Q1 2025 Altice USA Inc Earnings Call

Greetings, and welcome to the Altice USA Q1 2025 results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad.

as a reminder, this conference is being recorded. [inaudible]

is now my pleasure to introduce your host, Sarah Freedman, Vice President of Investor Relations.

Speaker Change: Thank you. Welcome to the Altice USA Q1 2025 earnings call.

Speaker Change: We are joined today by Altice USA's Chairman and CEO , Dennis Mathew and CFO , Marc Sirota, who together will take you through the presentation and be available for questions.

Dennis Mathew: As today's presentation may contain forward looking statements, please carefully review the section titled forward looking statements on slide two. Now turning over to Dennis to begin.

Dennis Mathew: Thank you, Sarah, and thank you everyone for joining us today. In the first quarter I'm pleased to share that we made meaningful strides to stabilize our performance and solidify our foundation for long-term success here at Optimum.

Dennis Mathew: Our performance was driven by improvements in customer and network experience, expansion of competitive and targeted go-to-market initiatives, and a focus on transforming our business.

Dennis Mathew: We also successfully navigated two significant programming negotiations, achieving favorable outcomes with minimal disruption to our customers.

Dennis Mathew: Our progress reflects the dedication of our optimum teammates who continue to deliver for our customers and drive our strategic priorities.

Dennis Mathew: I'm incredibly proud that we were resertified as a great place to work, a testament to the culture driving our momentum. Thank you to the entire optimum team for making it happen. I'd like to begin on slide three with our quarterly performance highlights.

Dennis Mathew: Broadband subscriber netlosses of 37,000 improved sequentially from last quarter and reflect the investments and changes we have implemented in the last 18 months.

Dennis Mathew: When normalized for the impact of the nearly two-month programming disputes, we would have seen approximately 35,000 broadband net losses in the quarter.

Dennis Mathew: Broadband ARPU GRU 2.4% year-over-year supporting the progress we are making on stabilizing ARPU trends which Marc will provide details on shortly.

Dennis Mathew: On Fiber, we achieved all-time high fiber performance of 69,000 Fiber Net Editions.

Dennis Mathew: We ended the quarter with over 600,000 fiber customers reaching 20% penetration of our fiber networks.

Dennis Mathew: We continue to accelerate mobile growth with 49,000 mobile line net additions and surpass the milestone of 500,000 mobile lines.

Dennis Mathew: Our transformation is gaining momentum as we sharpen execution and expand targeted go-to-market strategies in high opportunity markets.

Dennis Mathew: We are also working to optimize our programming and expense opportunities and achieve nearly 69% growth margin in the quarter.

Additionally, quarterly churn reached the lowest levels in three years.

Dennis Mathew: Analyze broadband churn improved by 90 basis points year over year in Q1, particularly with involuntary and non-pature, driven by stronger base management, enhanced value propositions, and better network performance.

Dennis Mathew: We also continue to make incredible progress in our customer experience as evidenced by our recent recognition by the Global Stevia Awards for Excellence in customer service and customer service transformation, a testament to the ongoing dedication and commitment of team optimal.

[inaudible]

Dennis Mathew: Turning to slide four are 2025 priorities remain unchanged. To unlock revenue opportunities, drive freighter operational efficiency, continue enhancing our award-winning networks, and ensure our capital structure is aligned with our long-term operating goals.

Dennis Mathew: I want to pause here and underscore that 2025 marks a pivotal milestone for optimal.

Dennis Mathew: reflecting the culmination of our strategic investments, successful execution of our operational transformation, and delivery of financial discipline that has enabled us to slow the rate of adjusted EBITDA decline over the last three years.

Dennis Mathew: Looking ahead, in 2025, we expect to deliver approximately $3.4 billion of adjusted EBITDA. Stabilize broadband subscriber trends in the full year and improve investment returns.

Dennis Mathew: We will detail in the following slides the strategies that give us confidence that we can achieve this.

Dennis Mathew: Our top line performance will continue to be closely tied to subscriber trends

Dennis Mathew: We are taking purposeful actions to realize more revenue opportunities to addressing customer affordability challenges and competitive intensity, and by delivering greater values to tailored offers, localized pricing, and enhanced product positioning and bundles.

Dennis Mathew: As we continue to drive transformation, we are executing a broad range of initiatives aimed at enhancing the customer experience while reducing our cost to serve.

