Optimum (OPTU) Q4 2025 Earnings Call Transcript

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DATE

Feb. 12, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Dennis Mathew
• Chief Financial Officer — Marc Sirota
• Vice President, Investor Relations — Sarah Freedman

TAKEAWAYS

• Total Revenue -- $2.2 billion, a 2.3% decline year over year, primarily driven by a nearly 10% reduction in video revenue, and an 8% decrease in news and advertising revenue (excluding political, +6%).
• Broadband Subscribers -- Net loss of 62,000 subscribers, ending at 4.2 million; fiber customers reached 716,000, up 33% year over year, with 12,000 fiber net additions for the quarter due to a moderated migration pace.
• Video Subscribers -- Net loss of 49,000, the lowest in over five years; total video subscribers at 1.7 million, down 13% year over year, with new video tiers now representing over 15% of the residential video base.
• Mobile Lines -- Total of 623,000 lines, up 35% year over year, with 38,000 net adds in the quarter; annualized mobile churn improved by over 700 basis points compared to the prior year.
• Residential ARPU -- Grew 0.4% to $134.49; while video ARPU contracted by $2.80, connectivity, and value-added services grew by $3.40, largely driven by broadband ARPU expansion.
• Broadband ARPU -- Increased 2.8% year over year to $76.71, the company's highest in fourteen quarters, reflecting success in rate actions and product mix retention.
• Gross Margin -- Reached 69.5%, up 180 basis points year over year, driven by product mix shift and disciplined programming cost management.
• Adjusted EBITDA -- $902 million, a 7.7% increase year over year; margin expanded by 380 basis points to 41.3%, marking the highest figure in sixteen quarters and surpassing the 40% milestone.
• Operating Expenses -- Decreased by nearly $60 million year over year in the quarter, reflecting over a 6% reduction in headcount, and broad cost control initiatives across the organization.
• Free Cash Flow -- Approximately $200 million generated in the quarter, supported by a 28% year-over-year reduction in cash capital expenditures, and a capital intensity of about 13%.
• Network Expansion -- Added 65,000 new passings in the quarter, and 177,000 for the year, mostly as fiber; total fiber passings expanded by 43,000 during the quarter to a total exceeding 3 million company-wide.
• LightPath Business -- Achieved 35% revenue growth in the quarter, and 13% growth for the full year, with total awarded AI-driven contract value reaching $362 million in 2025; adjusted EBITDA grew 17% year over year.
• Programming Costs -- CFO Sirota stated, "our costs are down in the quarter, 16% on programming costs. I think an industry-leading measure, 15% for the full year"; for every $1 in video revenue decline, $1.20 in programming cost reductions were achieved.
• Debt Refinancing & Liquidity -- Completed $2 billion, and $1.1 billion refinancing transactions with JPMorgan; consolidated liquidity is approximately $1.4 billion, with a leverage ratio of 7.3x annualized adjusted EBITDA for the last two quarters; pro forma weighted average cost of debt is 6.8%, with 81% of the debt stack fixed.
• AI and Automation Investment -- Company-wide adoption in customer service, network management, and marketing is driving a 19% improvement in field dispatch rates, and a 12% increase in digital interactions.
• Asset Sales -- Divested the i24 News business in December, and sold the towers business earlier in the year to further streamline operations and improve efficiency.
• Product Mix -- At year-end, 43% of broadband customers subscribed to one-gig or higher speed tiers, with 52% of new customers selecting these options in the quarter.

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RISKS

• Ongoing subscriber losses across broadband and video segments, with CFO Sirota stating, "Net losses were primarily driven by fewer gross additions reflecting continued low household move activity, heightened price sensitivity among customers, and sustained competitive intensity."
• Management underscored industry-wide competitive intensity, noting "unprecedented levels of spend from a marketing perspective, very aggressive pricing and packaging, and value-adds and incentives."
• Continued top-line pressure as video revenue drops nearly 10%, and news and advertising revenue declines 8% year over year, largely due to adverse market trends and reduced political advertising.
• Management highlighted the need for "meaningful debt reduction and a reset," indicating leverage at 7.3x adjusted EBITDA could constrain strategic flexibility absent further improvements.

SUMMARY

Optimum Communications (NYSE:OPTU) delivered its first year over year adjusted EBITDA growth in sixteen quarters and surpassed a 40% quarterly EBITDA margin, reflecting rigorous cost discipline and operational transformation. Enhanced broadband ARPU and record-high gross margin were offset by revenue declines in legacy video and advertising segments, with subscriber pressures attributed directly to difficult competitive conditions and price sensitivities. Company management reported substantial workforce reductions, divestitures, and efficiencies in network investment, resulting in lower operating expenses and nearly 20% improvement in field dispatch rates. Debt refinancing improved liquidity and financial flexibility as the enterprise continues to focus on AI and automation throughout customer experience, support, and network operations. At quarter-end, the fiber expansion program resulted in over 3 million fiber passings, and LightPath bookings reached $362 million in AI-driven contracts within the year, setting the stage for future enterprise service growth.

• Management claims new simplified product options and pricing, tested late in the year, informed the 2026 customer acquisition strategy, with mobile convergence a major lever for broadband retention.
• CFO Sirota stated, "for every dollar of video declines that we see, we offset with $1.20 of programming cost reductions," highlighting a shift to high-margin video offerings and package negotiation discipline.
• The board has not provided guidance for 2026 EBITDA or ARPU, indicating future updates may be disclosed in the next quarterly call.
• Operator-led automation and Google CCAI deployment contributed to customer care improvement, with company-reported Net Promoter Score ending the year 11 points higher.

