CHARTER COMMUNICATIONS, INC. /MO/ (CHTR) Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered modest top-line growth and margin expansion amid subscriber headwinds. Total revenue rose 1.6% to $13.926B; Adjusted EBITDA grew 3.4% to $5.760B; net income margin improved to 10.5% (vs. 7.7% YoY) .
• Internet subs fell by 177K, chiefly due to the end of ACP and hurricane impacts; mobile lines added 529K as Spectrum Mobile continued to scale; video losses improved versus prior year with new pricing/packaging .
• Reported hurricane-related effects were material: approximately $35M EBITDA headwind, ~$125M incremental Q4 capex, and $37M of customer credits; ACP drove an estimated ~140K Internet losses in Q4, mostly non-pay .
• 2025 guidance anchors on peak investment year: capex ~$12B (incl. ~$4.2B line extensions, ~$1.5B network evolution) and expected growth in Adjusted EBITDA; multi-year trajectory points to run-rate capex <$8B post-evolution with strong FCF upside .
• Stock narrative catalysts: converged connectivity (mobile + broadband + seamless entertainment), AI-enabled service efficiency, rural expansion passings, and visibility into post-2025 FCF expansion; buybacks paused pending Liberty Broadband vote, then expected to resume .

What Went Well and What Went Wrong

What Went Well

• Mobile growth and mix: Mobile service revenue +37.4% YoY to $860M; Spectrum Mobile added 529K lines in Q4 and 2.1M in 2024, supporting consolidated EBITDA and customer-level margin expansion .
• Advertising uplift: Advertising revenue +26.4% YoY on stronger political spend; excluding political, the market remained challenged, but the contribution supported overall growth .
• Video re-bundling impact: Video losses improved (−123K vs. −257K prior year) aided by “Life Unlimited” pricing/packaging and streaming app inclusion strategy to enhance value and attach rates .
• Quote (CEO): “By having the best network, the best products and delivering customers the most value with unmatched service, we are well-positioned for customer and profitability growth and have clear visibility to free cash flow growth following this unique one-time investment cycle.” .

What Went Wrong

• Internet subscriber headwinds: Total Internet customers declined by 177K in Q4, driven by ACP elimination and hurricanes; ACP contributed ~140K Internet losses (primarily non-pay) and depressed gross adds in low-income segments .
• Free cash flow softness: Q4 FCF dipped to $984M (−7.3% YoY) as operating cash flow declined and capex increased, including storm-related restoration .
• Other cost pressures: Other costs of revenue +16.2% YoY (mobile device sales, direct mobile costs, political ad expense); EBITDA impact down ~$35M from storms .
• Analyst concern: Management highlighted that 2025 lacks political advertising tailwinds seen in 2024, and ACP churn impacts should normalize but create near-term uncertainty for Internet net adds .

Financial Results

Consolidated Performance vs. Prior Periods

YoY Snapshot (Q4 2024 vs. Q4 2023)

Segment Breakdown

KPIs and Operational Metrics

Notes: Fourth-quarter credits tied to hurricanes totaled $37M, partially offsetting revenue; advertising strength was political-cycle driven; ACP-related effects impacted gross adds and churn .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO strategic framing: “Our multi-year investments in network evolution, expansion and execution are delivering tangible results… we are well-positioned for customer and profitability growth and have clear visibility to free cash flow growth following this unique one-time investment cycle.”
• On ACP/hurricanes and operations: “Our fourth quarter adjusted EBITDA was reduced by approximately $35 million… the storms drove approximately $125 million in total incremental capital expenditures in the fourth quarter.”
• On convergence and value: “We save customers hundreds or even thousands of dollars a year… highlighting this value is the goal of our recent pricing and packaging under the Life Unlimited brand refresh.”
• AI-enabled service: “AI is… listening to the conversation, providing proactive optimized solutions, customer sentiment, call summarization… improving the customer interaction.”
• CFO on 2025 plan: “We plan to grow adjusted EBITDA in 2025… through mobile growth, customer benefits from new pricing and packaging, Spectrum One promotional roll-off, and continued efficiencies.”

Q&A Highlights

• Capex network evolution and DOCSIS path: 100% high-split planned; mix of DOCSIS 4.0 and extended 3.1; ability to execute within sub-$8B run-rate environment post-peak year .
• ACP impact normalization: Management expects ACP-related non-pay disconnects to be largely behind after Q3/Q4; underlying broadband performance expected to improve without ACP drag .
• Wireless economics: No near-term need for “owner’s economics”; margins already attractive with ~87% traffic on own network via WiFi/CBRS; mobile is an extension of broadband .
• Marketing and video strategy: Coordinated co-marketing with programmers for DTC app inclusion; value proposition drives broadband relationship and retention; Peacock inclusion coming, broader rollout in H1 2025 .
• Cash taxes and leverage: CY2025 cash taxes guided to $1.6–$2.0B; leverage targeted mid-point of 4–4.5x post-Liberty Broadband; buybacks to resume after vote .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2024 revenue/EPS/EBITDA was unavailable due to SPGI request limit; therefore, we cannot assess beat/miss versus consensus in this recap. Consensus retrieval via S&P Global was attempted but returned a daily-limit error; estimates are unavailable for this report [GetEstimates error].

Key Takeaways for Investors

• Convergence drives the thesis: Mobile scale (+529K lines in Q4) and integrated pricing materially support revenue mix and margin durability even as wireline video continues to decline .
• Peak capex in 2025 is a setup, not a stall: With ~$12B planned (incl. line extensions and evolution), management outlined a path to sub-$8B run-rate capex post-initiatives and strong FCF uplift potential thereafter .
• ACP and storm impacts are transitory: Internet losses tied to ACP/hurricanes should normalize; political ad tailwinds will fade in 2025, but management still guides for EBITDA growth via mobile and efficiency .
• AI/service productivity is a margin lever: Expanding AI use in care and field ops aims to reduce transactions, truck rolls, and churn—key for cost-to-serve and EBITDA progression .
• Video rebundling is strategic, not a growth engine: Streaming app inclusion and Xumo unify discovery, enhancing broadband value and retention; losses improved sequentially with new packaging .
• Rural expansion adds durable units: 117K subsidized rural passings activated in Q4 (393K in 2024); plan ~450K in 2025 supports subscriber growth and long-term penetration .
• Capital structure and liquidity remain solid: $93.8B debt principal, extended maturities, ~5.2% weighted average cost of debt; buybacks to resume post-Liberty Broadband vote .

Additional Relevant Q4 Materials

• Charter Announces Fourth Quarter and Full Year 2024 Results (press release)
• Webcast details and trending schedules (IR site references in release)
• Related Jan–Feb press activity: Spectrum Mobile reaches 10 million lines (milestone post-Q4)