Great. Good morning, everybody. Welcome to the Charter Fireside Chat at the Goldman Sachs Communicopia and Technology Conference. I have the privilege of introducing and moderating Chris Winfrey, who's the President and CEO of Charter. Prior to becoming CEO in 2022, Chris served as Charter's Chief Operating Officer beginning in 2021, after joining the company in 2010 as its CFO. My name is Mike Ng. I cover media, cable, telco here at Goldman Sachs. We have about 35 minutes for today's presentation. First and foremost, I want to thank you so much for being here, Chris. It's really a pleasure and a privilege to have you on stage here with us. Good to be back. Yeah. To start things off, I wanted to ask about how you see the market evolving. I've been really impressed with some of Charter Communications' efforts to innovate in video with the streaming inclusions. You guys are obviously doing a lot in terms of marketing and branding, emphasizing how the network is fiber-powered and talking about the retail value that video subscribers will get on the streaming side of the equation. Could you maybe just put that into context of how you see the market and the competitive landscape today and how you're setting up the company for success? Sure. Maybe a step back. I know that you mentioned my background at the company, but I got here in 2010 at Charter. I'd been in cable prior to that. The industry at the time was facing an environment where you had real competition coming against video in the form of wireline and satellite, and also Netflix, new at the time back in 2010. On the other hand, you had a broadband product that was pretty interesting but underappreciated. As we sit here in 2025, we now have an environment where broadband is experiencing new competition. We have this mobile product that's growing very fast, is underappreciated, and maybe for the first time in a really long time, the potential for stabilization of the video business. When you take a look at that, you sit back and say, what are the assets that we have and how do we use those to drive growth? The answer then and the answer now is, do you have the best network? We do. Do you have the best products? I would argue maybe not in 2010, but today we do. We have the best products everywhere we operate, ubiquitously deployed. Really importantly, can you save customers money? We do through mobile and now through video. We have used those products in a way that we save customers money even on the internet because it allows us to price and package in a different way. To fully lean into our convergence capabilities where, unlike our competitors, we have wireline and wireless everywhere we operate. To really utilize those product toolsets in a way that can give us a different voice in the marketplace. We have our work cut out in front of us to really get that message across. As an industry, I think we haven't done the best job explaining to customers why and how they save money by taking our products. Long term, I'm pretty confident in where we go because of the assets that we have. Great. Let's start a little bit with the fastest growing side of the business, which is mobile. To your point, you have a very attractive mobile offering. It's been a strategic focus for the past several years, even mostly focused on the residential side. Could you just give us an update on where you are in terms of mobile penetration, how you think about mobile as part of the broader product suite? Then we could talk about kind of business after that. Today on residential, our penetration is right around 20% of our customers have a mobile product with us. The way I think about it is, why shouldn't it be 100%? The reason I say that is because we are a, we've always thought about mobile as an extension of our broadband product. We are a facilities-based provider of wireless today, both to our own mobile subscribers as well as to everyone else's as well through Wi-Fi. If you think about the mobile lines and the service that's being provided, in essence, it's an additional broadband connection or in cable speak, it's an outlet. It's an additional broadband outlet that exists provided largely for the vast majority of traffic by our Wi-Fi. I think given that's the case, we should be the provider for all of those outlets because we can offer faster speeds and we can save customers money because we're the facilities-based provider for the vast majority of that traffic. I'm not sitting here saying that we're going to hit 100% penetration, but from an economics perspective and from the value of the product, I think we have a really long runway for growth on mobile. Yeah. You know, when you think about what's preventing that mobile penetration to increase back to what you would consider like a terminal or a fair level, what is the holdup in the minds of consumers? Is it brand perception? I mean, I'm actually a Spectrum customer. I haven't signed up for mobile yet because I'm stuck with my device payment plan on a different carrier. How many people are in your household with a mobile? Actually, only two, which is... I've asked about the line buyout. Right. Look, I wasn't planning, Don, but I'm going to sell you today and just we're on stage. We had in the past had a phone balance buyout to address exactly what Mike was talking about, but it was required to have three lines, two of which was a port. I don't know