Charter Communications, Inc.

Operator: Hello, and welcome to Charter Communications First Quarter 2026 Investor Conference Call. [Operator Instructions] Also as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. I will now turn the call over to Stefan Anninger. Stefan Anninger: Thanks, operator, and welcome, everyone. The presentation that accompanies this call can be found on our website, ir.charter.com. I would like to remind you that there are a number of risk factors and other cautionary statements contained in our SEC filings, and we encourage you to read them carefully. Various remarks that we make on this call concerning expectations, predictions, plans and prospects constitute forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated results. Any forward-looking statements reflect management's current view only, and Charter undertakes no obligation to revise or update such statements. As a reminder, all growth rates noted on this call and in the presentation are calculated on a year-over-year basis, unless otherwise specified. On today's call, we have Chris Winfrey, our President and CEO; and and Jessica Fischer, our CFO. With that, let's turn the call over to Chris. Christopher Winfrey: Thanks, Stefan. During the first quarter, Spectrum Mobile remained the fastest-growing mobile provider in our footprint, and we now have over 12 million mobile lines, including an increase of 370,000 Spectrum Mobile lines in the quarter. That's 1.8 million new lines over the last 12 months for growth over 17%. We're pleased with that growth given the continued intensity of mobile subsidies from the 3 big telcos. In addition, our video customer losses continued to improve year-over-year. 60,000 loss was less than 1/3 of last year's first quarter loss, driven by significant product improvements over the past couple of years. In Internet, competition for new customers remains high. In our first quarter, Internet customer loss totaled 120,000. Revenue was down 1% year-over-year, primarily driven by lower residential video revenue, while residential connectivity revenue grew 0.9% year-over-year. First quarter EBITDA, excluding transition expenses for the Cox transaction, declined by 1.8%, primarily due to a prior year benefits. Cable industry Internet growth has been pressured for several years now given new competition, a challenging housing environment and other factors like mobile substitution. But we remain confident about our ability to win in the marketplace and grow over the longer term. Ultimately, that confidence in our future success is founded on 3 building blocks. Our powerful advanced network, our core operating strategy around products and pricing, and our focus on improving customer satisfaction. Starting with customer satisfaction. Our customers remain the central focus when we make decisions for any product or service and how we allocate our resources. We have an integrated and detailed approach that starts at the highest levels of the organization. Our customer focus is not just cultural, it's also core to our incentives. Beyond the obvious share price incentives, NPS scores and other service-related metrics now drive a meaningful part of our overall annual incentive structure. Relentless improvement is also a key component of our approach and that applies to our network capability and reliability, products that we offer, and to our service. We're constantly working to improve each of these, with examples including new product innovations like our Invincible WiFi, and our Anytime Upgrade feature for mobile, and the dramatic decline we've seen in service in trouble calls per customer. We've also deployed new AI tools now used by our service agents, driving higher customer satisfaction and reducing call times with higher job satisfaction for employees as well. We have a seasoned very competitive team here at Charter fully aligned with our shareholders, and that team will only get better with the addition of top-flight talent from the Cox team, and Nick Jeffrey who joined in September. Moving to our Advanced Network. Our high-capacity network is an unrivaled asset. It offers gigabit speeds and low latency everywhere we operate. Those capabilities matter long term as customer data usage continues to increase, including in the upstream, where we're seeing 20% annual growth driven by things like self-driving cars, significantly increasing upload. By the end of this year, about 50% of the current spectrum network will be upgraded to symmetrical and multi-gig service, with significant work on the remaining 50% already in flight. By deploying remote OLTs and Mora WAN transponders, we will have fiber on-demand capabilities, and fully active telemetry in the vast majority of our footprint, giving us cost and service advantages. Our network is both wired and wireless in 100% of our footprint. It can get mobile from us wherever we offer our gigabit speeds and vice versa. And with our expanding hybrid MNO capabilities using CBRS and WiFi in conjunction with the Verizon mobile network, we are driving our seamless connectivity advantage. That is the basis for Spectrum Mobile's fastest overall mobile speeds. In addition, our network is both fiber-based and powered to its edge, which means it can uniquely provide enhanced wireless opportunities that we haven't pursued yet. If you think about our ubiquitous deployment of multi-gig unique seamless connectivity capabilities with low latency, edge compute, and the potential for fiber-powered DAZ, nobody has the set of assets that we do. You see us demonstrating those capabilities with early deployments, immersive content with Spectrum front row, authenticated offload for AWS and likely extending that to increasingly autonomous vehicles. We're also deploying other B2B products with Edge Cash and GPU as a service. Our network and data assets really lend themselves to future B2B and B2C applications, which require proximity and low latency under 10 milliseconds, which we now provide. Our industry has always excelled at finding new products and customers for our key assets. Our core operating strategy remains unchanged, offering great products at the best value with continuously improving service, and that service is uniquely delivered by our 100% U.S.