Optimum Communications — Q2 2026 Earnings Summary

Financial Performance

• Total revenue was $2.02 billion, a 5.8% decrease year-over-year (YoY) from $2.15 billion in Q2 2025.
• Residential revenue was $1.54 billion, down 6.7% YoY.
• Net loss attributable to stockholders was $291.8 million ($0.67 per diluted share), compared to a net loss of $96.3 million ($0.21 per diluted share) in Q2 2025; net loss margin was -14.4%.
• Adjusted EBITDA was $785.7 million, down 2.2% YoY, with a margin of 38.8% (up 140 basis points YoY).
• Gross margin was 71.0%, expanding 180 basis points YoY.
• Net cash flows from operating activities were $228.1 million, a 44.6% decrease YoY.
• Free Cash Flow was a deficit of $91.9 million, compared to $28.4 million in Q2 2025.
• Cash capital expenditures were $320.0 million, down 16.6% YoY, with capital intensity at 15.8%.
• Consolidated net debt was $25.3 billion, representing a net leverage of 8.0x L2QA.
• Operating expenses (excluding share-based compensation) improved by 5% year-to-date.

Guidance and Future Outlook

• Management stated a focus on executing daily, investing where the strongest returns are seen, and delivering best-in-class connectivity.
• The company is sharpening its go-to-market approach, deepening customer relationships through convergence, and transforming the customer experience to support stronger broadband performance over time.
• Future investment priorities include fiber expansion, network upgrades, and AI and automation capabilities.
• The company aims to address upcoming maturities and refinancing activities as part of its capital structure transformation.

Business Segments and Product Lines

• Broadband: Residential broadband ARPU was $132.22, down 1.1% YoY. Convergence ARPU was $79.80, up 2.4% YoY. Total broadband primary service units (PSUs) ended at 4.0 million with net losses of 40k in Q2 2026. 53% of the residential broadband base took 1 Gig or higher speeds, up from 38% in Q2 2025.
• Mobile: Mobile line net additions were +50k, the strongest second-quarter performance to date, bringing total mobile lines to 724k. Residential mobile service revenue grew 40% YoY to $53 million. Total mobile penetration of the broadband base reached 8.9%, up from 6.9% in Q2 2025.
• Video: Newer tiered video packages (Entertainment TV, Extra TV, Everything TV) reached 18% penetration of the residential video base, up from 10% in Q2 2025. Residential video ARPU grew 1.4% YoY. Video gross margin expanded approximately 1,000 basis points over the last three years compared to Q2 2023.
• Network Expansion: Added 68k total new passings in Q2 2026 and 223k in the last twelve months. Approximately 97% of the total footprint had 1 Gig or higher speeds available at the end of Q2 2026.
• Lightpath: Demand for AI-grade infrastructure remains strong, with new fiber builds announced to support two hyperscale data center campuses and a second infrastructure tenant on its Eastern Pennsylvania AI-grade fiber infrastructure build.

Market and Competitive Landscape

• The company operates in a competitive market, addressing challenges through simplified offers, pricing, and packaging enhancements.
• Customer retention is being enhanced through data-driven base management and proactive customer engagement.
• The company serves approximately 4.2 million residential and business customers across 21 states.

Risks and Challenges

• The company reported net losses in broadband primary service units (40k net losses in Q2 2026).
• Total customer relationships declined, with residential net losses of 41.4k and SMB net losses of 4.7k in Q2 2026.
• High debt levels persist, with the CSC Holdings, LLC Restricted Group showing a net leverage of 22.8x L2QA.
• The company faces risks related to upcoming debt maturities and the need for refinancing activities.

Management Commentary and Tone

• Dennis Mathew, Chairman and CEO, described results as reflecting "disciplined execution across every part of our business."
• Management highlighted the expansion of gross and Adjusted EBITDA margins, sequential improvement in broadband trends, and best-in-class mobile line growth.
• The tone emphasized strengthening the financial foundation as a top priority while positioning the business for long-term success.
• Management noted continued simplification of the end-to-end customer journey through improved communications and digital capabilities.

Other Key Points

• Private Placement of Preferred Units: On May 29, 2026, CSC Investments II LLC completed a private placement of Series A Preferred Units for an aggregate purchase price of $300 million. Dividends accrue at 13.0% per year if paid in cash or 15.0% if compounded.
• Private Exchange Transaction: On May 29, 2026, CSC II issued Preferred Units with an initial stated value of $212.5 million to Next Partner, L.P. and certain board members/executives in exchange for Optimum Class A and Class B common stock.
• Cash Tender Offer: In July 2026, CSC II completed a tender offer to purchase 120 million shares of Class A common stock at $2.50 per share for an aggregate price of $300 million. Purchased shares were not canceled.
• Impairments: The six-month period ended June 30, 2026, included a $2.7 billion indefinite-lived cable franchise rights impairment.
• Debt Structure: Consolidated net debt for the UnSub Group was $2.3 billion (1.2x leverage), and for Lightpath was $1.6 billion (5.5x leverage).
• Shares Outstanding: As of June 30, 2026, there were 392,560,390 combined shares of Class A and Class B common stock outstanding.