Altice USA (NYSE: ATUS) today reports results for the third quarter ended September 30, 2022.
Dexter Goei, Altice USA Executive Chairman, said : “In the third quarter, we made significant progress in delivering against our Optimum Fiber broadband strategy. We saw a further acceleration in our fiber network deployment, achieving our highest ever level of incremental fiber passings and now reaching 1.9 million total fiber passings
NEW YORK--(BUSINESS WIRE)--Nov 2, 2022--
Altice USA (NYSE: ATUS) today reports results for the third quarter ended September 30, 2022.
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Dexter Goei, Altice USA Executive Chairman, said : “In the third quarter, we made significant progress in delivering against our Optimum Fiber broadband strategy. We saw a further acceleration in our fiber network deployment, achieving our highest ever level of incremental fiber passings and now reaching 1.9 million total fiber passings. With fiber broadband net additions of 31k, we reached 135k fiber customers at the end of the quarter. Our multi-gig speed tiers continued to roll out across our Optimum Fiber footprint, offering faster fiber speeds to more customers across the Tri-State. While we are operating in a very competitive environment and are starting to see some macroeconomic pressures across our business, we are confident that we have the right strategy to return to sustainable growth. We are very pleased to welcome Dennis Mathew as our new CEO and have the utmost confidence in him to build on our current momentum and deliver on our growth plan.”
Dennis Mathew, Altice USA Chief Executive Officer, said: "I am delighted to join Altice USA and see enormous potential for the company. In my first 30 days, I have been extremely impressed with Altice’s leadership team and the passion, energy, and dedication of our thousands of employees across our connectivity, news, and advertising businesses. Looking ahead, we remain laser focused on executing against our fiber broadband strategy, laying the foundation to provide the best products and customer experience for the long term, as well as providing viewers and customers with the best news and advertising solutions in the marketplace.”
Three Months Ended September 30,
Nine Months Ended September 30,
Net income attributable to Altice USA, Inc. stockholders
Capital Expenditures (cash)
Revenue Growth and Adjusted EBITDA Detail
excl. air strand revenue (1)
Business Services Revenue YoY
excl. air strand revenue (1)
News & Advertising Revenue YoY
excl. air strand revenue (1)
Residential unique customer relationships (3), broadband subscribers and organic net additions (losses) (4)
Subscribers (in thousands)
Residential ending customer relationships
Residential customer organic net losses
Broadband ending subscribers
Broadband organic net additions (losses)
Key Operational Highlights
Residential revenue declined -4.4% YoY in Q3 2022 to $1.88 billion:
Residential revenue per customer relationship in Q3 2022 declined -1.9% YoY to $138.12, mostly due to the loss of higher ARPU video customers.
Business Services revenue of $366.6 million was down -16.8% YoY in Q3 2022 due to the early termination of a backhaul contract for air strands which resulted in the recognition of deferred revenue and termination fees over the amended term in the prior year period. Excluding air strand revenue in the prior period, Business Services revenue grew +0.1% YoY (1). SMB / Other revenue was down -21.6% YoY in Q3 2022, or down -0.1% YoY excluding air strand revenue (1). Lightpath revenue grew +0.5% YoY in Q3 2022.
News and Advertising revenue was down -16.1% YoY to $120.5 million in Q3 2022, or down -20.7% YoY excluding political revenue.
Optimum Mobile has approximately 236k mobile lines (6) as of September 30, 2022 (+5k net additions in Q3 2022), reaching 5.5% penetration of the Company's residential broadband customer base.
Fiber Rollout, Launch of Multi-Gig Fiber Internet and Network Expansion Update
FY 2022 Capex Guidance Reiterated
Additional Highlights and Announcements
Altice USA Appoints Dennis Mathew Chief Executive Officer; Names Dexter Goei Executive Chairman of the Board
Altice USA announced that its Board of Directors appointed Dennis Mathew to the position of Chief Executive Officer, effective October 3, 2022. Mr. Mathew assumed the CEO role from Dexter Goei who was named Executive Chairman of the Board of Directors, also effective October 3, 2022. Altice USA Founder Patrick Drahi remains a Director of the Board.
Optimum’s Retail Expansion Continues in Texas, New Jersey, and West Virginia
Optimum recently announced the opening of new retail stores in Texas (Abilene, Midland, and Lake Conroe, Prosper, a second location in Georgetown, and a second location in Tyler), New Jersey (Bayonne, Edison), and West Virginia (Parkersburg).
As of September 30, 2022:
As of September 30, 2022, the Company had 454,668,428 combined Class A and Class B shares outstanding.
