Q2 2016 – Altice Earnings Call Summary

Altice

Below are my key takeaways from the Altice Q2 2016 Earnings Call on Aug 9:

Summary of US Businesses:

Michel Combes, CEO, said, “Altice has completed its transformation into a leading integrated transatlantic operator.  All of our businesses are showing a positive trend.”

Acquired Optimum (Cablevision) and their 3.1MM customers for $17,700MM, making them the 4th largest US cable provider.  Last year they acquired Suddenlink and their 1.5MM customers for $9,100MM.  (See below for US footprint).

Optimum revenue in the quarter was $1,618MM, up slightly YoY from $1,600MM.  EBITDA was $532MM (32.9% margin) vs. $479MM (29.9% margin) in Q2 2015. Best quarter since 2012 with unique customer additions and slight loss of video customers.

Suddenlink revenue grew 5.3% to $640MM.  EBITDA grew 18.7% to $292MM EBITDA (45.6% margin), from the $246MM EBITDA (40.5% margin) in Q2 2015. Showed growth in unique residential customer relationships.

Altice US Footprint: Via Optimum and Suddenlink

 

Altice - US Footprint

 

Financials (In millions) Q2 2016 Q2 2015 % Diff
Total Revenue  $6,689  $6,635 0.8%
Adjusted EBITDA  $2,560  $2,434 5.2%
EBITDA Margins 38.3% 36.7% 4.3%
Optimum Revenue  $1,618  $1,600 1.1%
Adjusted EBITDA  $532  $479 11.1%
EBITDA Margins 32.9% 29.9% 9.8%
Suddenlink Revenue  $640  $608 5.2%
Adjusted EBITDA  $292  $246 18.5%
EBITDA Margins 45.6% 40.5% 12.8%

 

Optimum Metrics (In thousands) Q2 2016 Q2 2015 % Diff
Homes Passed  5,098  5,067 0.6%
Fiber/Cable Customers  3,148  3,117 1.0%
 – Net Adds 19 5
 – Pay TV  2,577  2,637 -2.3%
 — Net Adds -2 -16
 — Penetration 51% 52%
Broadband  2,854  2,781 2.6%
 —Net Adds 26  14
 —Penetration 56% 55%
Telephony  2,181  2,208 -1.2%
 —Net Adds -4 -7
 —Penetration 43% 44%
Fiber/Cable ARPU  $159.89  $159.48 0.3%

 

Suddenlink Metrics (In thousands) Q2 2016 Q2 2015 % Diff
Homes Passed  3,223  3,184 1.2%
Fiber/Cable Customers  1,481  1,439 2.9%
 – Net Adds -8 -13
 – Pay TV  1,062  1,103 -3.7%
 — Net Adds -23 -29
 — Penetration 36% 38%
Broadband  1,251  1,181 5.9%
 —Net Adds -2 -3
 —Penetration 42% 41%
Telephony 591  558 5.9%
 —Net Adds -1  1
 —Penetration 20% 19%
Fiber/Cable ARPU  $116.50  $113.92 2.2%

 

List of Key Properties:

Forward Thinking:

  • Suddenlink will focus on optimizing customer service, improve retention, reduce churn, and upgrade the network to enhance broadband bundles
  • Suddenlink will push Operation GigaSpeed, their goal of having top high speed rates of 1Gbps in 90% of Footprint by 2017
  • Optimum is committed to improving broadband speeds and will work towards goal of delivering 300Mbs broadband to entire footprint by 2017

Links to Company Website:

Please comment below if there are data points from Altice you’d like me to include in their next Earnings Call Summary.

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