Charter Communications Inc (CHTR) — Q4 2025 Earnings Call Transcript

Thanks, operator, and welcome, everyone. The presentation that accompanies this call can be found on our website ir.charter.com. I would like to remind you that there are a number of risk factors and other cautionary details contained in our SEC filings, and we encourage you to read them carefully. Various remarks that we make on this call concerning expectations, predictions, plans and prospects constitute forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated results. Any forward-looking statements reflect management's current view only, and Charter undertakes no obligation to revise or update such statements. As a reminder, all growth rates noted on this call and in the presentation are calculated on a year-over-year basis unless otherwise specified. On today's call, we have Chris Winfrey, our president and CEO, and Jessica Fischer, our CFO. With that, let's turn the call over to Chris. Thanks, Stefan.

In 2025, we continue to compete for customers by delivering great products. Video customers, despite well-known headwinds. The video product improvements we've made over the past two years, which improved connectivity relationships, are having an impact. In Internet, competition for new customers remains high, but customer losses improved year over year. Driven by customer losses, our revenue was down about 0.5% in 2025, and a challenging political advertising comparison. While EBITDA grew by about half a percent. The operating environment for new sales, particularly Internet, continues to reflect low move rates and higher mobile substitution, along with expanded cell phone Internet competition and fiber overlap growth similar to earlier in the year. Collectively, that drove fourth quarter Internet sales slightly lower year over year. Churn improved year over year, as expected, given last year's ACP-related impacts. And Internet churn, including non-pay churn, remains at low levels. With 2026 in full swing, our shareholders should know that we are a highly competitive group, and we intend to win in the residential and business connectivity marketplace. In this environment, getting back to positive net additions is a game of inches. We're incredibly focused on one, while clearly messaging our superior value and utility, and two, providing the best quality service in the market in a way that is recognized by our customers and our service is a competitive advantage. Let me go through how I believe Fortinet could impact our growth. Assuming regulatory approval of Cox, Spectrum will cover over 70 million households, which gives us additional scale to develop new products and services, serve more business customers, and save customers significant money. In 2026, we'll nearly complete our rural build-out providing us with over 1,700,000 new subsidized rural passings with growth for years to come, as well as upside from the densification of higher growth areas in places like Texas, Florida, and The Carolinas. We're gig capable everywhere. By the end of this year, 50% of the current spectrum network will be upgraded to symmetrical and multi-gig service, with significant work on the remaining 50% in flight and moving to completion in 2027. Those capabilities matter long-term, as customer data usage continues to increase. We're working with content owners in Silicon Valley to create applications and next-generation products like Spectrum Front Row, an immersive content experience with Apple and the NBA, that makes full use of our ubiquitously deployed, largely untapped fiber-based network. Bandwidth-rich products have always followed our network capability, and think of the last few hundred feet of our fiber-powered network as 1.8 gigahertz of contiguous spectrum, delivered at full capacity to each individual home and business. With the ability to place cellular radios nearly everywhere along the way, fiber deep, power, and right of way. We already have a fully converged connectivity service in 100% of our footprint, now with expanding hybrid MNO capabilities through CBRS and Wi-Fi to drive our seamless connectivity advantage at gigabit speeds wherever you go. So data usage will continue to increase for both wired and wireless networks, and customers don't know or care which network they're on as they move about. It just has to work. That is the service we uniquely provide. In mobile, we have a structural and strategic mobile reselling agreement with Verizon for current and future services. We'll launch an additional MVNO for business with T-Mobile in the next six months. Nearly 90% of Spectrum mobile traffic goes over our network already at higher speeds, making us the fastest mobile operator with the best prices. Mobile is profitable, it will continue to grow, and improves broadband churn meaningfully with the opportunity to drive more Internet sales. Our network carries more mobile traffic than any operator in our footprint. So we are a facilities-based provider of mobile services, with five gs macro cell towers as backup. Our owners' economics of a differentiated network create long-term advantage, which means we can save customers over $1,000 in a single year with Internet and mobile, and now we can do the same with video. Our video product and platform is now a killer app. When our video customers activate their included apps, video and broadband churn improvement is meaningful. Our video product can become another unique selling tool: seamless entertainment with all the key programmer apps included as part of our service over $125 of value per month. And finally, customers have a platform in Zumo that brings unified search discovery for all your live TV and apps. Utility and value, competitive advantage, and we continue to invest in technology, including AI, to increase customer satisfaction through self-service where customers want and enhancing our employee service capabilities. That's across sales, call center services, field operations, and the network itself. In 2026, for the first time, granule incentives will include net promoter scores. We have a competitive advantage with our service capabilities, and we're going to make sure we earn credit for the reputation that reflects that significant investment from our customers one by one, and we're going to guarantee all of it. We'll guarantee Internet service through a new invincible Wi-Fi product we'll launch in February, offering symmetrical and multi-gigabit service with a Wi-Fi seven router and battery backup, along with backup five g service. Seamlessly switched on the same SSID for storms or outages, as well as Wi-Fi seven extenders for larger homes. Invincible Wi-Fi is a market-first product combining Wi-Fi seven with five g and battery backup. Over a year ago, we deployed the nation's first wireline and wireless service commitment, guaranteeing transparency, reliability, and same-day installation and service. Internally, we're now moving that service window target to two hours, and one hour for business. At your doorstep from the time you call. None of our competitors match our service here. In addition to backing our customer service guarantee with credits, beginning in February, we'll now guarantee you a thousand dollars of savings per year when you take Internet and two lines of mobile from Spectrum. If we can't save you a thousand dollars or more when compared to the big three telco carriers, we'll credit the difference on your bill during the first year. Guarantee connectivity, guaranteed service, and guaranteed savings. With the best products in the U.S., uniquely serviced by U.S. Employees 24/7. We want to be America's connectivity company, with hyper-local service delivered by your neighbors, our local employees, and with community investment, including unbiased hyper-local spectrum news. All of this will expand to Cox following closing, assuming regulatory approvals. Our plan there is to introduce spectrum pricing and packaging, rapidly grow mobile, similarly return to Internet growth, and given Cox's low video penetration and our capabilities, we expect to grow video in the Cox footprint for a period of time as well. I also believe the combination of our very complementary B2B will create gross synergies we didn't anticipate when we did the deal. Winning connectivity in a cyclical and newly competitive environment is a game of inches. I'm not projecting broadband relationship growth this year. We expect to see an improved trajectory from the investments we've made over the past three years. The recipe for winning here is simple: best connectivity, best overall value, with the best service. And we aren't perfect. We own our mistakes with customers. But we are improving the way we communicate our value, utility, and quality service across our landscape. But I do believe we're the best-positioned company in the connectivity industry, and we will get better. From a financial perspective, we expect our operating plan to deliver EBITDA growth this year. The investments we've made to lower service transactions and our efficiency programs, including early benefits from customer and employee-focused AI tools, will continue to provide a tailwind for many years to come. 2025 was our peak year of capital expenditure, and capital expenditures after this year will decline significantly. Free cash flow will increase from an already significant amount. We expect our capital intensity to return to 13% to 14% of revenue by 2028 at Charter standalone, and we can probably do the same even with the Cox integration. One of the bigger debates around Charter has been about the best way to deploy our significant free cash flow, which is about to become much larger. Debating how to allocate that cash flow is a first-class problem to have in my mind, and Jessica will provide an update on our balance sheet strategy and capital return priorities in a moment. But the key focus for me, the real driver for the team and for the value creation of our company is to make sure we deliver long-term customer EBITDA and cash flow growth and demonstrate that long-term growth rate to investors along the way. If we do that, the rest will take care of itself. Now I'll pass it over to Jessica. Thanks, Chris.

