Optimum Communications, Inc.

Greetings. Welcome to Optum's fourth quarter of full year 2025 results conference call. At this time, I'll dispense our listen-only mode. The question and answer session will follow the formal presentation. If anyone today should require operator assistance, please press star zero from your telephone keypad. Please note that today's conference is being recorded. At this time, I'll turn the conference over to Sarah Friedman, Vice President of Investor Relations. Thank you, Sarah. You may begin.

Thank you. Welcome to the Optimum Q4 and Full Year 2025 Earnings Call. We are joined today by Optimum's Chairman and CEO, Dennis Mathew, and CFO, Marc 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, and good morning, everyone. Before we begin, I want to thank all our teammates across Optimum, particularly our network and frontline teams, for their proactive preparation and disciplined response during the multiple winter storms that affected the majority of our footprint in early 2026. Our teams worked alongside local, state, and federal authorities, as well as power companies, to mobilize personnel, equipment, and critical infrastructure. This focus defined by our One Optimum team culture helped to minimize disruption and keep our network resilient for our customers and communities. Let me now turn to our results and the key drivers of our performance. 2025 was a year of meaningful transformation for our business. We sharpened our focus on core priorities, strengthened execution to drive operating efficiencies, enhanced network quality and reliability, and made intentional decisions to elevate the customer experience. This foundational work was critical as competition intensified across nearly every market and promotional activity reached unprecedented levels. Against this backdrop, we took a balanced and disciplined approach to execute our objectives and remain firm in our go-to-market and base management strategies. Turning to slide three, you will see that our fourth quarter financial results reflect that focus. While total revenue declined by 2.3%, and all other revenue grew 2% year-over-year. Broadband subscriber results reflect both the intensity of the competitive environment and our conscious decisions to prioritize sustainable pricing and returns. We delivered our best performance on video net losses in the last several years, supported by lower video churn and growing penetration of newly launched video tiers. At the same time, we moderated the pace of fiber migrations, to balance near-term margins and cash flow. On mobile, we strengthened the quality of our mobile customer base, which contributed to improved mobile churn in the quarter. Looking at customer economics, broadband ARPU grew 2.8% and residential ARPU grew 0.4% year over year. These results demonstrate continued progress in product mix, retention, rate actions, and pricing discipline despite market dynamics. In the fourth quarter, Improved gross margins combined with cost discipline contributed to a meaningful step-up in adjusted EBITDA consistent with our guidance. Adjusted EBITDA grew nearly 8% year-over-year to just over $900 million, representing our first quarter of year-over-year adjusted EBITDA growth in 16 quarters. Adjusted EBITDA margin expanded to over 41% of 380 basis points, and gross margin reached approximately 70% of 180 basis points year-over-year. Adjusted EBITDA growth reflects nearly $60 million of year-over-year operating expense reductions, driven in part by continued improvements in customer experience and operational performance. Our field dispatch rate improved 19% year-over-year. Our seven-day customer care repeat rate reached its lowest levels ever in Q4. And we ended the year with a net promoter score 11 points higher than when we started the year. We further improved efficiency through the divestment of non-core assets, including the I-24 news business in December and the sale of our towers business earlier in the year. Our disciplined execution and capital management drove cash generation, resulting in free cash flow approximately $200 million for the quarter. In the fourth quarter, cash capital stepped down 28% year-over-year, achieving approximately 13% capital intensity, while growing our total passings footprint by 1.8% year-over-year for the full year. Overall, the fourth quarter reflects the progress we made throughout 2025 to improve the business, drive efficiency, and reset our foundation. With that context, let's turn to our full year 2025 results. Slide 4 outlines the commitments we set early in the year and how we successfully delivered on them, while remaining focused on controlling what we can control. Four-year revenue came in at approximately $8.6 billion. Broadband ARPU grew 1.6%. Programming and direct costs, along with other operating expenses, were each $2.6 billion. Notably, we made strategic and sometimes difficult programming decisions designed to strengthen the overall economics of the video business while remaining focused on customer needs. We completed several major programming agreements that provided customers with the content they valued, increased flexibility and choice, and reinforced cost discipline, resulting in improved video churn and gross margins. For the year 2025 adjusted EBITDA, was $3.4 billion excluding the divested I-24 news business, or $3.3 billion on a reported basis. Cash capital expenditures totaled roughly $1.3 billion. And we added 177,000 new passings, slightly exceeding our target. Overall, our full year 2025 performance reflects the deliberate trade-offs and disciplined execution across the organization during a challenging operating environment. Importantly, we entered 2026 with a simplified operating model, improved cost structure, and a clearer path to strengthening our performance. Let's now turn to slide five to review our 2026 priorities, which are centered on further simplifying how we operate to deliver greater customer and employee experiences. First, we are focused on improving our broadband