Okay. Good afternoon. For important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales rep. Excited to welcome back to the conference, second year in a row. Good to have you back, Dennis Mathew from Altice USA, Chairman and CEO. Dennis, good to see you again. Yeah, great to be here. Great to see you as well. Thanks for coming back to San Francisco. Yes. Happy to. I think it's been about, what, two and a half years for you as CEO of the company. From your perspective, when you look out over the next two to five years, what are the places that you and the management team are most focused on and you think can drive the most value for shareholders? Yeah, we're excited about this journey that we've been on. On a previous call, I mentioned that we've completed phase one, which has allowed us to really stabilize the business, transform the culture, build an incredible leadership team, and stabilize our network and the products that we have, and deliver the level of quality that our customers demand, and rebuild the trust with our teammates. This is all foundational to helping us drive this transformation. As I look out across the next two years, we have tremendous opportunity to continue to drive our go-to-market strategy, to continue to drive how we compete. We put some mile markers out there. We want to grow mobile to over a million customers. We want to grow fiber to a million customers. We want to launch new products and services and really drive adoption and monetization of those products and services. We want to continue to elevate our quality so that we can compete at the highest levels. We announced in the last call that we now have a multi-year network strategy that will really help us compete at the highest levels. I am excited for where we have been, but now it is time to hit the accelerator and really drive growth, really stabilize broadband, and ultimately drive EBITDA and cash flow growth. We have a whole set of strategies to help us get there. You mentioned some of the targets you guys have laid out for us: mobile lines, you mentioned fiber subscribers, but you also have some margin expectations, including 40% EBITDA. How do you grow? You just said it's time to grow, time to go on offense, and also at the same time generate consistent free cash flow year after year and get your operating margins up. Yeah, the last two years have really been about getting the right people on the bus, getting them in the right seats, and just rolling up our sleeves and stabilizing the organization through just sheer will and hard work and resiliency. The team has done an incredible job. Now we have an opportunity to really establish sustainable systems and processes and lean into digital and automation and AI. We could spend so much time here because this is not just words. These are actions and plans that are coming together. We laid out a target and a goal of continuing to drive OpEx efficiency of 4%-6% by the end of 2026. We are laying out a plan that will really get us there as we continue to drive efficiency in truck rolls and call volumes and really make it simpler for our teammates and for our customers to engage with us. This is a huge opportunity for us in terms of driving efficiency while raising and elevating employee experience and customer experience. At the same time, we do have the headwinds of video business continuing to see cord cutting, but we're launching new products. We're driving mobile, we're driving fiber, we're driving value-added services like TotalCare, and we're launching Whole Home Wi-Fi. We've launched Connection Backup. These new products will help us drive the top line while we drive efficiency into the business through digital and automation and AI. Most of these are sort of 2026, 2027 targets. If we focus on 2025, what are the things that we in the investment community should be looking at to sort of assess how well you're doing on your way to these longer-term goals? Yeah, the good news is we're not waiting till 2026 and 2027. Over the next couple of quarters, we'll be laying out a very clear strategy on how we deliver on these goals and objectives. We invested in some global benchmarking in Q4 to help us understand where are the gaps, where are the opportunities, how do we really ensure that we have a clear line of sight to delivering on these goals and objectives and make sure that we have the proper prioritization of programs and projects to execute against. You'll see quarter by quarter, are we continuing to drive and accelerate mobile? Are we continuing to drive and accelerate these value-added services that we keep talking about, which are really in the single digits in terms of penetration, and we'll start to deliver that in a much more meaningful way. You'll continue to hear about how we're driving Connection Backup and other products and services on the B2B side and how we're driving growth there. Historically, we've really just been a connectivity business on the B2B side, and now we're building out a whole portfolio of products that will allow us to drive ARPU and growth. We'll provide regular updates on how we're leveraging these new products to drive the top line as well as driving these initiatives to drive efficiency into the business. Could we expect to see residential revenue, the pace of residential revenue declines that we've seen over the last year or so, improve as we move through 2025? Is there enough visibility at this point? That's right. I mean, if we go back to EBITDA in particular, when I joined, nearly a 13% decline, and then we've been able to moderate that in 2023 to less than 7%, and this past year under 6%, closer to 4.4%. That's been through financial discipline, that's been through