Charter Communications (CHTR) Q4 2025 earnings review
Video Surprise Masks Core Internet Weakness
Charter delivered a stunning reversal in its Video segment, adding 44,000 subscribers in Q4 compared to a loss of 123,000 a year ago—a rarity in cord-cutting era cable. However, this success came at the expense of ARPU (-1.2%) and Video revenue (-10.3%), as the company leans heavily on discounted bundles and included streaming apps to retain customers. The core high-margin Internet business remains challenged, losing 119,000 subscribers. While Mobile continues to grow (+428k lines), total revenue declined 2.3% YoY, weighed down by the cyclical drop in political advertising and eroding legacy video pricing power.
🐂 Bull Case
The 'Seamless Entertainment' strategy—bundling streaming apps like Disney+ and ESPN+—successfully reversed video subscriber losses (from -257k in 24Q4 to +44k in 25Q4). This improves customer retention and supports the total connectivity bundle.
FY25 was the peak investment year ($11.7B). Guidance for FY26 lowers CapEx to ~$11.4B. As network evolution spend winds down, Free Cash Flow is positioned to expand significantly, supporting shareholder returns.
🐻 Bear Case
Charter has lost Internet subscribers for five consecutive quarters. Q4 losses (-119k) show no sign of recovery despite the video bundling success. High-margin broadband is being replaced by lower-margin mobile and video revenue.
Total revenue fell 2.3% and Adjusted EBITDA fell 1.2%. The gains in subscribers are in lower-ARPU bundles. Residential Revenue per Customer dropped 1.2% to $117.19, indicating the company is discounting heavily to maintain volume.
⚖️ Verdict: ⚪
Neutral. The strategic pivot to stabilize the base via video bundling is working visibly on volume, but it hasn't yet translated to EBITDA growth. The core Internet engine is sputtering. Investment thesis relies on the upcoming FCF inflection as CapEx falls.
Key Themes
Video Subscriber Reversal
Reversing. In a shock to the industry trend, Charter added 44,000 video subs, compared to a 123,000 loss in the prior year. This validates the strategy of including $100+ of streaming app value (Disney+, Hulu, etc.) in the bundle. While revenue per sub is lower, this acts as a powerful churn-reduction tool for the broader connectivity relationship.
Mobile Growth Engine
Decelerating but Robust. Mobile remains the primary revenue growth driver, up 13.1% YoY to $973M. While net adds slowed slightly to 428k (vs 522k YoY), the segment is critical for offsetting wireline weakness. 88% of traffic is offloaded to Charter's own network, preserving margins.
Broadband Stagnation
Stable/Negative. Internet revenue growth has flatlined (+0.7%) while subscribers continue to churn (-119k). Management cites low move rates and macro headwinds, but the persistence of losses suggests competitive pressure from Fixed Wireless (FWA) and Fiber overbuilders is capping gross adds.
Advertising Revenue Collapse
Decelerating. Advertising sales plummeted 25.8% to $401M. While largely expected due to the absence of political spend compared to 2024, the magnitude of the drop dragged total company revenue into negative territory (-2.3%). Even excluding political, the ad market remains 'challenged.'
Cox Acquisition Integration
With the Cox acquisition approved in mid-2025 (per prior summaries), integration costs are appearing in financials (Adjusted EBITDA adjustments). This deal is central to the FY26 thesis, offering opportunities to deploy Charter's mobile and video bundles into Cox's footprint to drive growth.
ARPU Compression
Decelerating. Monthly Residential Revenue per Customer fell 1.2% to $117.19. This confirms that the subscriber gains in Video and Mobile are coming at the cost of pricing power. A higher mix of lower-priced video packages and promo rates is diluting the per-user yield.
Rural Buildout Pacing
Charter activated 147,000 subsidized rural passings in Q4, bringing the FY25 total to 483,000. While a growth driver, rural net adds (46k in Q4) are not yet sufficient to offset the losses in the legacy footprint.
Other KPIs
Decelerating. Down 1.2% YoY. While OpEx was cut by 3.1% (lower labor/programming costs), it wasn't enough to offset the revenue slide. Margin remained healthy at 41.8% (up from 41.4%), showing effective cost control despite top-line pressure.
Decelerating. Down 21.4% YoY. The decline was driven by higher capital expenditures (+$273M) and unfavorable working capital timing. However, full-year FCF of $5.0B (+17.5%) remains robust.
Decelerating. Down 9.1% YoY, primarily due to lower EBITDA and higher tax expenses. EPS actually rose slightly ($10.47 vs $10.32) thanks to the aggressive buyback program reducing share count by 10.5%.
Guidance
Decelerating (Improving). Down from $11.7B in FY25. This confirms the narrative that peak capital intensity has passed, which should mechanically lift Free Cash Flow in 2026. Includes continued network evolution and rural expansion.
Stable. The initiative to offer symmetrical and multi-gigabit speeds across the footprint is on track. This upgrade is critical to defending against fiber competition.
Key Questions
ARPU vs. Subscriber Growth Trade-off
With Video subs turning positive but Residential Revenue per Customer declining 1.2%, are we seeing a permanent structural shift toward lower-yield bundled customers? How does this impact long-term margin expectations?
Internet Inflection Point
Internet losses have stabilized around -110k to -120k per quarter for the last year. With the new video bundles reducing churn, why aren't we seeing a clearer path to positive broadband net adds? Is gross add weakness purely macro, or competitive share loss?
Advertising Outlook
Excluding political, ad revenue was barely positive (+0.6%). With the macro environment still challenging, do you expect Ad Sales to be a drag on EBITDA growth throughout 2026?
Mobile Profitability
Mobile service revenue grew 13%, but growth is decelerating from the 30%+ rates seen in early 2025. As you lap easier comps, where does steady-state mobile revenue growth settle, and what is the current margin contribution?