- The company is working on reducing operating expenses
- It’s also going to decommission about 48,000 of its passings in low-density areas
- Addressing its huge wall of debt maturities remains a top priority for the company
Optimum is all about financial discipline these days as it attempts to decrease costs in an environment of high debt and broadband subscriber losses. The company’s stock is trading at about $.80 today.
For the second quarter, Optimum reported 40,000 broadband net subscriber losses. It now counts about 4 million broadband subs of which about 749,000 are fiber subscribers.
On its Q2 2026 earnings call Optimum’s CFO Marc Sirota said operating expense efficiencies are being driven by fewer truck rolls, fewer service phone calls, and salary cost reductions driven by workforce optimization via AI. “We are deploying additional tools and initiatives to further optimize operating expenses over time with a continued focus on enhancing the customer experience,” he said.
Optimum’s CEO Dennis Mathew added, “We made the decision to exit a small number of low-density, noncore markets within our West footprint, and we expect those customers to transition to other service providers during the third quarter.” To be exact, the company is going to decommission about 48,000 passings.
A bright spot in the quarter was that Optimum signed some exclusive bulk billing contracts with multi-dwelling-unit (MDU) property owners. MDU represents about 20% of its total footprint. “We have remained focused on strengthening our MDU subscriber business by shifting from individual customer relationships to more bulk agreements with property owners under long-term contracts,” said Sirota. “From these efforts, in the second quarter, we saw an additional 9,000 broadband connects.”
As TD Cowen analyst Gregory Williams said of the MDU deals, “If you can't win them, lock them in.”
Of its MDU business, Mathew said, “One of the big issues that we had when I joined was that we were signing agreements that were nonexclusive. And so, we had no protection, no real ability to drive long-term value through these arrangements. Starting about 12, 18 months ago, we started to prioritize redoing existing agreements as well as all new agreements and converting them from nonexclusive in retail to bulk.”
New Street Research analyst Vikash Harlalka noted that the bulk billing wins helped second quarter broadband subscriber losses be better than expected. “The company deserves credit for executing the contracts and adding these customers,” wrote Harlalka. “That being said, bulk contracts are opportunistic deals, which do not recur every quarter. Excluding bulk contracts, broadband subscriber losses would have been about 49,000, about 14,000 higher than last year.”
In fact, Optimum’s broadband subscriber trends have been going down for quite a while.
During Q2, Optimum added about 50,000 mobile lines, bringing its total mobile lines to 724,000. Mobile-broadband convergence penetration increased to approximately 9%.
Mathew said the company recently expanded its multiyear agreement with T-Mobile to access its 5G stand-alone network.
Optimum’s non-video average revenue per user (ARPU) grew $1.57 year-over-year, mainly tied to convergence with mobile offerings. Convergence ARPU, a metric the company introduced last quarter, grew 2.4% year-over-year to $79.80.
Optimum’s debt problems
Optimum is facing $6 billion in debt maturities over the next two years with $4.1 billion due in April 2027. “Against this dramatic backdrop, mere operating results pale in comparison,” wrote analyst Craig Moffett with MoffettNathanson. “With declining revenue and EBITDA, it’s hard to see how the company will be able to roll all those debt maturities. There has to be a restructuring sooner rather than later.”
Mathew said addressing the 2027 debt maturities remains a top priority as it negotiates with its lenders.
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