Charter Communications, Inc. (CHTR) September 2026 Conference Transcript

are available at the registration desk. For those of you that I haven't met, I'm Mike Rollins. I cover communication services and infrastructure for Citi. Very pleased to welcome Jessica Fisher, Chief Financial Officer of Charter. Thank you so much for being with us today. It's great to see you.

Great to be here. Thanks.

So maybe to get us started, first, congratulations on your upcoming role. um last week you know uh you announced uh your intention to leave spectrum can you tell us a little bit about your decision and uh um you know the opportunity um you know in front of charter sure um so first off i just have to express my gratitude to my teams at spectrum to chris who was a sponsor and mentor through a big chunk of my career um to the board who has been very supportive.

Look, I think we've done the right things for the future of the business, right? We've made some great investments across the business that I think will carry it into the future. We took a stand in video that has changed the trajectory of the video business, which ultimately is good for broadband and will grow the broadband side of the business. And we stuck to the strategy, right? Which is that we're selling high quality products that have value to customers and doing that coupled with high-quality customer service. When you put that together, the industry has been really challenging, but we've been one of the most successful teams in the industry against that very challenging backdrop. That was what enabled us to close the Cox transaction and the Liberty Broadband transaction in the last couple of weeks, and it set the company up quite well to continue to grow its cash flow over the next few years. There's a lot of exciting stuff still to come in Charter. That being the case for me, it was a good time to go take on a new challenge. And so I've accepted a role at Crux AI, which is a partnership between Google and Blackstone. We'll be building AI infrastructure, which, as we were just talking, is sort of being a different piece in the chain here, building what will create demand on the network going forward. It's an exciting space. I'm excited to go do it. But I wish the team well. And I think that I think there's still a lot more to come here at Charter as well.

Well, let's dig into that. It's great to have you here to be able to talk about this. So, you know, you mentioned the big news of the last few weeks was closing the Cox transaction. And so can you discuss the opportunity to take your playbook, the charter playbook, and the converged connectivity strategy now across a larger footprint?

Yeah, so the total footprint coming out of this, we have more than 70 million passings, only around 37 million customers. So the opportunity that's there is, you know, around almost 35 million homes and businesses that we can go sell to. And the way that we're going to do that. Look, on the Cox side, the lever that we have is the ability to bundle products much better than what they've done before. So their video penetration is a little under 10%. Their mobile penetration is very low. Their broadband ARPUs are high. And so what we will go do, and we've already sort of started to go do, is we're going to go sell using our pricing and packaging strategy, which has performed better than theirs, to drive lower pricing and acquisition and lower pricing actually sort of throughout the life cycle of the customer from a broadband perspective, but to couple that with video and mobile such that we do what we've always done across our footprint, which is to maximize the amount of cash flow that you can get per household. And when you look at where customer ARPUs are on the Cox side versus on our side, excluding the seamless entertainment allocation, they're not that different. And so there's a really clear opportunity to be able to sort of migrate the base in a way that will be good for the customer because it will make customers turn less because we'll be delivering more value. and will be good for the business because they think that we can generate unit growth over time related to sort of creating that better package for customers. And you bring that together with, so you have what you need to do on the revenue side, but a lot of real opportunity on the other side as well. There's some good things inside of the business, whether it's AI tools or what they're doing on the B2B side where we can take things that they do well and bring them to our business. There are things that we do well where we can push them into their business, some opportunities in advertising and some spaces like that. The confidence that we have and the synergies that will come from the transaction has increased dramatically as we've sort of dug in further. And so we've raised our synergy target to more than a billion dollars. And so overall, there's a lot of work to do. And we're excited. I didn't mention it, but in the pricing and packaging, actually, I think in the next week, week and a half that we'll be rolling that out over their footprint sort of at full scale. So lots of exciting work to do on that side. But I think we're really confident in our ability to sort of bend the trajectory that they've been on to put that business in a better place and to create value for the company in doing so.

So you mentioned the over $1 billion in synergy now. Is there a view on speed of travel to get there?

