CHARTER COMMUNICATIONS, INC. /MO/ (CHTR) Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 was mixed: revenue fell 0.9% year-over-year to $13.7B and diluted EPS was $8.34, with mobile lines +493k and video losses improving to -70k; adjusted EBITDA declined 1.5% to $5.56B .
• Versus Wall Street consensus (S&P Global), Charter missed on EPS ($8.34 vs $9.32*) and revenue ($13.67B vs $13.75B*), and was below EBITDA consensus ($5.56B vs $5.61B*); management flagged Q4 EBITDA will be pressured by political advertising comps .
• Guidance: FY25 capital expenditures maintained at ~$11.5B (lower than ~$12.0B in Q1); long-term leverage target to 3.5–4.0x post Cox close, with deleveraging to mid-range in 2–3 years .
• Strategic narrative: convergence (mobile + internet), video packaging with included streaming apps and Spectrum App Store are driving lower churn and better household economics; management emphasized AI-driven service and cost initiatives and a multi-year free cash flow ramp as capex peaks in 2025 .

Values with * are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

• Mobile momentum and convergence: “We remained the fastest-growing mobile provider… added nearly 500,000 Spectrum Mobile lines… 21% of our internet customers are now converged” .
• Video stabilization: video net losses improved to -70k vs -294k YoY, aided by new pricing/packaging and included programmer apps; Spectrum App Store launched to streamline app activation and upgrades .
• Free cash flow resilience: FCF was $1.62B, flat YoY as higher operating cash flow offset higher capex; CEO reiterated focus on free cash flow growth .

What Went Wrong

• Internet customer pressure: total internet customers -109k (gross adds lower YoY) amid low move rates, mobile substitution, and expanding fiber/FWA overlap; impact most pronounced in low-income segment .
• Advertising headwind: ad sales -21.3% YoY (political comp), with ex-political -0.5%, contributing to consolidated revenue decline .
• Profitability compression: adjusted EBITDA margin fell to 40.7% (from 40.9% YoY; 41.4% QoQ) and net income margin to 8.3% (from 9.3% YoY; 9.4% QoQ), with M&A and severance costs weighing on net income .

Financial Results

Headline Metrics vs Prior Year and Prior Quarter

Segment Revenue Breakdown

KPIs and Operating Metrics

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO: “We are operating well in a competitive environment… our focus is on free cash flow growth for shareholder value creation” .
• CEO on Q3 dynamics: “Revenue was down about 1%… EBITDA declined by 1.5%… operating environment… low move rates and higher mobile substitution… fiber overlap growth” .
• CEO on AI: “We’re deploying new technologies… machine learning and AI… agentic AI… opportunity to significantly lower operating cost with higher tenured service employees” .
• CFO: “We expect 2025 full-year EBITDA growth to be flat or marginally positive… EBITDA growth in the fourth quarter will be pressured… given last year’s political advertising strength” .
• CFO on FCF and leverage: “As capital spending peaks this year… we are poised for rapid free cash flow… long-term target leverage to 3.5–4x; deleveraging to the middle in 2–3 years” .

Q&A Highlights

• Broadband outlook: Management emphasized churn benefits from converged (mobile + video app activation) households; near-term pressure driven by muted housing, mobile substitution, new fiber/FWA competition, with expectation for improvement as macro/competitive footprints stabilize .
• 4Q EBITDA guidance: CFO noted certain Q3 offers pressured ARPU more than expected; removed in November, but Q4 EBITDA will be more pressured than previously anticipated due to political comps and marketing mix .
• Offer innovation: Management discussed targeted expressions (e.g., “free internet with four mobile lines”) to optimize household economics and churn, without sacrificing margin; small audience but high CLV .
• Cox transaction: Timeline unchanged (“mid-next year”); preparing for Spectrum brand launch, pricing, Zumo, and seamless entertainment/connectivity post-close .
• Efficiency & AI: Significant opportunity to reduce $8B cost-to-serve via AI/agentic automation, unified data spine, and service tools; exploring B2B monetization (Amazon, Nexar) and edge use cases .

Estimates Context

Actual vs Consensus – Q3 2025

Values retrieved from S&P Global.

• Forward look (consensus): Q4 2025 EPS 9.92*, revenue $13.74B*, EBITDA $5.62B*; with management indicating Q4 EBITDA pressure from political comps, near-term estimate downgrades are likely for EBITDA/EPS despite convergence momentum .

Values retrieved from S&P Global.

Key Takeaways for Investors

• EPS and EBITDA misses vs consensus and explicit Q4 EBITDA pressure commentary suggest near-term estimate resets and possible negative reaction catalysts tied to political comp dynamics .
• Convergence strategy (mobile attach to internet and video app inclusion via Spectrum App Store) is reducing churn and improving household economics; watch attach rates and app authentications as leading indicators .
• Free cash flow inflection set up: peak capex in 2025 ($11.5B) and lower cash taxes ($1B) lay groundwork for multi-year FCF growth; deleveraging to 3.5–4.0x post Cox enhances equity value per share .
• Internet growth remains the swing factor: macro low move rates, mobile substitution, fiber/FWA expansion suppress gross adds; stabilization in these drivers would yield outsized net adds rebound per management .
• Video stabilization is strategically valuable despite secular decline: improved sell-in, app inclusion, and lower churn support overall connectivity revenue and margin durability .
• Monitor transaction progress: Regulatory timeline for Cox (“mid-next year”), integration plans (brand, pricing, Zumo) and combined capex decline are incremental to FCF trajectory .
• Operational AI investments could meaningfully reduce cost-to-serve and improve customer experience over 12–18 months; track tangible KPIs (service calls/truck rolls, churn, NPS) for proof points .