Optimum Communications, Inc.

Good day, everyone. Welcome to Optimum Communications conference call. All participants will be in a listen-only mode until the question and answer session begins. Following the presentation, we will conduct a question and answer session. This call is being recorded. If you have any objections, please disconnect at this time. I would now like to turn the call over to Sarah Friedman, Vice President of Investor Relations. Please go ahead.

Thank you and good morning. Welcome to the Optimum's first quarter 2026 earnings call. I'm joined today by Optimum's chairman and chief executive officer, Dennis Matthew, and chief financial officer, Mark Sirota. Dennis and Mark will walk you through the first quarter results and then be available for a question and answer session. Before we begin, I'd like to remind everyone that today's presentation contains forward-looking statements. Please take a moment to review the cautionary language regarding forward-looking statements included on slide two of our presentation, as actual results may differ materially from those expressed or implied. We will also reference certain non-GAAP financial measures today. Reconciliations to the most directly comparable GAAP measures can be found in our earnings release, which is available on the investor relations section of our website. With that, I'll turn the call over to Dennis.

Thank you, Sarah, and good morning, everyone. As we entered 2026, we were clear that this needs to be a year of sharper execution, smarter competitive response, and continued transformation. To accomplish this, we laid out three priorities, improve broadband trends, maintain financial discipline, and invest for long-term value creation. In addition to evolving our capital structure, In the first quarter, we took deliberate steps to advance each of these areas, and our results reflect both the reality of an intense competitive environment and the impact of those strategic actions underway. Total revenue was $2.1 billion and adjusted EBITDA was $789 million. Broadband subscriber net losses totaled 64,000 in the quarter or 56,000 excluding a subscriber adjustment taken in the quarter related to prior periods. Mobile delivered its strongest quarter in the past six years with 52,000 line net ads. And we saw progress on video churn, which improved by over 400 basis points year over year on an annualized basis, supported by the adoption of our tiered offerings and streaming solutions. Operationally, we are focused on improving the stability and quality of our subscriber base. Customers today are making more thoughtful choices about where they spend, and we're meeting that moment by continuing to adapt our go-to-market approach. We are remaining nimble and adjusting our offers to lead with value without compromising on quality. As I will cover in more detail shortly, we are simplifying our go-to-market model to compete more effectively on entry pricing. At the same time, we are focused on providing customers with more value, strengthening loyalty, expanding product penetration and mix, and increasing sell-through within the base. The clearest validation of this approach is the momentum we are seeing in convergence. Customers who take both broadband and mobile churn at a meaningfully lower rate and generate higher lifetime value compared to broadband-only customers. To better capture this impact, we are evolving how we measure performance through the introduction of convergence ARPU as a new metric this quarter, which reflects the value of these relationships. We believe this is the right lens through which to track our progress because it demonstrates the value that broadband plus mobile relationships create, value that is increasingly not visible in standalone product metrics. On costs, we remain disciplined. We are continuing to optimize direct costs and operating expenses and make targeted investments in AI and automation, reducing truck rolls, improving first call resolution, and enabling our teams to serve customers and manage our networks more efficiently and proactively. Together, these actions are what we expect to drive margin expansion and structurally lower our operating cost base over time. Lastly, as Mark will speak to in more detail shortly, addressing our balance sheet remains a top priority. As we move forward, we continue to evaluate opportunities to strengthen our capital structure, to better position the business for long-term value creations. I'll cover each of our priorities in a moment, but the common thread is this. We are taking the right steps to build a more resilient business, and we remain focused on executing with the urgency that this environment demands. With that, let me turn to the 2026 priorities, which we introduced last quarter and provide more detail on the progress we are making. The theme across everything we are doing this year is applying simplification to drive acceleration. As we continuously evaluate both the business and competitive environment, we have taken a step back to identify where complexity is slowing us down across pricing, products, and operations. And we are consciously working to simplify the business so we can move faster, execute more consistently, and compete more effectively. Starting with broadband, The broadband environment in the first quarter remained as competitive as any we have seen. Across our footprint, ILAC's fixed wireless providers and fiber overbuilders all continue to