Before covering our results, I want to mention that we made several reporting changes to our customer and financial data this quarter, which are detailed in the footnotes to the trending schedule we issued today. To better reflect the converged and integrated nature of our business and operations, we now present our customer relationships statistics inclusive of all mobile customers, including mobile-only customers. We've also added a total connectivity customer section to the trending schedule, which represents all receiving our Internet or mobile connectivity services. We've also revised our mobile lines reporting methodology to better align with how we report our other services. Please also note that any forward-looking financial or customer information that we provide in today's discussion or presentation does not include Cox or any transition costs related to Cox integration planning, consistent with how we reported during the TWC BHN transactions. Now let's please turn to our customer results on slide nine. Including residential and small business, we lost 119,000 Internet customers in the fourth quarter, which is better than last year's fourth quarter with lower connects year over year, more than offset by lower disconnects driven by last year's ACP-related disconnects. In mobile, we added 428,000 lines, with higher gross additions year over year and higher disconnects on a larger base. Net adds in the quarter were lower due to heavy device subsidy activity by the big telco competitors, including the new iPhone 17 through the holiday sales cycle. Video customers grew by 44,000, compared to a loss of 123,000 in Q4 2024, with the improvement primarily driven by lower churn year over year resulting from the new pricing and packaging we launched last fall, Zumo, and seamless entertainment product improvements, including our programmer app inclusion packaging. New connects and upgrades to our fully featured video package with apps were up year over year. Our video customer results also include a small benefit related to the YouTube TV Disney dispute. Wireline voice customers declined by 140,000, with year-over-year improvement primarily driven by lower churn. In rural areas, we continue to see strong customer relationship growth, generating 46,000 net customer additions in our subsidized rural footprint in the quarter. In the fourth quarter, we grew our subsidized rural passings by 147,000, and by over 483,000 over the last twelve months, above our target of 450,000. We expect subsidized rural passings growth of 450,000 in 2026, our last large build year in addition to continued non-rural construction and fill-in activity. Moving to fourth quarter revenue on Slide 10. Over the last year, residential customers declined by 1.2%, and residential revenue per customer relationship also declined by 1.2% year over year, given the growth of lower-priced video packages within our base, a decline in video customers during the last year, $165 million of costs allocated to programmer streaming apps netted within video revenue, versus $37 million in the prior year period, and our free months promotion for new residential customers that we mentioned on our last call and which is no longer in the market. Those factors were partly offset by promotional rate step-ups, rate adjustments, the growth of Spectrum mobile lines, and $34 million of hurricane-related residential customer credits in the prior year period. By the way, the streaming app gap allocation headwind to residential revenue that I mentioned a moment ago should continue to grow over time as more customers authenticate into our streaming app offers. It could be as much as $1 billion for the full year 2026. And as a reminder, the GAAP adjustment is ultimately neutral to EBITDA, as an equal and offsetting benefit is applied to our programming expense line every quarter. As slide 10 shows, in total, residential revenue declined by 2.4% and was down by 1.2% when excluding costs allocated to streaming apps and netted within video revenue in both periods. Turning to commercial. Total commercial revenue grew by 0.3% year over year, with mid-market and large business revenue growth of 2.6%. And when excluding all wholesale revenue, mid-market and large business revenue grew by 3%. Small business revenue declined by 1.3%, reflecting modest year-over-year declines in small business customers and in revenue per small business customer. Fourth quarter advertising revenue declined by 20%, including the impact of less political revenue. Excluding political, advertising revenue was essentially flat year over year. Other revenue grew by 7.3%, driven by higher mobile device sales. In total, consolidated fourth quarter revenue was down 2% year over year and down 0.4% when excluding advertising revenue and programmer app allocation. Moving to operating expenses and EBITDA on Slide 11. In the fourth quarter, total operating expenses decreased by 3.1% year over year. Programming costs declined by 8.4% due to a higher mix of lighter video packages, a 2.2% decline in video customers year over year and $165 million of costs allocated to programmer streaming apps netted within video revenue versus $37 million in the prior period, partly offset by higher programming rates. Other costs of revenue increased by 2.4%, primarily driven by higher mobile service direct costs and mobile devices, partly offset by lower advertising sales costs given lower political revenue and lower franchise and regulatory fees. Cost to service customers, which combined field and technology operations and customer operations decreased 3.9% year over year primarily due to lower labor costs and lower