Optimum Communications (OPTU) Q1 2025 earnings summary

Executive summary

• Achieved record fiber customer growth with 69,000 net additions, surpassing 600,000 fiber customers and reaching 20% penetration, alongside the best mobile results in five years with 49,000 net adds and over 500,000 total lines.

• Lowest quarterly customer and broadband churn in three years, with annualized broadband churn improving by 90 basis points year-over-year.

• Revenue for Q1 2025 was $2.15–$2.2 billion, down 4–4.4% year-over-year, with net loss widening to $75.7 million and Adjusted EBITDA down 5.6–6% to $799 million.

• Embedded AI and digital tools across operations, including a new partnership with Google Cloud, and completed two major programming negotiations with minimal customer disruption.

• Free Cash Flow was negative $168.6–$169 million, reflecting higher capital expenditures and cash interest payments.

Financial highlights

• Total revenue was $2.15–$2.2 billion, down 4–4.4% year-over-year, with residential revenue declining 5.7% to $1.7 billion and broadband revenue falling 2% to $899.6 million.

• Adjusted EBITDA was $799 million, down 5.6–6% year-over-year, with a margin of 37–37.1%.

• Gross margin expanded to 68.8%, an all-time high, aided by programming cost savings.

• Free Cash Flow was negative $168.6–$169 million, primarily due to higher cash interest and capital expenditures.

• Capital expenditures increased to $356–$356.1 million, focused on network and customer premise investments.

Outlook and guidance

• Full-year 2025 revenue expected between $8.6 billion and $8.7 billion, with Adjusted EBITDA guidance at approximately $3.4 billion.

• Programming and other direct costs and other operating expenses each projected at approximately $2.6 billion.

• Cash capital expenditures projected at $1.2 billion for FY 2025, prioritizing high-return projects and network expansion.

• Targeting 1 million fiber customers by year-end 2026 and 1 million mobile lines by year-end 2027.

• Management expects continued pressure on video and telephony revenues due to customer attrition and competition.