Altice USA Consolidated Operating Results
(In thousands, except per share data)
Business services and wholesale
Programming and other direct costs
Restructuring and other expense
Depreciation and amortization (including impairments)
Gain (loss) on investments
Gain (loss) on derivative contracts, net
Gain on interest rate swap contracts
Loss on extinguishment of debt and write-off of deferred financing costs
Income before income taxes
Net income attributable to noncontrolling interests
Net income attributable to Altice USA stockholders
Basic net income per share
Diluted net income per share
Basic weighted average common shares
Diluted weighted average common shares
Altice USA Consolidated Statements of Cash Flows
Nine Months Ended September 30,
Cash flows from operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including impairments)
Loss (gain) on investments
Loss (gain) on derivative contracts, net
Loss on extinguishment of debt and write-off of deferred financing costs
Amortization of deferred financing costs and discounts (premiums) on indebtedness
Share-based compensation expense
Decrease in right-of-use assets
Provision for doubtful accounts
Change in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable, trade
Prepaid expenses and other assets
Amounts due from and due to affiliates
Accounts payable and accrued liabilities
Liabilities related to interest rate swap contracts
Net cash provided by operating activities
Cash flows from investing activities:
Payment for acquisitions, net of cash acquired
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from long-term debt
Proceeds from collateralized indebtedness and related derivative contracts, net
Repayment of collateralized indebtedness and related derivative contracts, net
Principal payments on finance lease obligations
Purchase of shares of Altice USA Class A common stock, pursuant to a share repurchase program
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash, cash equivalents and restricted cash at beginning of year
Cash, cash equivalents and restricted cash at end of period
Reconciliation of Non-GAAP Financial Measures:
We define Adjusted EBITDA, which is a non-GAAP financial measure, as net income (loss) excluding income taxes, non-operating income or expenses, loss on extinguishment of debt and write-off of deferred financing costs, gain (loss) on interest rate swap contracts, gain (loss) on derivative contracts, gain (loss) on investments, interest expense, net, depreciation and amortization (including impairments), share-based compensation expense, restructuring expense, and transaction expenses.
We believe Adjusted EBITDA is an appropriate measure for evaluating the operating performance of the Company. Adjusted EBITDA and similar measures with similar titles are common performance measures used by investors, analysts and peers to compare performance in our industry. Internally, we use revenue and Adjusted EBITDA measures as important indicators of our business performance and evaluate management’s effectiveness with specific reference to these indicators. We believe Adjusted EBITDA provides management and investors a useful measure for period-to-period comparisons of our core business and operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to the Company’s ongoing operating results. Adjusted EBITDA should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), and other measures of performance presented in accordance with GAAP. Since Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies.
We also use Operating Free Cash Flow (defined as Adjusted EBITDA less cash capital expenditures), and Free Cash Flow (defined as net cash flows from operating activities less cash capital expenditures) as indicators of the Company’s financial performance. We believe these measures are two of several benchmarks used by investors, analysts and peers for comparison of performance in the Company’s industry, although they may not be directly comparable to similar measures reported by other companies.
Reconciliation of net income to Adjusted EBITDA and Operating Free Cash Flow (unaudited):
Gain on interest rate swap contracts, net
Loss (gain) on derivative contracts, net
Loss (gain) on investments
Loss on extinguishment of debt and write-off of deferred financing costs
Depreciation and amortization (including impairments)
Restructuring and other expense
Capital Expenditures (cash)
Reconciliation of net cash flow from operating activities to Free Cash Flow (unaudited):
Net cash flows from operating activities
Capital Expenditures (cash)
Customer Metrics (10) (in thousands, except per customer amounts)
Total Unique Customer Relationships (3)
Fiber (FTTH) Customer Metrics (in thousands)
FTTH Total customer relationships (11)(12)
Consolidated Net Debt as of September 30, 2022
CSC Holdings, LLC Restricted Group (in $m)
Legacy unexchanged Cequel Notes
CSC Holdings, LLC Restricted Group Gross Debt
CSC Holdings, LLC Restricted Group Cash
CSC Holdings, LLC Restricted Group Net Debt
CSC Holdings, LLC Restricted Group Undrawn RCF
Cablevision Lightpath LLC (in $m)
Cablevision Lightpath Gross Debt
Cablevision Lightpath Cash
Cablevision Lightpath Net Debt
Cablevision Lightpath Undrawn RCF
Net Leverage Schedules as of September 30, 2022 (in $m)
Gross Debt Consolidated (13)
Reconciliation to Financial Reported Debt
Total Debenture and Loans from Financial Institutions (Carrying Amount)
Unamortized financing costs and discounts, net of unamortized premiums
Gross Debt Consolidated (13)
Finance leases and other notes
Excludes all air strand revenue and related costs from Business Services for all periods.
See “Reconciliation of Non-GAAP Financial Measures” on page 7 of this release.