Dennis Mathew: as well as increasing the flexibility of our programming agreements, expanding the use of digital and AI tools to reduce service calls and visits, and driving stronger ROI across both operating costs and capital expenditures.

Dennis Mathew: Finally, we remain disciplined in managing our capital structure and continue to evaluate all options that support long-term sustainability and align with our operating goals.

Dennis Mathew: This week, we entered into an agreement to sell certain tower assets for gross proceeds of approximately $60 million.

Dennis Mathew: We expect this transaction to close by early Q3 subject to customary closing conditions.

Dennis Mathew: As previously disclosed, we also entered into an agreement to sell the I-24 news business to next alt or an affiliate thereof. This transaction is expected to close later this year following the satisfaction of closing conditions, including receipt of regulatory approvals.

Dennis Mathew: These transactions provide us with additional operational focus and financial flexibility. We will continue to evaluate our balance sheet and operational efficiencies to monetize non-core assets as opportunities arise.

Dennis Mathew: Turning to slide five, I'll walk through some of the key operational strategies we are deploying and scaling to position to deliver approximately $3.4 billion of adjusted EBITDA in full year 25.

Dennis Mathew: First, on our competitive go-to-market efforts, we're enhancing marketing effectiveness through AI and digital tactics and refining our packaging and offers based on data-driven insights.

Dennis Mathew: Specifically, over the past few quarters, we've seen increased pressure in income constrained segments, particularly with gross additions, as some customers opt for lower cost alternatives.

Dennis Mathew: We see firsthand how customers are being impacted by inflation, unemployment, and broader economic pressures, which is why we're committed to evolving our packages to ensure there are solutions for every budget.

Dennis Mathew: At the end of April , we launched a new everyday low price offer designed to support families facing economic hardship.

Dennis Mathew: Later this year, we will enhance this product with lifestyle brand partnerships to enhance our value to families as they manage overall expenses.

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Dennis Mathew: We're actively working to increase awareness and accessibility of these services to direct outreach and by lowering qualification hurdles for a simplified sign-up experience.

Dennis Mathew: This leads me to our hyper-local playbook, an approach we can uniquely deploy, given our ability to move quickly in local markets.

Dennis Mathew: In Q1, we scaled the strategy across highly competitive areas in our footprint, offering attractive pricing paired with compelling features like price locks and free installation to lower barriers to switching.

Dennis Mathew: This strategy is highly targeted, data driven, and driving strong results. In these markets, we're already seeing over 10% lift in revenue driven by higher sales and penetration growth.

Dennis Mathew: We're also sharpening our focus on our multi-dwelling unit footprint, or M.D.U., which represent over two million serviceable passings across our footprint.

Dennis Mathew: MDUs are a valuable customer segment as a portion are secured through long-term agreements

Dennis Mathew: We've deployed new reporting and analytics tools to identify where we are under penetrated and then track monitor and optimize performance led by a focused leadership team to drive our Dakota Market for this segment.

Dennis Mathew: And we are enhancing our managed Wi-Fi offerings to deliver a stronger experience tailored to M.D.U. customers.

Dennis Mathew: Overall, our go-to-market approach is to deepen our connection across the communities we serve by optimizing our offers and customer engagement to reflect what matters most at the neighborhood level and we're already seeing positive momentum in several markets.

Dennis Mathew: Next, we are enhancing and expanding our products and services to strengthen our competitive profile.

Dennis Mathew: On Broadband, in April , we launched Whole Home Wi-Fi, a value-added service that provides more powerful and seamless coverage throughout the home, along with ongoing tech support for total peace of mind.

Dennis Mathew: Price at $10 per month, this product eliminates connectivity pain points such as dead zones and drop signals, especially as the number of connected devices in the home continues to grow.

Dennis Mathew: Later this year, we will roll out more next-generation Wi-Fi solutions to further enhance the in-home experience.

Dennis Mathew: If you recall, last year we launched total care, another premium support add-on priced at $15 per month.

Dennis Mathew: Together, we expect to reach 30% plus penetration of our broadband base as we scale whole-home Wi-Fi and total care over time.

Dennis Mathew: And, as I shared earlier, we also achieved over 20% penetration on our award-winning fiber network and continued to target 30% penetration by year-end 2026.