if we're launched this week or next week into the market, but we're going to extend that to two lines. Now, if you port two lines and bring two lines, we'll do a phone balance buyout up to $500 per line to get over that inertia that really exists and get you in a position where you can save money. I mean, somebody like yourself knows that you do know that it's the fastest mobile product in the country. It has a great plan for domestic as well as international with the unlimited plus. You can exchange your phone anytime with the trading plan that we have on that unlimited plus. Fastest mobile speeds, you save a lot of money today. I'm not going to ask you because I'm not going to, but the provider that you use for sure, if you have two lines in your household, you're for sure paying $140 per month. Am I right? Pretty close, yeah. Right. $140 minus $60 is $80 times 12. It's $1,000 a year. I don't care what income bracket you're in. That's a lot of money. After this meeting, I'm going to go get you signed up. The update to one of our many additional marketing plans that we have is a two-phone or two-line phone balance buyout. The answer to your question is breaking through that inertia, which some of that can come through devices, some of that can come through just people are busy, and some of that has to do with credibility and service reputation over time, all of which we're working on to kind of break through that inertia. Could you maybe just expand a little bit? Did I sell you, by the way? I'd like to know. I'm looking forward to the promotion coming live. Good. I think you said next week, so you could add one more net ad to... Yeah. I was wondering if you could just talk a little bit more about brand perception. Our team talks about this a lot. I think there's a historical or legacy perception of what cable is from a service and quality perspective. I think that's changed a lot. Could you maybe just talk to some of the improvements in customer service and brand and quality, and what needs to happen for consumer brand perception to catch up with what reality is? I think the biggest thing, just so we manage expectations, is it takes time. Yes. The key contributing factors are pricing and packaging, where you saw what we introduced last year at acquisition allows us to have a price point for broadband that is a lower price point with much faster speeds, more reliable product than any of our competitors offer, so long as you combine with video and/or mobile along the way. As a result, we save you money along the way. That works really well in acquisition. We have over 30 million customer relationships today, and we're in the process of going back carefully to the existing base and offering them that similar type of pricing and packaging, maybe not at the promotional rate, but at the new lower retail rate so that we can add value into the relationship at the same or even slightly higher ARPU in a way that customers save a significant amount of money. It's not just for acquisition, but really in the past month or so that we started to go out and put together what we call loyalty offers to go address the existing base. That solves a lot of the customer perception, pricing, packaging, am I getting value? The other piece is service. For a long time, and that takes a while to overcome, cable, because it is a physical service inside of your home, nobody wants to see somebody schedule a truck roll that might take you several days. When they come, if you're lucky, they're going to wear booties inside your house. That is a physical service. The legacy in a lot of that service historically was outsourced. Now, for a long time now, Charter has been in a position where 100% of our service is insourced and onshore, service and sales. In addition to that, we have call centers that operate 24 by 7. We've introduced a customer commitment where we're not perfect, but if your service goes down for more than two hours, we're going to automatically provide you a credit for the day. We're going to guarantee you that we'll have a service call at your house. If you call us before 5:00 P.M., we'll have somebody there today. If you have an install that needs to be done and call us before 5:00 P.M., we'll do it today. If we don't, we'll stand behind that commitment and provide a credit. That word of mouth takes a while to get around in people's experiences over time to develop that service reputation. I feel really good about where we are there. If you take a look at spectrum.com, our website today, you'll take a look at a lot of the things we're doing with the savings calculator, the heads-up comparison of two mobile lines with broadband, how we can save money, the fiber-powered broadband that you talked about. A lot of that is designed to not only be for customer education and improve, but really in a world where we're much more driven by AI search to feed into that so that the reality of what we're offering, the savings we provide, and the quality that we have gets reflected inside of search as opposed to people's service experience from 10 years ago on Reddit. Yep. Those are the challenges that we face and that we're trying to break through. It takes time, but we can take a look internally. We look at not just our transaction per customer, service calls, truck rolls, availability time, time to repair, time to show up. All that is making significant