Charter’s second quarter was met with a significant negative reaction from the market, as investors responded to a 6.1% adjusted EPS shortfall versus Wall Street expectations and ongoing subscriber losses. Management pointed to persistent competition, non-pay churn, and the continued impact of the discontinued Affordable Connectivity Program as key challenges. CEO Christopher Winfrey acknowledged that while mobile and video customer trends improved, internet subscriber declines and higher bad debt expenses weighed on results. He described the operating environment as highly competitive and admitted, “non-pay is up year-over-year… it has some impact that’s offsetting the benefit that we have from higher sales and lower voluntary churn.”
Is now the time to buy CHTR? Find out in our full research report (it’s free).
Charter (CHTR) Q2 CY2025 Highlights:
- Revenue: $13.77 billion vs analyst estimates of $13.76 billion (flat year on year, in line)
- Adjusted EPS: $9.18 vs analyst expectations of $9.77 (6.1% miss)
- Adjusted EBITDA: $5.69 billion vs analyst estimates of $5.76 billion (41.4% margin, 1.2% miss)
- Operating Margin: 23.8%, in line with the same quarter last year
- Internet Subscribers: 29.9 million, down 464,000 year on year
- Market Capitalization: $35.94 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Charter’s Q2 Earnings Call
- Craig Eder Moffett (MoffettNathanson) asked about the new T-Mobile MVNO deal and its implications for Charter’s business relationships with both T-Mobile and Verizon. CEO Christopher Winfrey explained the deal opens new opportunities in business segments but maintained that existing residential partnerships remain stable and strategic.
- John Christopher Hodulik (UBS) inquired about the impact of tax reform and non-pay churn, specifically how the end of ACP affected subscriber losses. CFO Jessica Fischer outlined expected cash tax savings, while Winfrey clarified that higher non-pay churn is primarily among former ACP-eligible customers.
- Jessica Jean Reif Ehrlich Cohen (Bank of America) questioned the sustainability and evolution of Charter’s improved video performance. Winfrey detailed the strategy to use enhanced video offerings as a tool for broadband and mobile customer retention, highlighting ongoing product upgrades.
- Peter Lawler Supino (Wolfe Research) asked for clarification on free cash flow projections from tax changes and sought an update on customer acquisition funnel dynamics. Fischer and Winfrey emphasized that free cash flow per share will benefit from tax legislation and that market softness, not product or pricing, is the main barrier to internet subscriber growth.
- Sebastiano Carmine Petti (JPMorgan) pushed for more detail on cost-to-serve and expense outlook. Fischer confirmed that expense trends remain on track, while Winfrey stressed that long-term cost-to-serve reductions are expected from ongoing investments in AI and workforce development.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) progress on the Cox Communications acquisition and related integration milestones, (2) further adoption and impact of AI-powered customer service tools on operational costs, and (3) stabilization or recovery in internet subscriber trends, especially as new product bundles and video packages roll out. The pace of rural buildouts and the effectiveness of marketing initiatives will also be closely watched.
Charter currently trades at $263.85, down from $379.95 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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