Dennis Mathew: On video, we are evolving our portfolio to ensure our entertainment offerings, bring our customers what they want, how they want it. We recently announced our collaboration with Disney to offer eligible customers the Disney Plus Hulu Bundle Basic Option for six months on us.

Dennis Mathew: After the six months, customers will continue to manage their subscription directly through optimal.

Dennis Mathew: This is the beginning of our new approach to enable customers to build their own curated content selection through us, with more OTT streaming partners and other services to become available for purchase through optimum in the quarters to come.

Dennis Mathew: In addition, we are scaling the availability of the three new video packages we launched in late 24 entertainment, extra and everything TV with existing and new customers while improving our video margin profile.

Dennis Mathew: In Q1, over 25% of new video customers chose Entertainment TV, our $30 entry-level package without sports and news, highlighting strong demand for affordable skinny bundles.

[inaudible]

Dennis Mathew: Turning to B2B, we recently unified our B2B and optimum media divisions under one leader keep Boeing to capitalize on new growth opportunities while delivering greater value to optimum business customers.

Dennis Mathew: This uniquely opens the door to more opportunities for cross selling and driving innovative advertising and connectivity offers. On the B2B side, we're expanding product availability of fiber broadband to drive higher fiber penetration.

Dennis Mathew: We recently launched Secure Fiber Internet at No Extra Cost and Secure Internet Plus at $20 per month, which allows for security feature customization.

Dennis Mathew: These new cybersecurity solutions are in high demand and built on our cloud-based high-capacity infrastructure and designed to provide powerful, reliable protection.

Dennis Mathew: In Q4 we launch connection backup at $30 per month for B2B customers.

Dennis Mathew: which provides a reliable, automatic, backup internet connection, specifically designed for point-of-sale systems and other critical business devices. We continue to scale this product and are already seeing meaningful take rates in the first quarter.

Dennis Mathew: We estimate that these types of products and add-on services can achieve over 30% penetration over time.

Dennis Mathew: It's worth noting that these B2B solutions are in addition to other new products we have launched over the last year, such as device protection and insurance as well as pro Wi-Fi internet with marketing solutions, which we continue to enhance and drive greater penetration.

[inaudible]

Dennis Mathew: Turning to mobile, we continue to build momentum and drive convergence. We are seeing demand from both new and existing customers who want the simplicity and value that come from combining broadband and mobile in one seamless experience.

Dennis Mathew: Our mobile service revenue grew 47% year-over-year in Q1 and we reached over 6% of our broadband base converged with mobile, representing a meaningful growth opportunity to continue to drive

Dennis Mathew: In addition to delivering top-line revenue growth, our mobile and value-added services portfolio enhance customer lifetime value by creating stickier, higher RQ customers and help us to compete more effectively.

Dennis Mathew: We estimate that new revenue from mobile and value-added services will exceed half a billion dollars of incremental revenue over time.

Dennis Mathew: And finally, we are focused on advancing our transformation in driving greater efficiencies across the business.

One key area is through optimization of our programming agreements.

Dennis Mathew: Our negotiations are guided by a customer first mindset supported by advanced data and analytics that helps us to understand viewing habits and advocate for the best possible value and flexibility.

Dennis Mathew: In early Q1, this approach led to the temporary drop of two networks for approximately 1.8 million customers while we negotiated for more flexible terms for our customers and our business.

Dennis Mathew: Throughout this period, we proactively engage directly with our customers offering alternative viewing options and solutions tailored to their individual needs.

Dennis Mathew: While this caused some impacts in the quarter which we have detailed in the presentation, our thoughtful approach significantly minimized customer inconvenience and churn, and we retained 99.8% of those impacted.

Dennis Mathew: I am extremely pleased with the positive response from our customers.

Dennis Mathew: How our team proactively manage the situations, the outcomes we reach with our partners.

Dennis Mathew: and how we've strengthened our playbook for future programming negotiations and deal optimization.

Dennis Mathew: Next, we have made significant investments in people and technology over the last two years.

Dennis Mathew: As a result, we have transitioned from legacy systems to digital platforms and our continued investment in automation and AI tools allows us to work faster and is becoming embedded in how we operate.

Dennis Mathew: As we enter this next phase of transformation and evolve into a digital first company, leveraging AI and automation, we are continually optimizing organizational structure and staffing models to increase efficiency, eliminate redundancies, and strengthen our performance-driven culture.