improvements. Also, internally, when we take a look at things like net promoter scores and customer satisfaction, it's having a big impact. Going back to the first point, the best way that you can have a great customer satisfaction is to save them a lot of money. Right. In the end, you got to have all that together. It's a long-term trek, but we're doing it. It's working. Going back to the mobile conversation for a minute, Charter recently signed a new MVNO with T-Mobile. I think it's mostly on the business side of the equation. My understanding is that there were limitations on the existing MVNO in terms of number of lines. This was required to move more into business and SMB. Could you help us just understand your ambitions on this side of the business? How important is having a mobile offering in terms of bolstering your go-to-market on business? Yeah. For small business, it's been an active part of our approach. It came after residential, and as a result, we're less penetrated in small business than we are in residential. That's increasing, and it's increasing fast. A lot of the same type of programs that we talked about before are available for small businesses. As you mentioned, we weren't able to approach mid and large-sized businesses in the past. The relationship we have with T-Mobile takes advantage of the fact that they're underpenetrated in that space. We're underpenetrated in that space. I think particularly for the mid-market space in business, we haven't been selling there. It opens up a real opportunity for us to sell and to add value to the broadband, video, and telephony relationship that we have with businesses by being able to save them a significant amount of money with the mobile product. For a business, it's a real expense. For business, when you have tens and dozens of lines or hundreds of lines, it can add up quick. That can be the difference of us winning that business. We don't have an incumbency in that footprint, so we can be aggressive the same way that we've been in residential. Right. That's a good segue to the next question, which is Charter's mobile EBITDA plus CapEx has been profitable for several quarters. Could you just expand a little bit on how you view the mobile profit pool? Is it a business in and of itself that you expect to be a driver of P&L, or is this really something that's complementary to the broadband business? Yeah. Look, on one hand, at the beginning, I said, and I mean, mobile is just an extension of our broadband business. It's another Wi-Fi extension together with the CBRS that we're now deploying allows us to provide that. However, if you were to take a look at mobile as a standalone product, and we don't think about it that way, we don't market or service it that way, but we have the ability to financially express that internally, it has been free cash flow positive for some time, as you highlighted. It's growing. The reason it's growing is because the underlying economics are very good. We now have enough scale to fully cover the fixed operating cost and the fixed capital that's there, in addition to this level of subscriber acquisition cost that we have today. As you continue at this pace of growth, the amount of EBITDA and free cash flow continues to expand, and it grows in a healthy way. The mobile business for us, I think, is one that is underappreciated, underappreciated in terms of its potential for sustained subscriber and financial growth. Maybe starting going back to where we started, maybe in a similar way that broadband was back in 2010 when I joined the company. Right. OK. Shifting back towards just the broadband discussion, could you talk a little bit about the competitiveness in the market? Starting with fixed wireless, what are you seeing today in terms of competitive intensity from fixed wireless access providers? What does Charter do in response to that being increasingly available in Charter markets? Sure. Maybe I'd just tackle the entire broadband market space because it's hard to do with one competitor without the other. The fixed wireline, the fiber overbuild pace is about the same as it was. We compete really well in that space, and we have for a decade, so not much has really changed. You add to that the addition of a new type of competitor with cell phone internet or fixed wireless access, whose footprint has been expanding both by operator as well as now the addition of a third operator. By definition, the footprint of that competitiveness has expanded slightly recently. The quality of our product is better. The speeds are better. The pricing, when combined with mobile, is better. I haven't seen, other than that expansion, any irrational competition that's really taking place there. Right. That doesn't mean that we should sit still and just say we should do nothing. We have one other piece that's going on, I would say, that is arguably just as big as the cell phone internet new competition. There's a macro environment where a few factors. One is the reversion to mobile substitution to pre-pandemic levels. Hopefully, that's about complete. Second is a record low mover environment. Third is a very low amount of new construction and new build, which means we have lower selling opportunities. At the same time, you have new forms of, albeit inferior, but new forms of competition along the way, which puts a lot of short-term pressure on gross sales. Everything