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    CHTR
    Earnings call· Jun 2026(Q2 FY26)

    CHARTER COMMUNICATIONS, INC. /MO/ CHTR

    Jul 24, 2026 Source

    Executive summary

    Charter Q2 FY26 — Mobile Line Growth and Cox Integration Progress Amidst Internet Customer Losses

    Charter reported mixed Q2 FY26 results, with strong mobile line additions and improved video customer trends offset by significant Internet customer losses and a decline in consolidated revenue and adjusted EBITDA. The company is focused on leveraging its converged network, improving customer satisfaction, and executing the Cox integration, which is expected to close mid to late August, to drive future growth and achieve a lower leverage target of 3.5x within three years.

    Highlights

    5

    • Added over 400,000 Spectrum Mobile lines in Q2 FY26, totaling 1.7 million lines over the last 12 months, a 16% growth.

    • Video customer losses improved significantly to 21,000 in Q2 FY26, compared to 80,000 in 2Q FY25.

    • Advertising revenue grew by 12.3% year-over-year in Q2 FY26, driven by higher political revenue.

    • Expects run rate transaction expense synergies from Cox acquisition to grow from at least $800 million to $1 billion per year.

    • Post-transaction leverage target lowered to 3.5x, expected within 3 years, while continuing share repurchases.

    Concerns

    5

    • Internet customer loss of 172,000 in Q2 FY26, higher than a year ago, due to increased competition and top-of-funnel softness.

    • Revenue was down 1.7% year-over-year in Q2 FY26, driven by lower residential revenue.

    • Adjusted EBITDA declined by 4.3% year-over-year in Q2 FY26 (3.2% excluding transition expenses).

    • Residential revenue per customer relationship declined by 1.8% year-over-year in Q2 FY26 (flat excluding programmer app allocation headwind of $251 million).

    • Full-year 2026 stand-alone Charter EBITDA (excluding transition costs) expected to decline around 1% year-over-year.

    Guidance & targets

    8
    CategoryTargetConfidence
    Stand-alone Charter EBITDA
    Benefit from cost pass-through and political advertising
    medium materiality
    High
    Stand-alone Charter Adjusted EBITDA (excluding transition costs)
    Decline around 1% year-over-year
    high materiality
    High
    Stand-alone Charter Total Capital Expenditures
    Approximately $11.4 billion
    high materiality
    High
    Stand-alone Charter Run Rate Capital Expenditures
    Below $8 billion per year
    high materiality
    High
    Net Debt to LTM Adjusted EBITDA Ratio
    3.5x
    high materiality
    High
    Cash Tax Payments
    Between $500 million and $800 million
    medium materiality
    High
    Share Repurchases
    Restart in the fourth quarter and continue throughout the deleveraging process to 3.5x
    high materiality
    High
    Net Debt to LTM Adjusted EBITDA Ratio (pro forma)
    Just above 3.9x
    high materiality
    High

    Segment performance

    9
    SegmentRevenueYoYQoQMargin
    Residential Internet
    Higher customer loss than a year ago, similar to Q1, driven by expanded fixed wireless competition, mobile substitution, and fiber overlap.
    Customer loss: 172,000Churn: largely unchangedTop of funnel softness: Yes
    		————
    Residential Mobile
    Fastest-growing mobile provider in footprint, with higher gross additions year-over-year offset by higher disconnects.
    Lines added: 406,000Total mobile lines: 12.5 millionTotal lines over last 12 months: 1.7 million
    		—16%——
    Residential Video
    Significant improvement in customer losses year-over-year, driven by lower downgrades, lower churn, and higher upgrades from product improvements and new pricing/packaging.
    Customer loss: 21,000Customer loss 2Q FY25: 80,000
    		————
    Residential
    Decline driven by lower revenue per customer relationship and decline in video customers, partly offset by mobile line growth.
    Customers declined: 1.8% YoYRevenue per customer relationship declined: 1.8% YoY (flat excluding programmer app allocation headwind of $251 million)
    		Declined by 3.5%-3.5%——
    Commercial
    Overall growth driven by mid-market and large business.
    		Grew by 1.5%1.5%——
    Commercial Mid-Market & Large Business
    Strong growth in this segment.
    Revenue growth excluding wholesale: 3.5%
    		Grew by 2.8%2.8%——
    Commercial Small Business
    Revenue growth driven by higher revenue per customer, partly offset by customer decline.
    Revenue per customer growth: 1.5% YoYCustomers declined: 0.8% YoY
    		Grew by 0.7%0.7%——
    Advertising
    Growth primarily due to higher political revenue.
    Revenue growth excluding political: -4.6% YoY
    		Grew by 12.3%12.3%——
    Other Revenue
    Driven by higher mobile device sales, partly offset by a one-time benefit in the prior year.
    One-time benefit in prior year: $45 million
    		Grew by 7.1%7.1%——