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Dennis Mathew: At this juncture, I'm pleased to welcome Colleen Kohn as our new chief human resources officer.

Dennis Mathew: The team and I look forward to partnering with her to build a resilient, high-performing organization aligned with the needs of our evolving business.

Dennis Mathew: Our digital and AI tools are already delivering impact, reducing service calls by over 1 million and truck rolls by 280,000 in the last 12 months, while improving the customer experience.

Dennis Mathew: We're excited to continue advancing our systems to drive further efficiencies and value.

Dennis Mathew: To support this evolution, Optimum is proud to announce an expanded partnership with Google Cloud to build an intelligent and personalized customer experience across web interactions, mobile apps, call centers, and in-person kiosks.

Dennis Mathew: Optimum will use Google Clouds' generative AI technology, including Google's customer engagement suite, Vertex AI platform, and Gemini models to improve customer service.

Dennis Mathew: Provide more robust tools to our frontline teammates, build stronger, more resilient relationships with our customers and unlock meaningful workforce efficiencies.

Dennis Mathew: Today we're resolving over 50% of customer inquiries with our in-house AI virtual agent called ABA. We're excited to add Google Cloud's AI technologies to our toolbox and further improve the customer experience.

Dennis Mathew: Our digital transformation has also allowed us to take a more proactive approach to network maintenance by leveraging data in new ways to deliver best in class service quality at the street and neighborhood levels.

Dennis Mathew: We are preemptively resolving issues before they lead to service visits and minimizing calls into the call center, ultimately helping more customers with fewer resources and lower costs for us.

Dennis Mathew: At the same time, we're enhancing our telemetry systems to give agents better diagnostics and clearer guidance, enabling faster and more effective resolution when customer issues do arise.

Dennis Mathew: In Q1, our average monthly service dispatch rates approached recent lows, driven by our proactive approach and enhanced maintenance efforts.

Dennis Mathew: In summary, these strategies are helping to strengthen our competitive position, stabilize our customer base, and drive greater efficiency across the business to deliver meaningful results.

Dennis Mathew: I will now turn it over to Marc to walk through our financial outlook shaped by these strategic

Marc Sirota: Thank you, Dennis. Let's begin on slide six. Adjustity that has declined in recent years, but notably we have steadily improved the rate of decline as our transformation gains momentum.

Marc Sirota: because of our investments and focus. We expect full-year of approximately $3.4 billion in 2025 and a full-year revenue between $8.6 and $8.7 billion.

Marc Sirota: Our revenue outlook reflects subscriber trends and the anticipated decline in political advertising during this non-presidential election year.

Marc Sirota: We continue to see programming cost savings driven by video subscriber volume and optimized agreements with programming cost moderating by 12% year over year in Q1.

Marc Sirota: Excluding benefits from content savings during the non-carriage periods. In the full year 2025, we expect total direct costs of approximately $2.6 billion, inclusive of other direct costs which should take up as our mobile business continues to grow.

Marc Sirota: We remain focused on driving stronger returns on both OPEX and KAPEX.

Marc Sirota: As we streamline operations, simplify our organizational structure and improve marketing effectiveness. We expect approximately $2.6 billion of other operating expenses in the full year 2025. This is a slight moderation compared to the full year 2024.

Marc Sirota: has more of these initiatives take hold. We expect further moderation in 2026.

Marc Sirota: On CAPEX, we're prioritizing the highest return capital projects and further implementing cost efficiencies across network maintenance.

Marc Sirota: We now expect full-year 2025 capital spend of approximately $1.2 billion, while still achieving our goals related to network upgrades, pasting expansion, and new product launches.

Marc Sirota: I'm extremely pleased with the progress we're making and the steps we're taking to sharpen our execution. I'm confident these actions will drive stronger performance and improve results in full year 2025.

Marc Sirota: Next, on slide seven, you'll see an overview of our broadband fiber and mobile subscriber performance over the last few quarters. While Dennis reviewed most of these results earlier, I want to highlight a few points.

As mentioned, broadband subscriber net losses in Q1 were 37,000

Marc Sirota: The impact of the aforementioned content interruptions for almost two months in the quarter resulted in approximately 2700 fewer broadband net ads.

Marc Sirota: Our broadband performance in the quarter was supported by churn stabilization across our footprint.

