Charter Communications, Inc. (CHTR) Earnings & Analysis

Latest quarter

Charter reported Q2 FY2026 revenue of $13.5 billion, down −1.74% from Q2 FY2025. Revenue exceeded the consensus by 0.06%, based on reported revenue of $13.5 billion against the consensus of $13.5 billion. Charter reported diluted EPS of $10.66, up 16.1% from $9.18 a year earlier; EPS exceeded the consensus by 7.03%, versus the $9.96 consensus.

The filing said revenue fell primarily because of a higher seamless-entertainment allocation and fewer customer relationships, partly offset by mobile-line growth. The filing said Internet revenue declined as average residential Internet customers and rates fell, while mobile-service revenue increased with average residential mobile lines and rates. Charter’s gross margin was 39.3%, versus 40.2% a year earlier, and its operating margin was 22.6%, versus 23.8%. Charter reported free cash flow of $1.1 billion, up 45.2% from $726.0 million in Q2 FY2025.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Chris Winfrey said Charter added more than 400,000 mobile lines during the quarter, while its 172,000 Internet-customer loss was higher than a year earlier amid high competition for new customers. He said softer gross additions, rather than changes in churn, remained the primary source of Internet-customer growth weakness. Jessica Fischer said expanded fixed-wireless competition, lower sales from low-income consumers, mobile substitution and fiber overlap with aggressive promotions affected the Internet customer result.

Winfrey said Charter expects to stabilize and return to broadband growth over time through its converged connectivity product and pricing, demand for speed, data and reliability, and improved customer-satisfaction scores. He said the company is emphasizing Internet sales before mobile and video upgrades, while bundling products to reduce churn. Fischer said pricing adjustments and speed upgrades did not affect the second quarter but are expected to support residential revenue in the second half.

Fischer said adjusted EBITDA declined 4.3% from a year earlier, or 3.2% excluding transition expenses, as Charter incurred $65.0 million of transition expenses related to the pending Cox transaction. She said those expenses had been somewhat higher than expected because of the closing delay and changes in the expected mix of operating costs and capital expenditures, while the combined transition-cost and capital-expenditure total was still expected to meet or improve upon the company’s expectation. She also said Charter was pursuing measures including benefit-plan changes and overhead simplification.

On capital investment, Fischer said Charter continued to expect approximately $11.4 billion of standalone capital expenditures for 2026 and said annual run-rate capital expenditures would be below $8.0 billion after its evolution and expansion initiatives conclude. In response to questions on broadband ARPU, Fischer said it would improve sequentially in Q3, while Charter’s focus remained connectivity ARPU and customer-relationship ARPU excluding programmer-app allocation. Charter did not quantify a product-level ARPU target.

Winfrey said Charter expected at least $800.0 million of annual run-rate Cox transaction expense synergies and said the estimate could grow to $1 billion. Fischer said the company had lowered its post-transaction leverage target to 3.5× and expected to reach it within three years of the Cox and Liberty Broadband transaction closings.

Guidance

Charter changed its standalone FY2026 EBITDA outlook excluding Cox transition costs from slight growth, which it gave in Q1, to a decline of around −1.00% year over year. Jessica Fischer said the company expected political advertising, cost pass-throughs and efficiency initiatives to benefit the second half, and said Charter was working on additional initiatives to improve the full-year trajectory.