-based employees, 24/7, with the customer commitment supported by money back guarantees. That core operating strategy has served us well. It fueled our organic and inorganic growth from Legacy Charter in 2013, with just 5 million customer relationships, to Charter today with nearly 32 million customers. And now pro forma for the Cox transaction with over 70 million passings. We take the responsibility that we have to our local communities personally, and it's reflected in our operating strategy. With those 3 building blocks in place, we're going to turn to what we're doing day to day right now to win in an increasingly converged market. Our competitors are all talking conversions, but we uniquely provide it now and in the future. Slide 5 of today's presentation clearly shows they offer more for less than our competitors. Our results don't yet reflect that reality given the legacy reputation of cable. So we remain focused on clearly messaging and delivering our superior value, utility and service to both new and existing customers. And we're doing that in different ways. We launched our $1,000 savings guarantee in February, which demonstrates the value we deliver in a very clear way. If you sign up for Spectrum Internet and switch to more mobile lines from Verizon, AT&T or T-Mobile, we guarantee $1,000 of savings in your first year, or we'll cover the difference. We also recently launched a new Digital Buy Flow for online channel, it better demonstrates our bundled value and savings versus competitors, and the new Buy Flow is achieving better yield. We're also actively migrating our existing base of customers to our newer pricing and packaging, giving them more product, including Internet speed increases and mobile, for the same price or slightly more than they're paying so they get more value, creating higher satisfaction and reducing their propensity to churn. Roughly 45% of our residential customers are now in the pricing and packaging launched in late 2024. With respect to providing superior utility, over 50% of our expanded basic video customers have activated at least one of our included streaming apps, with those activating, taking nearly 4 streaming apps on average. Customer churn for expanded basic customers for activate is 1/3 lower, and it is meaningfully lower across all customer tenure. Keep in mind that nearly all video customers are also broadband customers. So that's a big help. We also launched our new Invincible WiFi router in February, which effectively guarantees connectivity. When a home or business loses power Invincible WiFi's battery unit keeps the router running. It also comes with the back of 5G cellular connection keeping customers online without interruption if a network disruption occurs. The upgrade and attach rate was much higher than expected, and we've had to prioritize our supply to a smaller audience until we get the right level of supply. So a little frustrating short-term. But Invincible WiFi is a great way to add utility to our service, which improves quality, lower churn and earns more revenue. It's a great example of an innovation that provides better utility to our customers. In Mobile, we have the most value rich plans in our footprint. A market-leading Anytime Upgrade program, the most valuable repair and insurance plans and the best international service plans are out. And in Service, I'll simply highlight what we've talked about previously, our continuous service improvements through telemetry improvements with our network upgrades, the use of AI in the network and frontline employee tools, same-day service and installation guarantees, often we're at your doorstep in an hour, and the commitment to a U.S.-based service agent. We are America's connectivity company. Before I turn things over to Jessica, I just wanted to provide a brief update on where we are with the Cox transaction. We've now received all the necessary federal and state approvals that we need to close, except from California, and we're working with the California Public Utilities commission towards the summer close. Within a couple of months of closing, we will launch the Spectrum brand and our pricing and packaging within the legacy Cox footprint. Our focus is always will be on product penetration and customer ARPU not single product ARPU and, of course, growing free cash flow per pass. Cox's low mobile and video penetration rates are major opportunities. And that's what's going to assist us in migrating the customer base to our pricing and packaging in an efficient manner. That's something we've done successfully several times before, including the Time Warner Cable, Bright House and Bresnan and Charter in both 2013 and the last 18 months really. In addition to benefiting from better mobile and video products, the Cox communities will benefit from lower promotional and retail pricing, sales channel expansion, including field sales and stores, and our very complementary B2B capabilities, which will help accelerate growth in both Cox and Spectrum business. As part of the acquisition, we're picking up talent, which we expected and unexpected capabilities in B2B and network AI. And we're stepping into a very high-quality network asset. The Cox network has been very well maintained with robust investment through the years. Cox's mid-split process is nearly complete, and it gives us plenty of competitive runway to implement high split in DOCSIS 4.0 after we finish those projects within current Spectrum footprint. We can then make that move at lower cost and at faster speed, it's what was included in our original plan, although we don't have to rush it. So we're looking forward to the completion of our multiyear investment programs, the near-term actions to win in our current footprint, and the pending Cox closing and driving growth in that footprint. With that, now I'll pass it over to Jessica. Jessica Fischer: Thanks, Chris. Please note that any forward-looking financial or customer information that we provide in today's discussion or presentation does not include Cox or any transition costs related to Cox integration planning. Let's please turn to our customer results on Slide 8. Including residential and small business, we lost 120,000 Internet customers in the first quarter, driven by lower connects year-over-year, partly offset by slightly lower churn. The operating environment for new sales, in particular, Internet continues to be competitive. We continue to see expanded fixed wireless competition and higher mobile substitution as well as ongoing fiber overlap growth at a rate similar to prior quarters. Though I would point out that we also continue to have higher market share than our competitors, even in mature fiber markets. Collectively, that drove first quarter Internet sales lower year-over-year. Churn improved year-over-year, and Internet churn, including non-pay churn remains at very low levels. In Mobile, we added 368,000 lines, with higher gross additions year-over-year, more than offset by higher disconnects. Net adds in the quarter were lower due to heavy device subsidy activity by the