Thank you for standing by. And welcome to Altice USA Q1 2020 Results Presentation. I will now turn the call over to your host, Nick Brown. Please go ahead, sir.

Hello, everyone. And thank you for joining. In a moment, I'll hand over to Altice USA's CEO, Dexter Goei; and CFO, Mike Grau, who will take you through the presentation, and then we'll move to Q&A. As today's presentation may contain forward-looking statements, please read the disclaimer on Page 2. The slides are available on the company's website, and a replay of the call will be made available. And now, I'll hand over to Dexter.

Thanks, Nick. Hello, everyone. Starting, just jumping straight into Slide 3. I first wanted to take a moment to thank the entire Altice USA team, who has been working tirelessly to keep our communities connected. As an essential service in this time of crisis, our products, broadband, TV, mobile, news, play a critical role, and it's a responsibility we take very seriously. Through a variety of programs, including free Altice Advantage broadband for students, free WiFi for students, schools and first responders and the FCC pledge, we've been keeping customers and communities safe and connected during this time of need. While it is certainly an unprecedented time for all, I'm inspired by the ongoing dedication and work ethic displayed by our teams each and every day. I'll get into more detail about our community efforts shortly, so let me summarize our Q1 highlights. Total revenue growth of 2.2% in Q1 was driven by the strength of our core broadband business, which grew 14% year-over-year. We have seen record demand for our broadband service, achieving the best ever quarterly performance with 50,000 broadband net additions, excluding Altice Advantage. Additionally, the pace of voluntary broadband speed upgrades almost doubled in March month-on-month, and we saw a 24% increase in network data usage. To support this ongoing network demand, we accelerated our deployment of 1 gig speeds, which is now available in more than half of our Optimum footprint and over 75% of the Suddenlink footprint. Adjusted EBITDA was flat year-over-year and up 1%, excluding mobile losses, and we saw strong growth in free cash flow, up 80% year-over-year. Given the severe dislocation in our share price following this market selloff, we opportunistically accelerated our share repurchases for this year, completing $750 million in the first quarter and over $1 billion, including April 30. This means that we retired almost 7% of total shares outstanding and 14% of our free float in only 4 months. Our buyback target for this year remains $1.7 billion, thus you should expect a bit of a slowdown in the pace of repurchases from here on as we remain committed to our year-end leverage target of 4.5 to 5.0x net debt to EBITDA. As an organization, we are well positioned given the increasing reliance on our networks and services, which have been performing very well. There are though some uncertainties around our SMB and advertising businesses as many of our peers have highlighted as well. For that reason, we intend on providing an update on the outlook for revenue and EBITDA expectations later this year as we gain more visibility. However, as Mike will outline later, we remain confident in our ability to deliver revenue, EBITDA and free cash flow growth in 2020, driven by ongoing cost management, reduced CapEx expectations, reduced interest costs and improvement in working capital. Moving on to Slide 4. Although the impact from COVID-19 was relatively limited in Q1, we wanted to spend a minute highlighting where we expect to see more of an impact in Q2 as well as some of our recent initiatives to respond to the pandemic. First, on the positive side, we've seen significant increases in demand for higher broadband speeds within both our residential and SMB businesses. However, stay-at-home restrictions have meant many of our SMB customers have had to temporarily close their retail operations, which raises the possibility of increased bad debt and is impacting local advertising revenues. Additionally, we've closed 86% of our own retail outlets and reduced our own marketing spend, which is impacting our mobile sales and handset volumes in particular. We are taking this as an opportunity to accelerate the digitization of our whole business from driving more digital sales to adding online support tools for payments and account management. Elsewhere, we are seeing some permitting delays impact our fiber-to-the-home network rollout, which is driving reduced CapEx expectations for this year. The health and well-being of our employees and customers are paramount, so we've established programs such as enhanced employee safety initiatives and remote working solutions. And we've taken many steps to support customers and local communities. For example, we signed the FCC's pledge to help consumers and businesses stay connected during this time. We have been collaborating with hospitals, schools and government agencies to ensure that we have connectivity services they need to assist the public, including waiving fees for first responders and other critical entities. We have made several programs like Altice Advantage Internet and student WiFi available at no cost through the end of the school year for students. Finally, the company has committed $10 million in community relief to support our small business customers and their recovery efforts. Additionally, our management team has pledged a percentage of our salaries to support charities like Feeding America and the Boys & Girls Club of America, which are also committed to supporting our local communities. In summary, although this is a challenging time, we think this is a time that presents a lot of opportunity for us as a business. Moving on to Slide 5 and speaking of our business, we continue to see solid revenue performance in Q1. We continue to perform well in our core residential business, which is about 80% of our total revenues. Residential revenue grew 0.5% year-over-year, which was driven by broadband revenue growth of 14%. This strong broadband growth is being driven by a mix shift towards standalone broadband products, ongoing up-tiering to higher broadband speeds and our recent rate event from which we saw about a half-quarter impact in Q1. Business services grew at 3.9% in Q1. News and Advertising grew at 11.4% in Q1, driven mainly by growth of our targeted advertising business, a4 and Cheddar. Turning to Slide 6. We illustrate the best ever quarterly performance for our core residential business at the customer relationship and broadband additions. We added 35,000 unique residential customer relationships or 44,000, including 9,000 Altice Advantage student customers. This translates to a record 50,000 net additions or 60,000, including Altice Advantage. This compares to 37,000 broadband additions in Q1 2019, which was in itself an exceptionally good performance last year. And we've seen also good performance continue through April. On video, we continue to see an accelerated pace of declines with 42,000 losses in Q1, as we highlighted last quarter. This is driven mainly by bigger pass-throughs of programming cost inflation with our rate event this year and a lower video attachment rate for gross add customer additions. The lower attachment rate on gross additions is actually a very positive free cash flow trend for us with the reduced CapEx outlays and better margins as bundled video on promo is not attractive economics as well. However, in April, we have seen these losses also slow down materially. Additionally, we rolled out Altice One and Suddenlink at the end of 2018, which contributed to better video performance in Q1 2019. However, video remains an important business to us, and we still have a