber net adds, video margins) show tangible operational momentum .
  • Reaffirmed FY 2025 Adjusted EBITDA ≈$3.4B and capex ≈$1.2B, with biggest EBITDA improvement in Q4, points to back‑half execution and potential beat‑and‑raise risk if cost moderation exceeds plan .
  • The $1.0B ABS loan improves pricing vs last HY notes and creates a scalable financing perimeter, offering optionality to address 2027–2028 maturities — a medium‑term de‑risking catalyst .
  • Product attach strategies (Total Care, Whole Home WiFi, OTT bundles) and hyper‑local GTM are improving win share and ARPU quality; watch for sustained broadband stabilization and further mobile conversion .
  • News & Advertising growth (+12.8% YoY in Q2) and Lightpath hyperscaler pipeline augment diversified revenue avenues amid residential softness .
  • External legal investigation headlines (not company‑issued) present a potential sentiment overhang; monitor for any formal proceedings or company responses .
  • Trading lens: near‑term sentiment may hinge on EPS miss magnitude and Street skepticism about 2H step‑up; upside skew if cost moderation and ABS‑enabled flexibility are validated on Q3/Q4 prints .