big telco competitors, including the iPhone 17. Video customers declined by 60,000 versus a loss of 181,000 in 1Q, '25, with the improvement primarily driven by much lower video downgrades and customer churn year-over-year, resulting from the new pricing and packaging we launched in late 2024, Xumo and the Seamless Entertainment product improvements, including our programmer streaming app inclusion packaging. New connects and upgrades to our fully featured video package with apps were up year-over-year. Wireline voice customers declined by 174,000, with the year-over-year improvement primarily driven by lower churn. In Rural we continue to see strong customer relationship growth, generating 41,000 net customer additions in our subsidized rural footprint in the quarter. Subsidized rural passings grew by 89,000 in the first quarter, and by over 483,000 over the last 12 months, which is in addition to our continued nonrural construction and filling activity. Moving to first quarter revenue results on Slide 9. Over the last year, residential customers declined by 1.5%, while residential revenue per customer relationship declined by 1.4% year-over-year. Given the growth of low-priced video packages within our base, $218 million of costs allocated to programmer streaming apps and netted within video revenue, versus $47 million in the prior year period, and a decline in video customers during the last year. Those factors were partly offset by promotional rate step-ups, rate adjustments and the growth of Spectrum Mobile lines. Excluding the Programmer Streaming app allocation headwinds to residential revenue, residential revenue per customer relationship grew by 0.3% year-over-year. As Slide 9 shows, in total, residential revenue declined by 2.7%, and it was down by 1.1% when excluding costs allocated to streaming apps embedded within video revenue in both periods. Turning to commercial. Total commercial revenue grew by 1% year-over-year with mid-market and large business revenue growth of 2.1%, and when including all wholesale revenue, mid-market and large business revenue grew by 2.8%. Small business revenue grew by 0.2%, reflecting year-over-year growth in revenue per small business customer of 0.9%, mostly offset by a year-over-year decline in small business customers of 0.7%. First quarter advertising revenue grew by 5.3% given higher political revenue year-over-year. Excluding political, advertising revenue declined 3.4% year-over-year. Other revenue grew by 14.2%, driven by higher Mobile sales -- Mobile device sales, and in total, consolidated first quarter revenue was down 1% year-over-year, but increased 0.1% when excluding advertising revenue and Programmer app allocation. Moving to operating expenses and adjusted EBITDA on Slide 10. In the first quarter, total operating expenses decreased by 0.2% year-over-year. Programming costs declined by 9.3% due to $218 million of costs allocated to Programmer Streaming apps and netted within video revenue, versus $47 million in the prior period. A higher mix of lighter video packages and a 1.3% decline in video customers year-over-year, which was partly offset by higher programming rates. Other cost of revenue increased by 11.4%, primarily driven by mobile service direct costs, higher mobile device sales and higher advertising sales costs given higher political revenue. Cost to service customers, which combines field and technology operations and customer operations decreased 1.4% year-over-year, primarily due to lower labor costs. Marketing and residential sales expense declined by 3.2% year-over-year due to lower marketing expenses and labor expense. Transition expenses relating to the pending Cox transaction totaled $24 million in the quarter. Finally, other expense grew by 5.3%, primarily driven by onetime benefits of $75 million in 1Q, '25. Adjusted EBITDA declined by 2.2% year-over-year in the quarter, and declined by 1.8% when excluding transition expenses. Turning to net income. We generated a bit under $1.2 billion of net income attributable to Charter shareholders in the first quarter compared to a bit over $1.2 billion in the prior year period, primarily driven by lower adjusted EBITDA year-over-year, partly offset by lower other operating expense. Given our noncash L.A. Laker RSN balance sheet write-down in the prior year. Turning to Slide 11. First quarter capital expenditures totaled $2.9 billion, $456 million higher than last year's first quarter, driven by timing of spend with higher network evolution spend, which lands in upgrade rebuild spend, and higher CPE, driven by new WiFi 7 routers and our new Invincible WiFi unit. We continue to expect total 2026 capital expenditures to reach approximately $11.4 billion. Looking beyond 2026, we expect total capital spending in dollar terms to be on a meaningful downward trajectory. And after our evolution and expansion capital initiatives conclude, our run rate capital expenditures should be below $8 billion per year. Just to highlight that reduction in capital expenditures, on its own, from approximately $11.7 billion in 2025 to less than $8 billion in 2028, is equivalent to over $28 of free cash flow per share based on today's share count. If we take consensus 2026 free cash flow and substitute our expected 2028 CapEx for 2026 CapEx, our current stock price would imply a free cash flow multiple of only about 3.8x, and a free cash flow yield of over 25%. Turning to first quarter free cash flow on Slide 12. First quarter free cash totaled $1.4 billion, about $200 million lower than last year, given accelerated timing of capital expenditures in the year, lower EBITDA and higher cash paid for interest year-over-year, partly offset by a less unfavorable change in cable working capital. Turning to cash taxes. First quarter cash taxes totaled $64 million. We continue to expect that our calendar year 2026 cash tax payments will total between $500 million and $800 million. We finished the first quarter with $94 billion in debt principal. Our weighted average cost of debt remains at an attractive 5.2%, and our current run rate annualized cash interest is $4.9 billion. During the quarter, we repurchased 4.3 million Charter shares, totaling $963 million at an average price of $225 per share. As of the end of the first quarter, our ratio of net debt to last 12-month adjusted EBITDA remained at 4.15x, and stood at 4.22x pro forma for the pending Liberty Broadband transaction. During the pendency of the Cox deal, we plan to be at or slightly under 4.25x leverage pro forma for the Liberty transaction. Following the close of those transactions, we will target the low end of the 3.5 to 3.75x range, which we expect