Optimum Communications Q1 Earnings Call Highlights
Optimum Communications (NYSE:OPTU) reported lower first-quarter revenue and a large net loss tied to a non-cash impairment charge, while executives said the company is leaning on simplified pricing, mobile growth, cost controls and balance-sheet actions to navigate an increasingly competitive broadband market.
On the company’s Q1 2026 earnings call, Chairman and Chief Executive Officer Dennis Mathew said Optimum entered the year focused on three priorities: improving broadband trends, maintaining financial discipline and investing for long-term value creation. He said first-quarter results reflected “both the reality of an intense competitive environment and the impact of those strategic actions underway.”
Total revenue was $2.1 billion, down 4% year over year, while adjusted EBITDA was $789 million, down 1.3%. Adjusted EBITDA margin expanded 110 basis points to 38.2%, according to Chief Financial Officer Marc Sirota. The company ended the quarter with $1.3 billion of liquidity.
Broadband Losses Continue Amid Competitive Pressure
Broadband remained the company’s most closely watched challenge. Optimum reported broadband subscriber net losses of 64,000 in the quarter, or 56,000 excluding a subscriber adjustment related to prior periods. Sirota said the company ended the quarter with 4.1 million broadband subscribers.
Mathew said the broadband environment “remained as competitive as any we have seen,” citing aggressive entry pricing, extended price locks and promotional incentives from incumbent local exchange carriers, fixed wireless providers and fiber overbuilders. He said the competitive profile in the West had shifted notably as fixed wireless availability and fiber overbuilding expanded.
In response, Mathew said Optimum is simplifying and standardizing pricing and core offers nationally, while using value-added products to support customer lifetime value. He acknowledged that lower entry pricing could pressure broadband ARPU in the near term, but described the move as “a deliberate step to stabilize subscriber trends.”
During the question-and-answer session, Raymond James analyst Frank Louthan asked about fixed wireless overlap. Mathew said fixed wireless overlaps about 85% of Optimum’s East footprint and almost 80% in the West. He said Optimum competes with T-Mobile, AT Internet Air and Verizon, with T-Mobile prominent in the East and AT and T-Mobile particularly active in the West.
Mobile Posts Best Quarter in Six Years
Mobile was a bright spot in the quarter. Optimum added 52,000 mobile lines, its strongest quarterly performance in approximately six years, bringing total mobile lines to 674,000. Sirota said mobile lines grew 33% year over year.
Executives said mobile growth is central to Optimum’s convergence strategy, which emphasizes selling broadband customers additional products such as mobile, video, Whole Home Wi-Fi and Optimum Total Care. Mathew said customers who take both broadband and mobile churn at a meaningfully lower rate and generate higher lifetime value than broadband-only customers. In response to an analyst question from Evercore’s Kutgun Maral, Mathew said customers taking both broadband and mobile show a 20% churn benefit.
Optimum introduced convergence ARPU as a new metric in the quarter. Sirota said convergence ARPU, which captures broadband and mobile service revenue along with other high-margin broadband products, grew 1.2% year over year to $79.32. He said the company expects the metric to become increasingly important in evaluating performance, though he also said both broadband ARPU and convergence ARPU are expected to decline year over year for the full year as Optimum prioritizes volume stabilization and multi-product penetration.
Video Strategy Focuses on Retention and Margins
Video subscriber net losses were 51,000, excluding the prior-period adjustment. While video revenue remains under pressure from subscriber declines, executives said Optimum is improving the economics of the business through new video tiers and programming cost discipline.
Mathew said the company’s simplified video packages — Entertainment, Extra and Everything TV — represented the majority of sell-in during the quarter. Adoption within the residential video base rose to 17% in Q1 2026 from 6% in Q1 2025. He said the new tiers are demonstrating more than 20% churn improvement compared with legacy packages.
Mathew also said Optimum is highlighting the streaming value included in its video tiers. He noted that the company’s Everything TV tier includes access to more than 50 apps, along with a unified login and billing relationship through Optimum.
Sirota said residential video gross margin expanded to 24% in Q1 2026 from approximately 14% in Q1 2023. He said programming and direct costs declined almost 6% in the quarter, with programming costs down nearly 13% year over year.
Cost Controls Support Margin Expansion
Optimum continued to emphasize operating efficiency. Sirota said gross margin reached 69.4%, up 60 basis points year over year. Other operating expenses, excluding share-based compensation, fell 5% year over year.
He cited a 23% decline in call volumes, 39% fewer truck rolls and a 16% reduction in service visits. Salary costs were reduced by more than 13% year over year. Mathew said investments in AI and automation are helping reduce truck rolls, improve first-call resolution and enable teams to manage networks and serve customers more efficiently.
Despite adjusted EBITDA margin expansion, Optimum reported a net loss of approximately $2.9 billion. Sirota said the loss included a $2.7 billion non-cash impairment charge related to indefinite-lived cable franchise rights. He said the charge does not affect cash flow, liquidity or ongoing operations.
Guidance, CapEx and Balance Sheet Remain in Focus
Sirota said Optimum expects total revenue to decline by mid-single digits for full-year 2026, with adjusted EBITDA expected to decline by low to mid-single digits. He said the revenue outlook reflects continued pressure from subscriber volumes, especially in video, while cost discipline is expected to partially offset the decline.
The company expects 2026 capital expenditures of $1.2 billion to $1.5 billion. Lightpath capital expenditures are expected to be $200 million to $300 million, primarily supporting construction tied to recently announced hyperscale contracts. Sirota said Optimum ended the quarter with approximately 10 million total passings and 3.1 million fiber passings, and expects 150,000 to 175,000 total passing additions for the full year.
Balance-sheet management was a recurring theme. Sirota said Optimum’s weighted average cost of debt was 6.8%, weighted average life of debt was 3.1 years and 81% of total debt was fixed. The company’s leverage ratio was 7.5 times the last two quarters’ annualized adjusted EBITDA.
Sirota said Optimum is aware of upcoming maturities and is working to address them “proactively and with urgency.” He said meaningful debt reduction and a balance-sheet reset are “essential” to the next phase of the company’s transformation, though executives did not provide specific details on potential actions.
Mathew said the company is still in the early stages of its revised go-to-market strategy, but pointed to improved sales channel yield, moderating gross add declines and stable gross add ARPU as early signs of progress. “We are taking the right steps to build a more resilient business,” he said.
About Optimum Communications (NYSE:OPTU)
Altice USA, Inc, together with its subsidiaries, provides broadband communications and video services in the United States, Canada, Puerto Rico, and the Virgin Islands. It offers broadband, video, telephony, and mobile services to approximately five million residential and business customers. The company's video services include delivery of broadcast stations and cable networks; over the top services; video-on-demand, high-definition channels, digital video recorder, and pay-per-view services; and platforms for video programming through mobile applications.
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