significant number of customers that are long-tenured and highly valuable double and triple play bundled customers. For example, approximately half of our customers have been with us for 5 years or more, one third have been with us for 10 years or more. Those customers are paying closer to our rack rate for video than customers coming in on promo. Moving on to Page 7, you can see the exceptionally strong demand for our broadband offerings, underpinning our customer and revenue growth. As I mentioned before, our broadband speed upgrades more than doubled in Optimum in March, month-over-month, benefiting from stay-at-home restrictions put in place. Total data usage was up 24% over the same period, averaging close to 400 gigabits per customer in March. This growth was driven mainly by a similar percentage increase in video streaming. We also saw material increases in the usage of other popular Internet applications, such as online gaming, VPN and video conferencing services as many of our peers have seen as well. We are also seeing a resurgence of fixed voice line usage and reduction in out-of-home mobile roaming costs as many of our customers are currently working from home. We invested a lot in our network in the last few years and it's performing very well right now, with plenty of capacity to handle these increased usage trends. With the continued deployment of cable DOCSIS 3.1 and fiber technologies, we have now made 1 gigabit broadband service available in more than half of the Optimum footprint. As a result, we've already seen an acceleration in 1 gig sales, up 56% in March. But as the next slide shows, we're only getting started right now. Turning to Slide 8. You can even more clearly see the long-term progression of higher speeds among our customers. The average broadband speeds taken by Altice USA's customer base is now 222 megabits down, more than triple what we saw just 3 years ago. But more importantly, about two-thirds of our base still only takes 200 megabits or less. That's about 2.8 million subscribers that we are certain will upgrade over time. We have rapidly deployed 1 gigabit capability with the expansion across Optimum's footprint, more than doubling our overall availability in Q1 2020 to 63%, including Suddenlink across Altice USA. The 1 gig sell-in rate was 13% of all gross additions in areas where available. Increasing 1 gig availability to the rest of Optimum's footprint through the rest of 2020 increases our opportunity to continue to upsell higher broadband speeds. And we're still on track for commercial launch of our bundled fiber offerings later this year. Our long-term fiber-to-the-home opportunity will allow us to deliver even faster speeds to our customers, with significant opportunities for additional CapEx and OpEx savings. In summary, we remain very optimistic about our core connectivity business. Slide 9 provides an update on our mobile business. We've had good momentum in Q1 with 41,000 subscribers net additions, reaching 110,000 total lines since we launched in September last year. That's almost a 3% penetration of our broadband subscriber base. However, since we have ended our introductory offer and retail stores closed in March, we have seen a slowdown in volumes. So Q1 will likely be lighter in terms of lines added and revenues. There are two positive impacts on our margins, though. First, we've seen a 20% decline in cellular data consumption in the last month, reducing our RAN cost from increased WiFi network offload during stay at home. And secondly, we reduced our sales and marketing spend while the stores are closed. We remain focused on improving customer experience and broadening our product offerings with a continued expansion of our handset lineup and preparations well underway for a 5G service launch. We are also very excited to share that we've begun our new partnership with T-Mobile and are actively working with them to accelerate opening up their network to all of our customers. On Slide 10, turning to Business Services. We wanted to provide some color on how the business is performing given this unique time. First of all, it's important to flag that Business Services is only 15% of our total revenue. Of that, roughly two-thirds of our market in Business Services is SMBs, but only a small percent is in affected sectors such as restaurants, hospitality and auto dealers. We expect our SMB customers may be more impacted by COVID than some of our other enterprise customers. We have seen a slowdown in gross additions since March. However, churn trends remain stable, which is very encouraging. Additionally, similar to our Residential business, we are seeing increased demand for higher broadband speeds from our SMB customer base. It is also important to note that the vast majority of our SME customers take voice and use our service for connectivity to their alarm system. Both of these elements increase the utility and retention value of our services to our SMB customers during this difficult time. We have been extremely focused on retention efforts, including introducing customer credits during the shutdown and our community relief program aimed at small businesses. Our large enterprise customer base, which is Lightpath, accounts for about one-third of our total business services revenue and key verticals such as government, education, health care and carrier wholesale represents over half of this as we are the leading provider by market share in our footprint in these sectors. These verticals have been less affected by COVID-related closures, and we expect that to continue to be the case. We are also seeing an increase in the number of enterprise customers upgrading their service to support remote work with managed services like secured Internet and conferencing solutions. At this point, we have limited visibility into when all of our markets will reopen. With that said, however, Texas and Arkansas are already in the process of reopening this week, which will provide a good early indicator for us on how businesses perform. You can see in the chart here that Suddenlink SMB represents about 22% of our Business Services revenue. Overall, we're confident that our telecom infrastructure and secured network services are essential services for these businesses. Turning to Slide 11 for our News and Advertising business. Like our peers, we have seen some local ad cancellations in some of the most affected industries such as hospitality and auto. It's important to put in perspective that News and Advertising represents only 4% of our total revenue. And local advertising, which is the most affected, makes up roughly only one-third of that 4%. As these businesses typically order 1 to 2 months ahead, this is likely to impact Q2 more than we've seen in Q1. The outlook for national advertising partly depends on duration of stay-at-home restrictions. For example, we've seen national brands with retail presence suspend their marketing spend altogether. Our full year expectations for the business will depend on a lot of factors, namely the return of large national advertisers to their normal schedules and spend levels. The good news is that some of our West markets are in the process of reopening, as I noted earlier, which is a necessary leading indicator of advertising coming back. Remember, political advertising is still likely to contribute positively in the second half, which was roughly about $40 million in incremental revenue in the last critical year back in 2018. And on the news side of the business, we are seeing very positive viewership trends with a 577% increase in Cheddar website traffic, a 131% increase in Cheddar TV viewership and a 48% increase in News 12 TV viewership. And now, I'll hand over to Mike, who will take you through the financials in more detail.