putting the right governance in place, but also launching new capabilities around pricing and packaging and really making sure that we can execute on promo rolls and rate increases and really have a higher level of discipline in terms of acquisition pricing and managing the base to help us further stabilize revenue while at the same time driving adoption of these new products. Really, this is something that we just didn't have the muscle historically in terms of base management. Historically, our base management was providing a rate increase. We now have the ability to have robust conversations about new products, new services, new packages that will help us further stabilize ARPU and revenue in 2025 and into 2026. We've had a number of conversations with competitors and cable peers of yours over the last couple of days. One topic, of course, is AI and how that's being leveraged in the operations of the business. Are you doing that at Altice? Where is that having the biggest impact if you are from an operating point of view? Yeah, we're really excited about how we can leverage AI to elevate the employee and customer experience. We started in our call centers. We started in retention and care. It was really challenging for our frontline teammates when a customer would call. We had very basic tools, literally a spreadsheet where they would have to go through thousands of lines to figure out what offers to provide customers. Now we have a tool called Ava that allows the frontline teammate to really have a much more structured conversation. We are doing that by leveraging customer lifetime value, understanding the competitive landscape, understanding the products and services, and teeing up for that teammate one of three or five offers that can maximize CLV while delivering a great offer for the customer. We are scaling that into care. We're starting to scale that into sales and really help us ensure that our teammates have the absolute most productive, constructive conversation. We're also running pilots with our field technicians so that ultimately we can elevate the capability of those tools and really ensure that we can drive resolution much faster. Ultimately, we want to become proactive versus reactive so that we can see on the network where there are issues and challenges. The other big opportunity via generative AI is to really consolidate these knowledge bases and make it much simpler for our frontline teammates and our teammates in general to find the information they need, whether that's employee information around benefits and/or information that they need to help solve customer issues. Today, they have to go into five different tools, and it takes time to really figure out how to solve and troubleshoot. This year, we will leverage AI to make that significantly simpler. Got it. Thank you for that update. I want to move on to sort of your fiber and DOCSIS strategies because that's been evolving since you've been the CEO. As you know, Altice, the prior team was fiber to the home was really the strategy. It feels like you guys have come to sort of a fork in the road and moved a little bit more in the DOCSIS direction. That's fair, but I would love to hear from you why you think kind of pulling back on the fiber expansion plans that were there from the prior team and kind of reinvesting back into HFC and DOCSIS makes sense today. I'm really excited about DOCSIS and the power of the HFC network. I feel like over the last few years, it's really not been well understood, the power of this network. When I joined, there was a lot of questions. Hey, we're going to fiberize the whole country. What's the plan? This capital-intensive. I knew that I was very excited about the plan for the East because obviously we are competing against a very mature fiber provider there. I've competed in that space in the past. Having a best-in-class, next-generation network that delivers eight gig symmetrical made a lot of sense. We had to do a bit of an inventory of what do we have in the West. What we found is that we have an incredible network. We're able to upgrade that network and deliver gig and multi-gig speeds in a very cost-efficient manner. The return on investment, just the math, makes a lot of sense where we're able to do this for hundreds of dollars versus thousands or tens of thousands of dollars. It took us some time. We had, again, a brand new team that did an inventory, helped us really build that strategy. We're excited to lean into our incredible DOCSIS network. We've invested tremendously in getting us to a gig, and we have a path to getting to 65% multi-gig over the next few years. At the same time, we're unique. We have experience in fiber. As we look at new build and new passings, we're going to lean into fiber. We can do that in a cost-effective manner. We can do that in a way that really maximizes that capability. We have now 70,000 passings in the West. As we continue to look at opportunities to build new passings, we're going to lean into fiber where it makes sense. We are very excited about this strategy that really maximizes our return on investment. Competitively, Dennis, in the East, are you now fiberized or wherever you compete with FIOS, or is there still some more gap there? We have 3 million passings, so that's a pretty significant, substantial overlap. We feel like we have what we need to compete, especially as we've now launched mobile across the footprint. We now have these incredible video packages. We've really evolved our go-to-market strategy. As I've mentioned in the past, we've established local leadership teams that are close to the customer and close to the competition. We are seeing some real momentum as we've exited 2024, jumping