to achieve within 3 years following close. Even with this de-levering, we continue to expect significant ongoing capital returns to shareholders. Before turning the call over to Q&A, I want to make a few comments regarding our pending Cox transaction. We now estimate transaction synergies, or run rate operating expense synergies of at least $800 million, and are likely to grow that further. Those estimates do not include the benefits of applying Charter's operating strategy to create revenue and operating cost synergies over time or CapEx savings. We believe those operating synergies will also be significant. Turning to our reporting plans. I wanted to give you a brief preview on how we expect to report, and to mention a few things to better navigate our post-close results. Our first post-close results will reflect a full quarter for legacy Charter, plus a stub period for legacy Cox. So year-over-year actual comparisons won't be helpful. But we intend to present Charter's quarterly trending schedule with pro forma data along the lines of what you receive today. Going forward, we will report similar customer PSU and revenue data for both legacy entities for several quarters following close, both separately and on a consolidated basis. This approach will allow you to track the development of both legacy Charter and legacy Cox. We will not show expenses or capital expenditures by legacy entity. That's not really practical, given the shared nature of key large items like programming, overhead and significant centralized capital spend. We will also continue to report transition expense and capital related to the integration, and we'll provide updates on certain items, including estimates for the synergies we have realized, so that you can better isolate the organic growth of the business. At close, our outstanding share count will increase as we will issue the equivalent of just over 46 million Charter shares to Cox Enterprises, comprised of common and preferred partnership units, partly offset by net charter share reduction of about 6.8 million shares associated with the Liberty Broadband transaction. That 6.8 million figure is lower now than when we announced the Liberty Broadband transaction, primarily due to our ongoing share repurchases from Liberty Broadband. If we had closed on March 31, our stand-alone share count at close, on an as-converted as-exchanged basis, would have been about $179 million. We will provide additional post-close reporting updates as we get closer to close. And with that, I'll turn it over to the operator for Q&A. Operator: [Operator Instructions] Our first question will come from Sean Diffley with Morgan Stanley. Sean Diffley: So clearly, the focus is on getting the Cox deal done, and thank you for the updates on synergies and timing with California PUC. But I was curious your assessment on the potential for further cable M&A from a regulatory standpoint. Obviously, the FCC when reviewing the Cox deal mentioned increasing competition from the likes of fixed wireless and satellite. So I'm curious how you're framing your ability and willingness to do more meaningful consolidation from here in the cable sector? Christopher Winfrey: Sure. Look, first and foremost, and make it clear, I'm not commenting on any particular company or assets. But I think as everybody knows, we like cable as an investment, I think it's a great business. We'd like to acquire more cable assets if it can be done in an appropriate price, conditions and the size of the transaction depends on -- will drive higher synergies. When you hear Jessica talked about the synergies inside of Cox, you can kind of flex that up and down based on the size. I think when you step back and take a look at the environment from a regulatory perspective, and each deal is unique, and you have to brush in its own way. But at the end, we're just regional competitors with other cable -- each of the cable companies is a regional competitor. We don't have overlap and all of us are competing against national and global competitors. That's never been the case more than it is today. When you think about fiber overbuild, when you think about national telcos with both wireless, mobile, wireless fixed wireless access, fiber overbuild themselves in many cases. If we think about the video space, which is really global competition, and each element of the space that we operate in, it's much more competitive than it was 5 or certainly 10 years ago. I think the Charter operating strategy when you think about the benefits that we provide in transactions like Cox or with Time Warner Cable Bright House, the operating strategy has been good for customers, and it's been good for employees, and we've demonstrated that. It's not just a something that we say at the time of an acquisition. It's actually been delivered 100% U.S.-based, lower pricing for retail and promotional pricing, and with innovative new products. We've used that scale to improve the quality of the service and the products. So it's helped us to be a better competitor and a better service provider against national and global competitors. And I think there's a significant rationale, but there's nothing that we're looking at today, or doing today other than just finishing the Cox transaction, but I think the opportunity is there to do more over time, and we'll evaluate it when it's available. Operator: Your next question will come from Craig Moffett with MoffettNathanson. Craig Moffett: So let's stay with the Cox transaction for a second. Once you close, you're now running in your own stand-alone business about flat year-over-year broadband ARPU. There's been a lot made of the fact that Cox's broadband prices and therefore, its broadband ARPU is significantly higher than yours. How do you think about the trajectory of how quickly you can move those customers onto Spectrum pricing. And so what does that look like as you give those generally more attractive offers to Cox customers? Christopher Winfrey: Sure. Look, you're right, the broadband ARPU is higher than ours. You can see that. But also the customer ARPU is actually not that different. And so I think that's the place to focus on is what's the customer ARPU going to do overtime and the margin at a household level. So clearly, the broadband stand-alone pricing, which is part of the rationale for getting the deal done is broadband pricing is going to be lower, both at promotional and retail and the broadband reported ARPU for Cox is going to go down. Our goal is to use video and mobile, given the super low penetration that exists to those products that Cox to make sure that customer ARPU is intact and can potentially likely