ATUS Q2 Deep Dive: Margin Pressure Continues as Broadband Stabilization Efforts Advance

August 12, 2025 at 03:07 AM EDT

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Telecommunications and cable services provider Altice USA (NYSE: ATUS) met Wall Street’s revenue expectations in Q2 CY2025, but sales fell by 4.2% year on year to $2.15 billion. Its GAAP loss of $0.21 per share was significantly below analysts’ consensus estimates.

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Altice (ATUS) Q2 CY2025 Highlights:

Revenue: $2.15 billion vs analyst estimates of $2.15 billion (4.2% year-on-year decline, in line)
EPS (GAAP): -$0.21 vs analyst estimates of -$0.01 (significant miss)
Adjusted EBITDA: $803.8 million vs analyst estimates of $848.9 million (37.4% margin, 5.3% miss)
Operating Margin: 14.5%, down from 22.4% in the same quarter last year
Broadband Subscribers: 3.93 million, down 160,400 year on year
Market Capitalization: $960.7 million

StockStory’s Take

Altice’s second quarter results were met with a significant negative market reaction, as the company’s GAAP loss per share and adjusted EBITDA came in well below Wall Street expectations. Management attributed the underperformance to ongoing revenue declines, driven largely by video subscriber losses and persistent competition, especially from fiber overbuilders and fixed wireless alternatives. CEO Dennis Mathew acknowledged, “macroeconomic pressures, low move activity and increased competition from fiber and fixed wireless continue to weigh on gross additions.” The company also cited higher operating costs, including investments in technology and transformation initiatives, as contributors to weaker profitability.

Looking forward, Altice's management is focused on stabilizing broadband performance and driving incremental revenue through new product offerings, operational efficiencies, and capital structure improvements. The company expects initiatives such as the expansion of value-added services, continued fiber and mobile adoption, and workforce optimization to support margin improvement in the second half of the year. CFO Marc Sirota emphasized that adjusted EBITDA gains will be “supported by seasonally stronger subscriber performance, incremental revenue opportunities…and continued operating expense efficiencies toward year-end,” but cautioned that competitive and macroeconomic headwinds remain.

Key Insights from Management’s Remarks

Management cited ongoing video subscriber declines and heightened competition as the primary drivers of revenue and margin pressure, while highlighting early signs of stabilization in broadband and success with operational efficiency initiatives.

Broadband stabilization efforts: The company saw sequential and year-over-year improvements in broadband subscriber net losses, driven by enhanced churn reduction programs, localized strategies, and expanded offers tailored to income-constrained and MDU (multi-dwelling unit) markets.
Fiber and mobile momentum: Altice accelerated fiber net additions and improved mobile line growth, with management noting stronger customer quality and higher penetration of unlimited plans and device financing. These trends are helping to offset competitive pressures in traditional broadband.
Video segment optimization: Introduction of new video tiers and expanded OTT (over-the-top) streaming partnerships, such as with Disney+ and Hulu, are aimed at creating more flexible offerings and improving video margins, despite continued subscriber losses in the segment.
Operational efficiency gains: Workforce optimization, AI-driven tools for customer service and network operations, and a deliberate focus on reducing service visits contributed to lower operating expenses, with expectations for further cost moderation in the second half of the year.
Capital structure initiatives: The company executed a $1 billion asset-backed loan secured by HFC (hybrid fiber-coaxial) assets, providing additional liquidity and flexibility to address its upcoming debt maturities while improving the overall cost of capital.

Drivers of Future Performance

Altice’s outlook hinges on expanding its broadband and mobile footprint, optimizing cost structure, and leveraging new product offerings to drive incremental revenue and margin improvement.

Expansion of value-added services: Management expects products like Total Care, Whole-Home Wi-Fi, and enhanced B2B offerings to contribute up to $500 million in incremental revenue over time as penetration increases, thereby supporting ARPU (average revenue per user) stabilization and growth.
Operational cost discipline: Continued workforce reductions, AI-powered network management, and streamlined service delivery are expected to drive lower operating expenses, with the majority of efficiency gains anticipated in the fourth quarter and into 2026.
Competitive and macroeconomic risks: Management acknowledged persistent headwinds from fiber and fixed wireless competitors, low housing formation, and broader macroeconomic uncertainty, which may limit the pace of subscriber and ARPU growth.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely monitor (1) the pace of broadband subscriber stabilization and ARPU growth as new products and strategies scale, (2) execution of operational efficiency initiatives, including workforce optimization and AI-driven cost reductions, and (3) further progress on capital structure improvements and debt management. The trajectory of fiber and mobile adoption, as well as competitive responses in key geographic markets, will also be important indicators of Altice’s ability to sustain long-term margin recovery.

Altice currently trades at $2.19, down from $2.38 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

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