into 2025 with our ability to compete in the East, leveraging fiber, leveraging this incredible product portfolio. The reality is we've had to spend some time rebuilding trust with the customer. We've had to really rebuild that trust, rebuild that brand. Now we're winning awards from Ookla and others for having the best fiber network. We are going to hit the accelerator now. We are driving quarterly historic highs in terms of fiber migrations. We are going to continue to drive in the East. We are very excited for our ability to compete in the West. The West, we continue to see headwinds with fiber overbuilders and fixed wireless, but we now have the right network and right product portfolio to compete. What does hitting the accelerator mean from a go-to-market perspective in the East versus the West? Are you using different strategies depending on who the competitor is? Can you talk a little bit about that? I mentioned on the last call, we were doing a for-market test where we can now look at how do we need to evolve our pricing and packaging to match the competitive intensity. When I joined, it was literally one size fits all across the entire country. That does not make sense. It is very inefficient. We now have, one, the strategy and, two, the infrastructure to be able to compete more effectively, whether it is having the right retention offers, having more aggressive acquisition offers based on the level of competitive intensity. That looks a little bit different, whether it is a fiber overbuilder versus a mature fiber provider that has a broader portfolio of products. Yes, we are evolving. We're not going to have a thousand playbooks, but we'll have a few playbooks that match the competitive intensity and ultimately allow us to maximize rate while driving volume. Where are you seeing fiber competition ramp? What's your sense of where we are in sort of the competition with fixed wireless in the Altice footprint? Yeah, on the fiber side, the East is about 70% overbuilt with fiber. And that's been steady. Essentially Verizon. Essentially Verizon, and that's been very steady. In the West, it has been steadily increasing. It's now at 45%. People always ask me, "Hey, how's the pace? Is it speeding up? Is it slowing down?" It has been steady. I think it will continue to be steady until I see something different. We are evolving our playbooks and strategies and planning accordingly. Fixed wireless has come in across the footprint. They have particularly been targeting the income-constrained demographic. Really, these are challenging macroeconomic times. There was an article in the Wall Street Journal a few weeks ago that literally said that 50% of spending comes from 10% of the population. I mean, it's like numbers I've never seen before. We did the research as we are building out this income-constrained strategy and found that 75% of the population has some level of budget strain that they're trying to manage for. Folks are in a position where they're looking for value and consistency and transparency in the pricing and, quite frankly, a "good enough product" in this season while they're managing through that. We are launching some pilots in Q2 and really looking forward to scaling that strategy in the second half of the year. We are seeing the pace of fiber continue in the West. We see fixed wireless, I think, continuing to be competitive across the footprint. I know you guys are working on some new price tiers, particularly for that part of the marketplace. I think you've also lapped a lot of the fiber kind of rack rate adjustment. There's been a lot going on in ARPU, and there's obviously a huge focus. Certainly, if you could get ARPU growing again, it would mean a lot for that broader P&L and cash flow position. Can you talk about your expectations of sort of getting back to broadband and residential ARPU growth and some of the things you're doing on the pricing side to make that happen? Yeah, our focus is customer ARPU and driving customer ARPU, being a lot more disciplined on the growth side of the house while driving a disciplined approach on the base. We have just a lot more tools in our toolkit. We just have more products, more services. When I joined, quite frankly, it was a little bit of much more art than science in terms of how we executed, which ended up driving more churn than we would have liked. Now coming into this year, as I mentioned on the last call, our goal is to deliver an incremental $100 million of value through our pricing strategy. That is going to be a combination of driving rate in a disciplined fashion across the base and also in our acquisition strategies. We are starting to see that come to life. We have a whole host of new products and services like mobile and others to be able to help us drive and continue to stabilize ARPU, customer ARPU, and ultimately get back to customer ARPU growth. We've been talking a lot about broadband, but I want to make sure we talk about wireless. You guys have obviously laid out some targets there. Yes. Convergence has been a big topic today with all the telecom and cable CEOs at the conference. What's your perspective on the role of mobile and wireless for Altice over the long term? Yeah, we're excited about mobile and the value that it delivers to the business. I think from a churn perspective, we're seeing tremendous benefit for our customers. It is helping us provide tremendous value. When you bring broadband and mobile together, we're able to save customers hundreds, if not thousands of dollars, literally. It's our job now to tell that story. When I joined, it was really just sitting on the shelf. We didn't have an offer. We didn't have it built into our go-to-market strategy. We