that I just said suggests that the macro environment at some point will change. The newness of the competitive environment will stabilize. We could sit back and do nothing and say we recognize we have the better network, we have the better products, we can save customers money, and maybe we should just be patient. That's not who we are. We're not sitting still. There is no rock that is unturned at this point to go drive growth. We're doing a lot of different things, including testing different offers in the marketplace, different go-to-market strategies, and the different way that we even talk about our business. On the move activity point, I guess my interpretation of that would be like, hey, when move activity picks up, the switcher pool will increase. I would just like to hear a little bit about your position in that scenario. Do you think you're a net share gainer when there's a meaningful switcher pool? I know there's been a lot of debate around that. We are a net share gainer in an environment where moves pick up for no other reason, mathematically, because of the size of our footprint. Right. Meaning if you're an off-net mover for somebody else, you're an on-net mover for us, and we pick up that volume. We're eagerly awaiting for the move environment to pick up. Interest rates matter to us not just from a financing perspective, but also in the health of the housing market as well. There's a lag, obviously, but we watch that as well. OK. Great. On the pricing side of the equation, could you frame for us how you think about broadband pricing over time? How do we kind of interpret what the impact to broadband ARPU will be from this pivot towards broadband plans with multi-year price slots? Sure. Yeah. I think the broadband ARPU marketplace is healthy right now. You take a look at the fiber providers, their ARPU is increasing. If you take a look at cell phone internet, it's relatively stable in terms of ARPU. For us, our broadband ARPU is going to move around. A lot of that has to do with product allocation. We think about relationship ARPU and ARPU per homes passed. Ultimately, what's your gross margin that you can get per home passed and per customer relationship? There's going to be times where we have product allocation between mobile and broadband and even video that's shifting around. We just think about the total ARPU per relationship. I think the pricing is relatively rational for the time being. Yeah. We have ways to actually use pricing and packaging the way that I described before to lower our acquisition pricing, lower our retail pricing, and lower the promotional roll-offs and still have higher ARPU and gross margin per relationship and per passing because of this other set of products that we have that we can utilize. Maybe we can talk about that other set of products. I think irrespective of where you come out on the cable debate, I think everybody would acknowledge that you guys are doing really interesting things in video, right? Yeah. I think there's a tremendous amount of support from the media industry in what you all are doing. Could you talk a little bit about that and perhaps talk about some of the obligations from the media companies to make sure that you succeed or the incentive that they have for you to succeed and where you are in the timeline of marketing that? From the investor and analyst side, when will we begin to see all those streaming inclusions show up in results, right? Yeah. Yeah. Look, we had to get through all the deals, which we did. We had to launch all the direct-to-consumer apps as inclusion offers to our customers, which we did. For those that had an ad-free upgrade, we had to make sure that for existing customers, that was available on our platform so that we could save them money and only charge the incremental cost, which we did. Each programmer had its own authentication principles and their existing credentials that we had to work through as well. We've just launched the video store. As a Spectrum customer on my Spectrum app, you can go take a look inside of the streaming section. You can take a look at the way to, in a uniform way, manage all of your different direct-to-consumer inclusion offers, including ad-free upgrades. We have that on spectrum.net. We have that on my Spectrum app in a way that's now customer-friendly. It was not at the beginning. It was a brand new concept. It was a little kludgy. We didn't want to get heavily behind it and market it and have a service experience that wasn't optimal. It's not 100% yet, but it's good enough to start marketing. We are marketing that video product in our entire footprint. To the point you made, programmers are now getting behind us to use their talent, their IP to make sure that our customers, our video customers, know that they can activate these inclusion offers for free and that the best place to watch their direct-to-consumer app is actually on Spectrum Internet. If you go back to some of the credibility pieces that we talked about before, I think some of that can be helpful in the way that we market and that we earn the trust and business of customers longer term with video. This whole thing started about when we realized the video product had a high price. The content was increasingly hard to find. A lot of the content was available exclusively in the apps, but not in the linear relationship. We had to make a