Charter Communications Q2 Earnings Call Highlights

Key Points

• Charter lost 172,000 internet customers in Q2 as competition from fixed wireless, fiber overlap, and softer low-income demand continued to pressure broadband growth. Management said churn was not the main issue and expects a return to broadband growth over time.
• Mobile remained a bright spot, with Spectrum Mobile adding 406,000 lines in the quarter and video losses improving sharply to 21,000 from 80,000 a year ago. Charter said mobile and video bundles are helping reduce churn and improve retention.
• The Cox acquisition is nearing completion, with Charter now expecting the deal to close in mid-to-late August and targeting at least $800 million in annual run-rate synergies, potentially rising to $1 billion. The company also paused buybacks temporarily but expects them to resume in the fourth quarter.

Charter Communications NASDAQ: CHTR reported a larger internet customer loss in the second quarter as competitive pressure continued to weigh on new customer additions, while mobile line growth remained strong and video losses improved substantially.

The company lost 172,000 internet customers during the quarter, compared with a smaller loss a year earlier. President and CEO Chris Winfrey said weaker gross additions, rather than increased churn, remained the primary reason for the broadband performance. He said expanded fixed-wireless competition, fiber overlap and softer activity among low-income consumers have affected customer acquisition.

“Internet customer growth is taking longer to reverse,” Winfrey said, adding that Charter expects competitive expansion to eventually subside. The company expects to return to broadband growth over time through its converged internet and mobile offerings, improved network capabilities and better customer satisfaction scores.

Second-Quarter Results

Charter’s consolidated revenue declined 1.7% year over year in the second quarter. Adjusted EBITDA fell 4.3%, or 3.2% excluding $65 million of transition expenses associated with the pending Cox Communications transaction.

Chief Financial Officer Jessica Fischer said residential revenue declined 3.5%, though the decline was 1.8% excluding the effect of programmer streaming-app costs allocated to video revenue. Residential revenue per customer relationship also declined 1.8%, but was essentially flat excluding that app-allocation effect.

Commercial revenue increased 1.5%, including 2.8% growth in mid-market and large-business revenue. Advertising revenue rose 12.3%, helped by political advertising. Excluding political revenue, advertising revenue declined 4.6%.

Charter generated $1.3 billion in net income attributable to shareholders, essentially unchanged from the prior-year quarter. Lower EBITDA was offset by a gain on debt extinguishment related to open-market debt repurchases.

For the full year, Fischer said Charter now expects standalone EBITDA, excluding transition costs, to decline by approximately 1%. The second half is expected to benefit from political advertising, internet cost pass-throughs and efficiency initiatives. Management said it is pursuing additional expense-reduction measures, including benefit-plan changes, overhead simplification and other cost actions.

Mobile Growth and Video Improvement

Spectrum Mobile added 406,000 lines in the quarter, bringing Charter’s mobile base to more than 12.5 million lines. Winfrey said the company added 1.7 million lines over the past 12 months, representing 16% growth.

Management emphasized mobile’s role in customer retention. Winfrey said internet customers with Spectrum Mobile churn nearly 40% less than customers without mobile service, while customers who also take video churn more than 40% less.

Charter’s video customer loss narrowed to 21,000 from 80,000 in the second quarter of 2025. Fischer attributed the improvement to fewer downgrades, lower churn and more upgrades, supported by the company’s programmer-app inclusion packages and pricing changes introduced late in 2024. New connects to its fully featured video package also improved, with some benefit from the World Cup, she said.

In subsidized rural markets, Charter added 47,000 net customer relationships during the quarter. Subsidized rural passings increased by 127,000 in the quarter and 487,000 over the past 12 months.

Charter said it is making pricing adjustments that include speed upgrades for most affected customers. Fischer said the changes did not affect second-quarter results but should support residential revenue in the second half. Broadband average revenue per user is expected to improve sequentially in the third quarter, aided by the normalization of earlier retention offers and the new cost pass-through.

Cox Transaction and Integration Plans

Charter said it now expects its acquisition of Cox Communications to close in mid-to-late August. Winfrey said Charter plans to introduce Spectrum pricing and packaging in Cox markets shortly after closing, aiming to improve internet customer performance and expand penetration of mobile and video services.

The company continues to expect at least $800 million in annual run-rate transaction expense synergies and said that estimate could rise to $1 billion after closing. The synergy estimate excludes potential operating and capital-expenditure benefits.

Charter is recruiting more than 1,000 residential and business sales employees in Cox territories. It also plans over the next year to onshore and insource Cox call-center activity, moving service coverage in those markets to a 24/7 platform. Winfrey said Charter expects to absorb most or all of the work currently handled by Cox’s offshore contractors through Spectrum’s operating efficiencies and digital capabilities.

Management said Cox’s customer and revenue trends have been “a couple clicks lower” than Spectrum’s, but said there has been no major change in the company’s integration strategy. Charter expects the combined company to have approximately 70 million passings, 37 million customers, roughly $67 billion in revenue and about $28 billion in EBITDA.

Capital Spending, Debt and Capital Returns

Second-quarter capital expenditures totaled $2.9 billion, nearly flat from a year earlier. Charter maintained its expectation for approximately $11.4 billion in standalone capital expenditures in 2026. Looking beyond 2026, Fischer said annual standalone capital spending is expected to decline to less than $8 billion after network evolution and expansion initiatives are completed.

Free cash flow was $1 billion in the second quarter, down about $75 million from a year earlier, reflecting lower EBITDA and less favorable working-capital changes.

Charter ended the quarter with $94 billion of debt principal, a weighted average debt maturity of 11.7 years and a weighted average cost of debt of 5.2%. The company repurchased $1.2 billion of its debt in the open market for $1 billion in cash during the quarter, capturing about $250 million of discount.

The company also repurchased 4 million shares for $838 million, at an average price of $210 per share. However, it has paused buybacks through the end of the third quarter because of the pending Cox closing, related financing and liability-management efforts. Charter expects repurchases to resume in the fourth quarter.

Management lowered its post-transaction leverage target to 3.5 times net debt to adjusted EBITDA and expects to reach that level within three years of the Cox and Liberty Broadband transactions closing. Fischer said Charter expects leverage to be just above 3.9 times at the end of the third quarter, assuming the transactions close and its newly announced debt exchange offer succeeds.

About Charter Communications (NASDAQ:CHTR)

Charter Communications, Inc is a U.S.-based telecommunications and mass media company that provides broadband communications and video services to residential and business customers. Operating primarily under the Spectrum brand, the company offers high-speed internet, cable television, digital voice (phone) and wireless services, as well as managed and enterprise networking solutions for commercial customers. Charter's service portfolio targets both consumer and business markets with bundled and standalone offerings designed to meet streaming, connectivity and communications needs.

The company's consumer-facing products include Spectrum Internet, Spectrum TV and Spectrum Voice, while Spectrum Mobile provides wireless service through arrangements with national wireless carriers.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.