didn't have the right level of compensation and incentives. We were building out retail, and we weren't showcasing mobile. Now you walk into retail, you see mobile, you'll be able to have a robust conversation. We weren't selling it in our care channels, retention channels. We have started to ramp those channels because it is a great opportunity for us to have a robust conversation with our customers about incremental value that we can provide, particularly in these challenging times. As we prepared to relaunch mobile, when I joined, we did the customer research. Over 25% of customers were looking for their provider to provide both an in-home and out-of-home connectivity solution. That was almost two years ago. The expectation only continues to increase. It is not just, "Hey, just have two products from one provider." They want real value, and they want the simplicity of having that from one provider. We are delivering that, and we are continuing to invest in our channels to drive growth there. Wireless certainly can be a marketing-intensive, retail-intensive business. How do you differentiate the Optimum, particularly on the East or across your footprint, your wireless business from the competition? Can you do all that and grow the business with, again, sustaining free cash flow generation? Yeah, the good news is that we have opportunities to just drive awareness, drive consideration through the millions of interactions that we have every day, whether it's in our channels, whether it's in retail. It's been a steady journey of really driving into our base the products that we have. We have an incredible partnership with T-Mobile and the MVNO relationship we have. We've been continuing to unlock new products, new services. Now it's all about continuing to tell that story in the existing conversations that we're having. That in and of itself is allowing us to drive this growth and fuel this growth. We're very excited about continuing to tell that story across the existing channels, across our existing marketing assets, and making customers aware that we have now the ability to give them tremendous value by bringing their broadband and their mobile services together. Got it. The other thing that I thought was interesting in your investor deck was a video slide showing the attach rate actually going up. I do not think I have seen one of those in a long time. You guys have been working hard at kind of reinventing your video packaging. You seem excited about it. What have you guys been able to do? Is this something you think customers value still and want from Altice? Yeah, I'm very excited about putting the customer at the center of everything that we do and taking a stand for our customers and not forcing individuals to pay for content that they don't watch. That is the conversation that we are having with our programming partners. It's not easy. There's decades of brokenness that needs to be fixed. We've had conversations, and folks have said, "Dennis, we've been doing this this way since 2004." It's like, "Well, that's the problem. It's not 2004. It's 2025." Tech companies, the largest in the world, have entered this space. There's more streaming available than ever. You can look up online. I give a whole conversation about how broken this is. Could you imagine walking into a grocery store wanting to buy Diet Coke and then being required to buy Hot Tamales? I cannot imagine that. Yeah, like, "Hey, I'm trying to buy Diet Coke. Great. For the privilege of buying Diet Coke, you have to buy Hot Tamales." That is literally the state of the business. The good news is that we're excited to work with our programming partners to be able to offer this level of flexibility and provide value because this is particularly challenging times for our customers. We have been able to reach deals that allow us to do that. Now we're seeing an uptake in video. Look, one quarter doesn't make a trend. We have a lot more work to do. Folks are excited about our Entertainment Package for folks that are not interested in broadcast and regional sports or sports. They just want to watch HGTV and the Food Network and AMC. That's what they're interested in. For those that are interested in these other more expensive types of content, we can give them those products as well. Ultimately, we're excited later this year we'll be able to seamlessly bundle in and package in streaming services as well. Got it. Okay, that's helpful. I'm going to remember the Hot Tamale analogy. I like that one. I like Hot Tamales, by the way. I don't like Diet Coke. I'm not a big Diet Coke guy. I like coffee, black coffee. I'm the same. I'm with same. I'm with you. All right, let's talk about the P&L a little bit more. You guys have laid out some margin targets. We talked about the 40% adjusted EBITDA. There's also 70% gross margin targets that you've talked about. How do you get there? This 4%-6% reduction in OpEx, especially coming off a quarter where OpEx was a bit elevated, I think, versus expectations. Can you bridge us from where we are in Q4 to where we're going? Yeah, the good news is when I joined, you had OpEx going up and to the right, and it was a bit challenging there. We had to put the right controls in place. As I think about phase two, it's all about driving digital, driving automation, really taking even more noise out of the system. That 4%-6% is one that I'm confident in. Over the next couple of quarters, we'll lay out kind of what's happening and when it's happening and how we're going to deliver on that. It's going to be continuing to put systems and processes in place that help elevate the customer experience while driving meaningful efficiency on the direct margins. I'm confident