Marc Sirota: and our performance in the East footprint improve year-over-year in Q1 despite programming non-carriage periods.

Marc Sirota: In the West, gross additions remain challenged as we saw continued elevated competition from fiber-overbuilders and less market activity.

Marc Sirota: Furthermore, mobile and fiber remain significant growth opportunities for us, and we continue to expand participation across all channels.

Marc Sirota: This quarter, we accelerate momentum in both areas and we continue to expect 1 million fiber customers by year-end, 2026 and 1 million mobile lines by year-end, 2027.

Marc Sirota: We are very encouraged by the early traction from our strategic initiatives which are resulting in strong broadband fiber and mobile trends.

Marc Sirota: Turning to slide 8, I'll review our financial performance in Q1.

Marc Sirota: Total revenue will approximately $2.2 billion declined 4.4% new over year and was driven by residential declines of 5.7%.

Marc Sirota: Business Services declined of 0.4%, supported by Light Path Revenue Growth of 7.3%.

Marc Sirota: News in advertising decline of 3.1% and offset by growth another of 52% primarily driven by growth in mobile equipment revenue.

Marc Sirota: In Q1, we saw revenue impacts from customer credits issued in connection with the two programming interruptions.

Marc Sirota: Q1 Adjusted EBITDA of $799 million declined 5.6% near over a year, driven by revenue decline, offset by programming savings, and an increase in other operating expenses, excluding share

Marc Sirota: The increases in other operating expenses was driven by higher one time customer care, sales and marketing expenses related to the temporary programming interruptions.

Marc Sirota: as well as a net increase in labor-related costs and benefits.

Primarily due to higher employee health and wellness expense.

These impacts were partially offset by lower truck roll costs.

Marc Sirota: Excluding the revenue programming and operating expense impacts from non-carriage periods, adjusted EBITDA would have declined, approximately 4.8%.

Marc Sirota: Total gross margin expanded by 180 basis points year-over-year to 68.8% in Q1, driven in part by non-recurring program and cost savings, which were partially offset by customer credits.

Excluding these one-time items, gross margin, would have been approximately 68.2%

Marc Sirota: While a portion of the benefits this quarter was not recurring, the underlying trends remain positive with gross margins reaching an all-time high. This reflects a continued mixed shift away from video, as well as ongoing efforts to optimize both video and product gross margins. [inaudible]

We continue to target 70% gross margins by year end 2026.

Marc Sirota: Q1 total adjusted EBITDA margin was 37.1%. Excluding the impacts I just mentioned, the adjusted EBITDA margin would have been approximately 37.2%. And we continue to target 40% normalized adjusted EBITDA margin over time.

Marc Sirota: Turning to slide 9, residential ARPU of $133.93 declined 1.3% in Q1 year-over-year.

Marc Sirota: This is driven by lower volume of video customers, customer credits related to programming interruptions, partially offset by rate actions taken at the end of Q4, as well as stronger gross ad arpo, which is up 1.8% new over year.

Marc Sirota: Excluding impacts related to temporary programming non-carriage, residential R2 would have declined just 0.6 percent.

Marc Sirota: Broadband ARPU grew 2.4% to $75.31, determined by great actions, rate discipline, and upgrade activity.

Marc Sirota: We continue to make progress on stabilizing our RRQ trends in several ways.

Marc Sirota: First, we are minimizing our poor impact from retention efforts with CLV-based models and AI assisted tactics.

Marc Sirota: Second, our streamlined pricing approach is delivering better value for our customers and shifting demand toward higher speed packages.

Marc Sirota: with almost 6% of new customers taking one gig or higher speeds. By the end of Q1, 35% of our customer base was on one gig or higher speed tiers.

Marc Sirota: Third, we are driving mobile penetration to the selling of our value-added services portfolio as Dennis referenced earlier.

Marc Sirota: And finally, through improved go-to market execution and targeted rate actions, we're preserving our food better while remaining competitive at the hyper-local level.

Marc Sirota: Turning this slide 10, I'll walk through our network investments in how we're driving greater efficiency across our capital envelope to support long-term growth in enhanced service delivery.

We added 25,000 total new passings in Q1 reaching 9.9 million total passings.

Marc Sirota: We grew our fiber footprint by 33,000 passings, primarily through fiber new builds and in the quarter with 3,000,000 fiber passings.