increase over time and to drive margin in there. And so as a result, what you'll end up with is a financial profile and its trajectory that's being preserved based on providing more value into the household. The churn rate at Cox is higher than ours. So I think we have a real opportunity to drive benefits there. I think entering into the market, Craig, with a -- it doesn't -- the Cox is great. Spectrum, I think, is a great name. It's not one over the other. It's that you will have a new name in the marketplace in these markets with lower broadband pricing and retail and promotion with a free mobile line for a year that doesn't exist today with the fastest mobile product in the country, at the lowest price really for anything of that scale. And a video product that is fully developed. Meaning in the Spectrum footprint, we came out with Spectrum TV app, it's improved over time. It didn't have pause live TV. It didn't have Cloud DVR at the beginning, all that exists today. It exists with seamless entertainment in a way that's now easy to activate, which wasn't the case before. So in the Spectrum footprint, those products, including mobile and video, just continue to get better. And here, we're going to enter into Cox footprint with a big bang. New name, great way to save money, both at retail and promotion for broadband, excellent mobile and video products that are fully developed and brand new in the marketplace. And I think we're going to make a splash because we're new. Now that doesn't go on forever. Your service reputation has to earn that. So is that a 2-year tailwind where you're going to have much higher sales because you are new and because you're providing all this additional product and pricing and value. That will be the case. We're going to have a field sales force that don't exist today. We're going to have service hours that don't exist today. We're going to develop the in-sourcing capabilities in U.S.-based workforce that can do same-day installs and same-day service in a way that doesn't exist today. And we have the opportunity to earn a brand-new service reputation in that market and have long-term growth. All of which to go back to your question means that you can have higher sales of broadband. You can have lower churn of broadband. You can have a significantly higher attach rate for mobile and video that preserves your overall customer ARPU and margin. And have more operating and CapEx cost synergies along the way that allow you to fund that growth. So I think it's going to be a unique footprint even relative to the stand-alone Charter that you're looking at today. And pace of migration for the broadband base similar to what we've done inside the Charter stand-alone footprint many times in what we did with Time Warner Cable and Bright House. You can pace the migration based on your marketing efforts to your existing customers and how quickly do you put them into loyalty offers and see what's working. And in terms of additional product attached to offset some of the lower pricing that we're introducing into the market. So I feel really good about where we're going to go. And we're just waiting to be able to bring that type of benefit in those savings into -- not just California. California is about 1/5 of the overall Cox customers. But we have 4/5 of the footprint that is patiently awaiting. We're excited to get going and bring those benefits to the California customers and to the customers across the rest of the country. Jessica Fischer: I'd add one more, just a miracle item to that, Craig, as you're thinking about it. I mean, Chris said that the average revenue per customer is not that different from where we sit. The other interesting thing is that the EBITDA margin is also not that different from where we sit today, even though broadband makes up a much larger portion of their revenue than it does of ours, which might have linked itself to a different cost profile. So we have some space if we move the operating cost structure to look more like ours over time and in particular, as you move it that way, recognizing that it's a marginal additional business rather than an entire business that you have to fully replicate an overhead structure for. There's plenty of space to then create room for that change that you make in the revenue stream over time as well. Christopher Winfrey: Yes. I'm going in a different direction, everything that we just talked about based on the residential side, but I mentioned it in the prepared remarks. I think one of the real pleasant surprises -- we've had many pleasant surprises in evaluating the Cox assets and getting to know the team, you can better. But the B2B capabilities are entirely complementary. If you think about from Cox has best-in-class hospitality capabilities. They have the longest service reputation in B2B across the country for cable operators. They have products that, in some cases, with rapid scale that we don't have and the hope is that we can deploy that across our existing base. And we have scale in Spectrum business that can benefit the Cox footprint, but also can apply the things that they do really well and apply that across a much broader footprint even in hospitality. If you think about what they do in Las Vegas, and applying that across New York, L.A., Orlando and Dallas, all of our major markets. We're -- I'm pretty excited, and we're going to have a big nucleus of the Cox team that's really helping and driving that part of the business to higher growth for both Spectrum business and Cox's what exists today. So not our biggest portion of our overall revenue base, but I think it's going to be a big revenue contributor for both of the current operations. Operator: Your next question will come from Vikash Harlalka with New Street Research. Vikash Harlalka: I have a 2-parter on pricing and ARPU. Chris, you were ahead of the curve on pricing strategy when we compare it with your peers. But do you think you've pulled all the levers on pricing strategy? Or are there more pricing changes to come? So as an example, like a 5-year price lock that Comcast and Optimum have been be amended? And then on ARPU, broadband ARPU was flattish in 1Q. Should we expect an acceleration from here? Christopher Winfrey: Sure. Look, we're always -- we like our pricing and packaging strategy. It works. And clearly, we'd like to be having more sales on the front end. And so that are used for really thinking through are there other ways to go to market and get a better response rate from customers. And so we're constantly evaluating that. So there's no pride if we see things that are working elsewhere, we'd be happy to adopt it. So we spend time looking at it