Thank you, Dexter, and thank you, everyone, for joining our call. We certainly hope you're all staying safe and well. On Slide 12, you can see that Altice USA's adjusted EBITDA margins in the first quarter of 2020 are in line with last year, excluding mobile losses at 43.1%. Our margins would be higher except for the recent Cheddar acquisition, which has slightly diluted the margins since this business only just turned breakeven. And remember, this represents about a 10 percentage point increase from when we first acquired Suddenlink and Cablevision, and we have been able to sustain margins at these elevated levels while investing in all of our new growth initiatives. In Q1, our net EBITDA impact from COVID was relatively low, and we estimate it to be less than $10 million. Our EBITDA less CapEx margin reflects added capital outlays related to our fiber investments beginning towards the end of 2018, but we expect additional opportunity to expand our operating free cash flow margin going forward. As Dexter mentioned earlier, the mix shift towards broadband is also contributing positively, offsetting the video customer loss and programming cost inflation and aided further by additional efficiency measures, which we continue to adopt every year. Turning to Slide 13. We can see a breakdown of cash capital expenditures, which decreased year-over-year, partly due to lower mobile investments given the initial associated launch CapEx costs. Our total capital intensity was 12.2% in Q1. But without fiber and new home build investments, this would have been less than 9%. We still expect that upon the completion of our fiber build, we will be able to reduce CapEx significantly with additional opportunity of further reducing OpEx as well. But given the permitting delays that Dexter mentioned, the fiber rollout will likely be slower than we anticipated entering the year, which is the primary reason we are lowering our CapEx expectations to be sub $1.3 billion for the year. We are currently more focused on expanding 1 gig availability with our DOCSIS 3.1 upgrade enabling more bandwidth and delivering on the next generation of gig-capable broadband gateways. Additionally, we are excited for the commercial launch of our fiber double and triple play products later this year and look forward to updating you on progress there. In the same way that COVID has given us an opportunity to evaluate digitally transforming our business, we expect that many of our customers are also rethinking the manner in which they manage and utilize their broadband connections. Accordingly, we are investing in our network, anticipating that we will see some permanent changes in consumption behaviors among our customers. We will be ready to accommodate their preferences. Turning to Slide 14, you will see our free cash flow in more detail. We generated $294 million of free cash flow in Q1, which is up 80% year-over-year, in large part, driven by lower cash CapEx, as we just discussed, and improved working capital cash flows. Remember, cash interest is higher in the first and third quarters because of the timing of coupon payments. We are seeing a benefit from refinancings we executed on last year from the recent fall on our floating rate of debt and from the benefit of amending prior interest rate swap contracts. We also still have some large bonds becoming callable later in 2020, which, depending on market conditions, should bring further cash interest savings into 2021. Cash tax payments were just $1 million in Q1. I wanted to highlight that the recently passed CARES Act allows us to extend our NOLs by more than a year. We now do not expect to be a significant federal cash taxpayer until 2022. Taking in summation, we are confident that we will be able to deliver on free cash flow growth in 2020, even with slightly more revenue uncertainty in some parts of our business. Turning to share repurchases. We repurchased $750 million of stock in Q1 and approximately $300 million additional through April, having opportunistically accelerated our buyback this year, as Dexter explained, in order to take advantage of the volatility in the market. We still expect to complete $1.7 billion in share buybacks this year. As shown on Slide 15, we continue to have a very strong balance sheet position. We have no significant bond maturities greater than $1.1 billion until 2025, as you can see on the maturity schedule in the appendix to this presentation with none in 2020 and a weighted average life of debt of 6.2 years. We have significant liquidity of $2.5 billion at the end of Q1 with an undrawn revolver and cash on hand on the balance sheet. That's on top of the free cash flow we continue to generate from our recurring revenues every day. Our weighted average cost of debt is now 5.6% compared to 5.9% at the end of 2019. As I already mentioned, we have additional opportunities to further reduce our cost of debt. We will continue to proactively manage maturities, but we can afford to wait and be opportunistic about when we go to market in that regard. Finally, on Slide 16, we provide our updated financial outlook for 2020, most of which we have already touched upon. Due to the current market uncertainty, we intend to provide an update to our revenue and margin guidance later this year. We are taking down guidance on cash capital expenditures to below $1.3 billion, and I would reiterate that we continue to expect to grow EBITDA less CapEx and free cash flow this year with ongoing cost management activities, lower capital expenditures and improvements in working capital cash flows. Lastly, our year-end leverage target remains 4.5 to 5x on a last 2 quarters annualized basis, and we are reaffirming our annual share buyback target at $1.7 billion. And with that, we will now take any questions.