Marc Sirota: We continue to edge out our footprint in a fiber rich manner with a majority of fiber pastings in 2025, contributing to total new pastings.

Marc Sirota: We see strong trends in both our HFC and fiber networks with similar take rates of one gig or higher speeds across both footprints of almost 60%.

Marc Sirota: We continue to invest in our networks, prioritizing the highest return opportunities and implementing tools and processes to enhance efficiencies.

Marc Sirota: We have begun our mid-split upgrades on our DOXIS 3.1 network, expanding and reallocating spectrum to enable download speeds over one gig.

Marc Sirota: And our light path business continues to expand in the hyper-scaler community, with the recent announcements of its entrance into the Columbus Ohio market, with a new 100-in-2 route mile, underground high-fiber count network, anchored by a major hyper-scaler partner.

Marc Sirota: Over the last few years, we have moderated our capital spend, stepping down by approximately $210 million in the full year, $233, and by $270 million in the full year, 2024.

Marc Sirota: As we continue to drive more efficient investments, we now expect cash capital for the full year 2025 of approximately $1.2 billion dollars.

Marc Sirota: Importantly, we're maintaining our investment discipline without sacrificing progress and continue to target 175,000 total additional pastings in the full year 2025.

Marc Sirota: Next on Flight 11, I'll review our free cashflow performance in the quarter.

Marc Sirota: Free cash flow in Q1 is negative $169 million, primarily driven by cash interest of $547 million, which increased by $145 million year-over-year.

Marc Sirota: The year-over-year increase in cash interest was largely driven by the additional semi-annual bond payment related to the 11 and 3-quarters senior guaranteed notes issued in January of 2024, which were used to refinance a portion of our term loans.

Marc Sirota: Compared to 2024, we only had one cash interest payment related to this issuance.

Marc Sirota: Additionally, in September 2024, we executed a six-month synthetic liboard contract on the incremental term loan B5 to mitigate the end of liboard.

Marc Sirota: This resulted in a six-month interest payment being made in March of 2025 compared to monthly cash interest payments prior to September .

Marc Sirota: As a result, we paid $52 million of interest related to the prior years in Q1 of 2025.

Marc Sirota: Beginning in April , the term loan B5 will bear interest in an alternative base rate, currently defined as the prime rate plus 1.5% per annum.

and Dennis Mathew.

Marc Sirota: And finally on slide 12, I'll review our debt maturity profile.

Marc Sirota: We remain well positioned with no majorities until 2027. At the end of Q1, our weighted average cost of debt is 6.8%. Our weighted average life of debt is 3.8 years, and 73% of our total debt stack is fixed.

Marc Sirota: At the end of the quarter, we have a liquidity of approximately $700 million, the run drawn revolver capacity and ending cash balances.

Marc Sirota: Our leverage ratio is 7.6 times the last two quarters of annualized adjusted EBITDA.

Marc Sirota: We remain focused on exploring opportunities to ensure our capital structure supports our long-term operating goals.

Marc Sirota: In conclusion, we have the right strategy in place, and we remain focused on executing the discipline and rigor to create sustainable, long-term growth and enhance value for our shareholders.

With that, we will now take any questions.

Marc Sirota: Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad and the confirmation tool will indicate your line was in the question queue.

Marc Sirota: You may press star 2 if you would like to then move your question from us.

Marc Sirota: The participants using speaker equipment and they'd be necessary to pick up your handset before

Speaker Change: And our first question comes from the line of Michael Rollins with City, please proceed.

And I'm going to talk to you.

Speaker Change: Thanks and good morning. I'm so just curious if you could provide some additional context on the competitive landscapes for your broadband business.

Speaker Change: with respect to the impacts of fiber and SWA competition. And within that context, are you seeing any change in customer behavior, including an incremental leaning towards value?

Speaker Change: products in the market. And then just finally to wrap that all together, as you describe some of the improvements in the business that you're seeing, is there an opportunity over the next few quarters to start reducing? Thank you very much.

The broadband losses on the year-over-year basis. Thanks.

Speaker Change: Thank you, Michael. The competitive landscape remains intense. You know, when we think about the east, we continue to see competition from mature Velco, like Verizon, as well as fixed wireless from Timo, pockets of other fixed wireless solutions in the West.

Speaker Change: We remain 45% overbuilt based on the latest BDC data, but we are seeing continuing.