INDUSTRY GLOSSARY

• ARPU: Average Revenue Per User, reflecting total average revenue received per customer.
• Passings: Homes or businesses passed by the company's network infrastructure, indicating serviceable locations.
• Fiber Migrations: The process of moving customers from legacy networks (e.g., copper or coaxial) to fiber-optic connections for improved service and returns.
• LightPath: Optimum Communications' enterprise-grade fiber connectivity and digital infrastructure division.
• ABS Transaction: Asset-Backed Securities issuance, allowing LightPath to securitize revenue streams to support refinancing and capital allocation.
• HFC: Hybrid Fiber-Coaxial, a network technology combining optical fiber and coaxial cable.
• One-Gig: Broadband service offering download speeds of 1 Gbps or higher.
• Net Promoter Score: A benchmark measurement of customer loyalty and satisfaction.
• Gross Add Attachment Rate: The percentage of new customers that add a particular product (e.g., video) when joining.
• Churn: The rate at which existing subscribers discontinue service.
• Capital Intensity: The ratio of capital expenditures to total revenue, measuring capital investment efficiency.
• Programmatic Advertising: Automated, data-driven buying and placement of advertisements across digital channels.
• Base Management: Strategies aimed at retention, churn reduction, and average revenue improvement within the existing customer base.

Full Conference Call Transcript

Dennis Mathew: Thank you, Sarah, and good morning, everyone.

Dennis Mathew: Before we begin, I want to thank all our teammates across Optimum Communications, Inc., particularly our network and frontline teams. Their proactive preparation and disciplined response during the multiple winter storms that affected the majority of our footprint in early 2026. Our teams worked alongside local, state, and federal authorities as well as power companies to mobilize personnel, equipment, and critical infrastructure. This focus defined by our one. 2025 was a year of meaningful transformation for our business. We sharpened our focus on core priorities, strengthened execution to drive operating efficiencies, enhanced network quality and reliability, and made intentional decisions to elevate the customer experience.

This foundational work was critical as competition intensified across nearly every market and promotional activity reached unprecedented levels. Against this backdrop, we took a balanced and disciplined approach to execute our objectives and remain firm in our go-to-market and base management strategies. Turning to slide three, you will see that our fourth quarter financial results reflect that focus. While total revenue declined by 2.3%, connectivity and all other revenue grew 2% year over year. Broadband subscriber results reflect both the intensity of the competitive environment and our conscious decisions to prioritize sustainable pricing and returns.

We delivered our best performance on video net losses in the last several, supported by lower video churn and growing penetration of newly launched video tiers. At the same time, we moderated the pace of fiber migrations to balance near-term margins and cash flow. On mobile, we strengthened the quality of our mobile customer base, which contributed to improved mobile churn in the quarter. Looking at customer economics, broadband ARPU grew 2.8% and residential ARPU grew 0.4% year over year. These results demonstrate continued progress in product mix retention, rate actions, and pricing discipline despite market dynamics. In the fourth quarter, improved gross margins combined with cost discipline contributed to a meaningful up in adjusted EBITDA.

Consistent with our guidance, adjusted EBITDA grew nearly 8% year over year to just over $900,000,000, representing our first quarter of year-over-year adjusted EBITDA growth in 16 quarters. Adjusted EBITDA margin expanded to over 41%, up 380 basis points, and gross margin reached approximately 70%, up 180 basis points year over year. Adjusted EBITDA growth reflects nearly $60,000,000 of year-over-year operating expense reductions, driven in part by continued improvements in customer experience and operational performance. Our field dispatch rate improved 19% year over year. Our seven-day customer care repeat rate reached its lowest levels ever in Q4. And we ended the year with a Net Promoter Score 11 points higher than when we started the year.

We further improved efficiency through the divestment of noncore assets, including the i24 News business in December and the sale of our towers business earlier in the year. Our disciplined execution and capital management drove cash generation, resulting in free cash flow of approximately $200,000,000 for the quarter. In the fourth quarter, cash capital stepped down 28% year over year, achieving approximately 13% capital intensity, while growing our total passings footprint by 1.8% year over year for the full year. Overall, the fourth quarter reflects the progress we made throughout 2025 to improve the business, drive efficiency, and reset our foundation. With that context, let us turn to our full-year 2025 results.

Slide four outlines the commitments we set early in the year and how we successfully delivered on them while remaining focused on controlling what we can control. Full-year revenue came in at approximately $8,600,000,000. Broadband ARPU grew 1.6%. Programming and direct costs, along with other operating expenses, were each $2,600,000,000. Notably, we made strategic and sometimes difficult programming decisions designed to strengthen the overall economics of the video business while remaining focused on customer needs. We completed several major programming agreements that provided customers with the content they value, increased flexibility and choice, and reinforced cost discipline, resulting in improved video churn and gross margin.

Full-year 2025 adjusted EBITDA was $3,400,000,000 excluding the divested i24 News business, or $3,300,000,000 on a reported basis. Cash capital expenditures totaled roughly $1,300,000,000 and we added 177,000 new passings, slightly exceeding our target. Overall, our full-year 2025 performance reflects the deliberate trade-offs and disciplined execution across the organization during a challenging operating environment. Importantly, we entered 2026 with a simplified operating model, improved cost structure, and a clearer path to strengthening our performance. Let us now turn to slide five to review our 2026 priorities, which are centered on further simplifying how we operate to deliver greater customer-first and employee experiences.

We are focused on improving our broadband trajectory, simplifying our product portfolio by offering fewer speed tiers, transparent pricing, and driving increased attachment of value-added services. This includes rolling out our refreshed mobile offer to drive deeper convergence and putting greater emphasis on our new video tiers. Mobile convergence serves as a key driver of improved broadband retention and residential ARPU. Following the investments we made in mobile in 2025, we expect that mobile along with other value-added product bundles will reduce churn and increase customer lifetime value.

