Altice USA, Inc.

Greetings and welcome to the AllTaysUSA first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sarah Friedman, Investor Relations. Thank you, Sarah. You may begin.

Hello and welcome to the Altice USA Q1 2024 Earnings Call. We are joined today by Altice USA's Chairman and CEO, Dennis Mathew, and CFO, Mark Sirota, who together will take you through the presentation and then be available for questions. As today's presentation may contain forward-looking statements, please carefully review the section titled Forward-Looking Statements on slide two. Now turning over to Dennis to begin.

Thank you, Sarah. I'm pleased to be here with all of you to review our Q1 performance and discuss some of the opportunities we are working on for the rest of the year. In Q1, we continued to make progress on improving our financial and operational performance. Our transformation journey is well underway, and I'm thrilled to report that our efforts are yielding results. To start off, I'd like to acknowledge the dedication of our teammates across the country who are working hard every day to serve our customers. Over the past year, our focus has been on investing in our teams and talent, evolving our go-to-market strategy, and elevating quality across every area of our organization. We are focused on quality products, quality network, and quality service. Customers want quality and value, and our teams are working hard to deliver the best quality at the best value. To that end, we are strengthening our networks, improving our execution discipline, and enhancing our product portfolio to compete more effectively against existing and new market players. Our improvements across first-time right initiatives are driving lower contact rates, fewer service visits, and higher net promoter scores, and our evidence that we are making operational progress, which is translating into customer loyalty and sets us up for long-term growth. And our efforts have garnered recognition from independent third parties, further validating our progress. Beginning on slide three, I will review some of the progress we made in Q1 against the main levers for sustainable long-term growth which we laid out last quarter. First, we are focused on delivering the highest quality network experiences to our customers. Through our advanced networks, both fiber to the home and hybrid fiber coax, our customers are receiving faster and more reliable services than ever before. We're pleased to share that Optimum's fiber internet network was recently recognized by Ookla SpeedTest for delivering the fastest and most reliable internet speeds in New York and New Jersey, and the lowest latency across New York, New Jersey, and Connecticut. In addition, Optimum received the top ISP award by CNET in eight major cities across Connecticut, New Jersey, North Carolina, Texas, and Arizona. These endorsements showcase the strength of our networks. We have up to eight gig symmetrical service over our fiber network, making us the nation's largest provider of eight gig speeds and one gig download speeds across 95% of our total footprint. And we continue to see data consumption increasing. In Q1, the average monthly data usage of our broadband-only base was over 700 gigabytes of data, which has grown 13% since Q1 of last year. Additionally, the top 10% of our residential customer base uses more than 2 terabytes of data per month. This level of growing consumption paired with our unmatched speeds and reliability give us confidence in our ability to compete long-term against competitors like fixed wireless. And we are expanding our network to new markets with strategic edge-outs, allowing us to leverage our nearby plant and infrastructure to increase overall returns on CapEx. For example, we recently began extending fiber to Montclair and West Orange, New Jersey, using existing nodes servicing nearby markets. We are currently selling Optimum Mobile to these communities with plans to begin lighting up our fixed fiber network in both areas later this year. This allows us to generate additional beneficial returns with efficient CapEx. In 2024, we will add more than 175,000 additional total passings. We will deploy strong go-to-market strategies to all new homes passed with compelling promotional offers and ensure we are effectively attracting new customers and capturing material share. In Q1, we maintained our momentum in reducing service calls and visits. while advancing digital and self-service solutions, and customers are noticing. The quality improvements in customer experience has led to meaningful upticks in NPS, including relationship NPS, transactional NPS, and early tenure NPS, reflecting improved customer satisfaction across the board and translating to relatively stable churn. This is driven by a first-time right approach. When a customer contacts us, we want to ensure their questions are resolved the very first time, and we continue to track improvement on this front. We also continue to enhance our connectivity portfolio by delivering more value to our customers. Our optimum complete offer, which bundles broadband and mobile services, creates a unified connectivity experience that customers want. We are excited about our opportunities in mobile. Our mobile business is gross margin positive and helps us create stickier, more profitable customer relationships. And we plan to add tablets, device protection, smartwatches, and more to our optimum mobile portfolio later this year, delivering even more value to our customers. We continue to see video as an important product in our portfolio, and we are innovating the experience to meet the changing needs of our customers. Optimum Stream is our main set-top box across the East footprint and continues to be rolled out across the West footprint. And we'll look to launch two new video tiers later this year to offer more entertainment