decision, were we going to be in the business or out of it? If we were going to be in the business, we had a view that it's a lot of money, and our customers need to get value for it. If we were going to take rate increases from programmers and pass that through to essentially our broadband customers, which our wireline and wireless competitors don't have because they don't have the product, then we needed to make sure there was an appropriate amount of value in that video product. It was something they couldn't get somewhere else that made them think it was worth it and that it was additive to the overall relationship. Our profit margin on video had declined significantly a long time ago. Our interest in video, while it is very interesting to help out the video ecosystem, is selling in more broadband and selling more mobile and having the product be sticky. I think we're there, and you'll start to see us market a lot more heavily, really for the benefit of our connectivity services. You asked a question about the programmers. I think to a T, they're all in. They understand that the best relationship they can have is through us because it's a wholesale relationship. There's no operating costs, there's no subscriber acquisition costs, the churn is lower, and the overall revenue and the margin is higher than what they might get elsewhere. It doesn't mean that they're not trying to tap into other areas of the market, but they're getting behind us. It's a pretty unique moment in time in terms of the quality of the relationships that we have with the programmers and how they've leaned in. Yeah. It's really interesting to me because when I think about ARPU, you have the kind of broadband and video ARPU on a like-for-like basis, but then you also have this storefront revenue. Correct. Which will sit on top of that and also be additive to ARPU. Yeah. Fair enough. What we haven't done is leaned heavily into the upgrades to the ad-free yet. That's coming, and this platform allows us to do that. The other piece is that we're just going to start marketing these direct-to-consumer apps to our broadband customers, which for certain of our partners, including Max, is really important. I know it was important to Peacock and to Disney+, of course, as well. To the extent that we can't get a customer into a traditional video relationship because we have an ongoing billing relationship, because we have an ongoing customer service relationship with these customers, and because we have Zumo, which allows you to have the unified search and discovery of all live and SVOD together, it means that we can be the video store, as you said, even if they're not taking a traditional video relationship and add value to the customer and to the programmers and to ourselves by doing that that way. Yeah. That piece makes perfect sense where you're a store, you're a reseller, the relationship is completely symbiotic. I was just wondering if you could comment a little bit on the ad-supported inclusions into the video package because things like ESPN+ Unlimited make perfect sense to me because your customers shouldn't be paying for ESPN+ twice. Correct. With something like a Disney+, right, there is exclusive content on a Disney+. There is going to be some exclusive content in ESPN+ Unlimited as well. Yeah. Some of the additional sports that they've added around. Our customers get access to ESPN+ as well, which two years ago was frustrating that we didn't have. This has included all that and doesn't through the ESPN Unlimited. The incremental content, that's how we got here. Right. It wasn't just Disney+. It was Peacock. It was Paramount+. It was every single one of these platforms. The high-quality stuff was being moved exclusively into the direct-to-consumer with less advertising, deeper library, the newest stuff. We looked and said, geez, maybe what we should do is get out of the linear business and just package some of these apps. Of course, that didn't make economic sense for the programmers, which is why we ended up where we are. I think it's a great outcome. Right. Yeah, that's a good point. They're not investing as much in the linear network, so it makes sense then. I mean, ESPN+ would say they are because they're spending a tremendous amount on words. In fairness, and I'm sure each of them, I'm not going to get sideways with them, I'm sure each of them would quibble with that point. It's hard to argue that there isn't a really fantastic amount of content that's available exclusive in some of these apps. That's right. OK. Can we talk a little bit about the Cox acquisition? It seems very complementary to the Charter strategy. When you look at things like Cox's video penetration, mobile penetration, it seems like there's a playbook that can be executed on to help improve those sorts of things. Could you talk a little bit about Cox, why it made sense, where you see the biggest opportunities? Look, the Cox family has owned that set of cable assets since 1962. They've been in the cable business since 1962. It's not a decision they came to lightly. The need for scale, the ability to do what we do with pricing and packaging, and to have the assets that we have available to us through mobile and through video, I think, were big drivers of that. They saw our operating philosophy was true to some of their own ethos around community investment, around how we treat employees, our U.S.