bad debt expense. Excluding bad debt, the cost of servicing customers declined 3.2%. Marketing and residential sales expense was essentially flat year over year due to lower labor expense, offset by a change in sales mix to higher cost sales channels. Transition expenses related to the pending Cox transaction totaled $15 million in the quarter. Finally, other expenses declined by 3.1%, primarily due to lower labor expense. Adjusted EBITDA declined by 1.2% year over year in the quarter, and for the full year 2025, EBITDA grew by 0.6%. For the full year 2026, we are planning for slight EBITDA growth, excluding the impact of transition costs. Note that the first half of 2026 EBITDA will be more challenged than second half EBITDA, given the one-time benefits we saw in Q1 last year, and the benefit of political advertising that we expect in 2026. Turning to net income, we generated $1.3 billion of net income attributable to Charter shareholders in the fourth quarter, compared to $1.5 billion in the prior year period, given lower adjusted EBITDA and higher income tax expense. Turning to Slide 12. Fourth quarter capital expenditures totaled $3.3 billion, $273 million higher than last year's fourth quarter, primarily due to two multiyear software agreements that were accrued in the quarter and higher network evolution spend, which lands in upgrade rebuild spend. 2025 capital expenditures totaled $11.66 billion, slightly above our recent expectation for $11.5 billion given the new software agreements I just mentioned, which will drive other benefits across the business. We expect total 2026 capital expenditures to reach $11.4 billion. On Slide 13, we have provided our current expectations for capital spending through the year 2029, now including line extension spending associated with the BEAD program, which totals about $230 million and is mostly in 2027-2029. For the years 2025 through 2028, the outlook you see on Slide 13 is in line with what we've provided in January 2025, with the inclusion of BEAD, some modified timing across years, and slight changes across categories. As I mentioned, we have added 2029 to our outlook and expect it to exhibit about the same amount of spend as we expected for 2028. Looking beyond 2026, we expect total capital spending in dollar terms to be on a meaningful downward trajectory. After our evolution and expansion capital initiatives conclude, our run rate capital expenditures should be below $8 billion per year. Just to highlight, that reduction in capital expenditures on its own from $11.7 billion in 2025 to less than $8 billion in 2028 is equivalent to $28 of free cash flow per share based on today's share count. Turning to free cash flow on Slide 14. Fourth quarter free cash flow totaled $773 million, about $200 million lower than last year given a less favorable change in working capital and higher CapEx, partly offset by lower cash taxes due to the One Big Beautiful Bill Act, and cash paid for interest. Turning to cash taxes, fourth quarter cash taxes totaled $139 million, and while for year 2025, cash tax payments totaled just under $900 million, we currently expect that our calendar year 2026 cash tax payments will total between $500 million and $800 million. We finished the fourth quarter with $95 billion in debt principal. Our weighted average cost of debt remains at an attractive 5.2%, and our current run rate annualized cash interest is $4.9 billion. During the quarter, we repurchased 2.9 million Charter shares totaling $760 million at an average price of $259 per share. As of the end of the fourth quarter, our ratio of net debt to last twelve months adjusted EBITDA remains at 4.54, and stood at 4.21 times pro forma for the pending Liberty Broadband. During the pendency of the Cox deal, we plan to be at or slightly under 4.25 times leverage, pro forma for the Liberty transaction. As you may recall, when we announced the Cox transaction, we committed to move our target leverage to the midpoint of a 3.5 to 4 times range. We're very comfortable with our balance sheet and our ability to pivot rapidly given our significant free cash flow generation, which provides flexibility to reduce leverage by up to 0.5 turns annually over the next several years. But we have also heard our shareholders' preference for less leverage during a lower growth period. So today, we are moving our post-transaction target leverage to the low end of a new 3.5 to 3.75 times range, which we expect to achieve within three years following the close. Even with this deleveraging, we continue to expect significant ongoing capital returns to shareholders. Lower leverage will drive some impact on our weighted average cost of capital, which should, in turn, positively affect valuation. It should attract a broader constituency of holders to the stock, and open the potential for improved debt ratings, including an investment-grade corporate family rating, although that is not an explicit goal. We will continue to generate very meaningful and growing levels of free cash flow, and while we always reinvest in the business as our top capital allocation priority, there are no large-scale projects like RDOF or Network Evolution on the horizon. We expect to revert to normalized CapEx in the range of $7.5 to $8 billion per year by 2028. We will have significant additional capital available to return to shareholders. To overcome the perception of negative perpetuity growth implied in our valuation today, we need to win in the marketplace. And as Chris outlined, that's where we are focused, and where we believe we can drive value going forward. With that, I'll turn it over to the operator for Q&A. Thank you.

