On August 1, 2024, Altice USA Inc (ATUS, Financial) released its 8-K filing for the second quarter of 2024, revealing a mixed performance with revenue and earnings falling short of analyst expectations.
Company Overview
Altice USA Inc (ATUS, Financial) is a major broadband communications and video services provider in the United States. The company was formed after Altice Europe acquired Suddenlink in 2015 and Cablevision in 2016. These acquisitions brought together networks that provide television, internet access, and phone services to approximately 9.5 million homes and businesses, primarily under the Optimum brand. Altice USA also owns News 12 Networks and i24News, which broadcast local and international news.
Financial Performance
For Q2 2024, Altice USA reported total revenue of $2.2 billion, a 3.6% decline year-over-year, missing the analyst estimate of $2.25 billion. The company also reported a net income attributable to stockholders of $15.4 million, or $0.03 per diluted share, falling short of the estimated earnings per share of $0.07.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Total Revenue | $2.2 billion | $2.3 billion | -3.6% |
| Net Income | $15.4 million | $78.3 million | -80.3% |
| Adjusted EBITDA | $867.2 million | $921.7 million | -5.9% |
| Free Cash Flow (Deficit) | ($40.9) million | ($34.6) million | -18.2% |
Operational Highlights
Despite the financial challenges, Altice USA reported significant operational improvements. The company saw growth in fiber customer net additions, reaching 434,000 fiber customers, a 74% increase compared to Q2 2023. Mobile line net additions also accelerated, with 33,000 new lines added in Q2 2024, doubling the growth rate from the previous year.
Altice USA's Chairman and CEO, Dennis Mathew, commented, "In the second quarter, our company achieved significant improvements in operational metrics and customer satisfaction, growth in our fiber, mobile, and B2B businesses, and continued stabilization of ARPU across our base."
Challenges and Future Outlook
The company faced a 4.4% year-over-year decline in residential revenue, amounting to $1.8 billion, and a 7.2% drop in news and advertising revenue, totaling $105.3 million. These declines were partially offset by a 1.3% increase in business services revenue, which reached $369.3 million.
Altice USA also reported a decrease in net cash flows from operating activities, which fell to $306.8 million in Q2 2024 from $438.8 million in Q2 2023. The company's adjusted EBITDA margin also declined to 38.7% from 39.7% in the same period last year.
Balance Sheet and Debt
As of June 30, 2024, Altice USA's consolidated net debt stood at $24.6 billion, with a net leverage ratio of 7.2x. The company's weighted average cost of debt was 6.5%, with a weighted average life of debt of 4.6 years.
Conclusion
Altice USA Inc (ATUS, Financial) continues to face financial challenges, including declining revenues and net income. However, the company has made significant strides in operational improvements, particularly in its fiber and mobile segments. Investors will be closely watching how these operational gains translate into financial performance in the coming quarters.
Explore the complete 8-K earnings release (here) from Altice USA Inc for further details.
