Altice USA, a leading U.S. connectivity and media provider

Altice USA, Inc is one of the largest broadband communications and video services providers in the United States. The company delivers connectivity solutions to almost 5 million residential and business customers across twenty-one states. Its product offering includes Optimum Fiber Internet, Optimum TV, and Optimum Mobile. Complimenting their portfolio is Optimum Media, an advertising and data business providing audience-based, multiscreen advertising solutions, including the delivery of local and international news through News 12 and i24NEWS. The company’s stocks are actively traded, reflecting its presence in the market.

Altice Stock listing

Altice Class A shares are listed on the New York Stock Exchange under the ticker symbol #ATUS. The company made its public trading debut on the NYSE in June 2017. It “priced its IPO at $1.9 billion, with its 63.9 million shares selling for $30 apiece, within the expected range of $27 to $31.” [CNBC]. It was also reported by CNBC at the time that, “Altice USA’s parent company will hold 70.3 percent of Altice USA’s shares and 98.3 percent of the voting rights in the company.”

Top institutional shareholders

As of 30 June 2024, FMR, LLC held the largest stake with 31.9 million stocks (6.93%), followed by Clarkston Capital Partners LLC with 31.24 million shares (6.78%), and Vanguard Group Inc. with 21.46 million shares (4.66%). Other notable holders include Shaw D.E. & Co., Inc. with 11.53 million shares (2.50%), Apollo Management Holdings, L.P. with 10 million shares (2.17%), and Redwood Capital Management, LLC with 8.19 million shares (1.78%). Loomis Sayles & Company, LP, Thompson, Siegel & Walmsley LLC, Blackrock Inc., and Oaktree Capital Management Lp also held smaller positions, ranging from 7.37 million to 5.94 million shares.

Separation of Altice USA from Altice NV

In 2018, Altice announced a group reorganisation with a structural separation of Altice USA from Altice NV, both controlled by Patrick Drahi. The transaction involved Altice NV spinning off its 67.2% interest in Altice USA through a distribution to shareholders. Altice USA would issue a $1.5 billion special cash dividend and implement a $2 billion stock repurchase program.

The controlling shareholder, Next, alongside other aligned parties, would maintain control of both entities with a long-term ownership commitment. After the separation, Altice NV (Altice Europe) would include Altice France, Altice International, and Altice Pay TV subsidiary.

Market capitalisation

Altice USA’s market capitalisation as of 4 October 2024 is valued at US$1.55 billion, with revenue of US$9.11 billion, and a net income of -US$56.8 billion.

Altice USA reports second quarter 2024 results

In the 2^nd quarter of 2024, total revenue reached $2.2 billion, reflecting a 3.6% decline YoY. Residential revenue, which accounted for $1.8 billion, experienced a 4.4% decrease compared to the same period last year. The average revenue per user (ARPU) for residential customers was $135.95, marking a slight decline of 1.1% or $1.49 YoY. Business Services revenue, however, saw a positive trend with a 1.3 increase, totalling $369.3 million. On the other hand, News and Advertising revenue fell by 7.2%, reaching $105.3 million.

Net income attributable to stockholders for Q2 2024 stood at $15.4 million, or $0.03 per diluted share, down from $78.3 million, or $0.17 per diluted share, in Q2 2023. Net cash flows from operating activities also dropped to $306.8 million in Q2 2024 from $438.8 million in the same quarter last year. Adjusted EBITDA was $867.2 million, showing a YoY decrease of 5.9%, with an EBITDA margin of 38.7%.

Cash capital expenditures amounted to $347.7 million, a significant 26.6 reduction YoY, with capital intensity at 15.5%, or 12.9% excluding fiber-to-the-home (FTTH) and new builds. The company continues to maintain disciplined capital spending and now expects full-year cash capital expenditures to be under $1.6 billion. Free cash flow for Q2 2024 recorded a deficit of $40.9 million, including $57 million in higher cash taxes compared to last year.

10^nd quarter 2024 key operational highlights

One of the significant operational achievements in Q2 2024 was the considerable growth in Net Promotor Scores (NPS), which was driven by enhanced customer experience (CX). Transactional NPS (tNPS) has surged by 34 points over the past 2 years, from Q2 2022 to Q2 2024. The company also made strides in improving its CX with a focus on operational efficiency and base management.

Over the past 8 months, 700k+ customers have had their service speeds adjusted to better match their needs. This period also saw approximately 1.7 million fewer inbound customer calls and around 235k fewer truck rolls, demonstrating operational efficiency. The self-install rate has seen a significant 56% increase in Q2 2024.

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