Yeah. So I actually think that there's a big chunk of the synergies that come very quickly. So, you know, you get to run rate like something on the order of half, probably in a very, very short timeframe. And then I think the trajectory from there is a little more that you have to do uh to go get to the other pieces but look there's a lot of opportunity whether it's around things like like organizational structure and overhead or whether it's around just sort of the bread and butter you know contracts and operating efficiencies that we'll get uh implementing across the business so i i think you can you can get to a good amount of it quickly great um maybe zooming out uh just broadband competition broadly can you just give us an update what's going on on in a competitive environment for your broadband business? Yeah, you know, the market is still very competitive. And I think you might have heard one of our peers talk about it yesterday. But I think our point of view, you know, it was very competitive in Q1. It was very competitive in Q2. It continues to be very competitive in Q3. There are ebbs and flows as to which competitor is out there being more competitive and who has sort of backed off of offers. But the overall space, it hasn't changed, but it continues to be a competitive space.

How are you seeing the threats, both near-term and long-term, from Fiber, FWA, and now the Leos like Starlink?

Yeah. So if I think about the needs, so the need that AI is driving and overall data growth or data usage growth is driving, ultimately, you're going to need high speed, highly reliable, low latency networks. And those networks are wired networks primarily today, right? So the keep competitor that we have across markets is going to be the wired network in those markets, which is fiber. On the fixed wireless side, are there customers who are satisfied with fixed wireless today yes but does it have the same speed or the same reliability of a wired connection it doesn't and and will it be capacity constrained at some point in the future i think probably will it doesn't mean that you can't discount them as a competitor uh but but i think that um that ultimately sort of the wired networks prevail and it's kind of interesting so if you if you think about satellite, satellite's been really good in rural spaces where they couldn't get connectivity before. And we've talked about the impact that that's had in terms of getting those art off markets that we've gotten to a bit later, that it is harder to sort of pull customers away from satellite as an incumbent than it was to pull them away from some of the previous iterations, which were very bad in service for those areas. But if I look at the product and I say, on fixed wireless, we have an idea of what happened, which was ease of installation with fixed wireless was much easier than waiting a few days for a cable tech to come and install your service. And so we've done a lot to actually sort of change and to be able to be there, you know, same day, if what you call before five o'clock or next day, to be competitive with that aspect of fixed wireless, which was a place that we had a blind spot and we had to adjust to them coming into the market. In satellite, the product is more expensive. It requires a more difficult installation. The reliability data that we see today is not better. The speeds are not better. And so you look at it and you say, okay, will they win on brand alone? That typically doesn't carry you all the way to the end of the day. And so I don't discount someone who is well-funded and has a lot of really smart people working for them. And so we continue to monitor the situation with satellite. But ultimately, from a technology perspective, it certainly feels like the right technology to prevail is wired technology.

While we're talking on the subject of Starlink, can you add any perspective to the press reports on a possible relationship between Charter and Starlink and SpaceX?

I think the right thing to do in any market is to be out there talking to people about ways that you can lower your costs, ways that you can utilize your network in a better way or improve the quality of service you can provide to customers, ways that you can create new products that don't exist today that might create revenue streams. We have those conversations with lots of different people all the time. and sometimes they come to fruition in something that you can announce and sometimes they don't and I don't have anything to talk about. But I think ultimately the fact that conversations happen with peers and competitors across the industry shouldn't be a surprise to anyone.

Coming back to just the broadband dynamics, it feels like if I think about the broadband category or just across fiber, cable, you know, the whole thing, ARPUs were a bit softer this year. And the question is whether or not we're hitting some kind of resistance point in terms of what customers are willing to pay. Is there something more secular going on? Or is this just the dynamics of things being a little bit more heated on competition and convergence? What can you share with us with what's happening with ARPUs?

