Is Altice USA's Strategic Turnaround Creating Value for Long-Term Investors?

Altice USA has embarked on an ambitious transformation in 2025, aiming to stabilize its broadband subscriber base, diversify revenue streams, and strengthen its capital structure. The question for long-term investors is whether these efforts are sufficient to overcome persistent competitive pressures and subscriber attrition. By dissecting the company's operational and financial strategies alongside its market challenges, we can assess whether Altice is on a credible path to value creation—or if its turnaround remains a work in progress.

Operational and Financial Transformation: A Foundation for Growth

Altice's 2025 initiatives reflect a clear focus on modernizing its business model. The company has made strides in improving broadband retention, with net losses narrowing to -35,000 subscribers in Q2 2025, a 31% improvement from the prior year. This progress is partly attributed to localized pricing strategies and enhanced sales channel performance, which have driven a 0.9% year-over-year increase in broadband ARPU to $74.77.

The company's pivot to fiber and mobile services is equally noteworthy. Fiber customers surged by 53% year-over-year to 663,000, with penetration rising to 21.9% of the broadband base. Mobile lines grew by 42% to 546,000, reflecting a 6.8% penetration rate. These segments are critical for future growth, as they offer higher margins and resilience to price competition. Altice has also expanded value-added services, such as Total Care and Whole Home Wi-Fi, which now serve 90,000 and 31,000 subscribers, respectively. For small businesses, new offerings like Secure Internet Plus and Device Protection further diversify revenue.

Financially, Altice has taken steps to stabilize its balance sheet. A $1.0 billion asset-backed loan secured by HFC assets in New York City provides liquidity for network upgrades and debt management. This move, combined with a 5% workforce reduction and AI-driven automation, has improved operational efficiency. Adjusted EBITDA rose to $803.8 million in Q2 2025, with a 37.4% margin, despite a 4.2% revenue decline. The company now targets $3.4 billion in Adjusted EBITDA for FY 2025, signaling confidence in its transformation.

Competitive Pressures: A Harsh Reality

Despite these gains, Altice faces a brutal competitive landscape. Fiber overbuilders and fixed wireless providers are eroding its traditional broadband market. The company's residential broadband subscriber base fell by 160,400 year-over-year in Q2 2025, leaving it with 3.93 million subscribers. While fiber expansion is a countermeasure, the transition is slow. For now, Altice's broadband segment remains vulnerable to macroeconomic headwinds, including low housing mobility and economic uncertainty, which limit new customer acquisition.

The video segment, which still contributes a significant portion of revenue, is declining. Residential ARPU fell 1.7% year-over-year, dragged down by shrinking video demand. This highlights a broader challenge: Altice must transition from a legacy video-centric model to a broadband- and mobile-driven business without sacrificing profitability.

Balancing the Scales: Can the Turnaround Succeed?

Altice's strategic initiatives are undeniably ambitious. The company's focus on fiber, AI, and operational efficiency addresses key weaknesses. However, the path to long-term value creation hinges on three factors:
1. Subscriber Retention: Can Altice sustain the improved churn rate? The 35,000 net losses in Q2 2025, while better than 2024, still represent a drag on growth.
2. Margin Resilience: Adjusted EBITDA margins have declined from 22.4% in Q2 2024 to 14.5% in Q2 2025, reflecting higher operating costs. Can cost discipline offset these pressures?
3. Execution Risk: The $1 billion loan and AI integration are bold moves, but execution missteps could derail progress.

Investment Implications

For long-term investors, Altice presents a high-conviction, high-risk opportunity. The company's strategic direction—focusing on fiber, mobile, and operational efficiency—is aligned with industry trends. However, the broadband market's competitive intensity and Altice's high leverage (8.0x net leverage ratio) remain red flags.

Key Considerations:
- Catalysts: Successful fiber expansion, margin stabilization, and debt reduction could unlock value.
- Risks: Persistent subscriber attrition, rising costs, or regulatory hurdles could undermine the turnaround.
- Valuation: Altice's stock trades at a discount to peers, reflecting skepticism about its ability to execute. A rebound in EBITDA and subscriber growth could justify a re-rating.

In conclusion, Altice's strategic turnaround is showing early signs of success, but the jury is still out. Investors must weigh the company's operational progress against the harsh realities of its market. For those with a long-term horizon and a tolerance for risk, Altice could be a compelling bet—if it can prove it can outmaneuver its competitors and deliver on its transformation promises.