lean aggressively into lower entry pricing, extended price locks, and promotional incentives. In the West in particular, the competitive profile has shifted considerably with the expansion of fixed wireless availability, as well as fiber overbuilders further intensifying market dynamics in an already challenging landscape. This is the backdrop against which we are executing. That said, we remain focused on what we can control. Our response has been to simplify and establish a more consistent and competitive product and pricing structure across our footprint. While this may lead to near-term pressure on broadband ARPU from gross additions, it is a deliberate step to stabilize subscriber trends. In practice, our simplified approach is based on standardizing pricing and core offers nationally, while driving incremental sales of value-added services like mobile, our new video products, whole home Wi-Fi, and total care to partially offset this pressure. Our next priority, maintaining financial discipline, is embedded in how we run the business every day. We are focused on making consistent, deliberate decisions that protect and strengthen the economics of the business for the long term, even when that means absorbing near-term pressure. As Mark will highlight, we are focused on minimizing the rate of non-video revenue declines and are taking deliberate steps to improve video margins. through driving higher attach of our new video packages, continuing our approach to analytic-based programming contract negotiations, and growing video ARPU. In the first quarter, adjusted EBITDA declined by 1.3%, while margins expanded year over year, reflecting revenue decline of 4% and a continued focus on cost management and operational efficiency. Within direct costs, we are benefiting from favorable programming cost trends and continued video ARPU growth, which is driving sustained video gross margin expansion of almost 350 basis points year over year and nearly 1,000 basis points in the last three years. Importantly, these efficiency gains have strengthened our cost structure without compromising the customer experience, as reflected in our transactional net promoter score, which has remained at a two-year high. Finally, we ended the quarter with $1.3 billion of liquidity, providing us with the flexibility to continue executing on our key priorities and investing in the business in the near term. Building on that, the discipline we apply to how we operate also guides how we invest for long-term value creation. In short, we are prioritizing capital allocation in the areas with the strongest opportunity to drive sustained growth and returns. A big part of that, of course, is our award-winning network. We remain focused on building fiber, selling fiber, and continuing to migrate customers organically within our base, having expanded our network by over 500,000 homes passed over the past three years. As we think about where to direct our resources, growing broadband is the top priority and our operational decisions reflect that. While fiber migration remains an important part of our long-term roadmap, we are currently prioritizing new builds and new broadband customer trends over migrations of existing customers to fiber. Over time, we expect to re-engage more proactively to transition customers to fiber, but in the current environment, we are focused on investing where we see the highest near-term returns and greatest impact on long-term value creation. LightPath remains a meaningful growth engine, delivering over 8% year-over-year revenue growth and almost 10% adjusted EBITDA growth. We are also investing in the customer experience by improving self-install capabilities, improving the MyOptimum digital platform, and continuing to build tools that make it easier for our teammates to serve our customers and for our customers to do business with us. Taken together, our capital investments are targeted at the areas where the returns are clearest, and we continue to manage our overall capital intensity with the same discipline we apply across the rest of the business. Next on slide five, I'll spend some time on our go-to-market and base strategies around driving improved trends. On the acquisition side, it starts with making it easier for customers to understand our value through simpler offers and more competitive entry pricing. On the sales side, we are providing clearer pathways to upsell into higher speed tiers and value added services and are beginning to leverage AI driven performance management. While we are still in the early stages, this collective approach is driving channel improvements. Year-over-year gross ad decline is moderating. Sales channel yield has improved meaningfully. And we're seeing relatively stable gross ad ARPU, all reflecting a healthier acquisition model. Importantly, our lower, more competitive entry pricing serves as a strong acquisition generator, bringing in customers through lower speed tiers advertised, while the majority continue to choose one gig speed at signup. You can see that pull through in our residential broadband base. The portion of customers taking one gig or higher has grown to approximately 47%, up from 37% a year ago and 21% in 2023. We are leveraging a lower entry price point to drive multi-product upsell, increasing bundle adoption among new customers, and supporting stronger lifetime value. At the same time, we are starting to take a more proactive approach to base management to improve