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Charter Earnings Miss Estimates in Q1, Revenues Decline Y/Y
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Key Takeaways
CHTR's Q1 EPS missed estimates; revenue fell 1% YoY on weaker residential video performance.
Charter saw mobile revenues jump 15.1% and ad sales rise, offsetting declines in Internet and video.
CHTR lost internet and video customers, while total customer relationships fell 1.5% YoY.
Charter Communications (CHTR - Free Report) has reported first-quarter 2026 earnings of $9.17 per share, which missed the Zacks Consensus Estimate by 8.02%. The reported figure increased 8.9% year over year.
Revenues of $13.6 billion declined 1% year over year, driven by lower residential video revenues, partially offset by growth in residential mobile service and other revenues. The reported figure exceeded the Zacks Consensus Estimate by 0.49%. Residential connectivity revenues grew 0.9% year over year.
CHTR has shown a weak performance, missing the Zacks Consensus Estimate in all the trailing four quarters, with an average negative surprise of 5.26%.
Charter Communications, Inc. Price, Consensus and EPS Surprise
Residential revenues totaled $10.49 billion, down 2.7% year over year due to a decline in residential customers of 1.5% and a decrease in monthly residential revenue per residential customer of 1.4%.
Internet revenues declined 1.3% year over year to $5.9 billion, driven by a decline in Internet customers year over year, partly offset by a favorable change in bundled revenue allocation, promotional rate step-ups and rate adjustments.
Mobile service revenues increased 15.1% year over year to $1.1 billion, driven by mobile line growth and rate adjustments, partly offset by less favorable bundled revenue allocation year over year.
Video revenues totaled $3.3 billion in the first quarter, a decrease of 9.2% year over year.
Voice revenues decreased 5% year over year to $338 million, driven by a decline in wireline voice customers, partly offset by voice rate adjustments.
Commercial revenues increased 1% year over year to $1.8 billion, driven by mid-market and large business revenue growth of 2.1% and a slight increase in small business revenue.
Mid-market and large business revenues excluding wholesale increased 2.8% year over year, mostly reflecting PSU growth of 4.5%.
First-quarter advertising sales revenues of $358 million increased 5.3% from the year-ago quarter, primarily driven by higher political revenues. Excluding political revenues in both periods, advertising sales revenues decreased 3.4% year over year, reflecting lower linear advertising revenues, partly offset by higher streaming advertising revenues.
Other revenues totaled $906 million in the first quarter, an increase of 14.2% from the first quarter of 2025, primarily driven by higher mobile device sales.
CHTR’s Subscriber Statistics
First-quarter total customer relationships declined 1.5% year over year to 31.7 million. Total connectivity customers decreased 1% year over year to 30.5 million.
Total Internet customers decreased by 120K in the first quarter of 2026, compared with a decline of 59K in the year-ago period. As of March 31, 2026, Charter served 29.6 million total Internet customers.
The company added 368K total mobile lines in the first quarter compared with 507K in the year-ago quarter. As of March 31, 2026, it served 12.1 million mobile lines.
Total video customers decreased 60K in the first quarter of 2026 compared with a decline of 181K in the year-ago quarter. As of March 31, 2026, Charter served 12.5 million total video customers. The year-over-year improvement in video net losses was driven by simplified pricing and packaging, and benefits from the inclusion of programmer streaming applications in Spectrum's expanded basic video packages.
In the first quarter of 2026, total wireline voice customers decreased 174K compared with a decline of 278K in the year-ago quarter. As of March 31, 2026, Charter served 5.9 million total wireline voice customers.
In the first quarter of 2026, Charter activated 89K subsidized rural passings. Within CHTR's subsidized rural footprint, total customer relationships increased by 41K.
CHTR’s Operating Details
Total operating costs and expenses decreased 0.2% year over year to $8 billion, driven by lower programming costs, mostly offset by higher other costs of revenue.