as we continue to stay disciplined in these discussions, we continue to elevate there. Last quarter at over 67%, and we'll continue to drive there. It is going to be a combination of driving transformation, driving growth of these new products, these new services, being disciplined. We've shown that we can drive into the base these new products. We said we were going to launch mobile and drive growth of mobile. We are. We said we were going to drive fiber and deliver that in an accelerated pace. We're doing that. Now as we launch these new products and services, I'm confident that we'll be able to integrate them into the channels so that whether it's at the point of sale or in one of our care or retention or retail channels, we'll be able to drive adoption of these products so that we can ultimately drive EBITDA growth. Is some of the gross margin opportunity on the video side and sort of getting programming costs more aligned with the reality of the business? That's right. It's going to be a combination. We're excited for where we are on the growth in terms of gross margin positive on mobile. We'll continue to drive on video, and we'll just continue to be disciplined in the way we drive the business as we move forward. Got it. On the OpEx efficiency, I know we'll hear more from you, but is a lot of that around taking kind of transactions out of the business in terms of truck rolls and call center stuff and all that kind of thing? That's right. We want to be the simplest provider to work with. We're not there. We know that customers are looking for tools and want to be—they don't necessarily wake up saying, "Man, I want to call my cable provider." We're probably the last people they want to call. They may have a quick question. We've launched an app. We're going to be investing in delivering more and more capabilities, whether that's self-service or chat, and really making it easier. Half our calls are confusion around billing. We're making investments there to make it, one, just simpler to understand the bill and what's happening and why it's happening, but then also just quickly get that answer, whether it's in the IVR or in the app, make sure people understand what's happening and why it's happening. I mean, this isn't sexy stuff. This is kind of like, "Dennis, this is like mom and apple pie," but this is sexy stuff for us. I'm excited about it because I see the noise in the system and the frustration that it causes for our teammates and for our customers. Resolving that frustration is going to be incredible for the business, but it's also going to drive loyalty and drive really further trust in the relationships with our teammates and our customers. Let me ask you another question, then we'll see if there's anything from the audience as we wind down here. We talked a bit about the pivot from fiber kind of back to HFC. From a CapEx point of view, Dennis, is 2025 kind of a high watermark for CapEx at Altice USA, at least as we think about the next several years as you kind of scale back to a DOCSIS upgrade versus a fiber expansion or any way you can help think about capital intensity? Yeah, I can't be more proud of the team. We are continuing to deliver on all of our business objectives while bringing down CapEx. It's all about driving efficiency. We were able to leverage technologies like OFDM and OFDMA to continue to elevate the performance of our HFC network for hundreds of dollars versus node splits that were costing tens of thousands of dollars. We're continuing to find efficiency is my point. There's still more work to do. I'm confident that we have the CapEx envelope that we need to continue to drive the business in terms of investing in growing our footprint, investing in growing multi-gig, investing in new products while continuing to find efficiencies this year and as we move forward. Got it. Any questions from anybody? Yeah, David, go ahead. There's a mic coming just so they can hear in the webcast. Can you talk a little bit about the balance sheet liability management? You have a couple of years to think about your next step maturity, but you do have elevated financial leverage. Yes. Just kind of philosophically, how do you think about managing that as leverage continues to be quite elevated? Yeah, nothing to announce today. I was really proud of the team in terms of giving us the runway to operate the business. First and foremost, as I stepped into this role, that was very important to me to have runway to really make the changes we needed to make, the transformational changes around the operation and our ability to drive our go-to-market strategy and deliver the level of quality expected. Now we're evaluating all options. The environment continues to evolve. When we're ready to provide more details, we will. We're looking at all options so that we can manage that appropriately. Yeah. I know you guys have guided to free cash flow growth in 2025 and 2024. Is that still the expectation? Correct. Correct. We're going to continue to be disciplined, continue to execute our strategies, which will help us to continue to deliver. Got it. Okay. All right. Anything you want to wrap up with, Dennis, before we run out of time? I'm excited about the momentum. As you can tell, as we exit 2024 and enter 2025, I'm excited. We have tremendous growth opportunity on mobile, on fiber, on the new value-added services that we're launching. I'm really excited about the results of these four market tests that we've delivered. We are going to continue to hit the accelerator as we drive transformation throughout the enterprise. All right. Thank you, everybody. Great. Thanks, Dennis. Awesome. Thanks so much. Thanks for spending some time. Thank you so much.