The first question comes from the line of Philip Cusick with JPMorgan.

One clarification first. Dexter, I thought I heard you say in your prepared remarks, I think you're looking for growth in revenue and EBITDA as well as free cash flow this year. Did I hear that right? Or was I mistaken?

Yes. I mean, listen, we've obviously withdrawn our guidance since we are in this level of uncertainty today. We can't really forecast what we think is going to happen throughout the rest of the year. But what we see today, we continue to expect the revenue and EBITDA growth this year.

Got it. Okay. It seems a little confusing. And then maybe just talk about the strength of broadband in the first quarter. Did you see a pull forward of seasonality in the sort of summer months or summer homes of Eastern Long Island? Or was there other things going on sort of pre-COVID that was driving that?

No. I think there was obviously some acceleration of people who are coming back to their summer homes quicker than usual. But by and large, we saw a lot of new subscribers coming on board. People that typically have been not connected to us or I would assume also not connected to anyone who used to use most of their broadband connectivity in the office or on mobile. And so we saw a resurgence there, significant. And it's really a tale of two little shifts in terms of time periods, which is the Optimum footprint went into lockdown, let's call it, March 20 but probably more like middle of March. And so we saw very strong increased activity in the Optimum footprint going through the end of March and into the beginning of April. And then many of the Western and Midwestern states didn't come into lockdown until towards the end of March, beginning of April. And so we are seeing right now a very, very strong performance coming from the West markets today. What is clear is there's one additional trend that's happening, which is as the gross add numbers start to slow down on the Optimum footprint given the resurgence in March, we're seeing churn rates fall even quicker, which has not surprised us given that people are in lockdown, people are not moving. There's much, much less voluntary churn and people want to maintain the stability of their existing service. So we're really seeing benefits from all fronts in terms of the lockdown relative to our residential business.