Hi. Thank you. Good morning. Let me start with wireless. First, you signed a new agreement that both Comcast and Verizon have talked about. I wonder if you could just say anything about what that new agreement looks like and whether it has any impact on your strand mount and offload strategy? And then on that point, Chris, you said that you're close to 90% offload. I think you had previously said 85% a couple of quarters ago, and then last quarter, I think, said 88%. That already is a 20% reduction in how much you're sending over the wholesale network that you're leasing from Verizon. Is the 90% just a reference to that similar to 88%, or has the offload gotten even better since then? Sure. Look.

For obvious reasons, we'll stay consistent with what Comcast and Verizon have said as well. But, you know, that's for the most part, we've amended and modernized our long-term MVNO agreement with Verizon, and continued to support profitable growth for both Charter and Verizon. It is a very good deal for them and a relationship for both. You know, as you know, it's long-term, and, you know, the market evolves over time. And so it's just natural that you have, you know, partners inside of a deal take a look and want clarity on certain things. So I'd look at it more in that context as opposed to anything else. You know, we have a structural and long-term, you know, agreement that underpins everything that we're doing here, and that hasn't changed. On the 90%, you know, I think it's around 89% or something like that. It's bumping in that area. So it's moved up a bit, but it's on a steady climb. And as we've always talked about before, the reality is that we have a very attractive structure and partnership with Verizon, and so we can be opportunistic here. Because of the favorable economics that we've always had with Verizon continue to have, there's a balance there in terms of the pace of 23 markets last year that we talked about for CBRS. We'll probably do, I think, maybe 20 or so more, but we'll be in all the states where we have, you know, CBRS power licenses within this time frame. So we continue to roll out there at an opportunistic pace. Thanks, Craig. We'll take our next question, please.