It is important to highlight that our simplified go-to-market strategies reflect testing and trials we started in select markets in late 2025, which showed encouraging results in December, and which we will continue to use to inform our broader 2026 strategy. Improving our broadband trajectory directly supports our second priority of maintaining financial discipline in 2026. Our approach begins with a continued focus on base management, including proactive churn reduction, targeted competitive responses in areas of elevated pressure, a customer loyalty program, and the use of price locks for certain subscriber cohorts. We will also continue to drive product margin expansion across the portfolio. Video is a good example.

Industry-wide cord cutting and shifts in consumer behavior have contributed to significant video revenue decline since 2022. Despite this, our video profitability in 2025 was higher in absolute dollars than in 2022, and video gross margins were more than 750 basis points higher in the full-year 2025 compared to 2022. This performance reflects our disciplined approach to programming costs, margin management, and the introduction of flexible packages that resonate with our customers. Furthermore, we will continue to deploy advanced AI tools and automation across the organization, including in network operations, customer service, marketing, and sales.

Specifically, we are increasingly using AI tools to support our frontline teams and help improve their productivity, which in turn leads to better employee and customer experience. For example, as a result of our partnership with Google, millions of customer calls are now routed through Google CCAI, which analyzes customer sentiment and agent interactions to identify opportunities for continuous improvement and best practices across our care organization. On the network side, we leverage access network automation, which ingests network telemetry and operational data, including trouble tickets, and applies AI to more precisely identify the location and root cause of a network issue.

Taken together, these capabilities help us resolve problems faster and proactively, reduce recurring issues, identify opportunities for self-service, and reduce contact rate and service, which enhance efficiency and improve our overall cost structure. Finally, investments in these tools and automation combined with changing business demands allow us to continue to evolve our workforce and organizational structure. In late 2025, we expanded partnerships with leading third-party service providers to rationalize and consolidate elements of our field services and retail operations, improving accountability and driving operating efficiencies. We will continue to evaluate opportunities, both internally and with key partners, to ensure we have the right workforce structure to drive our business forward.

Importantly, our approach to managing costs has not come at the expense of network performance, product quality, or customer experience. In fact, customer satisfaction scores continue to improve and our network continues to lead the market. Just last week, our Optimum Fiber network in the Tri-State once again earned multiple number one rankings from Ookla’s Speedtest for best-in-class Internet performance, outperforming every major 5G home Internet provider on speed, reliability, and consistency. These results reinforce that Optimum Fiber delivers the fastest and most reliable speeds, the lowest latency, and a best-in-class gaming experience across key markets. Finally, our third priority is investing for long-term value creation.

This includes continued fiber expansion, targeted network upgrades, and ongoing investment in technology and tools that improve the customer experience, enhance performance, quality, and reliability, and drive operational efficiency. With more than 3,000,000 fiber passings, we view fiber as an important long-term value engine and are actively improving the migration process to increase customer lifetime value while improving ARPU erosion and migration costs, helping to maximize the value of our existing customer base. As these process enhancements are implemented, we expect to expand migrations in a disciplined, returns-driven manner over time.

On the new build front, we have more precision than ever in how and where we build, as well as greater command of how we drive penetration to those new passings through a coordinated go-to-market strategy. We will continue to balance our build plans with long-term economics to further enhance our returns. Of note, we can offer one gigabit or higher download speeds to approximately 6% of our entire footprint. We will continue to evaluate markets to deploy mid-split upgrades on our DOCSIS 3.1 HFC network to enable multi-gig speeds and improve capacity and reliability in a highly capital-efficient manner.

Regarding our capital structure, as Marc will review shortly, we completed several debt refinancings in 2025 which improved liquidity and expanded financial flexibility, giving us room to operate in 2026. In closing, I could not be prouder of the entire Optimum Communications, Inc. team for their hard work in 2025 and their unwavering commitment to each other and our customers. Despite the sustained competitive intensity, I remain confident that by simplifying how we operate, we can strengthen execution and elevate our operating performance to build a stronger business and deliver long-term shareholder value. I will now turn it over to Marc to review our performance in greater detail. Thank you, Dennis.

Starting on slide six, I will review our subscriber trends. In the fourth quarter, we lost 62,000 net broadband subscribers and ended the year with 4,200,000 broadband subscribers. Net losses were primarily driven by fewer gross additions reflecting continued low household move activity, heightened price sensitivity among customers, and sustained competitive intensity.

Marc Sirota: In addition, our more measured and disciplined promotional approach combined with the competitive environment contributed to higher churn year over year.

Marc Sirota: As we closed out 2025, we began testing a simplified pricing and product structure with more competitive offers, and those early learnings have helped shape the 2026 broadband strategy that Dennis previewed. Our fiber customer accounts reached 716,000 at the end of Q4, representing 33% year-over-year growth.

Marc Sirota: Net additions moderated in the fourth quarter with 12,000 fiber customer net adds, reflecting our intentional decision in mid-2025 to slow fiber migrations. This approach underscores our focus on executing migrations in the most value-accretive manner, minimizing ARPU erosion, and optimizing costs. Total mobile lines at the end of the fourth quarter reached 623,000 lines, representing 35% year-over-year growth. In Q4, we added 38,000 mobile lines, in line with recent trends. Our focus remains on building high-quality mobile customer relationships to reduce churn and increase penetration within our broadband base.

Marc Sirota: In Q4, annualized mobile churn improved by over 700 basis points, reflecting the effectiveness of programs and initiatives we launched in 2025 to strengthen quality in the mobile value proposition.

Marc Sirota: As we enter 2026, our mobile program is centered on driving high-quality sales, expanding multi-line attach rates, and deepening broadband-mobile convergence.

Marc Sirota: To drive growth, strengthen retention, and expand customer lifetime value. We ended the year with 1,700,000 video subscribers, down 13% year over year. In the fourth quarter, we recorded a net loss of 49,000 video subscribers, representing our lowest quarterly video net losses in more than five years and a marked improvement compared to recent trends. This performance reflects our intentional video strategy of delivering the content customers want at a compelling value with choice and flexibility at the center of our negotiations. This proactive approach enabled the launch of three new higher-margin video tiers in 2024, which are performing well, stabilizing gross add attachment rates, and supporting our lowest video churn in more than a decade.