You know, I don't think that we've hit a ceiling, if you will. I think on our side, as I said, we don't always look at broadband ARPU on its own. And so one of the things in the dynamic that's happened is just in how we think about pricing inside of the bundle. and there are scenarios where if you go with a lower broadband price but you add more products, we see that as wind. And so we don't focus as much on broadband RPO on its own. That being said, I think across the broadband market that there still is some space for pricing. I think it has to come in many cases for customers with additional value that you're providing. And so we did a cost pass-through in July-August timeframe, and we did a speed uplift associated with it that for those customers, it was people in older pricing and packaging plans might have lower speeds. That was significant. We see things like our Invincible Wi-Fi product, which adds in a cellular backup, as something that provides additional value to the customer and therefore is a good opportunity to go do something on pricing. And the market, I think, continues to bear some sort of additional pricing over time. I think that there are some folks out there who were pushing their ARPUs up rapidly. And so you see less of that, which is probably more healthy for everyone. But I think that there is still capacity for ARPUs to grow. It's just a question of where exactly you are.

So if you keep it like slow and low in terms of the increases, it's just more it's easier and with value and with value.

Yeah, I think that that's right. But if somebody is somebody is pushing really hard, then you end up in one of those scenarios where you're working through the resetting process and the resetting process creates some drag. But I think that there's continued capacity for, you know, inflation-like or maybe, I don't know, target inflation-like movement across pricing over time.

And I know it's not the sole focus, but I think, you know, on the 2Q earnings call, it was discussed that these price actions can help the ARPUs improve broadband, specifically 3Q, 4Q. Is that still the track?

Certainly. So with the couple of things that you see, so the price adjustments, which ran sort of mid-July to mid-August. So you get about two months of that inside of Q3. And then in addition to that, we talked about sort of what had been happening with retention offers, which were quite hot sort of early in the year, and then came down in their intensity over the course of the second quarter and were mostly normalized by the time you got to June. Because of that, I think you get sequential positive movement as you go into Q3. And then there's always sort of lots of factors as you get further on after that, but a good sequential movement.

Helpful. And so one other question that we've been just trying to think through is when I think about the spectrum broadband strategy, you know, it's been under the single brand, a retail basis to the customer. And, you know, given just the pickup in competition across the category, is Charter thinking through the possibility of using what I think is commonly called like flanker brands, right, to create different segmentation for the market might give you different ways of, you know, going after different value propositions. And there's another side to this, which is, would you only do it on a retail basis? Or could you see a world in which you might say, you know what, there's other players out there, let's wholesale our broadband to someone. And now you have a much larger distribution engine selling on your platform.

Look, never say never. There are sort of lots of interesting ideas out there. But I think our focus right now, from a brand perspective, is really on improving our go-to-market and improving sort of customer satisfaction in the mainstay spectrum brand. And so I suspect that where you'll see our focus in the short term is on the work that we're doing around improving in that respect.

You know, one of the big focal points has been your focus and leadership on convergence. And it's not just on the mobile side, it's also on the seamless video and seamless entertainment side. So how is that going in terms of conveying that value proposition to customers?

So I think if you look at the couple of sets of sort of big new offer sets that we've done over the past few years, like Spectrum One was really effective going and driving mobile. The sort of life unlimited launch in those new pricing and packaging has been effective at keeping that mobile momentum. Actually, we've been generally continuing to grow gross ads in mobile on a year-over-year basis, which against our growing base allows us to continue to grow at rapid rate. And also really stabilizing the video product along with the changes that we made to the product set there. And so both of those things, let's say they don't get a great amount of credit in the market. like slowing video losses and increasing mobile uptake from a financial perspective it's like sort of an unmitigated good in terms of where we've been from a financial perspective and then it carries into and you say okay well like what what do you get from it in broadband because ultimately even when we talked about like why do what we're doing around video well we're doing it because you got to have an impact on broadband and why do what we're doing in mobile you're doing it in part because there's good financial advantages, but also because ultimately it's got to have an impact on broadband. We're seeing a big piece of that impact, right? So a customer who takes our video product churns at a rate that's about 40% less than a customer who's broadband only, and when they then go activate seamless entertainment apps, so then go activate streaming apps associated with that video product, that churn actually goes even lower. And at this point, about 55% of our customers who have access to those seamless entertainment apps have activated them. And so we're getting good uptake there, which is having good churn impact. Similarly, on the mobile side, a customer who takes internet and mobile churns about 40% less than a customer who hasn't taken the mobile product. That gets better when they take more mobile lines. And today, mobile penetration of internet customers is only about 20%. So we still have a lot of opportunity to grow the mobile business. We have opportunity to continue and we've been effective at adding mobile lines inside of the base in order to increase that impact um and then and then you might say okay well but like where does that go and why don't we see it in net ads and and the issue in net ads has been a gross additions problem so then we go back to the prior question i say the focus that we have is on our go-to-market and not improving customer satisfaction because we think that's what we need on the gross addition side we're actually doing really well on the things that are impacting churn which it which is helpful but we But we got to go crack the nut on gross additions to get to the right answer.