Total Unique Customer Relationships represent the number of households/businesses that receive at least one of the Company’s fixed-line services. Customers represent each customer account (set up and segregated by customer name and address), weighted equally and counted as one customer, regardless of size, revenue generated, or number of boxes, units, or outlets on our hybrid-fiber-coaxial (HFC) and fiber-to-the-home (FTTH) network. Free accounts are included in the customer counts along with all active accounts, but they are limited to a prescribed group. Most of these accounts are also not entirely free, as they typically generate revenue through pay-per-view or other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion. In counting bulk Residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual room units at that hotel.
Customer metrics do not include Optimum Mobile customers.
Since Q2-21, figures include Morris Broadband, LLC acquired subscribers.
Mobile lines includes approximately 33.4k lines receiving free service.
Net debt, defined as the principal amount of debt less cash, and excluding finance leases and other notes and collateralized debt.
Total passings represents the estimated number of single residence homes, apartments and condominium units passed by the HFC and FTTH network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our HFC and FTTH network. Broadband services were not available to approximately 30 thousand total passings and telephony services were not available to approximately 500 thousand total passings. Total passings include approximately 89k total passings acquired in the Morris Broadband acquisition in Q2-21.
ARPU is calculated by dividing the average monthly revenue for the respective quarter (fourth quarter for annual periods) derived from the sale of broadband, video and telephony services to Residential customers by the average number of total Residential customers for the same period.
Represents the estimated number of single residence homes, apartments and condominium units passed by the FTTH network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our FTTH network.
Represents number of households/businesses that receive at least one of the Company's fixed-line services on our FTTH network.
FTTH customers represent each customer account (set up and segregated by customer name and address), weighted equally and counted as one customer, regardless of size, revenue generated, or number of boxes, units, or outlets on our FTTH network. Free accounts are included in the customer counts along with all active accounts, but they are limited to a prescribed group. Most of these accounts are also not entirely free, as they typically generate revenue through pay-per view or other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion. In counting bulk residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual room units at that hotel.
Principal amount of debt excluding finance leases and other notes and collateralized debt.
CSC Holdings, LLC Restricted Group excludes the unrestricted subsidiaries, primarily Cablevision Lightpath LLC and NY Interconnect, LLC.
CSC Holdings Consolidated includes the CSC Holdings, LLC Restricted Group and the unrestricted subsidiaries.
Numerical information is presented on a rounded basis using actual amounts. Minor differences in totals and percentage calculations may exist due to rounding.
Altice USA (NYSE: ATUS) is one of the largest broadband communications and video services providers in the United States, delivering broadband, video, mobile, proprietary content and advertising services to nearly 5.0 million residential and business customers across 21 states through its Optimum brand. The Company operates a4, an advanced advertising and data business, which provides audience-based, multiscreen advertising solutions to local, regional and national businesses and advertising clients. Altice USA also offers hyper-local, national, international and business news through its News 12, Cheddar News and i24NEWS networks.
FORWARD-LOOKING STATEMENTS
Certain statements in this earnings release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this earnings release, including, without limitation, those regarding our intentions, beliefs or current expectations concerning, among other things: our future financial conditions and performance, results of operations and liquidity; our strategy, objectives, prospects, capital expenditure plans, fiber deployment and network expansion and upgrade plans, distribution channel expansion plans and leverage targets; our ability to achieve operational performance improvements; and future developments in the markets in which we participate or are seeking to participate. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “intend”, “may”, “plan”, “project”, “should”, “target”, or “will” or, in each case, their negative, or other variations or comparable terminology. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. To the extent that statements in this earnings release are not recitations of historical fact, such statements constitute forward-looking statements, which, by definition, involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements including risks referred to in our SEC filings, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and subsequent reports on Form 10-Q. You are cautioned to not place undue reliance on Altice USA’s forward-looking statements. Any forward-looking statement speaks only as of the date on which it was made. Altice USA specifically disclaims any obligation to publicly update or revise any forward-looking statement, as of any future date.
CONTACT: Investor Relations
Nick Brown: +1 917 589 9983 /nick.brown@alticeusa.com
Sarah Freedman: +1 631 660 8714 /sarah.freedman@alticeusa.comCommunications
Lisa Anselmo: +1 516 279 9461 /lisa.anselmo@alticeusa.com
Janet Meahan: +1 516 519 2353 /janet.meahan@alticeusa.com
KEYWORD: UNITED STATES NORTH AMERICA NEW YORK
INDUSTRY KEYWORD: TECHNOLOGY AUDIO/VIDEO TELECOMMUNICATIONS MOBILE/WIRELESS NETWORKS INTERNET CARRIERS AND SERVICES
Copyright Business Wire 2022.
PUB: 11/02/2022 04:05 PM/DISC: 11/02/2022 04:06 PM
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