Charter Communications Q1 EPS Miss, Internet Subscribers Down 120K, FCF Falls 12%
Charter Communications reported Q1 EPS of $9.17, missing estimates by $0.74, and revenue dipped 1% year-on-year to $13.6B, yet exceeded forecasts. The company lost 120,000 internet customers, saw free cash flow fall 12.3% to $1.4B, and guided full-year capex to $11.4B.
1. Q1 Financial Results
Charter delivered adjusted EPS of $9.17 versus the $9.91 consensus and reported revenue of $13.6 billion, down 1% year-over-year but slightly above analyst expectations. Adjusted EBITDA declined 2.2% to $5.6 billion and free cash flow dropped 12.3% to $1.4 billion due to higher network investments.
2. Subscriber Trends and Strategic Initiatives
The company lost 120,000 residential internet customers compared with a 59,000 loss in the prior-year quarter, while adding 368,000 mobile lines versus 507,000 a year earlier, bringing totals to 29.6 million internet customers and 12.1 million mobile lines. Management cited low move rates, muted housing formation, and fixed wireless competition as key broadband headwinds, and is doubling down on converged connectivity through Spectrum Mobile, U.S.-based agents, and AI-driven telemetry.
3. Capex and Network Evolution
Capital expenditures rose 19% year-over-year to $2.9 billion, including $812 million for network line extensions. Full-year capex is forecast at $11.4 billion as Charter aims to deliver symmetrical multi-gig service to 50% of its footprint by end-2026, supporting 20% annual upstream data growth, and leverage the Cox acquisition to enhance pricing and packaging in underpenetrated markets.
4. Share Repurchases and Outlook
Charter repurchased 4.3 million shares for $963 million during the quarter while reiterating confidence in long-term customer growth and free cash flow improvement. Management plans to further optimize packaging, service quality, and rural network initiatives to drive sustainable returns.