-focused sales and service infrastructure being 100% onshore, all resonated with them. From our perspective, we saw the opportunity to take a business that's been well invested over many decades from a network perspective, that has employees that believe in the quality of this business and the industry, and that can get excited about the strategy that we have and incorporate them as part of this team and broader team. Because they had lower growth in broadband and because they have lower video penetration and lower mobile penetration, therein lies the opportunity to go address the one thing that is different about them, which is a higher ARPU for broadband. Those tools that are available to us to use mobile, to use video, to actually do what I talked about before, increase your ARPU and your gross margin per household at the same time, taking down your broadband pricing to make sure that you're competitive at acquisition and retention, is, I think, a relatively unique skill set that we've developed at Charter. We did it in 2013. We did it with the acquisition of Bresnan, TWC, Brighthouse. We're actually in the process of doing it to ourselves right now through the new pricing and packaging that we launched last year for acquisition and that I mentioned, loyalty migration that we're doing today. When do you push on different levers and what are the tools that you need to have? That meant we feel really comfortable about the ability to take it on, to integrate, and to create value for all of our shareholders. When you look back to TWC, Brighthouse, I would have thought a big part of the cost synergies there would be programming cost synergies. As you look to Cox, are there diminishing returns to scale? Because you're, yeah, both sides, I think, are scale players at this point. I think the synergy opportunity there is less because the penetration is less. OK. If you're a programmer, you look at it and say, I really don't care about that because it's dwindling at a much faster rate to begin with. Here, at least when Charter takes on these passings, the goal is to actually grow that from a Cox perspective. You can have a lower rate, but you can have higher volume. That would be a positive synergy to the programmers. Right. Hard for us to say. What we put into our synergy calculation, similar to what we've done elsewhere, was really about baseline procurement, overhead, and some fundamental stuff. Those things that are operating synergies were completely left apart. Things like, can you accelerate the revenue trajectory for B2B because of the high-quality assets and teams and products that they have, plus our expanded footprint, our larger footprint? Areas like hospitality come to mind, which they do really well. The advertising business on that lower amount of video customers, we have a more sophisticated monetization and long-tail inventory addressable capabilities. The launch of Spectrum News into some of these markets can have a pretty meaningful impact as well. There's a litany of areas that aren't what I call transaction synergies, that are operating synergies, which we fully expect to get over time. That comes about not because you're doing a transaction, but because you're adding on to what has historically been a pretty successful strategy at Cox. Yeah. Maybe in the last couple of minutes here, could you talk a little bit about EBITDA growth in the midterm? You guys are obviously doing a ton in terms of investing in the brand and some of the new products and services. There's some cyclical stuff later this year. Political advertising and everything. Political, yeah. Look, start out with the fact that we have tremendous free cash flow today and really a takeoff in free cash flow that's about to come. We also recognize the importance of EBITDA growth along the way, and we're focused on that. We have multiple ways to achieve that EBITDA growth outside of some of the seasonality that you mentioned. The first and foremost is stabilization of broadband and the ultimate return to growth. The second is, I think, the mobile businesses, which is largely underappreciated in terms of the quality of its growth and its earnings and the structure that we have. The third would be through video. To the extent we can stabilize video, there's a big gross margin drain that comes through as a result of higher losses in video. Together with, we've been in a multi-year transition out of a set-top box equipment revenue environment to either a box-less environment or to Zumo at a lower rate. We've absorbed that, and that's reflected in the financials today. As that stabilizes and that transition completes, the impact to EBITDA and gross margin will become less. Finally, really being at the same time a great service operator and militant on cost. Those things go hand in hand. By being a great service operator, your transaction cost per customer can come down. The utilization of AI to be an accelerant to that taking place is very much in focus. We're focused on providing great service, but doing so in a way that can lower your operating cost over time and contribute to EBITDA growth. Excellent. Chris, it's been such a privilege to have you on stage here with us. Thank you so much for coming to our conference and for speaking with us. Good, thanks for having me. Thank you. All right. Good. Thank you, sir. Thank you very much. It's good to see you.