    Operational metrics

    49
    Adjusted EBITDA (excluding Cox transition expenses)
    Declined by 3.2%YoY
    Q2 FY26

    Softer gross additions remains the primary driver of our Internet customer growth weakness.

    Adjusted EBITDA
    Declined by 4.3%YoY
    Q2 FY26
    Consolidated Revenue
    Down by 1.7%YoY
    Q2 FY26

    Decreased 0.8% when excluding advertising revenue and programmer app allocation.

    Programmer App Allocation Headwind
    $251 millionvs. $67 million in prior year period
    Q2 FY26
    Total Operating Expenses
    Virtually flatYoY
    Q2 FY26
    Programming Costs
    Declined by 9.7%YoY
    Q2 FY26

    Due to $251 million of costs allocated to programmer streaming apps, higher mix of lighter video packages, and 0.8% decline in video customers, partly offset by higher programming rates.

    Other Cost of Revenue
    Increased by 11.3%YoY
    Q2 FY26

    Primarily driven by higher mobile device sales, mobile service direct costs and higher advertising sales costs.

    Cost to Service Customers
    Grew 1.4%YoY
    Q2 FY26

    Primarily due to higher fuel and medical costs.

    Marketing and Residential Sales Expense
    Declined by 3.1%YoY
    Q2 FY26

    Due to lower marketing expenses from procurement initiatives, but volume of impressions was much higher.

    Other Expense
    Declined by 2.5%YoY
    Q2 FY26

    Primarily driven by lower professional service expense.

    Net Income Attributable to Charter Shareholders
    $1.3 billionEssentially flat YoY
    Q2 FY26

    Offset by a gain on extinguishment of debt related to open market debt repurchases.

    Cash Tax Payments
    $101 million
    Q2 FY26
    Total Debt Principal
    $94 billion
    Q2 FY26
    Weighted Average Life of Debt
    11.7 years
    Q2 FY26
    Weighted Average Cost of Debt
    5.2%
    Q2 FY26
    Current Run Rate Annualized Cash Interest
    $4.9 billion
    Q2 FY26
    Shares Repurchased
    4 million
    Q2 FY26
    Net Debt to LTM Adjusted EBITDA Ratio
    4.18x
    Q2 FY26
    Net Debt to LTM Adjusted EBITDA Ratio (pro forma Liberty Broadband)
    4.21x
    Q2 FY26

    Pro forma for the pending Liberty Broadband transaction.

    Debt Repurchased in Open Market
    $1.2 billion
    Q2 FY26

    Repurchased par value of debt for cash, reducing total leverage.

    Implied Transaction Enterprise Value for Cox Business
    $27 billion
    Q2 FY26

    Based on today's Charter share price and $800 million of transaction synergies.

    Net Debt (pro forma Cox and Liberty Broadband transactions)
    Approximately $110 billion
    Q2 FY26

    As of the end of the second quarter and pro forma for the Cox and Liberty Broadband transactions.

    Preferred Coupon for Cox's Ownership
    $103 million
    Quarterly

    Will be expensed as part of net income attributable to noncontrolling interests after close.

    Equivalent Charter Shares Issued to Cox Enterprises
    Just over 46 million
    Post-close

    Comprised of common and preferred partnership units.

    Net Charter Share Reduction (Liberty Broadband transaction)
    About 4.7 million
    Post-close

    Lower than previously announced due to ongoing share repurchases from Liberty Broadband.

    Total Shares (as-converted, as-exchanged)
    About 177 million
    Post-close
    Mobile Lines Added
    406,000Higher gross additions YoY
    Q2 FY26

    Offset by higher disconnects.

    Total Mobile Lines
    Over 12.5 million
    Q2 FY26
    Mobile Lines Growth (LTM)
    1.7 million16% growth
    LTM Q2 FY26
    Mobile Customer Penetration of Internet
    About 20%
    Q2 FY26
    Average Lines Per Mobile Customer
    Just below 2
    Q2 FY26
    Internet Customer Churn Reduction with Mobile
    Nearly 40%
    Q2 FY26

    Internet customers that also purchase our mobile product churn nearly 40% less than Internet customers who don't have mobile.