trajectory. We are simplifying our product portfolio by offering fewer speed tiers, transparent pricing, and driving increased attachment of value-added services. This includes rolling out our refreshed mobile offer to drive deeper convergence and putting greater emphasis on our new video tiers. Mobile convergence serves as a key driver of improved broadband retention and residential ARPA. The investments we made in mobile in 2025, we expect that mobile, along with other value-added product bundles, will reduce churn and increase customer lifetime value. It is important to highlight that our simplified go-to-market strategies reflect testing and trials we started in select markets in late 2025, which showed encouraging results in December, and which we will continue to use to inform our broader 2026 strategy. Improving our broadband trajectory directly supports our second priority of maintaining financial discipline in 2026. Our approach begins with a continued focus on base management, including proactive churn reduction, targeted competitive responses in areas of elevated pressure, a customer loyalty program, and the use of price locks for certain subscriber cohorts. We will also continue to drive product margin expansion across the portfolio. Video is a good example. Industry-wide court cutting and shifts in consumer behavior have contributed to significant video revenue decline since 2022. Despite this, our video profitability in 2025 was higher in absolute dollars than in 2022. And video gross margins was more than 750 basis points higher in the full year 2025 compared to 2022. This performance reflects our disciplined approach to programming costs and the introduction of flexible packages that resonate with our customers. Furthermore, we will continue to deploy advanced AI tools and automation across the organization, including in network operations, customer service, marketing, and sales. Specifically, we are increasingly using AI tools to support our frontline teams and help improve their productivity, which in turn leads to better employee and customer experience. For example, as a result of our partnership with Google, millions of customer calls are now routed through Google CES, which analyzes customer sentiment and agent interactions to identify opportunities for continuous improvement and best practices across our care organization. On the network side, we leverage access network automation, which ingests network telemetry and operational data, including trouble tickets, and applies AI to more precisely identify the location and root cause of a network issue. Taken together, these capabilities help us resolve problems faster and proactively, reduce recurring issues, identify opportunities for self-service and reduce contact rate and services, which enhance efficiency and improve our overall cost structure. Finally, investments in these tools and automation combined with changing business demands allow us to continue to evolve our workforce and organizational structure. In late 2025, we expanded partnerships with leading third-party service providers to rationalize and consolidate elements of our field services and retail operations, improving accountability and driving operating efficiencies. We will continue to evaluate opportunities both internally and with key partners to ensure we have the right workforce structure to drive our business forward. Importantly, our approach to managing costs has not come at the expense of network performance, product quality, or customer experience. In fact, customer satisfaction scores continue to improve, and our network continues to lead the market. Just last week, our Optimum Fiber Network in the Tri-State once again earned multiple number one rankings from Ookla SpeedTest for best-in-class internet performance. outperforming every major 5G home internet provider on speed, reliability, and consistency. These results reinforce that optimum fiber delivers the fastest and most reliable speeds, the lowest latency, and a best-in-class gaming experience across key markets. Finally, our third priority is investing for long-term value creation. This includes continued fiber expansion, targeted network upgrades, and ongoing investment in technology and tools that improve the customer experience, enhance performance, quality, and reliability, and thrive operational efficiency. With more than 3 million fiber passings, we view fiber as an important long-term value engine and are actively improving the migration process to increase customer lifetime value while improving ARPU erosion and migration costs, helping to maximize the value of our existing customer base. As these process enhancements are implemented, we expect to expand migrations in a disciplined, returns-driven manner over time. On the new build front, we have more precision than ever in how and where we build, as well as greater command of how we drive penetration to those new passings through a coordinated go-to-market strategy. We will continue to balance our build plans with long-term economics to further enhance our returns. We can offer one gigabit or higher download speeds to approximately 96% of our entire footprint. We will continue to evaluate markets to deploy mid-split upgrades on our DOCSIS 3.1 HFC network, which can enable multi-gig speeds and improve capacity and reliability in a highly capital efficient manner. Regarding our capital structure, as Marc will review shortly, we completed several debt refinancing in 2025 which improved liquidity and expanded financial flexibility giving us room to operate in 2026. In closing, I couldn't be prouder of the entire Optimum team for their hard work in 2025 and their unwavering commitment to each other and our customers. Despite the sustained competitive intensity, I remain confident that by simplifying how we operate, we can strengthen execution and elevate our operating performance to build a stronger business and deliver long-term shareholder value. I'd now like to turn it over to Marc to review our performance in greater detail.