and thinking about it? When we've run some trials around 5-year guarantees or 5-year price logs that we try different things, we haven't seen the necessary lift ourselves. But maybe that's because we didn't do it at scale. So -- we also want to think about not just the promotional price, but what are the roll-off and what's the retail rates. And so it's an entire package of where you end up over time. So all of which to say, we continue to evaluate and look at things. We're very focused on returning to broadband growth. But right now, we don't see any reason to change what we're doing and continue to focus on that. It doesn't mean that we're not trying things left and right to make sure that we can get a better response rate and consideration from new customers. Jessica Fischer: And from an ARPU growth perspective across the year, I think that you've heard Chris just say that one of the things that we do in the market constantly is to tune offers to make sure that we're driving the right, sort of, total customer lifetime value for the business, but also being cognizant of what happens then inside of the year with ARPU and EBITDA. And as we do those things and look at pricing overall, there are a number of factors can drive up or down there. I think on ARPU growth for the year, it'll be close either way in terms of whether we end up with net growth. As you noted, it was pretty flat in the first quarter. But it will depend on a number of factors in how we sort of address the marketplace. Christopher Winfrey: Operationally, just so you have a sense of how that works is I talked earlier when Craig asked the question, the pace of your loyalty migrations for existing customer base, how aggressive you're leaning in that has a high customer lifetime value impact. But it can have a short-term broadband impact. So the pace of proactive and reactive migration of your existing base, and some of the -- to a lesser extent some of the offers that we try at the outset for new acquisitions. And so you have to trade off the customer lifetime value and the ROI of some of those efforts versus the short-term impact to ARPU and things that all of us like to see from an ARPU development. And that's an active -- I wouldn't say daily, but it's a monthly practice of just coming and taking a look at where we're at and making sure we're doing the right thing for the long-term health of the business, and for the customer relationship and at the same time, meet our financial commitments along the way as well. Operator: Your next question will come from John Hodulik with UBS. John Hodulik: Maybe just -- can we get some color on sort of the competitive environment? I think Chris or Jessica, you guys sort of laid out what you're seeing in sort of each of the segments. But from a -- are you seeing more pressure on fixed wireless with AT&T's efforts in that area? And then on the fiber side, it seems like there's an aggressive promotional environment, especially around converged offerings. Just wondering if that's having an impact? And then lastly, on the satellite side, obviously, a lot of focus on these LEO constellations. Are you seeing any pressure in rural markets? Or do you expect that to intensify over the next couple of years? Christopher Winfrey: Goodness, John, there's a lot in there. So let me try to start from the very top, about the operating environment and competitive environment. You've heard a little bit in our commentary. The -- our issue right now really is top of funnel issue. So what do I mean about that? Our yield at the point of sale is as strong as ever. Our churn remains at historical lows, and that's really supported by the value of the products and everything that we're doing to bundle in, which is driving churn lower. The external factors on top of that funnel, which I'll come back to some of the specifics that you asked in just a second. But the top of the funnel, external factors, they're really the same, which is that we have new competition, and any form of new competition has impact. So yes, we see the continued footprint expansion from cell phone Internet where AT&T has taken the place and others have slowed down. But A&T has filled that gap with a fixed wireless access product that originally they said they didn't think made a lot of sense. On the other hand, the pace of gigabit overbuild growth, it continues at the same pace it's been. And so there's nothing really new there. Our share in those fiber overlap areas, as Jessica mentioned, including particularly mature fiber overlap areas, that remains above the competition generally across our footprint. And the promotional activity, I guess, is the big question there, too, is, it did it there? Yes, throughout the quarter. It was up and down and varied by competitor and during the course of the quarter. But there's not a fundamental change in the level of promotional activity. And on the external side, we have a continued muted housing environment, the slow household formation. And as we talked about before, low move rates and mobile substitution growth, it's still there, but it seems to be slowing a little bit, hopefully. So what does that all mean? If you step back, our yield across all channels, it's good and improving. Churn is low. And issues about considering more consideration of sales traffic at the top of the funnel. And that really comes down to, I think, continued improvement in our service reputation, our marketing, our offer expressions and the way that we're using mobile and video really to drive broadband. And so we're fully focused on those areas. I'm not going to tell you we're sitting here waiting on a better housing environment, which I do think will happen. But in the meantime, we're focused on what we can do. And there's an opportunity to be an even better operator here along the way. And through both the external conditions and our own efforts, I think we can get back to broadband growth. That was your first big question. The second was on AT&T and fixed wireless access entry, which they are filling the gap that -- with lower growth from others to subside -- or the growth that rates are subsiding. So I think that answers that. The converged offer that we're seeing from other providers? Look, there's a bit of flattery that's going on there because everything that we do seems to be copied. And so even the branding of our Spectrum One, I think, has been mimicked and -- but its capabilities are limited in terms of footprint, where we have the ability to provide convergence in 100% of the footprint. You've seen multiple competitors come out and try to talk about a savings guarantee. They don't do that against us. We do a savings guarantee against AT&T, T-Mobile and Verizon. We guarantee $1,000 of savings. So you saw that, kind of copied. Even on the service commitment, if you take a look at the fine print on others who copied our service commitment, it's not the same. We actually provide a guarantee. And that means that we'll actually pick up the phone, not just call it back when we don't, and we'll show up on same day if you have a service or an installation. So I think the quality of what we're doing is higher, and you are seeing some people trying to mimic some of the convergence. And I think it's talking up our advantages. If you take a look at some of the slides we've shown investors in the past, our capabilities there are better. Our ability to save customers' money is higher. And the quality of our service as America's connectivity company with 100% U.S.