churn. Over half of our residential broadband customers have been with us for more than five years, and over a third have been with us for more than 10 years. We are being deliberate about reinforcing customer loyalty and protecting our long-tenured base. We recently launched the Optimum Thanks You loyalty program, which focuses on customer engagement and value adds, such as speed upgrades and price lock offerings. We are beginning to see encouraging early indicators from these efforts, including improved customer perception and retention in select markets. Together, we expect that strengthening our competitiveness combined with improved sales conversion, marketing execution, and better base management provide the right roadmap to improve subscriber trends over time. Turning to slide six, our broadband and mobile convergence momentum continues to build as customers increasingly look for simplicity, value, and a single provider for their connectivity needs. Broadband remains the anchor product in the home, while mobile plays a critical role in enhancing that value. By bundling mobile with broadband, we're increasing customer stickiness, improving retention, and driving higher lifetime value. We delivered strong mobile growth in the first quarter, reaching 674,000 mobile lines. This is supported by continued improvement in our go-to-market execution, including stronger sales quality, better experience, more competitive offers with everyday low pricing, and discounts on broadband, and a focus on multi-line adoption, all of which are driving higher-value customer additions. This is reinforced by our recently launched Unbig Your Bill campaign, which highlights meaningful annual savings compared to the major carriers. Mobile customer penetration in our broadband base reached almost 9% in the first quarter. While we have steadily grown convergence in our base, we still see significant runway to continue to drive mobile attachment and deepen penetration among existing customers. More broadly, our entry offer plus attach model is central to our strategy and how we go to market. Every new broadband customer is an opportunity to deepen the relationship and attach mobile as well as video, whole home Wi-Fi, total care, or other value-added services. This approach allows us to balance more competitive entry pricing with stronger lifetime value. Moving to slide seven, video continues to play an important role in how we create value across customer relationships, helping drive retention and add value within the bundle. We recognize that customer behavior has evolved and our approach reflects that. We're focused on giving customers more choice and flexibility while improving the overall economics of the business. We're seeing that shift play out in the adoption of our simplified video tiers, entertainment, extra, and everything TV, which we scaled last year. These packages are better aligned with how people consume content today and represented the majority of sell-in during the quarter, with adoption within our residential video base increasing from 6% of the base in Q1 25 to 17% in the first quarter of 26. Importantly, these new tiers are demonstrating upwards of 20% churn improvement within video compared to legacy packages, reinforcing their role in improving retention and long-term customer value. We are also continuing to enhance how we merchandise these tiers, better showcasing the breadth of the included streaming apps and the inherent value customers receive as part of their optimum TV subscription. For example, our top tier Everything TV includes access to over 50 apps, representing significant streaming value compared to purchasing these services separately. We are also emphasizing the simplicity of a unified login and billing relationship through Optimal, helping to drive greater engagement and product attachment across our base. By more tightly integrating broadband and streaming directly into our go-to-market approach, we are creating a seamless and connected customer experience that is beginning to show early retention benefits. With that in mind, we are optimizing the video business for margins and long-term value while it continues to play an important role in reducing broadband churn. So while video revenue continues to be under pressure, driven by a declining video subscriber base, we are, however, growing video unit economics on ARPU while stabilizing programming costs inflation per subscriber. As a result, we have seen an expansion of residential video gross margin by 1,000 basis points from approximately 14% in the first quarter of 23 to 24% in Q1 of 26. In summary, we've strengthened video subscriber trends by better aligning with evolving customer preferences while simultaneously enhancing profitability. Stepping back, we are focused on executing against what we can control, simplifying the business, strengthening our competitiveness, and taking a more proactive approach to improving retention and driving greater lifetime value. While the environment remains challenging and our near-term results reflect these headwinds, we're encouraged by early signs in go-to-market execution and continued convergence momentum. Combined with our ongoing focus on cost discipline and targeted investment, we believe these actions position us to improve trends and build a more durable, resilient business over time. With that, I'll turn it over to Mark to walk through our financial and operating results in greater detail.