On November 4, 2024, Altice USA Inc (ATUS, Financial) released its 8-K filing for the third quarter of 2024, revealing a mixed financial performance. The company reported total revenue of $2.2 billion, a 3.9% decrease year-over-year, falling short of the analyst estimate of $2,236.05 million. Additionally, Altice USA posted a net loss attributable to stockholders of $43.0 million, or $0.09 per share, missing the estimated earnings per share of $0.04.
Company Overview
Altice USA Inc (ATUS, Financial) operates under the Optimum brand, providing television, internet, and phone services to approximately 9.5 million homes and businesses across the United States. The company emerged from Altice Europe's acquisition of Suddenlink and Cablevision, which were spun off to shareholders in 2018. Altice USA also owns News 12 Networks and i24News, offering local and international news services.
Performance and Challenges
Altice USA's Q3 2024 results underscore ongoing challenges, including a 5.6% decline in residential revenue to $1.7 billion and a 1.9% decrease in residential ARPU to $135.77. Despite these setbacks, the company achieved a 9.5% increase in News and Advertising revenue to $117.7 million. The decline in residential revenue highlights competitive pressures and low switching activity, particularly in income-constrained segments.
Financial Achievements and Industry Context
In the telecommunications sector, Altice USA's focus on fiber and mobile growth is crucial. The company reported a 63% increase in total fiber customers, reaching 482,000, with 47,000 net additions in Q3 2024. Mobile line net additions were the highest in four years, with 36,000 new lines, totaling 420,000. These achievements are vital for maintaining competitiveness and expanding market share in a rapidly evolving industry.
Key Financial Metrics
Altice USA's adjusted EBITDA for Q3 2024 was $862.0 million, a 5.8% decline year-over-year, with a margin of 38.7%. The company's free cash flow was $76.9 million, impacted by $115 million in higher cash interest. Capital expenditures increased by 1.7% to $359.2 million, reflecting ongoing investments in network expansion and upgrades.
Dennis Mathew, Altice USA Chairman and CEO, stated, "Over the last two years, we’ve made significant progress in strengthening our networks, stabilizing our operations, and setting a strong foundation for long-term growth."
Balance Sheet and Cash Flow
As of September 30, 2024, Altice USA's consolidated net debt stood at $24,564 million, with a net leverage ratio of 7.1x. The company's net cash flows from operating activities were $436.0 million, down from $474.5 million in Q3 2023. The decline in cash flow reflects increased interest expenses and capital investments.
Analysis and Outlook
Altice USA's Q3 2024 results highlight the company's strategic focus on fiber and mobile growth, essential for long-term competitiveness. However, the decline in residential revenue and net income underscores the challenges posed by market competition and economic pressures. The company's transformation plan aims to unlock free cash flow opportunities, but achieving sustainable growth will require continued investment in network expansion and operational efficiencies.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $2.2 billion | $2.3 billion | -3.9% |
| Net Income (Loss) | ($43.0 million) | $66.8 million | N/A |
| Adjusted EBITDA | $862.0 million | $915.5 million | -5.8% |
| Free Cash Flow | $76.9 million | $121.3 million | -36.6% |
Explore the complete 8-K earnings release (here) from Altice USA Inc for further details.