At year-end 2025, these video tiers account for over 15% of our residential video customers. Lower video churn was driven in part by higher retention effectiveness as our teams increasingly migrate customers to these new tiers.

Marc Sirota: Across broadband, mobile, and video, all results reflect deliberate trade-offs in a challenging competitive environment. While subscriber trends remain under pressure, we are taking clear actions to drive improved performance in 2026 through simplified product and pricing, a more focused go-to-market approach centered on convergence, investments in AI to improve marketing and sales channel yield, and improved customer value propositions. Next, on slide seven, I will review our quarterly financials.

Marc Sirota: Total revenue of approximately $2,200,000,000 declined 2.3% year over year. Revenue pressure remains mainly concentrated in video, which declined almost 10%. News and advertising revenue declined 8%, driven by tougher political comps from the prior year. Excluding political revenue, news and advertising revenue grew 6%. Connectivity and all other revenue grew 2% year over year. This was supported by timing of rate actions within residential connectivity, mobile revenue growth of over 40% as well as business services growth of over 8% driven by LightPath revenue growth of 35%. LightPath growth was driven by nonrecurring revenues from and deliveries of services to large hyperscale customers, as well as recurring revenue growth from continued positive net installations.

News and advertising growth, excluding political, was driven by continued growth in our advanced advertising agency services business.

Marc Sirota: Contributing to higher national sales.

Marc Sirota: Residential ARPU grew by 0.4% to $134.49, or grew by $0.54. Of the $0.54 year-over-year growth, video represented a $2.80 decline, while all other products grew by $3.40 driven by broadband ARPU expansion and selling of mobile and value-added services. Residential ARPU remains under pressure as a smaller share of customer relationships include a video product. While this continues to weigh on top line and per-customer revenue, the impact of a declining video base is increasingly being mitigated by continued product margin expansion. Broadband ARPU grew 2.8% year over year to $76.71, our highest quarterly broadband ARPU in fourteen quarters.

Marc Sirota: Driven primarily by the benefits of timing of rate actions as well as disciplined rate preservation in care and retention. Continuing on slide eight, gross margin reached 69.5% and expanded by 180 basis points year over year. This reflects the continued mix shift towards higher-margin products such as broadband, and new video tiers along with a disciplined approach to programming agreements and ongoing efforts to optimize video margins.

Marc Sirota: We also continue to see favorable mix shifts to our higher-speed broadband with 52% of new customers selecting one-gig or higher tiers during the quarter, bringing 43% of our broadband base to one-gig or higher speeds at year end.

Marc Sirota: Adjusted EBITDA of $902,000,000 grew 7.7% year over year.

Marc Sirota: Fourth quarter adjusted EBITDA margin expanded by 380 basis points year over year to 41.3%, representing our highest EBITDA margin in sixteen quarters, and surpassing the 40% margin milestone. Our fourth quarter adjusted EBITDA performance was supported by a few key drivers. In the quarter, revenue declines moderated primarily supported by rate actions and pricing discipline, LightPath revenue growth, and continued momentum in mobile. Strong gross margin performance reflected the benefits of disciplined programming and direct cost management, which helped offset some revenue pressure. And operating expenses declined year over year by almost $60,000,000. Contributing to this was a strategic workforce optimization, which represented over 6% reduction in headcount year over year.

In addition, we exercised tighter cost controls across the business, including a mix shift in marketing in the quarter to rationalize customer acquisition costs. Turning to slide nine, I will walk through our network investments and capital expenditures.

Marc Sirota: As shown on the left side of the slide, full-year 2025 cash capital totaled approximately $1,300,000,000, reflecting our disciplined approach to capital deployment, increased capital efficiency, and focus on prioritizing higher-return investments. For the full year, cash capital spend excluding LightPath improved by 10% year over year for an improvement of over $120,000,000. LightPath capital spending accounted for approximately $200,000,000 in full-year 2025.

Marc Sirota: Total capital intensity reached less than 16% in the full-year 2025, our most efficient in the last four years.

Marc Sirota: Excluding the LightPath business, capital intensity would have been approximately 14%, a 500 basis points reduction compared to 2022. On the far right, you can see how that capital translates into network expansion enhancements. In the fourth quarter, we added approximately 65,000 total new passings, bringing full-year additions to 177,000 total passings. In total fiber passings expansion of 43,000 homes in the quarter, resulting in 134,000 new fiber passings for the full year. Underscoring our continued progress in expanding our footprint primarily as fiber passings. Our approach to network investment remains balanced and disciplined.

We moderated capital intensity, prioritized fiber and high-return projects, and leveraged targeted upgrades to our HFC network to support improved broadband competitiveness, protect margins, and drive long-term network value. Turning to slide 10, I will highlight the continued strength and momentum of our LightPath fiber business. LightPath continues to increase its position as a provider of AI-grade digital infrastructure and connectivity. At 2025, LightPath awarded AI-driven contract value totaled $362,000,000. This represents a 40% increase over the $110,000,000 of total contract value awarded in 2024. As shown on the right, LightPath revenue, which is consolidated in business services revenue within Optimum Communications, Inc. total revenue, has grown steadily over the past several years.

LightPath revenue reached $468,000,000 in the full-year 2025, representing 13% growth year over year. This growth reflects continued demand from hyperscale customers along with strong underlying recurring enterprise revenue. Profitability continues to scale along with revenue, with LightPath adjusted EBITDA growth of 17% year over year. In addition, in February, LightPath priced an inaugural ABS transaction of approximately $1,700,000,000 which is expected to close in early March. Proceeds are primarily expected to repay existing LightPath debt. Overall, LightPath continues to serve as a differentiated growth platform within our portfolio, supported by durable revenue growth, expanding margins, and attractive returns while reinforcing the strategic value of our fiber infrastructure and addressing broader enterprise and network connectivity needs.