-based sales and service. We've made that investment. And I think we're set up to deliver. We need to -- it doesn't mean that we're perfect. We have a lot of room for improvement to execute better, but we've made that investment. And so that sets us up pretty well to do that. On satellite, I would just say we don't underestimate any competitor, particularly one that is as well capitalized as they are, and as innovative as -- all, not just Starlink, but also Amazon and others. But so far, our tracking in data doesn't suggest a significant customer share loss to satellite. It might be -- we do see evidence that in some of the subsidized rural footprint, we're hitting all of our targets in subsidized rural footprint. I think we would be doing even better there if some of that market had not been preceded with satellite, which in certain markets with low density I think long term, it's actually a great product. I think if the density is low enough, it can serve enough capacity and enough customers. I think it's ideal from a full broadband coverage to the country where really fiber-based solutions can't, and probably shouldn't go. I also think from a satellite perspective, there's probably more areas there to cooperate, then to think of it as a direct competitor to in a suburban and urban environment. So if you take one way of doing that as a -- we've already done a 5G as our backup service through Invincible WiFi. There are other ways to attach satellite and to become a seller of that product to the extent that they were willing to have us as a reseller to bundle that together with our broadband service. I think there's some merit to looking at that as well, and we're thinking through all those things. So I go back to -- on satellite where I started. We don't underestimate the capabilities either from innovation or from a capital perspective, but we're keeping a close eye and so far, we don't see a major impact, and it could be more friend than foe. Operator: Your next question will come from Sebastiano Petti with JPMorgan. Sebastiano Petti: Just wanted to see if you could circle back on prior expectations for -- to grow EBITDA, ex the transition cost. Is that still the plan for the year? So that's my first question. And then thinking about, I guess, in terms of broadband ARPU. You did see a little bit of a slowdown there. But could you help us think about the expectations for the balance of the year? I mean, I think, Chris, you talked about trade-offs, near-term trade offs for the longer-term kind of health of the business. Should we anticipate your pricing strategy or the annual cadence of price increases within those comments? Is that something that we should probably contemplate maybe broadband pricing increase later this year is maybe not necessarily something we should expect as you kind of try to maybe help the CLVs in the long term, trying to keep turned down? Jessica Fischer: I'll start on the EBITDA side. We do continue to plan to grow EBITDA slightly this year with the benefit of the tailwind from political advertising. And as you point out, excluding transition costs. As we go through the year, we talked about the tuning exercise around offers, and changes in that tuning are going to have an impact on how close to the line we are on EBITDA growth. But that continues to be our plan. And... Christopher Winfrey: On broadband ARPU, Jessica can reiterate it, but I don't want to say in a different way and then somehow create daylight after the fact on broadband ARPU other than to say, the piece that you asked on pricing increase, we haven't made any determination on that yet. For obvious reasons, it's always been our strategy to try to keep prices as low as we can so that we can have enhanced competitiveness. That's been part of our philosophy. It was our philosophy and when it wasn't popular. And it allows you to have better acquisition and better retention. That's still the case. And so we try to minimize that, but also recognize that we're still in -- certain parts of the business have an inflationary environment. So we think through those real time as the year goes on. And there's a multifactor consideration that Jessica talked about, and I talked about before -- going that. So we haven't made any decisions on that front yet. Jessica Fischer: Yes. And I think because of that, from an overall Internet ARPU growth perspective, it will be close either way in terms of where we land on overall Internet ARPU growth for the year, but it will depend on a number of those factors that Chris talked about, and the tuning around offers as well, and it is what you do with the overall pricing profile across all of our products. Sebastiano Petti: And then just... Christopher Winfrey: Okay. Go ahead with your question. We'll let you cheat, go fire away. Stefan's upset, but you can go. Sebastiano Petti: Sorry. Yes. I appreciate that. Just quickly, any context, just if you could provide around the upside to the synergies at Cox? I mean, just kind of given the upgrade here today, I mean, sources of that? And then just kind of how we're thinking about that? Jessica Fischer: Yes. There's -- so moving from $500 million to $800 million, there's a portion of that related to procurement synergies, including programming, as well as we just have a better sort of picture and visibility into the financials. And so base-lining some of those costs that we see at a more detailed level against what we expect based on how we operate. It's certainly how we get them place to place. And as I said, I think there's a space for us to continue to find more there. Christopher Winfrey: Yes, I think there will be. Operator: Your next question comes from Steve Cahall with Wells Fargo. Steven Cahall: Chris, yesterday, Comcast reported a pretty strong inflection in their subscriber trends. It came on the back