Okay. And one more, if I can. You saw broadband revenue per user accelerated pretty dramatically. How much of that is either a price increase or a change in allocation versus sort of real incoming demand of people shifting upward? Was that upshift material enough to impact the growth rate?

Yes. That's a great question. Just trying to break it down a little bit. About 4 to 5 percentage points of that 14 is allocation based on our rack rates, so that's an accounting change. But on a true cash basis it's about 10%. The remainder of it is about half of it is up-tiering, true up-tiering and subscriptions. About one quarter of it is volume based, and one quarter of it is the price increase.

The next question comes from the line of Craig Moffett with MoffettNathanson.

Two questions, if I could. One, just to follow-up on the last question. How much headroom do you think there is with respect to broadband ARPU? You're now over $70. I know there's an allocation element of that, which hides that to some extent, from at least bundled customers. But what have you learned about broadband price sensitivity and how do you think about the sustainability of broadband price increases going forward?

Craig, listen, I think we continue to be very optimistic of our product runway. In terms of where our subscribers were four, four-and-a-half years ago when we showed up and where they are today, they've increased their speeds about three to three-and-a-half times. Particularly on the Optimum footprint an average speed moved from closer to 50 megabits up to where we are today at an average across Altice USA of about 222 megabits. But if you look at our subscriber base today, on the gross add side, customers are primarily taking 200 megabits and above. The 1 gig product is starting to get very strong traction in its early days here in the Optimum footprint. More importantly, we have about 2.8 million of our subscribers who are taking 200 megabits or below today. In terms of the rate that we're seeing for upsell and gross adds taking higher speeds, we would anticipate that continues to grow nicely to higher speeds. We're at the cusp of a strong launch in our fiber-to-the-home. That starts with a couple of products, but the centerpiece being the 1 gig fiber product, and we have the ability to go up to 10 gigs based on our current infrastructure. So the product roadmap is strong. People keep asking why they need more, but consumption keeps increasing. We feel very good about the medium term that we're going to continue to sustain very good ARPU growth on broadband.

And on video, if I could just pivot to video for a second, there's been a lot of talk lately about sports and who owes whom money. I wonder if you could just comment a bit on what your latest thinking is with respect to obligations to regional sports networks when games are off the air and national sports networks, like ESPN, when games are off the air? And how you think those disputes are likely to be resolved?

To be clear, we owe people money, as opposed to a lot of people owing us money on this stuff. We've had initial discussions with all of the major sports programmers, both on a regional and national basis. We're engaging with them currently on this discussion. You may have seen the New York Attorney General has reached out to distributors to start providing some relief to customers, given that there's a lack of sports programming. We're in complete agreement with the New York AG. This becomes a contract-by-contract discussion with each one of the providers. I can't give you particular insights because every single contract looks quite different from the other, but we'd expect to get some relief for sure.

The next question comes from the line of Brett Feldman with Goldman Sachs.

I'm going to follow-up on video. I thought I heard you say during the prepared remarks that video losses had moderated this quarter, but maybe I misheard. And so I'm curious if that's correct. And then just even thinking beyond that, you consider the country being in a recession, the New York market is pretty tough in particular. Obviously, we don't have sports. I think a lot of people assume that that's going to lead to greater pressures on video subscriptions over time. I'm wondering if you agree. And maybe just more broadly, are you rethinking where video fits in your bundle? Are you maybe more motivated to be bundling some of the OTT offers as video here would be really appreciated.