First-quarter programming costs decreased $214 million, or 9.3%, from the first quarter of 2025, reflecting $218 million of costs allocated to programmer streaming applications netted within video revenue (versus $47 million in the prior-year period), a higher mix of lower-cost packages and fewer video customers, partially offset by contractual programming rate increases and renewals.
Other costs of revenues increased $181 million, or 11.4% year over year, primarily driven by higher mobile service direct costs and mobile device sales, as well as higher advertising sales costs given higher political revenue.
Field and technology operations expenses decreased $24 million, or 1.8%, year over year, primarily driven by lower labor expense.
Customer operations expenses decreased $6 million, or 0.8%, year over year, primarily due to a decrease in bad debt expense.
Marketing and residential sales expenses decreased $30 million, or 3.2%, year over year, due to lower marketing and labor expenses.
Balance Sheet & Cash Flow
As of March 31, 2026, the total principal amount of debt was $94.3 billion, and Charter's credit facilities provided approximately $4.6 billion in additional liquidity in excess of Charter's $517 million cash position.
In January 2026, CCO Holdings, LLC issued $1.75 billion of 7% senior notes due Feb. 2033 and $1.25 billion of 7.375% senior notes due February 2036. In February 2026, CCO Holdings redeemed $750 million of 5.5% senior notes due 2026 and $2.25 billion of 5.125% senior notes due 2027, effectively refinancing $3 billion of nearer-term maturities into longer-dated obligations.
Free cash flow in the first quarter of 2026 totaled $1.4 billion, an increase from $773 million in the fourth quarter of 2025. The sequential improvement was driven by lower capital expenditures of $2.9 billion in the first quarter compared to $3.3 billion in the prior quarter, a less unfavorable change in accrued expenses related to capital expenditures and higher net cash flows from operating activities.
In the first quarter of 2026, Charter purchased 4.3 million shares of Charter Class A common stock for $963 million.
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Charter Earnings Miss Estimates in Q1, Revenues Decline Y/Y
Key Takeaways
Charter Communications (CHTR - Free Report) has reported first-quarter 2026 earnings of $9.17 per share, which missed the Zacks Consensus Estimate by 8.02%. The reported figure increased 8.9% year over year.
Revenues of $13.6 billion declined 1% year over year, driven by lower residential video revenues, partially offset by growth in residential mobile service and other revenues. The reported figure exceeded the Zacks Consensus Estimate by 0.49%. Residential connectivity revenues grew 0.9% year over year.
CHTR has shown a weak performance, missing the Zacks Consensus Estimate in all the trailing four quarters, with an average negative surprise of 5.26%.
Charter Communications, Inc. Price, Consensus and EPS Surprise
Charter Communications, Inc. price-consensus-eps-surprise-chart | Charter Communications, Inc. Quote
CHTR’s Segmental Details
Residential revenues totaled $10.49 billion, down 2.7% year over year due to a decline in residential customers of 1.5% and a decrease in monthly residential revenue per residential customer of 1.4%.
Internet revenues declined 1.3% year over year to $5.9 billion, driven by a decline in Internet customers year over year, partly offset by a favorable change in bundled revenue allocation, promotional rate step-ups and rate adjustments.
Mobile service revenues increased 15.1% year over year to $1.1 billion, driven by mobile line growth and rate adjustments, partly offset by less favorable bundled revenue allocation year over year.
Video revenues totaled $3.3 billion in the first quarter, a decrease of 9.2% year over year.
Voice revenues decreased 5% year over year to $338 million, driven by a decline in wireline voice customers, partly offset by voice rate adjustments.
Commercial revenues increased 1% year over year to $1.8 billion, driven by mid-market and large business revenue growth of 2.1% and a slight increase in small business revenue.
Mid-market and large business revenues excluding wholesale increased 2.8% year over year, mostly reflecting PSU growth of 4.5%.
First-quarter advertising sales revenues of $358 million increased 5.3% from the year-ago quarter, primarily driven by higher political revenues. Excluding political revenues in both periods, advertising sales revenues decreased 3.4% year over year, reflecting lower linear advertising revenues, partly offset by higher streaming advertising revenues.