Speaker Change: Growth of Overbuilders into our markets and we're continuing to see fixed wireless throughout the West as well. And so as we've done our consumer research and continue to talk to our customers

Speaker Change: We know that the macroeconomic headwinds are weighing heavy on on folks and so...

Speaker Change: and so I'm really excited about some of the new solutions that we are rolling out and have been rolling out.

Speaker Change: As I mentioned on the last call, we are launching and we just recently launched a new income constrained product.

Speaker Change: As we talk to that demographic in particular, these are folks that are looking for transparency, value, predictability and price.

Speaker Change: So it's still very early days, but as I look at our footprints, about 38% of our west footprint falls into this demographic 18%

Speaker Change: in the East, and so this will allow us to compete very effectively, I believe, going forward to be able to provide the right value, the right products, the right solutions for this consumer segment.

Speaker Change: We also see that there's intense competitive elements in M.D.U., that's where fixed wireless.

is competing effectively as well.

Speaker Change: and I'm excited to say that we are rolling out new strategies for M.D.U. We have 2 million M.D.U. passing.

Speaker Change: Historically, we have had very little visibility reporting tools to be able to drive our go-to-market in MDU.

Speaker Change: and our ability, we've recently brought in some new leadership, we've brought in, we've stood up some new tools and we're already seeing the benefits of those

tools and those new processes to help us drive penetration.

Speaker Change: in under-penetrated areas. We're adding 32,000 new M.D.U. passing this year.

Speaker Change: and so this will allow us, as we continue to expand in M.D.U. to compete even more effectively as we move forward. So, the competitive landscape across the east and the west remains intense, but we're continuing to evolve our go-to-market strategies and products set to be able to drive. Thank you very much.

Speaker Change: Value, the good news is that, you know, our turn is that all time best in the past three years, 90 basis point improvement, that's improvement in the east and improvement in the west.

When I look at the West in particular...

Speaker Change: and we have strategies now to help us drive and mitigate that impact and really ensure that we're competing most effectively for every jump-ball.

Thanks.

Thank you.

Speaker Change: The next question comes from the line of Frank Louthan with Raymond James, please proceed.

Hey guys, this is Roblin for Frank. So...

Speaker Change: Curious, you might have touched on those a little bit earlier, but just curious to know more about the lower end product and when that's beginning and when you expect that could ramp up. And also, if you're able to give us any updates on the insurance statistics for the wireless subs, that will be great.

Speaker Change: Thanks, Frank. We just launched. We're expanding that to half a million homes.

Speaker Change: We just expanded it to half a million homes and so we're excited to begin and continue a phase rollout of that product. We're looking very closely at the data to really understand what's working and how we continue to evolve that product as we move forward.

Speaker Change: and so, you know, early days, but more information to come, likely on the next call in terms of impact of sales velocity and our ability to drive our gross ads.

Speaker Change: You know, on the insurance products, I'm really excited. We launched our mobile device protection six months ago and already have 10% penetration into our mobile base.

Speaker Change: So it just really shows that we are absolutely controlling what we can control. Our teams are excited. It's a great value and we're able to drive that and continue to deliver and grow residential ARPU as we launch these types of new products and services.

Speaker Change: as we move forward and drive them on acquisition and into the base.

Great, it's very helpful. Thank you.

Speaker Change: The next question comes from the line of Jonathan Chaplin with New Street Research. Please proceed.

Jonathan Chaplin: Dennis, you guys pose discussions with bondholders during the course of the quarter. I'm wondering if you can give us some perspective on what drove the pose and you add an impact or is there a potential for the for the discussions too?

Jonathan Chaplin: to come back and to the extent that you can give any context on sort of how far apart the discussions are that would be really helpful as well.

Jonathan Chaplin: Thanks Jonathan. My friend Marc is closest to those conversations so I'll let him jump in here. Hi Jonathan. Yeah, we did update the market last month over the A.K. that

Arne Viociations with the co-op concluded Good.

Jonathan Chaplin: We did not reach an agreement to the respective potential transaction. Really nothing more to share at this point, certainly what we have information to share we will. Nothing to add at this point related to that.

Jonathan Chaplin: As we said before, we are proactively managing our debt maturities, we feel...

Good about the runway we have through 2027 and we'll continue to explore all options to manage the debt portfolio.

Thanks, Marc. Yep.