And finally on slide 11, I will review our debt maturity profile, pro forma for recent transactions. In the fourth quarter, we closed a refinancing through which we received $2,000,000,000 of new financing from JPMorgan to voluntarily prepay our existing incremental B6 term loan in full. Subsequent to quarter end, in January, we secured approximately $1,100,000,000 of additional financing from JPMorgan to refinance our $1,000,000,000 asset-backed facility. Both transactions enhance our short-term liquidity and financial flexibility. And as previously mentioned, in February, LightPath priced an ABS transaction, which is included in our pro forma schedule subject to closing. Pro forma for these transactions, our weighted average cost of debt is 6.8%.

Our weighted average life of debt is 3.3 years and 81% of our debt stack is fixed.

Marc Sirota: Consolidated liquidity is approximately $1,400,000,000 and our leverage ratio is 7.3 times the last two quarters annualized adjusted EBITDA. As we have communicated, one of the company's key strategic priorities is ensuring that our capital structure supports our long-term operating goals. We believe meaningful debt reduction and reset of the balance sheet are essential to continuing our transformation, competing effectively, and investing thoughtfully to maximize long-term value for all stakeholders. In closing, 2025 was a year of execution and progress. We strengthened our foundation, improved profitability, and positioned the business to move forward with greater focus and competitiveness. Importantly, we have remained focused on the operating and financial levers within our control.

Since Dennis and I joined the company nearly three years ago, our strongest broadband ARPU performance this fourth quarter represents our best adjusted EBITDA margin, our near-lowest capital intensity, and our strongest LightPath performance to date, along with a near all-time high gross margin. While the business environment remains challenging, we look to 2026 with clear and deliberate focus. We are simplifying how we operate and how we serve our customers while improving efficiency through continued disciplined cost management and execution. At the same time, we are investing across the portfolio in a way that protects cash flow and margins and creates long-term value for our shareholders. With that, we will now take questions. Thank you.

Operator: We will now be conducting a question-and-answer session. Our first question is from the line of Kutgun Maral with Evercore ISI. Please proceed with your questions. Great. Good morning and thanks for taking the questions. Two, if I could. First on broadband subscribers, as always, Dennis, thank you for the color and candor. Is there anything more you can unpack as it relates to Q4 and trends into 2026?

Kutgun Maral: I know that improving broadband trends is a key priority in the year, but that seems hard for any cable operator in this hypercompetitive backdrop. So do we think about the timeline and path towards an improvement as you continue to also focus on financial integrity? And then I know you have not provided, or at least that I have seen, explicit guidance for EBITDA and free cash flow. But following your execution against the 2025 outlook, I wanted to see if there is anything you would be willing to share on how we should think about these metrics in 2026. Thanks.

Dennis Mathew: Thanks, Kutgun. Q4, we continued to operate in a very hypercompetitive marketplace. We continued to see just unprecedented levels of spend from a marketing perspective, very aggressive pricing and packaging, and value-adds and incentives that were being provided. That being said, we continued to operate with discipline. As I have said. Last year was a year where we continued to lay the foundation. We are on a significant transformation journey. 2023–2024, we were focused on stabilizing the company. 2025, we continued to invest to ensure we have a high-quality network, and we are continuing to win awards across the, like, from Ookla. We saw an improvement in our customer experience, which was critical. 11 improvement.

And we are leaning into automation and AI which is really helping us optimize our cost structure and leaning into digital. We saw a 12% improvement there and 19% improvement on dispatch rate which allowed us to further transform the workforce. I say all this because this is critical as we think about how we can now start to, one, ensure we have command of the business. We have more command than ever as we think about reporting and analytics and ARPU erosion and managing credits and making sure that we are disciplined on acquisition pricing, and this will allow us to really start to go on the offensive in a more meaningful way from a go-to-market perspective.

And so as we enter into 2026, we are continuing to evolve our go-to-market. I am excited about some of the new programs that we have launched around referrals and platforms for leasing agents and property managers, affiliate programs, but then, ultimately, we have launched some simplified pricing and packaging across all the geographies and all the channels. And we will be able to leverage the hard work of 2025 to further invest in our go-to-market strategy. And so Q1 remains hypercompetitive, and there are lots of headwinds. But we did some foundational work in 2025 that will allow us to go on the offensive more meaningfully in 2026, is what I will say.

Maybe, Marc, you can comment on the financial questions.

Marc Sirota: Sure, Kutgun. Not going to be providing specific 2026 guidance on this call today. As Dennis was mentioning, we believe that the operational improvements we made in 2025 certainly put us in a better position to support long-term EBITDA stability and, over time, growth. In 2025, we certainly benefited from the operational efficiencies, the OpEx efficiencies, including the org redesign, vendor rationalization, the foundation of just simplifying how we operate, using AI in a much more meaningful way. These actions really reset our cost base, strengthened our execution, just as we were navigating this unprecedented competitive environment.

As we think about turning to 2026, I think the work that we did in 2025 really does allow us to invest in a targeted way into strategies that stabilize broadband trends. It is going to be some targeted investments in pricing, customer value, again, just continuing to improve the network. But we certainly will share more in our first quarter earnings call.

Dennis Mathew: Understood.

Kutgun Maral: Thank you both.

Dennis Mathew: Thank you.

Operator: Our next question is from the line of Frank Louthan with Raymond James. Please proceed with your question.

Frank Louthan: Great. Thank you. Can you give us an update on the balance sheet? You have done quite a few debt refinancings and the LightPath ABS deal. So what is the net impact there? And you have a debt stack going current this year. Just give us an update on the balance sheet and how you plan to address that in the next twelve months? Thanks.