So does that mean, you know, as you think about what you get to see internally, that we don't necessarily get to see in the outside world, that by having significantly better churn from these converged bundles, the reason people leave you might just be compressing to moves, which, you know, is like almost unavoidable, right? If someone moves, they can't take their broadband with them such that you're seeing that benefit and the lifetime value of your customers get better. And it's really just a function, as you mentioned, of improving the front end.

So overall churn was on a huge downward trajectory during COVID. And then we thought that it was going to come back up. And it has stayed low. and moves have stayed low and gone even lower. There's always, look, there's always a mix of voluntary and non-pay and moves in the overall churn component. But it's been quite low. It does have a hefty and great impact on customer lifetime value. But we got to go out and use, go to market and use brands to go acquire customers.

So, you know, speaking of that, I think Nick Jeffrey may have just arrived at Charter.

Yeah, I think he's been here a week. A little bit of a week.

So any early indications on how Charter is looking to enhance that go-to-market execution and customer acquisition engine?

You know, so I don't want to promise anything on Nick's behalf yet, but I think he's been really successful in other businesses with that improvement in go-to-market, with the improvement in customer satisfaction. I do see already the focus that he has around those things. And I think that that ultimately will be really good for the business. I'm excited about having him on the team. I'm excited to see what he does. I can't speak to it yet, but I think that, look, I have a lot of confidence that he's going to do great things for the business. And I think we know that we have room for improvement. We've talked about it. And so looking forward to see what that is.

How is the increasing emphasis on upstream traffic, including with what's happening with AI, changing the way you think about Charter's network differentiation and the investment in network modernization?

Yeah, so with the growth in demand for data and what it will take to serve AI, I think you need speed, I think you need reliability, and I think you need low latency. And all of those things are things that we've already made a bunch of investment in our network evolution to be able to deliver on our network. So I think that that piece is, it positions us well for what will be sort of the competitive marketplace of the future. We already see the increasing data needs happening. So upstream data usage is up around 20% in the year over year. A lot of that driven by things like self-driving cars, uploading lots more data. And as we get additional devices sort of using those kinds of, at a mass scale, using those kinds of models, I think we expect, you know, that's going to increase traffic a lot, which puts more pressure on more capacity constrained networks, which should be helpful for us. The other side of that is we'll also be able to use AI inside of our own business in ways that will benefit us, right? So if I think about the network itself, we've been, over the course of network evolution, adding telemetry, which is like sensors, essentially, to all of the active components of the network. And so previously, you might have said, oh, well, having more actives in your network is actually detrimental. But in this case, because everywhere where we have an active component, we're going to get data back from that active component on the functioning of the network and how well the network is working. It means that we can be very targeted then in improving service and in making changes to the network that need to be made, knowing where we have an issue, targeting, fixing that issue very quickly, and getting it done before the customer sees that they have a problem. which actually ultimately could end up advantaging hybrid networks versus a more passive network just because of the amount of data that we'll have and what we can do with that in terms of cost efficiency and customer service going forward.

There's one other element. As I try to think about just TAM expansion or charter and cable, there's the edge data centers that you effectively have with all of your local presence. And as AI workloads potentially become increasingly distributed, what does that mean in terms of a monetization opportunity for charter?

Yeah, it's absolutely an untapped revenue opportunity. When we get through with our network evolution, we'll have 250 megawatts of capacity that is already fiber connected, that has power and backup power already there, and that has cooling because these were effectively data centers for us and we just shrunk our footprint inside of them. I think particularly as AI moves in the direction of inference AI, that placement that is a bunch of small data centers at the edge of the network but very close to the customer will make that a really unique asset in terms of its capacity for monetization. And so I think it's an exciting opportunity. And we're trying to figure out what the right way is to sort of get to the point of that monetization.