    Internet Customer Churn Reduction with Video
    Over 40%
    Q2 FY26

    Internet customers that purchase our video product similarly churned over 40% less.

    Eligible Video Customers Activating Inclusion Apps
    55%
    Q2 FY26
    U.S.-based Sales and Service Team
    100%
    Q2 FY26

    Anchored by a 100% U.S.-based sales and service team.

    Network Miles
    Roughly 1.3 million
    Post-Cox close
    Passings with Converged Multi-Gig Internet and Mobile
    Over 70 million
    Post-Cox close
    Total Customers (pro forma)
    Approximately 37 million
    Post-Cox close
    Selling Opportunity (Passings without relationship)
    Nearly 35 million
    Post-Cox close
    Total Mobile Lines in Footprint
    Approximately 164 million
    Q2 FY26
    Spectrum Mobile Penetration of Total Mobile Lines in Footprint
    8%
    Q2 FY26

    13 million Spectrum Mobile lines out of 164 million total mobile lines in footprint.

    Available Capacity in Edge Data Centers
    Over 250 megawatts
    Post-network evolution

    Without additional investment, with capacity for much more at a very low cost with future potential partners.

    Subsidized Rural Net Customer Additions
    47,000
    Q2 FY26
    Subsidized Rural Passings Growth
    127,000
    Q2 FY26
    Subsidized Rural Passings Growth (LTM)
    487,000
    LTM Q2 FY26

    In addition to continued nonrural construction and filling activity.

    Wireless Offload Percentage
    87%Down from 88-89%
    Q2 FY26

    Temporarily pushed down due to product changes increasing 5G usage, previously 88-89%, originally 84-85%.

    Wireless Offload Percentage (Historical)
    88%Up to 89%
    Prior to Q2 FY26

    Previously 88%, moving up to 89%.

    Wireless Offload Percentage (Historical)
    84%Up to 85%
    Early Spectrum Mobile

    When Spectrum Mobile first launched.

    WiFi Traffic for MNOs
    Probably 75% to 80%
    Q2 FY26

    WiFi delivers 75-80% of traffic for the MNOs for the wireless telcos.

    Industry KPIs

    8
    MetricValueDetails
    Total revenueDown by 1.7%%
    Net income EPS$1.3 billionUSD
    Adjusted EBITDADeclined by 4.3%%
    CAPEX capital program$2.9 billionUSD
    Total operating expensesVirtually flat
    Content title performanceWorld Cup
    M a integration cost synergies$65 millionUSD
    Free cash flow operating cash flow$1 billionUSD

    Deals & partnerships

    5
    CoxAcquisition of Cox Communications$27 billion

    Fully developed integration plan. Will launch Spectrum pricing and packaging in Cox footprint. Recruiting over 1,000 new residential and business sales jobs. Onshoring and in-sourcing all call center activity over next year.

    Liberty BroadbandTransaction involving Liberty Broadband

    Pro forma for this transaction, net debt to LTM adjusted EBITDA was 4.21x.

    VerizonMVNO agreement for residential mobile services.

    Described as a "great partner" with a "great network" for capital-light mobility.

    T-MobileMVNO agreement for B2B mobile services.

    Allows for selling more lines and moving upstream in the B2B space. Described as "great partners."

    AmazonSeamless authentication for Amazon drivers to offload traffic via Charter's WiFi network.

    Example of potential wholesale opportunities for network capabilities.

    Risks & headwinds

    7
    Internet Customer Growth WeaknessQ2 FY26, ongoing

    Internet customer loss of 172,000 in Q2 FY26, higher than a year ago.

    Mitigation: Focus on Internet sale first, then mobile/video upgrades; improved converged connectivity product and pricing; higher demand for speed/data/reliability; improving NPS.

    Residential Revenue DeclineQ2 FY26

    Down 3.5% YoY in Q2 FY26.

    Mitigation: Pricing adjustments, cost pass-throughs, efficiency initiatives.

    Adjusted EBITDA DeclineQ2 FY26, full-year FY26

    Down 4.3% YoY in Q2 FY26 (3.2% excluding transition expenses). Full-year 2026 stand-alone Charter EBITDA (ex-transition costs) expected to decline around 1% YoY.

