Altice USA’s Fiber-Mobile Surge Signals a Telecom Turnaround

In an era where legacy telecommunications revenues are in decline, Altice USA (ATUS) is carving out a bold path to future-proof its business. Despite a 4.4% year-over-year revenue dip in Q1 2025, the company’s aggressive pivot toward high-growth fiber and mobile services—and its success in curbing churn—paints a compelling picture of operational resilience. With fiber broadband and mobile lines now surging past 600,000 and 500,000 respectively, Altice’s strategic bets are beginning to pay off. Investors should take notice: this is a company primed to dominate underpenetrated markets with the wind at its back.

The Fiber-Fueled Growth Engine

Altice’s Q1 results marked a milestone: 69,000 net fiber additions, the highest quarterly growth in its history. Total fiber customers hit 606,700, a 54% leap from 2024. The company’s network penetration now stands at 20.3%, a figure that underscores its aggressive rollout strategy. By adding 25,000 total passings in Q1 alone—and targeting 175,000 more this year—Altice is rapidly expanding its footprint.

This expansion isn’t just about scale. The rollout of multi-gig speed upgrades via DOCSIS 3.1 and Lightpath’s entry into Columbus, Ohio, with a hyperscaler partner, signals a shift toward enterprise-grade infrastructure. In markets where broadband competition remains fragmented, Altice’s vertically integrated model—combining fiber with mobile and B2B services—creates a sticky, full-stack offering.

Mobile Momentum and Convergence

Mobile lines surged by 49,000 in Q1, the strongest quarterly growth in five years. With total mobile customers hitting 508,600, Altice is capitalizing on the shift toward bundled services. The convergence rate—customers using both broadband and mobile—jumped to 6.3%, a clear win for cross-selling.

Partnerships like its AI-driven collaboration with Google Cloud are key here. By leveraging machine learning to optimize network performance and customer service, Altice is reducing operational costs while improving retention. This synergy isn’t just a cost play; it’s a competitive moat in an industry where service reliability drives loyalty.

Churn Reduction: A Silent Turnaround

While the top line struggles, Altice’s focus on operational discipline is bearing fruit. Residential broadband churn hit a three-year low, with annualized churn improving by 90 basis points. This isn’t luck—it’s the result of smarter pricing, better service quality, and a relentless push to sell higher-margin fiber bundles.

A would show this trend clearly. The downward slope here is critical: lower churn means retained revenue and reduced customer acquisition costs, directly boosting margins.

Financials: The EBITDA U-Turn

Altice’s Q1 adjusted EBITDA of $799 million fell 5.6% year-over-year, but the full-year outlook is bullish. The company now targets $3.4 billion in 2025 EBITDA, a $130 million jump from 2024. This confidence isn’t misplaced: fiber and mobile margins are far higher than legacy cable services, and cost efficiencies from AI and network upgrades are compounding.

Meanwhile, capital expenditures of $1.2 billion are wisely directed toward growth, not maintenance. Even with $24.9 billion in net debt, Altice’s 7.6x leverage ratio is manageable given its cash flow trajectory. A would reveal it’s on par with sector averages—a comfort for lenders and investors alike.

Why Buy Now?

The case for Altice rests on three pillars:
1. Untapped Market Share: With just 20% of its service area covered by fiber, the company has years of expansion ahead.
2. AI-Driven Efficiency: Partnerships like Google Cloud are turning costs into competitive advantages.
3. Structural Shifts: The demand for multi-gig broadband and mobile reliability isn’t cyclical—it’s permanent.

Yes, legacy revenue headwinds (down 4% in Q1) are a drag, but they’re being offset by high-growth segments. At a valuation of just 5.3x 2025 EBITDA estimates, Altice is cheap relative to peers.

Risks? Yes—but Manageable

Regulatory scrutiny and programming costs loom, but Altice’s geographic focus (primarily the Northeast and Midwest) limits its exposure to national antitrust issues. Meanwhile, its B2B push—driven by Lightpath’s hyperscaler deals—buffers against consumer price sensitivity.

Final Verdict: Buy the Turnaround

Altice USA’s Q1 results aren’t just a blip—they’re a blueprint. With fiber and mobile driving a meaningful EBITDA rebound, and underpenetrated markets offering clear runway, this is a stock poised to reward patient investors. The transition from legacy laggard to growth leader is underway. Don’t wait for the consensus to catch up—act now.

The chart tells the story: while the broader market has stagnated, ATUS shares have quietly begun to climb. The catalysts are in place—this is a buy.