Sure, Brett. We published the numbers in Q1. In April, we've seen a slowdown in those losses, so I can't call it for the rest of the year nor even the rest of the quarter. But given the trends that we're seeing in the Residential business, where we're continually seeing very good traction on the broadband product and a slowdown in churn rates by and large, and then a slowdown in our video losses as well, it bodes well at least in terms of our video performance relative to what we saw in the first quarter. We showed in the first quarter about a 5.4% loss for the year, which is a couple of hundred basis points north of where we typically have been for the last two or three years. Hopefully, we'll do better than that, but that's probably our high watermark for the year based on what we see today in terms of video losses. In terms of how we think about the product, we continue to have a very attractive video customer base in terms of aging and profitability. That's a product and service dynamic we'll continue to be very focused on. What's clear with our peers is that the gross add dynamics are not very attractive. So to your point, do we want to team up more with OTT providers? Absolutely. We're in those discussions. Video on promo in terms of onboarding double and triple plays are less attractive for us today and it shows in our attachment rates, which is the loss we've seen in terms of acceleration of video RGU losses is really a reduction in the attachment rates on gross adds. More importantly, it's not related to an acceleration in cord shaving at all. The product continues to have very strong stickiness particularly in our Optimum footprint. In our Suddenlink footprint, there is less attractive competition from satellite, and we're seeing very good resilience on our existing base in terms of churn of their video product. We're focused on maximizing profitability and cash flow, harvesting our existing subscriber base profitably and giving alternatives to our customers, attractive alternatives, on the gross add side.

The next question comes from the line of Benjamin Swinburne with Morgan Stanley.

Two questions. Maybe on broadband, to start. Obviously, real strength in the business. I'm just curious, the ability of your company to continue to install at the same rate you've been going at in terms of self-installation capacity, labor force. I know you guys have taken, I think, some wage support for your frontline workers. It seems like there's a real opportunity, particularly against FiOS to take a lot of share. I know you mentioned marketing spending is down for you guys. I'm just wondering how you're thinking about taking advantage of this opportunity and also the capacity of the organization to sort of meet demand in broadband during this sort of stay-at-home pandemic that we're working through. And then I have a follow-up for you guys.

Sure. On the broadband side, we've taken a lot of safety precautions in terms of customer-facing technicians with the proper PPE, making pre-calls to ensure customers aren't sick, prioritizing and limiting residential service visits in urban and hotspot areas. We feel we've done everything we can to put safety first for our technicians. It's true that FiOS has reduced its installed workforce and we may have seen some benefit from that. But the reactions we've seen in Q1, really March and continued in April, have been strong across all geographies, not just FiOS zones. Our ability to continue to install is a challenge, particularly with safety measures. There's a percentage of our technician workforce that is offline and we're looking to replenish or use subcontractors to help meet demand. What we saw in April relative to March was a slowdown in gross adds in the East, but an even slower slowdown in churn rates in the East, which has driven great economics. Throughout the Suddenlink footprint we continue to see very strong demand on the gross add side and we're meeting that. As states reopen over the next couple of months, we expect to meet demand through workforce management. Self-install is an opportunity; we do very little of it today. As we roll out new products and fiber-to-the-home, self-install becomes more relevant. That's on our roadmap for workforce training.

Got it. Thank you for the disclosure in the deck on advertising and your B2B business. It's very helpful. I'm just curious, I realize visibility is low. But do you have any update for us on how either Advertising and/or commercial revenue trends are in early Q2, one month in, just to help us think about the pace of the year?

It's clear that the advertising business is going to go through its trough in the second quarter. April is down significantly relative to expectations we started the year on and down year-over-year. I don't know the exact numbers, but somewhere around 30% plus down in Advertising revenues year-over-year in Q2 is a good starting point; we'll see how that develops. As markets open up quicker than others, particularly the Optimum market, that will lead to a quicker recovery. We've modeled scenarios and feel comfortable in a down case scenario which is leading us to withdraw revenue guidance but still call for revenue growth for the year. On the commercial side, we don't see a material acceleration in churn to date, although gross adds are down. Gross adds in the Optimum footprint are a small number since we have high market share, so slowing gross adds is not a huge revenue impact. Suddenlink SMB seems resilient. Lightpath enterprise seems resilient. Gross new orders, which have about a six-month lead time to install, have slowed and will impact revenues in the second half and into 2021 but not materially. We're monitoring SMB in Optimum closely. Policies such as no disconnects impact our forecast on potential bad debt, but today it's too early to call a draconian effect on our SMB business.

The next question comes from the line of John Hodulik with UBS.

First, a couple of follow-ups on the high-speed data side. Dexter, you just finished off with the Keep Americans Connected number or idea. Do you have a number for the number of subs that have sort of appealed to that program? And is that included within the net adds that you guys announced? Number two, obviously, a lot of great data points that you gave on that side. Is there — putting it all together, can that 14% high-speed data revenue growth accelerate as we look from first quarter into second quarter? And then second question is on the mobile strategy. When do you think you'll get access to the T-Mobile network? What has to happen? And can we expect, given the store closures, relatively few net adds until we get to that point and start adding or open the stores and add those new subscribers on that new network?