    Mitigation: Second half benefits from political advertising, cost pass-throughs, efficiency initiatives, additional cost management measures.

    Cox Transition ExpensesQ2 FY26, ongoing

    $65 million in Q2 FY26.

    Mitigation: Still expect sum of transition costs and CapEx to be at or better than anticipated; some is closing delay, some is change in mix of operating costs vs. CapEx.

    Challenging Housing Growth and Move EnvironmentOngoing

    Reduced customer and EBITDA growth.

    Mitigation: Focus on internal strategies to return to growth.

    Mobile SubstitutionQ2 FY26, ongoing

    Contributes to Internet customer loss of 172,000.

    Mitigation: Leveraging converged connectivity product, mobile bundling to reduce churn.

    Fiber Overlap Growth with Aggressive PromotionsQ2 FY26, ongoing

    Contributes to Internet customer loss of 172,000.

    Mitigation: Leading market in converged connectivity pricing, higher market share in mature fiber overlap.

    What to watch in Q3 FY26

    5

    Internet Customer Net Adds

    Over time (check for signs of improvement in Q3/Q4)
    CurrentLoss of 172,000 in Q2 FY26
    TargetStabilization and return to growth

    Why it matters

    Internet customer growth is a primary driver of overall company performance and a key focus for management.

    We expect to stabilize and return to broadband growth over time⏳ with our better converged connectivity product and pricing, higher demand for speed, data and reliability.

    Q&A highlights

    4

    Update on broadband ARPU guidance for the year and comparable wireless offload percentage to Comcast's 90%.

    Jessica Fischer stated broadband ARPU will improve sequentially in Q3, but the company manages for total customer relationship ARPU, not product-level ARPU. Chris Winfrey explained that aggressive Q1 retention offers impacted Q2 ARPU, which is now normalizing. He also noted Charter's wireless offload was 87% in Q2, down from 88-89% due to product changes increasing 5G usage, but expects it to move back up.

    “Broadband ARPU will improve sequentially in Q3. The use of more aggressive retention offers, as I said, lessened through 2Q and largely normalized in June.”

    asked by Craig Moffett · answered by Jessica Fischer

    2 min read6 chapters

    Detailed Narrative

    01

    Internet Performance & Competition

    Charter experienced a higher Internet customer loss of 172,000 in Q2 FY26, similar to Q1, primarily due to increased competition from fixed wireless, mobile substitution, and fiber overlap. Despite this, churn remained largely unchanged, and the company expects to stabilize and return to broadband growth over time⏳ by leveraging its converged connectivity product, pricing, and improving NPS.

    02

    Mobile & Video Growth

    Spectrum Mobile added over 400,000 lines in Q2 FY26, reaching over 12.5 million lines, making it the fastest-growing mobile provider in its footprint. Video customer losses improved significantly to 21,000, driven by product improvements, new pricing, and packaging launched in late 2024, and higher connects to fully featured video packages.

    03

    Cox Integration & Synergies

    The Cox transaction is expected to close mid to late August. Charter plans to launch Spectrum pricing and packaging in Cox's footprint, aiming for better Internet customer performance, unit growth acceleration, and significant B2B upside. Run-rate transaction expense synergies are now expected to grow from at least $800 million to $1 billion per year, excluding operating or capital expenditure synergies.

    04

    Capital Structure & Deleveraging

    Charter is lowering its post-transaction leverage target to 3.5x, to be achieved within three years. This will involve a multi-pronged approach, including open market debt repurchases ($1.2 billion par value for $1 billion cash in Q2) and a capped exchange offer targeting $20 billion of par value debt. Share repurchases are paused until Q4 FY26 but are expected to continue throughout the deleveraging process.

    05

    Network & AI Infrastructure

    Charter highlights its fully deployed multi-gig Internet network covering 70 million passings and 1.3 million miles of network. The company sees itself as a significant beneficiary of AI through network demand, data center connectivity, and potential utilization of its edge data centers, which will have over 250 megawatts of available capacity post-network evolution.

    06

    Customer Experience & NPS

    The company is focused on improving customer satisfaction and NPS through Internet pricing with price locks, $1,000 savings guarantee with mobile, and enhanced service capabilities, including a 100% U.S.-based sales and service team and same-day service guarantees. Nick Jeffery will join as COO on September 1 to further drive go-to-market capabilities and NPS.

    AI-generated summary of the company’s earnings call. Not investment advice.