You know, Chris, you guys have been competing in the market with the converge strategy for a number of years now. I'm wondering if you could maybe assess the position of Spectrum Mobile in particular in the market with consumers. You guys have been marketing the product for a long time. You've got very attractive price points. But, you know, you've been building a new product and new brand for some time. Where do you think that sits with consumers today? Is there more work to do? And maybe tie in how the sales force is executing in your mind on selling that into the base, into new customers. Obviously, it's core to the long-term growth of the company.

It is. So the conversion strategy is working. You can see that in our results. On one hand, you would look and say, well, the net add rate ticked down a little bit, but it ticked down in an environment with a tremendous amount of flooding the market subsidies that we didn't match, and yet we continued to grow, which shows and demonstrates the value of the product that customers perceive that we have. I don't think that customers are ultimately, at the end of the day, fooled. They can be entertained with an offer at one point in time, but at the end of the day, you look at the total amount that's on your bill. If you compare that with our competitors to what our bill looks like, you can buy a lot of advanced telephones, cellular devices, with that savings that we provide. So we're the all-in, best product for both speed and savings. Now your question about market perception, Spectrum Mobile is still a relatively new brand in the marketplace. And yeah. And getting that product from your cable providers is still a relatively new concept. So our brand awareness continues to go up every year. The reputation of the product continues to improve and settle in. The savings recognition and word-of-mouth I think is improving, but it'll take time for that to continue to develop. If you think back to some of the things that we did around video, there are other products like broadband, video, and phone, which can both be an asset as well as a liability to the mobile reputation at a particular moment in time. So, you know, when we have programming related rate increases that go through on the cable bill and impact the spectrum customer there, it flows through a little bit to mobile. So I think there is more that we can do, of course. But we're on a steady path to increasing brand awareness, and I think the increasing capabilities, the convergence, are recognized. Most customers still today haven't picked up on the fact that as you're moving around across the country, both inside our markets as well as other MSO cable markets, that you're actually connecting to faster speeds through Wi-Fi. For those of our investors who live in, for example, New York City or LA, I just encourage you as a Spectrum Mobile customer to drive around, walk around, and what you'll notice is that you're actually attached not to a 5G network, but you're attached to a Spectrum mobile network at a vastly superior speed than you would have gotten with 5G. We have work to do to really show and demonstrate that product capability in the way that we go to market, and I think that's upside for us. Because it is better speeds, it's at a better price. So eventually, word-of-mouth gets around that it is a great product, it's better than anything else out there, and it saves you money. So I'm positive about our prospects. The fact that we can do that in an environment that has so much flooding with subsidy, I think gives us a lot of confidence.

Hi. Thanks so much for taking my question. I have one quick one for Jessica. Could you just provide us any details on how your market share has trended in markets where you're competing against fiber operators for a few years now, and how do you see that evolve over time? And then one for Jessica. You said you expect EBITDA growth to be slightly positive this year. By our estimate, political advertising adds about a percentage point to EBITDA growth. Could you grow EBITDA higher than 1% this year?