[inaudible]

Speaker Change: The next question comes from the line of Craig Moffett with Moffett Nathanson. Please proceed.

Craig Moffitt: Hi, good morning. You talked a little bit a couple of times about your low end offering. I wonder if you could just zoom out a little bit and just talk about in general the competitiveness of your pricing. And do you feel like you've kind of...

Speaker Change: fully gone through the process of right sizing your broadband pricing and the bundles that you have with wireless and that has now gotten you into the position you want to be or is there still work to be done there?

Speaker Change: Thanks, Craig. It's remarkable the amount of progress the team has made in terms of pricing and our ability to control pricing, command pricing.

Speaker Change: You know, when I joined, it was really one-size-fits-all across from Connecticut, all the ways of Flagstaff, Arizona.

with the little ability to...

Speaker Change: Compete at a local level. There was a lot more art than science that went into rate events and promo roles.

Speaker Change: and I feel great that the team has put much more science for leveraging AI.

We're maximizing the monetization of these types of activities.

both in the base and in our acquisition.

Speaker Change: As I think about our great events and promo roles, the team has done a remarkable job to be able to minimize churn, minimize call volume, really ensure that we're maximizing the monetization of those events as they occur.

Speaker Change: Paper local playbooks as well as our income constrained products are allowing us to compete more effectively there while quite frankly in the areas that are less competitive we're able to moderate rate and compete in line with the market versus having to.

Speaker Change: Last the entire geography and across every market and so we feel good that we're able to continue to drive.

Speaker Change: ARPU generally, especially as we've launched a whole host of new products. Since I joined we've been able to double the number of mobile customers since since joining we've been able to triple the number of fiber customers since joining and so.

Speaker Change: Has more command of the business than ever and that we're going to be able to continue to drive. These incredible products that will allow us to drive overall value and.

Speaker Change: For our customers and really build loyalty and continue to drive the business forward. Our goal is to drive top line revenue and subscriber and EBITDA growth and I feel good that we have the strategies in place to do exactly that.

Speaker Change: Thing I would add is just really please as we drove gross at Arpoo up almost 2% year over year, a lot of that is coming through the value added services, but in addition, the tier mix, we're now 60% selling on mortgage services of.

Speaker Change: Future growth on top line revenue.

Speaker Change: Thank you.

Speaker Change: Thank you and the last question will come from the line of San make with B M. P. Parryback. Please proceed yeah morning, guys. Just two questions. Please thanks for the detail on the low income offers of the percentage of people who qualify how many already customers of you.

Speaker Change: The risk of cannibalization versus driving new gross ads. That's question one and then secondly, you talked about improving trends in the east year over year, but given the acceleration and losses I guess the implication is the west is getting quite a bit worse when would we would we expect trends in the west.

Speaker Change: Yeah in terms of cannibalization you know the low our income constraint, we're being very disciplined in terms of how we're deploying this availability of this product in terms of which sales channels.

Speaker Change: Deploying it in acquisition, how we're gating it really tiptoeing, our way into even testing it in retention and so these are things that we could not do when I started we just had no way to gate. These.

Speaker Change: Access to these offers and you know really you know had a high risk of cannibalization or eroding ARPU, but we've launched tools like Ava, which is our new AI assistant across our channels care retention sales and.

Speaker Change: We're able to provide offers to customers that are going to ultimately allow us to maximize customer lifetime value based on the competitive landscape based on the products and services that they are consuming and just really making it much more effective.

Speaker Change: These conversations on the west the good news is in the markets, where we are where we have what I would call mature overbuilders, where fiber overbuilders have come in for a year or two years et cetera, we are competing better.

Speaker Change: We saw it improvement in growth ads in those markets year over year, we saw an improvement in in churn, but we continue to fight the fight in these markets, where we have new entrants and we're sharpening our playbooks to be able to compete more effectively and I do.

Speaker Change: She's leveraging the income constraint product leveraging our ability to compete more effectively in mdus. Our hyper local playbooks. These are all tools in our toolkit that allow us to compete more effectively as we move forward I don't know Mark if anything you want.

Speaker Change: Great.

Speaker Change: [noise], Thanks, operator, I think that.

Speaker Change: I think that concludes the call over to you.

Speaker Change: Okay.

Speaker Change: Prescriptions today's conference. Thank you. Thank you for your participation you may now disconnect.

Speaker Change: Mhm.