You've already given us some examples on how AI can really improve efficiency. You know, as you look out over the next few years, whether it's AI or other aspects of driving efficiency, what are the ways that charter can generate measurable cost savings or even revenue enhancements?

Yeah, so the things that we're doing right now, right, we've implemented AI and other sort of digitization tools that are allowing us to contain many, many more calls and digital channels in the call flow. That's advantageous from a cost perspective. It's also actually improving customer experience and improving the experience for the folks in the call center are doing the work because their tools are better. And it enabled us as we closed the Cox transaction to have extra capacity to be able to bring in quickly some of those Cox workloads. And sort of, so our integration is also speeding up because of what we've been able to do with AI, bringing them inside of that space. So that one I think is exciting and it's kind of immediate. it. There's also some things, and it's kind of fun even, we had folks, these tools sort of democratize the ability to fix the problem that you're dealing with. And so inside of our field ops organization, we had someone who developed a tool that then has already been sort of now scaled to the broader organization that helps maintenance technicians prioritize their work better, right? And get to the right place more quickly and ultimately will generate cost savings. It's going to make them dramatically more efficient. So some super exciting things kind of happening in real time. Look, I think there also continue to be opportunities on the cost side where we can go do some things to really make ourselves more efficient. And I think that, We see the need to go get after some of those things. You saw us do some things even that'll have an impact between now and the end of the year that are continuing to be, maybe not bread and butter, but doing the right thing for the organization around whether it's centralization of some spaces where that's the right thing to do or benchmarking our benefit structure against others and making sure that we're aligned in ways that are beneficial from a cost perspective. And so we'll see benefits from that in the second half of the year. But I think there continues to be a lot more to do on that front in addition to the synergies that we'll get from Cox. And so there's exciting stuff to do to drive financial outcomes going forward as well.

So on 2Q earnings call, Charter talked about standalone EBITDA being better in the second half of the year. is that still tracking? And is it really more just about the political ad benefit? Or is it more about in terms of delivering that standalone better EBITDA, really some of these cost opportunities that you just shared?

It's definitely a good amount of both. So you do have the benefit of political advertising in the second half of the year. You also have the rate adjustment that we did inside of the July, August timeframe. And you have the things that I just talked about that we did on the cost side around some organization enhancements, as well as some of the things that we did around overhead costs and normalizing those costs to the marketplace. So the combination of those things, I think, gets you to that sort of better performance from an EBITDA perspective in the second half, along with political advertising. I do want to point out just from a reporting perspective that you won't actually see charter standalone EBITDA in the reporting for the second half of the year inside of Q3 and Q4. We will do standalone reporting for Cox and charter pro forma revenue and KPIs, so customer metrics. But on the cost side, because things integrate so quickly and some of the ways that i was talking about where you're you know having cox workloads that are that are moving to a charter call center where you have you know people organizations on the overhead side that are already sort of largely collapsing together uh and so because of that um trying to pull that back apart into what belongs to which which company is very difficult uh so so we won't provide it in that way and uh maybe just taking a just another step back and want to hit a little bit more on just, you know, some of the financial opportunities, but do you see further opportunities

for large-scale consolidation within the cable and broadband category? And how do you think Charter's role will play out in that context?

Look, we like cable businesses, and we think we're good stewards of cable businesses, and where it makes sense from a shareholder accretion perspective and from an industrial logic perspective, which I think combinations of cable businesses do, we'll look at M&A. I think today the standard for increasing your leverage in one of those transactions is very, very high. And so it would be a surprise to me to see us do a transaction that did that. But look, we want to do the right thing to drive shareholder value So in doing that, we want to be sort of good stewards of capital from an investment perspective. We want to be financially prudent across the business. And ultimately, I think that drives the best outcomes for the company. And so that's how we would approach on the M&A side.