Sure. So I'll take the first question related to fiber competition. I mean, we've competed well against fiber for many years. We expect to continue to do so. The reality is that's been going on for fifteen years, so we have a lot of experience and we have a lot of data and trends there. We have greater penetration than our fiber competitors, even in mature fiber markets. And, you know, when it happens, overbuild impact tends to be limited to a few percentage points of Internet penetration during the first year of a new overbuilt vintage, as it were, coming online. It's not ideal for us, but, you know, the pace of that's tied to the pace of overbuild, and that's been fairly consistent. In the meantime, as a result, we really don't see overbuilders reaching their ROI goals within our footprint now or in the future. The piece that I would, you know, add to that is you know, and I know you've done some analysis around this. Obviously, the introduction of fixed wireless access has impacts on everyone's penetration. I think that needs to be factored in as well. But inside of our footprint, we have a lot of experience, a lot of years of fiber overlap, as I mentioned in the prepared remarks, and that's not new. While it is new competition and that in and of itself presents some challenges, it's one we've dealt with over time. The bigger issue over the past three years is the macro environment in terms of housing, low moves, and the introduction of, even though it's an inferior product, it's a brand new competitor in the marketplace with an expanding footprint through phone, Internet, or fixed wireless access. On your second question regarding whether we'll grow EBITDA, when excluding advertising, I think the answer is maybe. It's certainly our goal. Look. EBITDA growth has faced challenges in 2026 given the headwind from broadband subscriber declines, but we think we can overcome that with a combination of mobile growth, changing mix of Internet driving positive ARPU growth, continued operational improvements, and attentive expense management, along with what we see from the political advertising space.

Thank you. I guess two questions. Of course, I'm going to ask about video. Chris, what do you think the sustainability of the video sub gains are? And is there any color that you can provide on first-quarter trends? And then just to follow-up on your comments regarding Silicon Valley, can you give us some color on what you're doing, you know, what the endeavors are, what the goal is, and what's the timing of maybe some products coming out?

Sure. Look. For video, I want to be really clear. Our north star here, our goal is not to have a net gain in video just for the sake of net gain. Our goal is to have a video product that supports broadband acquisition and broadband retention, and I think it's a powerful tool to do that if we can provide value and utility for customers. I do think the ecosystem is still really challenged. Programming costs continue to go up, and retransmission fees are a real problem. Around that, I think you'll see us continue to innovate. We do have some new product ideas, and we'll communicate with programmers about that in the course of the year. But the key, you know, for us going back to connectivity and acquisition insurance, our added video customer count helps with broadband. On your net gain question, it's not the goal that you're on thin ice. If you use that parallel and say, well, what happened in Q4? Q4 was really no different than Q3, so there's a slight difference between Q3 and Q4 in terms of net results. There's also a danger on both sides. Whether gaining or losing sub counts, that can make it a volatile area. I think there's some parallel to Internet in that we need to get ourselves out of that space. All subscription businesses can feel this pressure, and getting a more commanding lead through the things I talked about helps us in Internet, which really is the goal here together with mobile. With Silicon Valley, the overarching mission we have there is to communicate to those who develop products and software that they should stop developing to the least common denominator in terms of network capabilities because our cable ecosystem covers nearly the entire country. Unlike fiber overbuilders who do a lot of cherry-picking, we upgrade everywhere. We have already, we have a gigabit everywhere we operate and we're upgrading to symmetrical and multi-gig speeds. This presents a platform with low latency, by the way, that software developers and product developers should be developing to. They have unfettered access to that network. I think our experience has shown that once people understand that these networks exist and their capabilities, they'll develop products accordingly. Our time in Silicon Valley has really been spent around making people understand that this built platform is available for them, and that there are things we can do together.

Hey, good morning. Thank you for the question. I wanted to ask about operating expense growth next year and investment opportunities. You guys are obviously seeing really good momentum on the video side and streaming app inclusions, and also with convergence and Spectrum Mobile. So how are you balancing the commitments to EBITDA growth with the potential to invest to drive these opportunities a little faster? How do you balance that with efficiencies that you could potentially realize? Thank you.

I think Jessica can chime in for a second. But strategically, if you step back, we've made the investments. If you think about the place we're coming from, we've made the investment by keeping our pricing low. We've invested by having a fully US-based in-source sales and service capability. We've invested in our technology platforms, and that gives us the ability to have increasing efficiency while still innovating and developing new products along the way to be able to manage both with our foot on the gas and our foot on the brake simultaneously.

