ATUS Q1 Earnings Call: Management Focuses on Subscriber Stabilization and Operational Efficiency

Telecommunications and cable services provider Altice USA (NYSE: ATUS) met Wall Street’s revenue expectations in Q1 CY2025, with sales falling 4.4% year on year to $2.15 billion. Its GAAP loss of $0.16 per share decreased from -$0.05 in the same quarter last year.

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StockStory’s Take

Altice management attributed the company's first quarter performance to ongoing investments in customer experience, targeted go-to-market efforts, and operational changes aimed at stabilizing broadband subscriber trends. CEO Dennis Mathew cited improvements in churn and highlighted that, when normalized for programming disputes, broadband net losses would have been lower. The company also noted progress in fiber net additions and mobile growth, with over 69,000 fiber net adds and mobile lines surpassing 500,000. CFO Marc Sirota detailed that gross margin improvements were partly due to a continued mix shift away from video, as well as programming cost savings. Management acknowledged external pressures, such as customer affordability challenges and intensified competition, especially in income-constrained and multi-dwelling unit segments.

Looking ahead, Altice’s leadership indicated that stabilizing broadband subscriber trends and unlocking new revenue streams are key priorities for the remainder of the year. Management plans to expand targeted pricing and product offerings, especially for income-sensitive segments, and to further leverage digital tools and artificial intelligence to improve customer engagement and operating efficiency. CEO Dennis Mathew emphasized ongoing efforts to enhance the value proposition for customers through localized offers and partnerships, stating, “We are committed to evolving our packages to ensure there are solutions for every budget.” CFO Marc Sirota noted expectations for continued margin improvement and disciplined capital allocation, with a particular focus on driving fiber and mobile penetration.

Key Insights from Management’s Remarks

Management outlined several operational shifts and product launches designed to address subscriber declines and cost pressures, while emphasizing the role of targeted, data-driven strategies and technology investments.

• Hyperlocal go-to-market initiatives: Altice scaled a data-driven, neighborhood-level marketing approach in competitive markets, offering localized pricing and features such as price locks and free installation. Management reported over 10% revenue lift in targeted areas, attributing this to better alignment with local customer needs.
• New income-constrained product: The company launched a low-cost broadband offering to appeal to economically challenged households, initially targeting 500,000 homes. Early results are promising, with management planning to refine and expand the product based on ongoing data analysis.
• Fiber and mobile growth: Fiber net additions reached an all-time high, and mobile line growth continued, surpassing 500,000 lines. Management believes these segments are crucial for future growth and expects to reach 1 million fiber customers by 2026 and 1 million mobile lines by 2027.
• Programming and expense optimization: Altice renegotiated key programming agreements, minimizing customer disruption during brief channel drops and achieving cost savings. The company also sold noncore tower assets and the i24 News business to bolster financial flexibility.
• Digital and AI adoption: Investments in automation and AI, including a partnership with Google Cloud, have reduced service calls and improved operational efficiency. AI tools like the in-house virtual agent now resolve over half of customer inquiries, supporting both cost management and customer experience goals.

Drivers of Future Performance

Altice’s outlook centers on stabilizing subscriber trends, increasing fiber and mobile penetration, and managing costs through digital transformation and targeted product strategies.

• Expansion of targeted offerings: Management plans to broaden the rollout of income-sensitive broadband products and refine their hyperlocal marketing playbook, aiming to capture value-conscious customers while limiting revenue cannibalization. These efforts are expected to support subscriber stabilization amid ongoing competitive pressures.
• Digital transformation and AI efficiencies: The company is accelerating investments in digital and AI tools to streamline operations, reduce service costs, and improve customer satisfaction. Management believes these initiatives will enable further operating expense moderation and gross margin improvement.
• Capital allocation and product investment: Altice intends to prioritize capital spending on high-return network upgrades and new product launches, particularly in fiber, mobile, and value-added services. Management expects these investments to drive long-term revenue growth and improve the company’s competitive positioning.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the effectiveness of newly launched income-sensitive broadband products, (2) progress toward higher fiber and mobile penetration targets, and (3) evidence of sustained cost efficiencies from digital and AI-driven initiatives. We will also watch for updates on asset sales and further refinements to localized go-to-market strategies as indicators of Altice’s ability to deliver on its stated financial and operational goals.

Altice currently trades at a forward EV-to-EBITDA ratio of 0.3×. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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