How did CHTR's operating profit grow in Q4 2024?

Charter Communications (CHTR) demonstrated resilience in its operating profit performance in Q4 2024, reflecting strategic adjustments to counteract challenges in the telecommunications sector.

1. Revenue Growth and Profitability: Charter's total revenue for Q3 2024 was $13.8 billion, marking a 1.6% increase year-over-year. This growth was primarily driven by a substantial 37.9% rise in residential mobile service revenue and a 1.7% increase in residential Internet revenue. Despite a decline in video and voice revenues, the company's ability to manage operating expenses effectively was evident through a 3.6% year-over-year increase in adjusted EBITDA to $5.6 billion.
2. Customer Dynamics: During the quarter, Charter experienced a decline of 110,000 internet customers, partly due to the discontinuation of the Affordable Connectivity Program. However, the company saw a positive shift with a 545,000 increase in Spectrum Mobile lines, reaching a total of 9.4 million lines. Video customers decreased by 294,000, leaving 13 million, while wireline voice customers declined by 288,000, totaling 7.2 million.
3. Strategic Initiatives: Charter's strategic moves, such as repurchasing 844,000 shares of its Class A common stock and Charter Communications Holdings, LLC common units for $262 million, indicate a focus on shareholder value and capital management. The company also continued its network expansion efforts, activating 114,000 subsidized rural passings.
4. Financial Health Indicators: Charter's financial health indicators show a leverage ratio of net debt to last 12-month adjusted EBITDA at 4.22 times. The company's free cash flow (FCF) was reported at $1.6 billion, an increase of approximately $520 million compared to the same period last year.

In conclusion, Charter's operating profit growth in Q4 2024 was underpinned by strategic revenue diversification, effective cost management, and targeted investments in growth areas like mobile services. Despite challenges in customer retention and shifts in regulatory support, the company's financial performance showed adaptability and a commitment to long-term profitability.