Marc Sirota: Yes. I will take this, Frank. Again, pleased with the work that team has done this year. As we have communicated, one of the key company strategic priorities is ensuring that we have the right capital structure to support our long-term goals. We do still believe that meaningful debt reduction and a reset of the balance sheet are essential to continuing our transformation and really allowing us to invest thoughtfully to maximize long-term value for all of our stakeholders. We are not going to comment beyond that on the capital structure. I will just call out, proud of the LightPath team. They just priced this week their inaugural ABS, $1,700,000,000, that is expected to close here shortly, probably early March.

Those proceeds will be primarily used to repay the existing LightPath debt. Beyond that, we will not comment.

Frank Louthan: Alright. Great. Thank you very much.

Operator: The next question is from the line of Michael Rollins with Goldman Sachs. Please proceed with your question. Hey, good morning. Thank you so much for the question. I just have two.

Dennis Mathew: First, I was wondering if you could talk a little bit more about

Michael Rollins: the residential broadband ARPU strength, $77. I think that this is the second highest on record. So if you could talk about that and whether you see that as a good baseline for next year, that would be helpful. And then I just have a quick follow-up.

Dennis Mathew: Jump into that, Marc?

Marc Sirota: Sure, Michael. Yes, really, again, proud of the team for all the hard work. Overall, total residential ARPU grew 0.4% year over year. And this is despite all of the video headwinds, nearly a $3 decline in video contribution. We overcame that with $3.50 of connectivity and other ARPU expansion, really driven by broadband. The broadband results just continue to demonstrate our continued progress on product mix. We now have 43% of our customers taking one-gig services. Our selling is over 50% selling on one gig. When our fiber customers are over 50% on the one-gig platform, it shows the continued discipline that we have in retention, our pricing strategies, and price actions.

Just executing with a different level of discipline, leveraging AI at a size levels, and that is despite all of the competitive pressures. Certainly made trade-offs this quarter to focus on driving ARPU expansion and EBITDA stabilization. Came at a slight cost to subscribers, but still positive on how the team managed ARPU this year. When you think about video ARPU, that is up over 4% year over year. Mobile ARPU up 2%. So the team is really operating at all cylinders and really controlling what we control.

Dennis Mathew: Great. Yes. And I will say just on ARPU, the ability to control erosion, the ability to strategically drive our acquisition pricing. We are just gaining more command across all channels and geographies that will allow us to remain disciplined going forward.

Michael Rollins: Great. Wonderful. Thank you for all that color. Second, I wanted to ask about your expectations around video programming costs per subscriber. You know, really good favorability from that this quarter. You know, I can appreciate there are a lot of moving parts as we think about next year. The impact from, you know, the more skinny bundles perhaps, I know there are some comps on, like, carriage disputes. You know, there you have given some of the spin-offs like Versant and. Do you see opportunities to work down programming costs there? Just any thoughts there would be helpful. Thank you. Yes.

We have been laser focused on programming and our video strategy as you have seen over the past year or so. We are going into these conversations with much more data and clarity than ever. We have a clear understanding of the value of this content relative to our customer base, and so that gives us the opportunity to have some of these hard conversations. And we are fighting for our customers to make sure that we have got flexibility in terms of

Dennis Mathew: tiering and packaging, that we have the right cost basis, and we are able to ensure that ultimately our customers are at the center of these discussions, that we can deliver value and choice. And so we continue—we have, you know, ongoing programming discussions that are happening throughout the year, and that is going to be the focus: to make sure that we have very disciplined conversations so that we deliver for our customers, and we see the results we are able to produce.

For example, these new e-tiers that have been very well received and are helping us drive attach during acquisition, helping us also in terms of going back to our base and talking about these new tiers that deliver incredible value for them as well to help us stabilize the base. Marc, you want to talk a little bit about the financial elements? Sure. Again, the team

Marc Sirota: doing a fantastic job again, just renegotiating and resetting programming. Our costs are down in the quarter, 16% on programming costs. I think an industry-leading measure, 15% for the full year. And we know that there is pressure on revenue, so we are targeted and focused on driving our gross margin for every—interesting fact, for every dollar of video declines that we see, we offset with $1.20 of programming cost reductions. And so we are just taking a different approach. In fact, typically you see steady inflation in pricing for programmers. We are down almost 3% in the quarter on cost inflation. So we are heading in the other direction.

That is really just optimizing our packaging, our constructs, getting folks, as Dennis mentioned, onto these skinnier tiers that are meeting the customer needs. So really pleased with that. It is funny, when you look back before Dennis and I started in 2022, we have certainly eroded customers and revenue tied to the video business, but in an absolute dollars basis, we actually make more money now

Dennis Mathew: from the video business

Marc Sirota: from where we were in 2022. So again, controlling what we control, we take a very financially disciplined approach to pricing, packaging, and strategy here and I think it is paying off.

Michael Rollins: Dennis, thank you, Marc.

Dennis Mathew: Thank you.

Operator: The next question is from the line of Sebastiano Petti with JPMorgan. Please proceed with your questions. Hi, thank you for taking the question. I guess just housekeeping or just clarification. On the fourth quarter EBITDA, I did think, Marc, in your prepared remarks, you did say that there was some nonrecurring product

Marc Sirota: revenue.

Operator: That kind of hit that drove some of that

Dennis Mathew: strength.

Operator: Should we assume that is zero or very low-margin contribution to the overall EBITDA in the fourth quarter?

Dennis Mathew: Yeah.

Marc Sirota: From the fourth quarter, again, really pleased with the revenue trajectory. As we looked at the connectivity business specifically, just as it relates to the revenue side, really where we saw some of that one-time stuff was around LightPath tied to the hyperscaler activity that we have in the business.