On the FCC pledge (Keep Americans Connected), we had about 6,000 subscribers in the first quarter. That number accelerated going into April. What we're seeing towards the end of April now is that number has slowed down. We're in the mid-20,000s as of the end of April, but the rate of pledgers has slowed materially over the last week. Interestingly, about 30% of our pledgers are actually paying their bills and are current on their bill. Once people identify themselves as a pledger they're classified as a pledger, even though they're paying, which should probably take them out of the pledger category. Regarding HFC revenue growth, I don't want to claim acceleration into Q2. It's a very strong number — more like 9% to 10% on a cash basis versus 14% on an accounting basis. We clearly view this double-digit high-single-digit pathway as sustainable for the medium term given our product roadmap and subscriber base where about 2.8 million subscribers take 200 megabits or less today. On T-Mobile, I can't give a specific timeframe. We've started discussions about a month ago and they've been productive. We're discussing 5G as well. The contractual approach is that we need to be treated like other Sprint customers moving onto their network, so I suspect T-Mobile will try and move people onto their network as quickly as possible, but I can't give a timeframe. In Q2 you'll see lower gross adds in mobile given we've shut down about 40% of gross adds that come through retail and we've mostly closed retail. We also ended our $20 promo for life toward the end of the first quarter which dampened demand. We will relaunch a promo — I believe in mid-May — and we'll drive it through inbound call centers and e-commerce, and we're cautiously optimistic about productivity there which will also drive OpEx savings through digitization.

The next question comes from the line of James Ratcliffe with Evercore.

Two if I could. One following up on mobile. Can you talk about how the sales that go on gross adds and subscribers for Optimum customers versus non-Optimum and if that's matched your expectations on that front? And secondly, just to be clear on the CapEx spend. So should we basically think about the lower CapEx guidance as dollars that will be spent that just get spent in '21 rather than '20?

On the gross add side, we're trending about two times quicker than our peers in terms of attachment rate relative to our existing subscriber base since launch. We've hoped for a better take-up rate on mobile overall, and we're looking at distribution channels to accelerate penetration. We're focused on our existing subscriber base. The $20 price point was very attractive, we've come off that, now pricing is higher, and we'll launch a new promo in May. We expect to beat our prior guidance for mobile losses for the year given lower marketing spend and retail closure. On CapEx, yes there's a time shift. Permitting issues on FTTH, given many communities are shut, means some spend will shift into 2021. But there are other items reducing our CapEx budget, for example lower video attachment rates for gross adds are driving lower CPE costs. That contributes to the sub $1.3 billion CapEx guidance for this year. As we move into 2021, those trends of lower attachment rates may persist, further reducing CPE costs.

The next question comes from the line of Michael Rollins with Citi.

Two questions, if I could. First, just going back to the video discussion. If we look at video revenues year-over-year, they're down about 7% in dollars, programming expense dollars up 4%. Can you talk about what you're doing on the video pricing to try to recover some of the programming cost increases? And maybe why there's this variance that's happening between the video revs and the programming expenses. And then secondly, did you mention earlier, and I apologize if I missed it, the specific bad debt expense for reserves that you've taken to date?

I'll let Mike talk about the reserves. On video ARPU, we saw about a 4% to 5% increase as part of the 14% data accounting ARPU growth; that is coming straight out of video ARPU due to accounting allocation of our rack rates. The 7% video revenue ARPU decline is overstated — about 2% to 3% is accounting — and on top of that you have sub numbers coming down which drives video ARPU because the difference between an existing subscriber and a gross add is material. We're very focused on gross margin and the EBITDA equation. We're focused on bundle economics, rolling off promos, and emphasizing broadband plus OTT options as real alternatives to bundles. The double-play customer tends to be less attractive from a promo economics standpoint, so we emphasize profitable subscribers. On programming cost, we continue to work to push growth rates down and see opportunities sector-wide to slow programming cost inflation.

On the allowance for bad debt, we did not disclose a specific number and are not going to provide one, but we did disclose the estimated COVID impact on our 1Q EBITDA was somewhere in the neighborhood of $10 million or a little less than that. Any incremental bad debt reserves would be captured in there. We're looking at this closely and monitoring daily cash receipts and trends month-to-month versus prior year, and the aging of receivables. To date, we're not seeing a lot of differences, which has reassured us. The pressures that build in the economy could create more pressure in 2Q, but we're not seeing it to date through April in our cash receipts. We've booked some incremental bad debt expense in the quarter; it was a relatively modest number and we'll keep monitoring through 2Q. A lot depends on how soon the economy and states start to open their markets.

