Optimum Communications Q2 Earnings Call Highlights

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Sun, August 9, 2026 at 2:03 AM GMT+3 6 min read

OPTU -4.43%

Key Points

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Mobile growth partly offset broadband weakness: Optimum added approximately 50,000 mobile lines, bringing the total to 724,000, while broadband net losses improved sequentially to 40,000. Video losses also improved to 46,000, the company's best quarterly result in six years.
Margins expanded despite declining revenue: Second-quarter revenue fell 5.8% year over year to about $2 billion, but gross margin reached a record 71% and adjusted EBITDA margin increased to 38.8% as programming and operating costs declined.
Debt reduction remains critical: Optimum repurchased $300 million of shares and has no remaining 2026 debt maturities, but leverage remains high at 8 times annualized adjusted EBITDA. Management is pursuing a comprehensive restructuring of CSC Holdings debt while continuing fiber and multi-gig network investments.

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Optimum Communications (NYSE:OPTU) reported second-quarter 2026 revenue of approximately $2 billion and adjusted EBITDA of $786 million, as the company continued to manage broadband subscriber losses while expanding mobile lines, improving margins and reducing operating expenses.

Broadband net losses improved sequentially to 40,000 in the quarter, while the company added roughly 50,000 mobile lines. Chairman and Chief Executive Officer Dennis Mathew said Optimum is pursuing a strategy focused on simpler offers, improved customer experience, operational efficiency, network investment and a balance-sheet reset.

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"Broadband continues to face pressure. The competitive environment remains intense," Mathew said. "But our focus is on the areas we can control and execute against every day."

Subscriber trends show mobile momentum

Optimum ended the quarter with approximately 4 million broadband subscribers. While gross broadband additions were broadly stable year over year, the company said churn remained elevated, primarily because of heightened promotional activity from competitors.

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The company's multi-dwelling-unit footprint represents about 20% of its total footprint, according to Chief Financial Officer Marc Sirota. Optimum reported an additional 9,000 broadband connects and 8,000 video connects in the quarter from a bulk relationship portfolio conversion. Mathew said the company has been working to shift MDU agreements from non-exclusive retail arrangements toward longer-term bulk contracts with property owners.

Mobile results were a relative bright spot. Optimum added 50,000 net mobile lines, its best second-quarter performance to date, and ended the period with 724,000 lines, up approximately 33% from a year earlier. Mobile and broadband convergence penetration reached about 9% at quarter-end.

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The company also expanded its multiyear agreement with T-Mobile to access its standalone 5G network. Mathew said the arrangement is intended to provide faster service, a broader device lineup including wearables, and improved roaming and rural connectivity.

Broadband net losses: 40,000
Mobile net additions: approximately 50,000
Ending mobile lines: 724,000
Video net losses: 46,000
Fiber customer additions: 20,000
Ending fiber customers: 749,000

Video subscriber net losses were 46,000, a result Sirota described as the company's best quarterly video subscriber performance in six years. Newer E-tier video packages represented approximately 18% of the residential video base, compared with 10% a year earlier. Management said customers taking those packages have shown lower churn than customers on legacy offerings.

Revenue declines, but margins expand

Total revenue declined 5.8% year over year. Excluding the divestiture of an advertising agency services business, revenue would have declined 5.1%. The divested business generated about $100 million of revenue in full-year 2025 and had an immaterial impact on adjusted EBITDA, management said.

Residential video and video-related news and advertising businesses accounted for $92 million, or about 75%, of the year-over-year revenue decline. Residential connectivity and other revenue, including broadband, mobile, telephony and other revenue, declined 3.6%, reflecting broadband subscriber pressure partly offset by mobile growth.

Business services revenue rose 1.2% to $366 million, aided by 7% growth at Lightpath. The company said it expects full-year revenue to decline by a mid-single-digit percentage excluding the advertising divestiture.

Despite the revenue decline, Optimum's gross margin reached an all-time high of 71%, up 180 basis points year over year. Adjusted EBITDA fell 2.2%, while adjusted EBITDA margin expanded 140 basis points to 38.8%.

Programming and direct costs declined more than 11%, including a decline of more than 14% in programming costs. Other operating expense, excluding share-based compensation, declined more than 4% year over year in the quarter. Mathew said total truck rolls and service calls declined by more than 20% from a year earlier, while sales acquisition costs fell approximately 10%.

The company attributed efficiencies to fewer service visits and calls, network reliability improvements, digital self-service, workforce optimization, and greater use of data, automation and artificial intelligence. Optimum is rolling out Google's Customer Engagement Suite, which includes agent assistance and AI virtual agents powered by Google Gemini.

Fiber investment and network upgrades continue

Capital expenditures were $320 million in the second quarter, down nearly 17% year over year and representing approximately 16% capital intensity. Optimum expects full-year capital spending of $1.2 billion to $1.5 billion, with spending weighted toward the second half.

The company ended the quarter with about 10.1 million total passings and 3.2 million fiber passings. It expects to add 150,000 to 175,000 passings during 2026, excluding decommissioned passings that are expected to slightly reduce total passings in the third quarter.

Management said it exited a small number of low-density, non-core markets in its West footprint, representing 48,000 passings with nominal penetration. Customers are expected to transition to other providers during the third quarter.

Optimum plans to upgrade a majority of its network to multi-gig capabilities over coming years. Its fiber network currently provides speeds of up to 8 gigabits per second symmetrically, while selected HFC communities in West Virginia offer download speeds of up to 2 Gbps.

Capital structure remains a priority

Optimum said it has no remaining debt maturities in 2026, with its next significant maturities beginning in 2027. The company reported a weighted average debt cost of 6.8%, a weighted average debt life of 2.8 years, and approximately 81% fixed-rate debt.

During the quarter, the company completed its previously announced tender offer, repurchasing 120 million Class A shares at $2.50 per share for an aggregate purchase price of $300 million. Following the transaction, Optimum had approximately 273 million shares outstanding and 206 million shares held in treasury.

Leverage stood at 8 times the last two quarters' annualized adjusted EBITDA. Sirota said management continues to pursue a consensual comprehensive restructuring of CSC Holdings debt through negotiations with lenders, describing debt reduction and a balance-sheet reset as essential to the company's transformation and long-term investment plans.

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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