Dennis Mathew: Now,

Marc Sirota: really pleased with where LightPath is growing. As you heard, over $250,000,000 of contracts awarded in 2025, up from $100,000,000 about in 2024. We are just at the start of the cycle, I think, here as it relates to LightPath growth. So in my mind, these things will continue as we go out. I am really pleased how we are positioned in the hyperscaler market. We are well positioned for the connectivity provider to these data centers. So good about how LightPath is set up for continued growth.

Dennis Mathew: Okay. And then any way to help us think about the

Operator: the book-to-bill and the total contract value that has been announced to date. What is the timing or phasing as we should think about that over time? Are these like thirty-year IRUs? Any kind of help

Dennis Mathew: that. Yeah.

Marc Sirota: We will not get into the specifics around the individual contracts, but again, we see that there is a large opportunity still out there for us to capture with the funnel. Really pleased on over $360,000,000 of contracts booked to date. And, again, as we turn these networks on, we will start to see those revenues come in. And I would say the team is firing on all cylinders as far as construction and really getting those networks turned up. Beyond that, we will not comment on the specifics just due to confidentiality of those agreements. But really pleased on where we are positioned and really the opportunity ahead.

Operator: Got it. And then lastly, on competition. I mean, is it concentrated in one specific market or one specific legacy operating footprint as you think about Suddenlink versus Fios in the Northeast perhaps? Just any kind of help about where the competitive intensity is coming from.

Dennis Mathew: Thank you. Yeah. The competitive landscape continues, in line with what I have shared in the past. You know, when we look at the East, we are 70% fiber overbuilt, primarily with Verizon. You know, we have got fixed wireless at over 85% now across the East. In the West, I mentioned last time, based on the BDC data, we were 45%–46% overlap with fiber. That is now up to 50%. And almost 80% in terms of fixed wireless.

And so that intensity remains, but I believe that we are really well positioned in terms of having the right products, the right pricing, the right network to be able to compete, and that is exactly what we are going to be doing in 2026. Really going and leveraging all of the hard work in 2025 to be able to invest in our ability to go to market from an acquisition perspective and make sure that we can compete for jump balls, which, by the way, are fewer than ever just given the move environment, but then also from a base management perspective and continuing to lean in the base and mitigate churn. Thank you. Yep.

Operator: Our next question from the line of Craig Moffett with MoffettNathanson. Please proceed with your question.

Craig Moffett: Hi, thank you. I want to stay on this topic of LightPath because it really is, obviously, a pretty dramatic set of numbers.

Dennis Mathew: First of all, what portion of the growth

Craig Moffett: was what you characterized as nonrecurring? And I am curious as to what makes it nonrecurring. It is not obvious that contracts—if you see future growth in significant contracts with hyperscalers and cloud providers and the like—that would necessarily be nonrecurring. So I wonder if you could just talk a little bit more about that and what we can expect from LightPath going forward.

Dennis Mathew: Certainly. I will take that.

Marc Sirota: Craig, again, the LightPath business is accelerating the growth. 35% growth in the quarter, very strong results. And exciting for the full year. You see EBITDA along with that growing 17%. When you look at the core LightPath business, excluding the LightPath—the hyperscaler activity that we have going on—business grew 8% year over year. So there is still strong underlying demand for just the core business. As we enter into the hyperscaler business, maybe nonrecurring is not the right choice of words. But as we stand up these networks, the sale of those networks—we recognize that revenue as we build those projects.

And so as we continue to scale and get more contracts under our belt and build these new connected pipes, we will continue to see revenue growth coming from that. So feel pretty optimistic about where we stand today with the contracts that we have awarded and the growth that will come from that. And then, more importantly, the pipeline looks like—and where we are placed in the marketplace—to win incremental contracts and continue to drive our large AI-driven data center connectivity business. And so, really pleased. We do feel that there is a nice path of growth here, continuing growth for LightPath.

Operator: And outside of LightPath in the business services segment, what are you seeing outside of the enterprise and hyperscaler market? Particularly, I am thinking with small-medium business in your core footprint.

Craig Moffett: What do those trends look like?

Marc Sirota: Yeah.

Dennis Mathew: Craig, this is Dennis. For small-medium business, we remain disciplined. The environment is competitive. And so there is a lot of focus for us in terms of moving beyond just core connectivity. We have launched a whole host of new products like our Connection Backup product, like our Secure Internet product, a relaunch of WiFi Pro, and so we believe that there is opportunity here. And we also, earlier last year, completed the launch of the fiber products on the fiber network as well.

And so we see steady trends there, and we are going to continue to lean in, as we are on the residential side, to be able to move beyond just connectivity and offer a whole host of solutions so that we can drive growth in the core B2B business as well in the small and medium space. That is helpful. Thank you. Yep.

Operator: Our next question is from the line of Vikash Harlalka with New Street Research. Please proceed with your question.

Vikash Harlalka: Hi, thanks so much for taking my questions. Two, if I could.

Frank Louthan: One, since you mentioned the slowing down of the pace of fiber migrations in 4Q,

Vikash Harlalka: I was wondering if you could sort of, like, double click on that and just help us understand how you are thinking about 2026. And has your thinking around fiber changed at all for the long term? And then second, are there any further opportunities for you to take out nonprogramming cost from the business? Especially in 2026?

Marc Sirota: Thanks, Vikash.

Dennis Mathew: You know, on fiber, we remain very bullish on fiber. We see churn benefit. We see NPS benefit. And so we are excited. You know, our new builds at over 177,000 new passings are fiber-rich, the majority of which are fiber. On fiber migrations, as you know, this has been a transformation journey. When I first joined, there were numerous technical challenges with being able to migrate folks, and we had to spend the better part of a year solving those defects so that from a technical perspective, we were able to do that seamlessly, efficiently, and ensure all the products worked in the right way so that we were delivering the right customer experience.