The next question comes from the line of Jonathan Chaplin with New Street Research.

Dexter, I'm wondering if you can give us an update on what the average usage has grown to for broadband-only subs and for the guys that have taken video from you. And I'm wondering, as you look at the guys that have connected over the course of the last month that were wireless only, how much of the shift in usage you think is structural? And so how many of those previously wireless-only households do you think you might be able to hang on to when isolation ends? And then also a quick follow-up on broadband subscriber trends. They were obviously phenomenal this quarter. Do you think you've pulled growth forward from the second half of the year into the first half of the year? Or do you think you could end up with record net adds for the entire year?

On usage, broadband-only was about 400 gigabits per customer in March before the pandemic; we're now above 500 gigabits, roughly a 25% increase in usage for broadband-only subscribers. Total data usage across the network is up about 24%. We saw surges in the East up about 35-40% at times; the West saw surges around 15% in the first quarter. We'll update for the second quarter since the West lockdowns happened later. Regarding wireless-only households that connected, I'm cautiously optimistic we will retain a super majority of those customers. Work from home will be part of life for an extended period until testing and vaccines change dynamics. On net adds, I don't believe we pulled growth forward in a way that will hurt the year; we expect continued strong numbers. Historically we've trended mid-70,000 broadband net adds per year over the last couple years; we're at 50,000 so far. Q2 tends to be weaker, as does Q3 historically, and back-to-school dynamics are uncertain given schools. This is an essential product and our peer numbers are also strong.

The final question comes from the line of Doug Mitchelson with Credit Suisse.

A few questions, Dexter. You sort of sparked my curiosity on the self-installs. You talked about the lack of ubiquitous products holding you back historically from pursuing self-installs, but it's on the map. Can you just give us a sense of timing? Does it take a year, two years, three years? I know you're very focused on efficiencies. And you also said broadband-only are more attractive lifetime value of customer now. Is that really sort of a difference in acquisition costs going to the home and putting a couple of set-top boxes in? I don't know if you're willing to share the difference in acquisition cost between a double-play and a single play, but it's a remarkable state of play to say broadband-only is higher lifetime. And then I've got one follow-up.

On self-install, given the things we're doing from a network and user interface standpoint and our Altice One stability where we're at about 18% penetration growing 1-2% per quarter, we're probably within 12 months of starting a real push on self-install. I would expect in 2021 a real push with a fiber gateway available for self-install and an Altice One or straight modem product on DOCSIS for self-install. We've been focused on many priorities, but this is on the roadmap. On broadband-only lifetime value, bundling has gotten more aggressive and double-play economics are getting worse: set-top box costs, install costs and programming cost growth hurt promo economics. When you model free cash flow IRR, single-play broadband promos can be more attractive than aggressive double-play promos. Churn rates have historically been better on double-play, but promo economics can offset that. So we are focused on acquiring subscribers profitably and the mix shift to broadband-only can be beneficial in some promo environments.

So the last thing is, I'm trying to relate the stock buyback to leverage versus the leverage guidance. If I use your current net debt, you need about 5% EBITDA growth in the second half of the year to hit the 5x leverage ratio. I know you don't want me to pin you down on EBITDA growth in the back half of the year. And I think you get a couple of points from political there as well. The way I guess I wanted to ask it is, is there any sort of change to debt throughout the year or anything that we can put in our pocket beyond political in the back half of the year that we should think about when we're doing that relationship between the buyback ability and the leverage guidance?

You're right that advertising is the biggest question mark for revenue and EBITDA volatility, and bad debt and pledger conversion is a secondary concern. It's difficult to provide more clarity beyond what we've disclosed. We've implemented a lot of OpEx reductions: distribution cost down, media spend down, work-from-home reducing OpEx, revisiting real estate and employee compensation adjustments. There's a long list of measures that reduce OpEx and will flow through the year. So when you think about a 5% EBITDA growth number, there's a lot happening on the OpEx side as well. We're proactively managing maturities and will be opportunistic on refinancing. We believe the OpEx decisions we've made over the last six weeks will continue to flow through the year and support EBITDA. We're not ready to provide more clarity than that today.

I will now turn it back over for closing remarks.

Thank you, everyone, for joining. Let us know if you have any follow-up questions. Otherwise, we look forward to catching up with you virtually in the next few weeks. Thank you.

Thank you.

This concludes today's conference call, you may now disconnect.