Is there any other advice that you have for investors as people are thinking about how to incorporate all these financial contributions from Cox? You know, just in terms of not just obviously just bringing in the subs and the revenue, but you mentioned earlier that some of the management that you're going to have to do around the ARPU side, the risk that certain ARPUs come down as you're trying to get growth in the converged packages. So are there some timing issues, some revenue headwinds, repricing that people should just be mindful of?

Yeah. So first, I'm going to take another minute on reporting. So mid-October, we will give you a trending schedule that has pro forma for both legacy companies, as well as the combined to help from a modeling perspective. the one metric that will not be inside of the pro forma for Cox is on the business side of business passings and business customers their definitions are enough different from ours that we don't think it makes sense to report them at this time so they won't be in there and then from an overall reporting perspective I anticipate that with the transaction closing in the quarter we may report slightly later than our normal reporting schedule which has sort of long been contemplated as a possibility. And so we'll let folks know when that date might be. In terms of how you think about then going and doing the modeling, I think on the revenue side, recognize that, as I said earlier, their customer ARPU isn't that different from ours. And there's not sort of immediate repricing of the base. So what will happen is in acquisition, will be bringing people into better acquisition pricing. And then for Cox customers who call in and are looking for different pricing, you'll see them also migrating onto new pricing paths. But that looks a lot like what we did in TimeWare Cable and in Bresnan and actually did with our own base with the Life Unlimited packages. And I think that it can be maybe not perfectly linear, but what you should see is, you know, potentially their component of broadband ARPU So it sort of comes down over time to get people into more competitive broadband pricing, but at the same time that that revenue comes back on the other side in the form of mobile and video. From a synergies perspective, we talked about, I think there's a big chunk that comes early, something on the order of half. And then that after that, you have a good blend into getting to our synergy target where we have a lot of confidence. And on the capital side, you know, we gave some very rough thoughts on that inside of the proxy materials. We talked about that there might be a little bit of mixed sort of what's OPEX versus CAPEX from an integration cost perspective. But over time, what was in that model and what we believe to be the case is that their capital should trend to something that looks much more like legacy charters capital from a capital intensity perspective. Not today, but in the forward look that we've given you where that capital intensity trends down to a level that I think is fully sustainable in terms of the investments being made in the business, but creates a very healthy and large free cash flow going forward.

And how is charter balancing now return of capital to shareholders? And how do you think about that relative to just reducing the net debt leverage? And what I wonder about is, you know, just given where valuation is, should you just keep chipping away and lowering the leverage, you know, if you're not getting any credit for the buybacks?

Yeah. So, look, we just lowered our leverage target to 3.5 times, which I think that we'll get to over the course of three years. In doing that, we were trying to sort of thread a needle between different sets of investor and debt holder priorities. We certainly had heard many of our capital holders who saw delevering as priority, and we've created the path to get there. I think that we've done that while leaving space in terms of the amount of free cash flow that there is to continue to be able to buy back equity at what we believe to be very sort of valuable prices, right? But where we'll create value for shareholders by doing that. And so So as I said before, look, ultimately, we're trying to be good stewards of capital and to allocate both back into the business and investments in the right way, but then also be financially prudent in a way that drives value for shareholders. And if we can thread the needle around this point in a way that gets at both of those categories, we feel like that'll be a good outcome for shareholders and debt holders alike.

Very lastly, just anything that you want to leave us with that, as you see on the inside of Charter, that you just feel is being missed or underappreciated by the market?

Sure. Look, the valuation would tell you that people think that cable businesses are in for a very long and detrimental road. And that is not what it looks like from the inside, right? I think we have some work to do around what I said in go-to-market and in customer satisfaction. But actually, I think we have all of the tools to go do that. I think we have work to do around the cost side as well. We have all of the tools to go do that. And in fact, sort of the way that we're able to compete in front of customers, we compete quite well. and that we have the right technology to be able, the right network to be able to drive and to be one of the winners in the long-term business going forward. And so I really think it is that. It's that cable, I think, continues to compete well in the very long term because we have the right capacity, the right networks, and the right strategy to be able to deliver to customers. and so I think the picture is a lot rosier than people have priced in at least and so I look forward to seeing what that looks like in the future Thanks so much for being with us today Thank you