As we continued on that journey, now we really need to continue to refine the process so that we are doing this in the most cost efficient and maximizing customer lifetime value. You know? In full transparency, a lot of that activity was happening in our retention channel and in our care channel. We have an opportunity to really leverage our base management strategies to do that much further up the funnel so that we can maximize customer lifetime value and ARPU and ensure that we are delivering the absolute best experience. And that is why, purposely, we decided to slow down the migration process. We are continuing to drive from a gross add.

We are going to take a beat and make sure we have the right strategy to be able to

Marc Sirota: maximize our

Dennis Mathew: CLV when doing a migration. And so expect us to pull that strategy together over the next few months and then really hit the accelerator in the second half of the year and really do that in a way that is scalable and delivers the maximum enterprise value. Again, you know, we are going to do all of these things in a very disciplined fashion. That is how we operated in 2025, and this is another area where I know that we can do this in a way that is delivering even more value to the enterprise. And so we are going to build that strategy and more to come. And then—

Marc Sirota: On the cash for OpEx in 2026, I mean, just first reflecting on 2025, down nearly 9%, $60,000,000 quarter over year over year in the fourth quarter really—we talked about it going into the quarter—reflects all the optimization we have done over 2025, workforce transformation, really taking a hard look at our SAC costs and marketing and really rebalancing that. We mentioned that we expected lower consulting costs as we entered in the second half of the year, and that certainly took place. So pleased on really how we are acting with discipline around managing OpEx lower. As we think about 2026, we still think the work that we did in 2025 sets us up for a strong foundation.

It is going to allow us to make strategic investments in 2026, but continue to try to optimize our workforce, leveraging AI, and really driving out noise—truck rolls, phone calls—out of the ecosystem. So we still feel like there is opportunity, and we will continue to optimize the business. Yeah. We are really pleased with the early results that

Dennis Mathew: leveraging AI is delivering, but we are in the early innings. And so, as I mentioned earlier, you know, we have seen a 12% increase in digital interactions. So we are shifting from, you know, phone calls to chat and mobile and self-service, and we are still in the early innings of that. We are leveraging solutions to optimize the management of our network. And so again, early innings. We are seeing great results in terms of call and service visit reduction. You know, for the year, we were able to reduce dispatch rate by almost 20%. And there is more opportunity.

And so we are leaning into AI and seeing real tangible results in terms of driving efficiency, but also elevating customer experience. And so we are excited about continuing to lean in here. Thank you. Yes.

Operator: Thank you. The next question is from the line of Steven Cahall with Wells Fargo. Please proceed with your question.

Dennis Mathew: Thank you.

Steven Cahall: First, just wanted to drill down a little more in the ARPU trends. So as you talked about, really strong Q4 in terms of sequential growth. It sounds like gig selling is a big piece of that.

Steven Cahall: You also spoke to looking at doing some targeted competitive responses, including maybe price locks in 2026. So how do we wrap all that together? Do you think you can grow ARPU in 2026 and sort of continue that strong Q4 trend? And then a big-picture question on the balance sheet. You know, on a good day, the debt is 25 times the equity. On a bad day, it is closer to 50 times. I know you have got a lot going on with your creditors to look at ways to improve the indebtedness over time.

What do you think the scope is for something strategic where you can really, you know, maybe potentially chop that big debt stack down because there is just so much potential equity realization if you can do that. Thank you.

Dennis Mathew: I will talk a little bit about our strategy on ARPU and, Marc, you can fill in anything I missed and then, of course, talk a little bit about the balance sheet. But from an ARPU perspective, as I mentioned, we spent, you know, 2025 really laying the foundation. So we have much more command of ARPU holistically. Quite frankly, when I joined, we had little to no visibility in terms of ARPU erosion, what channel, how it was happening. We were able to use some, you know, brute force to mitigate that some, and we have now implemented solutions and tools to be able to manage that more effectively.

Had little to no command over things like rate events and promo rolls. Now we have incredible visibility into customers and customer segments so that we understand exactly what is happening, why it is happening, how much erosion occurs within our—with a promo roll, with a rate event, so that we can be much more targeted and disciplined in the way we do that. And then in terms of just being able to drive selling of products—faster, higher speeds, mobile—you know, we have not talked much about mobile, but we are really proud about the improvements that we have made. You know, we, as I mentioned earlier, we were going to, again, take a step back and focus on quality.

And now we have delivered a 700 basis point improvement in churn and we have seen incredible improvement: 10% improvement in ported phone numbers, 15% improvement in selling in new devices and financing devices. And so this will allow us to really start to scale not only on acquisition, but also in the base. And so we will be able to leverage all of this foundational work to drive our go-to-market, to improve our subscriber trends, and remain very disciplined from an ARPU perspective. Marc, anything to add?

Marc Sirota: I think you got it. The only thing I would just call out is, think about broadband ARPU certainly up $2 year over year, nearly 3%, very strong, again up $2 sequentially as well. It is really about the product mix that we talked about. There were timing of just the annual rate event. We did have some of that hit in the fourth quarter.

Vikash Harlalka: But we are going to take a measured approach to rate and volume

Marc Sirota: as we turn to 2026. We are not going to provide specific guidance on this call around ARPU trends 2026. We will do that in the first quarter call. But pleased around how we are executing and managing in a disciplined way the rate strategy.

Marc Sirota: And then on just the balance sheet, we are not going to really comment beyond what we always talked about. It is a strategic priority of ours. We do feel that there is a meaningful amount of debt reduction that we do need to obtain to really continue on our journey of transformation. But nothing more to share outside of that.

Operator: Thank you. At this time, we have reached the end of our question-and-answer session. I will turn the floor back to management for closing remarks.

Sarah Freedman: Thank you all for joining. Please reach out to Investor Relations or Media Relations with any further questions.

Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

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