Altice USA at a Crossroads: Subscriber Stabilization Meets a Structural Balance-Sheet Reset
Broadband losses narrow, mobile surges, and a $300M tender offer sets the stage for a consensual debt restructuring — but the road ahead remains steep.
ATUS · Earnings Call · 2026-08-06
A Quarter of Stabilization
Altice USA (ATUS) entered 2026 with a clear mandate: halt the subscriber bleed while engineering a financial reset. The second quarter delivered on both fronts, albeit with caveats. “Our second quarter results reflect disciplined execution.” — Dennis Mathew, Chairman and Chief Executive Officer · 2026-08-06 Broadband net losses improved sequentially to 40,000 — a marked slowdown from the 58,000 lost in Q1 and the ~60,000+ runs of late 2025. The improvement came from a mix of tactical pricing, channel productivity gains, and a notable bulk agreement win that added 9,000 broadband and 8,000 video connects in the quarter. Mobile was the standout: 50,000 net adds, the best second quarter ever, lifting total lines to 724,000 (up 33% year-over-year). Video also posted its best quarterly performance in six years, with losses narrowing to 46,000 as the company’s newer E-Tier packages now represent 18% of the residential video base, up from 10% a year ago. Underneath these metrics is a story of deliberate operational focus. The company is decommissioning 48,000 passings in low-density markets, exiting an advertising agency business, and winding down NY Interconnect — all part of a simplification effort that frees resources for core growth areas. “We've been laser-focused on making sure we're honed in on the core business and where we can drive maximum impact.” — Dennis Mathew, Chairman and Chief Executive Officer · 2026-08-06 The strategy appears to be working in select markets, as gross add performance improved year-over-year in several key geographies. But the competitive landscape remains brutal. Fiber overbuilds in the West now exceed 50% of the footprint, and fixed wireless overlaps at over 80%. As “Dennis Mathew acknowledged, "we're not fooling ourselves that that 50% will likely grow to levels similar to where we are in the East (over 70%)"” — Dennis Mathew, Chairman and Chief Executive Officer · 2026-08-06. The company is betting on convergence and network quality to defend share — a strategy that hinges on execution and capital.Convergence and Cost Discipline
The centerpiece of the operational turnaround is convergence. “Convergence ARPU grew 2.4% year-over-year to $79.80” — Marc Sirota, Chief Financial Officer · 2026-08-06 — a metric the company introduced last quarter to capture the combined economics of broadband and mobile. Mobile penetration reached ~9% of the residential base, yet the runway is long. The expanded T-Mobile agreement to access 5G standalone network and add wearables broadens the addressable market, but the near-term impact is modest. More importantly, multiproduct customers churn less. customer success is improving, as evidenced by rising attachment rates for mobile, Total Care, and Whole Home WiFi — though the company still runs manual base-management processes until its MarTech platform launches. Cost discipline is the other pillar. Operating expenses excluding SBC fell 4% year-over-year, with call volumes and truck rolls down over 20%. Gross margin expanded 180 basis points to an all-time high of 71%, helped by programming costs down over 14%. Gross margin is now a genuine strength, offsetting revenue pressure from video declines. Adjusted EBITDA margin rose 140 basis points to 38.8% despite a 5.8% revenue drop — a testament to structural cost reduction and mix shift. However, revenue is still falling. Excluding the divested advertising business, it declined 5.1% year-over-year, with video and news/advertising contributing $92 million of the decline. The company expects mid-single-digit revenue decline for the full year, and EBITDA to fall low-to-mid single digits. ARPU is under pressure from promotional pricing, though broadband ARPU remained stable thanks to upgrade sales (60% of new customers take 1 gig or higher). mobile network operator economics are improving with scale, but the contribution to consolidated EBITDA remains limited.Balance Sheet Reset
The most consequential development this quarter wasn’t operational — it was financial. In June, the company completed a $300 million tender offer, repurchasing 120 million shares at $2.50, and published a long-range plan outlining a path to a stronger balance sheet.Leverage sits at 8x annualized adjusted EBITDA, and net debt is roughly $25.3 billion. The company has no maturities until 2027, but the next wall looms large. Management is pursuing a consensual comprehensive restructuring of CSC Holdings debt with lenders, and the tender offer is widely seen as a precursor to that. “Our goal is to pursue a consensual comprehensive restructuring of the CSC Holdings debt through negotiations with our lenders.” — Marc Sirota, Chief Financial Officer · 2026-08-06 The shares repurchased are held in treasury, not canceled — a signal that equity holders may be part of the eventual settlement. Effective net cash illustrates the overhang. Yet the company is not standing still: capital expenditures of $320 million (16% intensity) are focused on fiber expansion and network upgrades, with Lightpath building AI-grade infrastructure for hyperscale data centers. The recent data center contracts in Michigan, Wisconsin, and Pennsylvania position the B2B unit for growth, though contributions are long-dated.While the transformation will take time and will require a meaningful reset of our balance sheet, we are actively executing against the strategic pillars that we believe will improve performance.