optionality for video customers. Next, we prioritize customer satisfaction and loyalty to better base management, a transparent pricing strategy, and offering high-quality products with exceptional value. Our base management strategy, supported by advanced data analysis, allows us to better understand and anticipate customer needs, fostering deeper engagement and satisfaction. in q1 we introduced everyday pricing as our new rack rates which reduces our back book pricing and creates a clear simple and transparent pricing journey for each customer this strategy is enhancing our rate event and promotional roll-off process leading to increased value and customer retention and our customers are responding we are seeing less ARPU erosion and stable customer churn trends, particularly at the time of promotional roll-offs. Combined with advanced retention tools that we've deployed to our care centers, we are able to look at the customer's lifetime value and provide offers specific to that customer to maximize save rates while also improving profitability. This includes speed rightsizing, offering mobile, video package optimization, and much more. You know, we recently launched our new brand platform with modern and fresh marketing, which highlights our segmented go-to-market approach. The platform, where local is big time, centers on our ability to bring customers and communities the reach and connectivity resources of a large national provider with the familiarity, connection, and localized attention of a small business. Our brand platform leverages the regional leadership structure we announced last year, We are able to compete town by town, neighborhood by neighborhood, house by house. With a granular view of each service area, we can tailor marketing, services, and offers at a hyper-local level. We have three main objectives with our new marketing platform. To deepen trust in the communities we serve, to attract and retain customers, and to strengthen our overall brand, driving business results. In addition, we're going on the offensive with our marketing in highly competitive areas and directly highlighting our superior value and quality product set compared to competitors. We have also made strong progress on increasing penetration on our fiber network, which will remain a focus for us this year. We closed the quarter with over 14% penetration on our fiber network, a marked increase from under 9% in Q1 of the previous year. As I mentioned on our last earnings call, we are improving our fiber migration and installation processes, and our customers are already seeing improvements in the fiber experience. As such, we will thoughtfully offer more migrations of our existing customers to fiber, as well as add new customers directly to fiber in our footprint to leverage our existing investments. And last, we are encouraged by the opportunities in B2B across our entire footprint. With a focus on better base management and sales execution, our business services revenue grew modestly in Q1 24 year over year. This is a notable improvement from the trend in Q1 of the prior year, which was down approximately 1% on a year-over-year basis. In Q1, we launched Optima Mobile for B2B, which will add to mobile growth over the course of the year. We also have plans to launch new managed services, including wireless backup and recovery, cybersecurity solutions, unified communication services, and more for our business customers. We are just getting started on providing a more robust product portfolio for businesses across our footprint, and I'm optimistic about the impact on our business long term. Before we move on to the next slide, it's important to recognize the impact of the current macro environment we are operating in. Although we have made significant improvements in our operations, we, along with our peers, face challenges due to the difficult macroeconomic conditions. As we start 2024, consumers are facing continued financial stresses. Household mobility remains low, particularly in New York tri-state area. Housing starts in March decreased by more than 30% in this region, where we have a significant presence. Additionally, we see continued competitive pressure in the West from new fiber entrance into traditional DSL markets, moderating the growth we would typically achieve. As we look at how we are competing against fiber overbuilders over time, our trends are stable. When an overbuilder launches, their initial penetration ramp levels off after a period, which proves that we can compete well over time. These consumer factors are affecting the number and timing of connects and non-pays, which is reflected in our net add activity in Q1. Our go-forward performance will continue to be affected by the competitive landscape and the timing of market recovery. Despite the current market headwinds, we are encouraged by key metrics which show that our underlying business is healthy. We are stabilizing residential ARPU, churn rates remain low, NPS metrics continue to improve, and our sales channel yields and productivity are increasing. We have the right strategy in place with a disciplined approach and a focus on profitability, which positions us on the path to sustainable long-term growth. In 2024, we'll remain focused on driving profitable customer relationships, elevating network product and service quality, and executing with discipline. We are accelerating our local go-to-market strategies, evolving our product portfolio, and driving enhanced base management and pricing strategies, all while maintaining financial discipline. As we look ahead to the remainder of the year, there is a lot to be optimistic about. We are well positioned to continue to drive our transformation journey, remaining confident that our strategy is yielding positive results. With that, I'll now hand it over to Mark to review our Q1 performance in more detail.