Other revenues totaled $906 million in the first quarter, an increase of 14.2% from the first quarter of 2025, primarily driven by higher mobile device sales.
CHTR’s Subscriber Statistics
First-quarter total customer relationships declined 1.5% year over year to 31.7 million. Total connectivity customers decreased 1% year over year to 30.5 million.
Total Internet customers decreased by 120K in the first quarter of 2026, compared with a decline of 59K in the year-ago period. As of March 31, 2026, Charter served 29.6 million total Internet customers.
The company added 368K total mobile lines in the first quarter compared with 507K in the year-ago quarter. As of March 31, 2026, it served 12.1 million mobile lines.
Total video customers decreased 60K in the first quarter of 2026 compared with a decline of 181K in the year-ago quarter. As of March 31, 2026, Charter served 12.5 million total video customers. The year-over-year improvement in video net losses was driven by simplified pricing and packaging, and benefits from the inclusion of programmer streaming applications in Spectrum's expanded basic video packages.
In the first quarter of 2026, total wireline voice customers decreased 174K compared with a decline of 278K in the year-ago quarter. As of March 31, 2026, Charter served 5.9 million total wireline voice customers.
In the first quarter of 2026, Charter activated 89K subsidized rural passings. Within CHTR's subsidized rural footprint, total customer relationships increased by 41K.
CHTR’s Operating Details
Total operating costs and expenses decreased 0.2% year over year to $8 billion, driven by lower programming costs, mostly offset by higher other costs of revenue.
First-quarter programming costs decreased $214 million, or 9.3%, from the first quarter of 2025, reflecting $218 million of costs allocated to programmer streaming applications netted within video revenue (versus $47 million in the prior-year period), a higher mix of lower-cost packages and fewer video customers, partially offset by contractual programming rate increases and renewals.
Other costs of revenues increased $181 million, or 11.4% year over year, primarily driven by higher mobile service direct costs and mobile device sales, as well as higher advertising sales costs given higher political revenue.
Field and technology operations expenses decreased $24 million, or 1.8%, year over year, primarily driven by lower labor expense.
Customer operations expenses decreased $6 million, or 0.8%, year over year, primarily due to a decrease in bad debt expense.
Marketing and residential sales expenses decreased $30 million, or 3.2%, year over year, due to lower marketing and labor expenses.
Balance Sheet & Cash Flow
As of March 31, 2026, the total principal amount of debt was $94.3 billion, and Charter's credit facilities provided approximately $4.6 billion in additional liquidity in excess of Charter's $517 million cash position.
In January 2026, CCO Holdings, LLC issued $1.75 billion of 7% senior notes due Feb. 2033 and $1.25 billion of 7.375% senior notes due February 2036. In February 2026, CCO Holdings redeemed $750 million of 5.5% senior notes due 2026 and $2.25 billion of 5.125% senior notes due 2027, effectively refinancing $3 billion of nearer-term maturities into longer-dated obligations.
Free cash flow in the first quarter of 2026 totaled $1.4 billion, an increase from $773 million in the fourth quarter of 2025. The sequential improvement was driven by lower capital expenditures of $2.9 billion in the first quarter compared to $3.3 billion in the prior quarter, a less unfavorable change in accrued expenses related to capital expenditures and higher net cash flows from operating activities.
In the first quarter of 2026, Charter purchased 4.3 million shares of Charter Class A common stock for $963 million.
Zacks Rank & Stocks to Consider
CHTR currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Zacks Consumer Discretionary sector are Brunswick (BC - Free Report) , Cinemark (CNK - Free Report) and Hugo Boss (BOSSY - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Brunswick have returned 8.3% in the year-to-date period. Brunswick is slated to report first-quarter 2026 results on April 30.
Shares of Cinemark have returned 24.7% in the year-to-date period. Cinemark is slated to report first-quarter 2026 results on May 01.
Shares of Hugo Boss have returned 10.1% in the year-to-date period. Hugo Boss is slated to report first-quarter 2026 results on May 05.