of a huge quarter for event marketing, and they've been pretty aggressive lately on ARPU and price locks as well. I know you all have been very, very active and proactive in the market with the way you've done pricing and packaging. You also talked about a lot of the competition. Do you feel like at this point, you need to get even more aggressive on either the marketing or the packaging front to kind of cut through this competitive noise? Or do you feel like if you just kind of continue on kind of doing what you're doing, that things will start to improve here as we get through some of this kind of competitive hump? And then just one on churn and gross adds. Traditionally, you all have done really well with jump balls when we've seen activity. It does sound like from what you said your gross add environment looks a little different now with the top of the funnel than it did historically. Any way to think about how if we do start to see a pickup in move activity you think that can drive the business forward? Christopher Winfrey: Sure. So look, first off, you should note that we were pleased, great to see the change in trajectory for Comcast and their Internet and their success in mobile as we talked about before, we don't have any overlap with Comcast, and we partnered with them on all kinds of different fronts from a technology and platform perspective. So we're cheering them on. I think it's good for everybody. They may be coming from a different place and timing going to your question related to pricing and packaging. But of course, our team immediately as of yesterday, has already started to see, is there anything -- any good nuggets there that we can get that we could see that might work for us and copy them to the extent there's something there. So far, we haven't seen that. But we know that they've been complementary of us. We want to done things around Spectrum Mobile. And we'll just take a look and see if there's anything there that's consistent with our kind of long-term competitive and financial objectives. As you mentioned, there might have been some onetime benefits and they may be coming from a different place. But it's no pride here in terms of adopting something that works. So we'll take a look. We're really pleased to see what they did. Are we going to stand still and just hold tight? No, we're not. Our head is not in the sand. I do think that our issue here is less about not that we -- we're open-minded to offer expression, but we've tried a lot of different things. I don't think that's our underlying issue. I think our ability to cut through and message to customers around our value and utility is actually the thing that's creating pain for us. Some of that ties to service reputation that we spend, feeds back in. And if you think about our willingness to think out of the box, the hiring of Nick Jeffrey as our Chief Operating Officer, really ties into those two things. And I think that could be obviously good for us, but I think it could be good for the industry as well as having somebody new to the team who has dealt with a highly competitive market, wireless market in the U.K., a global B2B business with Vodafone. And then as an over-builder an attacker successful one, frankly, here in the U.S., I think adding that skill set to an already pretty talented team that operates and executes really well. I think it's going to be good for us. But for all the reasons I talked about before, I think it could be good for the industry just because we don't compete with each other, we can watch for each other during -- learn from what we do. I think we do a pretty good job. The other question you asked is around jump balls and gross adds. The thing I would tell you is the gross adds was the variance year-over-year our churn did better. The vast majority of that came from the low income segment. And so I think we -- as we dug more into that, realize there's probably some offers that we've had in the market before that weren't as prevalent and we need to go back and reevaluate some stuff that we had that's worked. And so I think that's probably a decent size driver of the variance we had year-over-year in sales. And so we're working through that as well. So I -- again, just to come back, I don't think it's offer expression. It may be a little bit of offer availability in the low income. I think the bigger -- and that's kind of at the margin year-over-year. The bigger picture is how do you get back to full-time growth across all segments. And that really comes to doing a better job of messaging our valuing utility, and earning the service reputation that we have invested in already. So it's not about additional money. I don't think we need to spend anything more in marketing. Some sense, you may say that we're spreading too thin, maybe there's opportunities to cut back if we can simplify the message along the way, and we're thinking through all that. Jessica Fischer: One more thing I'd add on to the end there because you did talk about movers, and you hear us sometimes talk about movers. And given where the environment is, that does create confusion in some cases, actually do really well, in particular, with the mover cohort and it has to do with the scale of our footprint and what we can do with transitioning customers from one location to another. And so even when you look at sort of what's happening in overall market share shift and you might say, well, wouldn't more movement be problematic for you. Actually movement in the form of people moving from one household to the other continues to be something that we see as a net benefit to us. And so movement between homes in the marketplace, and more movers actually is an overall benefit to the extent that there is sort of recovery in the housing space. And I think as we think about joining our footprint together with the Cox footprint that will improve in that respect as well. And as we can cooperate with some of our peers, we actually try to do everything that we can to take good advantage of those good customer relationships where we have them, which is in a lot of spaces. Christopher Winfrey: Jessica kind of alluded to, not only from the Cox footprint, actually help both footprints in terms of off-footprint move retention. But I think there's a lot more that we can do within the industry. We've had some efforts in the past it's not as successful as it could and should be. And so we're actively working together with some of our partners there to do even better on that front. Stefan Anninger: Thanks, Steve. That concludes our call. Operator, back to you. Operator: Thank you for joining. This concludes today's call, and you may now disconnect.