Date of Call: May 7, 2026

Financials Results

  • Revenue: $2.1B, declined 4% YOY
  • Gross Margin: 69.4%, expanded 60 basis points YOY

Guidance:

  • Total revenue expected to decline mid-single digits in full year 2026.
  • Adjusted EBITDA expected to decline low to mid-single digits in full year 2026.
  • Total CapEx for 2026 anticipated in the range of $1.2B-$1.5B.
  • Fiber passings additions expected to be consistent with prior year trends of 150,000-175,000.

Business Commentary:

Broadband and Mobile Trends:

  • Optimum Communications reported broadband subscriber net losses totaling 64,000 in Q1 2026, or 56,000 excluding a prior-period adjustment, while mobile net adds reached 52,000, marking its strongest quarter in six years.
  • The broadband losses were due to intense competition from ILECs, fixed wireless providers, and fiber overbuilders, especially in the West. Mobile growth benefited from improved go-to-market execution and stronger multi-line attachment.

Revenue and EBITDA Performance:

  • The company reported total revenue of $2.1 billion, reflecting a 4% year-over-year decline, with adjusted EBITDA at $789 million, down 1.3% year-over-year.
  • Revenue decline was concentrated in residential video, while EBITDA was impacted by revenue losses partially offset by cost management and operational efficiencies.

Video and Convergence Strategy:

  • Optimum's residential video subscribers saw net losses of 51,000, but video ARPU grew, and residential video gross margin expanded by 1,000 basis points from 14% in Q1 2023 to 24% in Q1 2026.
  • The company focused on new video packages (Entertainment, Extra, Everything TV) which improved churn by 20% compared to legacy packages and enhanced convergence with broadband and mobile.

Capital Structure and Financial Discipline:

  • Optimum ended the quarter with $1.3 billion in liquidity and prioritized strengthening its capital structure, including a $1.1 billion refinancing and a $1.7 billion ABS transaction for Lightpath.
  • The focus on financial discipline and debt reduction aims to support long-term value creation and position the company for sustainable growth.

Cost Management and Operational Efficiency:

  • Programming and direct costs declined by almost 6%, with a 13% reduction in programming costs year-over-year and a 5% decrease in other operating expenses.
  • Cost efficiencies were achieved through operational improvements, AI deployment, and workforce optimization, contributing to margin expansion.

Sentiment Analysis:

Overall Tone: Neutral

Optimum Communications Inc’s 2026 Earnings Call: Broadband Growth Goals and Shifting Pricing Strategies Don’t Align
  • Management acknowledges a 'challenging' and 'intense competitive environment' with 'near-term pressure' but highlights 'early signs' of improved go-to-market execution, 'strongest quarter' in mobile in 6 years, and 'disciplined execution' to drive 'more consistent and sustainable performance'.

Q&A:

  • Question from Frank Louthan (Raymond James): Can you give us a little more color on the overlap of fixed wireless in your territory and specifically, the overlap of fixed wireless in the West? That would be my first question. Given the importance of the pay TV base, you know, I understand ARPU is up a little bit, but, you know, talk to us about how you can continue to use that base to minimize churn, and is there any way to lean into that and maybe expand that base to reduce churn going forward?
    Response: Fixed wireless overlap is about 85% in the East and 80% in the West. The company is competing on quality, value, and pricing transparency with a new go-to-market strategy, simplified pricing, and 5-year price locks. New video tiers are delivering a 20% churn benefit and are resonating with customers.

  • Question from Vikash Harlalka (New Street Research): Two, if I could. Dennis, I just wanted to clarify one of your key priorities. You mentioned that you’re targeting an improvement in broadband subscriber trends this year. Are you targeting an improvement in broadband subscriber losses compared to last year? If that’s the case, how do you get there given 1Q was worse than last year? On EBITDA, seems like EBITDA decline is going to be similar to last year or maybe slightly worse. Is the reset in broadband pricing impacting EBITDA growth this year? Where are you on the cost reduction of 4%-6% that you outlined last year for us?
    Response: The objective is to get back to broadband growth. The company is in the early innings of a new strategy focused on driving call volumes, sales conversion, and base management. EBITDA decline is managed by investing in ARPU and value-added services (mobile, Total Care, Whole Home Wi-Fi) to drive customer lifetime value. Cost management is on track with gross margin up 60 bps YOY and operating expenses down 5% YOY.

