Charter (CHTR) Q3 2025 earnings review
Revenue and EBITDA Turn Negative as Internet Losses Persist
Charter's Q3 results marked a negative turning point, with both total revenue (-0.9% YoY) and Adjusted EBITDA (-1.5% YoY) declining for the first time in recent history. The company's key growth engine, Spectrum Mobile, continued to add subscribers (+493k lines), but this was not enough to offset persistent Internet customer losses (-109k) and weakness in Video and Small Business segments. While the new video strategy has dramatically slowed subscriber declines, the core business of attracting and retaining broadband households remains under pressure from competition and a tough macro environment. Management's guidance for Q4 suggests this pressure will continue, if not intensify.
🐂 Bull Case
The strategy of bundling streaming apps into video packages is working. Video customer losses improved to just -70k, a significant improvement from -294k a year ago, helping to stabilize the customer base and support bundling.
Spectrum Mobile remains a bright spot, adding nearly 500,000 lines. The 'Connectivity' segment (Internet + Mobile) saw revenues grow 3.8% YoY, demonstrating the power of the converged offering.
🐻 Bear Case
For the fifth consecutive quarter, Charter lost Internet subscribers (-109k). This has now led to a YoY decline in total Revenue and EBITDA, signaling that mobile growth can no longer mask the weakness in the core business.
Management guided that Q4 EBITDA would be pressured 'by at least as much as it was in the third quarter' (-1.5% YoY), pointing to a weak end to the year and challenging setup for 2026.
⚖️ Verdict: 🔴
Bearish. The negative inflection in revenue and EBITDA is a significant red flag. While the video turnaround and continued mobile adds are positive operational achievements, they are not enough to offset the erosion of the core Internet subscriber base. With guidance pointing to continued weakness, the core investment case is under pressure.
Key Themes
Inflection Point: Revenue and EBITDA Turn Negative
Q3 marked the first YoY decline in both revenue (-0.9%) and Adjusted EBITDA (-1.5%) in recent periods. This reversal indicates that the strong growth from the mobile segment is no longer sufficient to offset declines in video, advertising, and the impact of losing core internet customers. Management's warning that Q4 EBITDA pressure will be at least as severe as Q3's suggests this is a new trend, not a one-off issue.
Persistent Internet Subscriber Losses
Charter lost another 109,000 Internet customers, marking the fifth consecutive quarter of declines. Management continues to cite low housing move rates and competition. While churn remains low, the data shows a systemic problem with gross additions in a competitive market for a limited pool of new customers. This contradicts the narrative of product superiority and is the primary driver of the overall financial decline.
Video Stabilization Strategy Proves Effective
The company's strategic decision to bundle programmer-owned streaming apps into its video packages has dramatically improved performance. Video customer losses narrowed to just 70,000, compared to a loss of 294,000 in the same quarter last year. This strategy is successfully turning the video product into a valuable tool for customer acquisition and retention in the core connectivity business.
Mobile Remains the Primary Growth Engine, but Decelerating
Spectrum Mobile added another 493,000 lines, bringing the total to 11.4 million. Mobile service revenue grew a strong 19.2% YoY. However, net additions have now decelerated for five consecutive quarters, from a peak of 545,000 in 24Q3. While still a powerful driver, the slowing growth rate is a trend to monitor as it makes it harder to offset weakness elsewhere.
New Focus on AI and Cost Efficiency
CEO Chris Winfrey dedicated significant time on the call to discussing the deployment of AI and machine learning to transform the company's $8 billion annual cost-to-serve. The goal is to improve the customer experience and lower operating costs through tools like real-time call transcription, AI-powered 'next best action' for agents, and automated call summaries. This signals a strategic pivot towards operational efficiency as top-line growth becomes more challenging.
Small Business Segment Shows Weakness
The Small Business segment, a component of Commercial revenue, declined 0.9% YoY. This was driven by a net loss of customer relationships in the quarter (-3k) and year-over-year (-25k). This indicates a potential area of competitive vulnerability that is not being offset by pricing power.
Other KPIs
Stable. Free cash flow was flat YoY, which is notable given that capital expenditures increased by nearly $500 million. The stability was driven by lower cash taxes and a favorable working capital benefit, which offset the higher investment spending. This highlights the ongoing heavy capital investment cycle.
Stable growth. This combined segment of Internet and Mobile services grew 3.8% YoY. This demonstrates the success of the mobile strategy, as strong mobile revenue growth (+19.2%) more than offset the impact of losing Internet subscribers and slower Internet revenue growth (+1.7%).
Down 21.3% YoY, primarily due to lower political advertising compared to the election-cycle period last year. Excluding political revenue, advertising sales were nearly flat, decreasing just 0.5% YoY, reflecting a challenging but stable advertising market.
Guidance
Decelerating. This outlook appears challenging given the -1.5% YoY decline in Q3 and the expectation of similar or worse performance in Q4. Through nine months of 2025, EBITDA is up 1.2% YoY, implying a significant decline in Q4 is needed to bring the full-year figure close to flat.
Negative/Decelerating. Management explicitly guided that Q4 EBITDA growth would be 'pressured by at least as much as it was in the third quarter.' This is due to difficult political advertising comparisons from 24Q4 and ongoing macro pressures, signaling a weak end to the year.
Stable. This guidance was reaffirmed from the prior quarter. The company remains in a peak investment cycle for its network evolution and rural expansion initiatives.