Yeah. I think that's right. If you think about how that translates into something like cost to service customers, ultimately, I expect that to be slightly down over the year versus last year. But a big chunk of that is related to improvements in operating efficiency and in the way that we utilize technology to make our services more efficient. On top of that, you know, in marketing and residential sales, last year, we had seen some substantial growth year over year. I expect that to be meaningfully slower this year than what we saw last year, largely due to investments already made, bringing the expense rate up, and changes that we've made to drive our message into the marketplace. So we believe in our ability to generate EBITDA growth while still doing the right things for the business to drive medium and long-term growth, which ultimately has always been our strategic goal.

Thanks, and good morning. There's been a bit of discussion lately around pricing strategies for these services, and whether companies should move to everyday value pricing versus lower, higher promotional pricing. Just curious about Charter's latest views on how you're approaching pricing in that strategy and the sustainability for what you see.

Sure. You know this, but by way of background for everybody else, in September 2024, we introduced new pricing and packaging bundled at those lower prices. Despite that, we've been able to maintain consistent ARPU, in many cases growing. In parallel, we’ve used that to first reactively and then proactively migrate good portions of the existing base to lower product pricing while maintaining or actually growing customer relationship ARPU through that process, absent some of the well-known video tier mix. Because people are taking more products per household, that has been a long-held strategy at Charter. Keeping your product pricing low with higher product penetration that leads to improved overall ARPU. By the end of 2025, we were about 40% of our footprint having that new pricing and packaging. We'll probably be at 60% at the end of this year. That has enabled us to manage an environment where we're lowering broadband pricing at both promotion and retail, both in standalone but more importantly in bundled pricing. This creates significant savings for customers.

Very helpful. Thanks.

First, Chris, just going back to fiber. You know, you said you don't expect the fiber overbuilders to reach their ROI goals, and we haven't necessarily seen that pressure translate into a slowdown, especially from the telcos. Don't know if that's due to lower cash taxes or something else, but I was wondering if you could just speak to how you expect the competitive environment to play out and when we might actually see a slowdown in that activity that could lessen some of the competitive pressure? And then also just on the promotional environment, I thought slide five was interesting with maybe a $40 gig offer in the market. I was just wondering if you see it really attractive to be more promotional this year or if I'm misreading that slide. If you are, what do you think that could do to subscriber trends as we move through the year? Thank you.

Yeah. So let me start with that one first. The $40 gig is when bundled with either two mobile lines or video. That's been in the market since September 2024. So that's our everyday pricing that's out there and clearly, it's had a big impact on the percentage of gig uptake among acquisitions. So it's not new, and we agree with you; we think it's positive. Regarding the ROI question, I've said this for twenty-five years that when we take a look at ROI, we think about classic IRR cash from cash payback. The danger here is that other people's ROI may be based on a going concern, versus a real financial ROI. You shouldn’t be investing for growing concern ROI. Most shareholders would rather have that capital back instead of deploying it in a poor return scenario. Regardless, that’s the case, and we have to compete irrespective of that. So our job remains to compete against whatever's brought to us, and that's what we've been doing for a long time. When density decreases, the cost per passing ultimately has to go up, thus slowing down the growth of competition. It could be tied to taxes and interest rates, but that isn't our focus. Our focus is on competing effectively.

Great. Thank you. Looking forward here, as far as some of the promotional activity that you have, how long do you see the need for price locks? What are your thoughts on that as a long-term solution? How quickly do you think you can get the Charter Cox customers up to levels of wireless penetration that you experience in your base footprint? Thanks.

Look. We don’t have any changes planned in our pricing strategy. I think the price locks are both good competitive reactions on our part, providing customers comfort and the ability to switch. I think that’s here to stay. Over time, could you see us evolve that further? Yes. But we're not at that stage today. What we have is working and will continue to work. We will always continue to modernize our pricing strategies. As for the wireless or mobile penetration at Cox, you should take a look at the Spectrum mobile penetration at Charter Curve. I think that's a good indication. I would expect the earlier days to be much faster than that, given our improved operations and infrastructure compared to our earlier performance. Our sales channels and marketing efforts are all in a much better place. Thanks, Frank. Operator, I'll pass it back to you to close out. Thank you.