  • Question from Kutgun Maral (Evercore): Two if I could. Maybe first on mobile. You know, results there continue to be quite strong. You’re already at almost, I think, 9% penetration of the broadband base. This might be a hard question to answer since we don’t get a lot of visibility into mobile profitability, but I’d be curious, you know, at what level of penetration or scale do you think you need to be at for the mobile strategy to have a more meaningful uplift to consolidated EBITDA? Is there any color you could provide on free cash flow for the full year?
    Response: Mobile churn improved meaningfully, and there is a 20% churn benefit when customers take both broadband and mobile. The company is in the early innings of scaling mobile and will continue to focus on converged ARPU. Mobile margins are improving with scale. Free cash flow saw slight improvement YOY; political advertising is expected in the back half. No specific full-year free cash flow guidance provided.

  • Question from Sam McHugh (BNP): Morning, guys. Sorry about that. Just 2 questions if I can. One on the EBITDA decline this year. Does that include the benefit of the sale of i24NEWS? If we strip out political advertising, is it fair to think about underlying EBITDA as declining maybe high single digits? Secondly on the ARPU side, is kind of the Q1 decline of 1.7% a pretty good run rate to think about for the rest of the year?
    Response: EBITDA guidance reflects revenue pressure from video subscriber losses; the i24NEWS sale is already closed and benefited last year's guidance. Political advertising is expected in the back half. The strategy intentionally invests to stabilize broadband, which may weigh on ARPU in the near term. The company is driving multi-product sell-in to mitigate pressure.

  • Question from Kannan Venkateshwar (Barclays): Hi, guys. Maybe just on the balance sheet side, could you give us a sense for, you know, the cash that you have, the $1.3 billion that you mentioned? I mean, how long can that last to run, you know, operations? I mean, when do you need to refinance? Then the debt maturity coming up, I mean, I know you can’t talk a lot about it. Conceptually, when you think about the way you’re thinking about alternatives to refinance, you know, your maturities, should we broadly think about more asset-based options rather than other alternatives?
    Response: The $1.3B liquidity provides flexibility to run operations and invest without near-term disruption. Addressing debt maturities is a key priority; the company believes a meaningful debt reduction and balance sheet reset are essential. Specific details on refinancing alternatives are not shared, but updates will be provided as available.

  • Question from Craig Moffett (MoffettNathanson): Hi, good morning. We all focus a lot on the broadband ARPU trend of percentages and that sort of thing. I wonder if you could just comment on what your long-term expectation is for broadband price levels. You’ve got prices now in the market in the sub $50 range that are promotional, not clear where they’re going to end up in kind of long-term pricing. What do you think is kind of the North Star that you think about for where prices are likely to settle out in your markets?
    Response: The company is focused on hyper-competitive pricing and driving convergence ARPU through multi-product attach (mobile, video, Total Care, Whole Home Wi-Fi). The goal is to maximize customer lifetime value and provide pricing transparency, moving away from a sole focus on broadband ARPU.

  • Question from Stephen Cahall (Wells Fargo): Yeah. Maybe first just to follow up on Craig’s question, is there a way in dollar terms to think about where residential broadband ARPU needs to settle? I’m just thinking about where fixed wireless and fiber compete in the market today, especially some of those new ones, probably closer to $70-$75. Curious if that’s right, and if broadband ARPU, you know, has that kind of trajectory over the next few years. Also, we’re increasingly hearing about some of the plans of satellite and how satellite will compete in the market. Seems like a less likely competitor in your East footprint, but I’m wondering if in the West where I think you’ve seen more impact from fixed wireless, if you think satellite will be an incremental competitor or sort of just another layer in an already, you know, competitive market, so less of an impact.
    Response: Convergence ARPU is the key metric, not standalone broadband ARPU. The company will manage pricing nimbly. Satellite is a potential future competitor but is not currently a meaningful threat in the East or West. Current competition is primarily from fiber overbuilders, telcos, and fixed wireless.

  • Question from Michael Rollins (Citi): Hi. Thanks. Good morning, thank you for taking the questions. Two if I could, please. First, you have a lot of markets and a number of them, particularly in the East, have experienced fiber competition for a longer period of time than most. Within that context, are you seeing micro-market level turnaround where you’re achieving stabilization or improvement in broadband that can inform you on the formula and the timing to get the broader portfolio to that, you know, opportunity? The second question is, what are you learning and this kind of relates, I think, to some of the past questions, but maybe to ask it this way. What are you learning about the long-term earnings power or EBITDA power for the Optimum portfolio when you evaluate all the things that you talked about today? You know, the investments in customer pricing, it could also be OpEx and CapEx and what you think you need to do to stabilize the broadband base and defend a reasonable share across your markets.
    Response: The company is managing at a local market level and has seen improvements in certain East markets regarding call volume and sales yield. The strategy is being extrapolated across the footprint. No specific long-term EBITDA guidance is provided, but the focus is on controlling broadband trends, direct costs, and OpEx while leveraging AI for efficiency.