Charter Communications, Inc.
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Item 1. Business.
Introduction
We are a leading broadband connectivity company with services available to 58 million homes and small to large businesses across 41 states through our Spectrum® brand. Founded in 1993, we have evolved from providing cable TV to streaming, and from high-speed Internet to a converged broadband, WiFi and mobile experience. Over the Spectrum Fiber Broadband Network and supported by our 100% U.S.-based employees, we offer Seamless Connectivity and Entertainment with Spectrum Internet®, Mobile, TV and Voice products.
Our strategy is focused on utilizing our fiber-powered network to deliver high-quality, competitively priced products, with outstanding service, allowing us to increase both the number of customers we serve over our network and the number of products we sell to each customer. This combination also reduces the number of service transactions we perform per relationship, yielding higher customer satisfaction and lower customer churn, which results in lower costs to acquire and serve customers and drives greater profitability.
Products
We offer Spectrum Internet products with speeds up to 1 gigabits per second (“Gbps”) across our entire footprint and multi-gigabit speeds in a portion of our footprint. We continue to upgrade our connectivity network, and we will offer symmetrical and multi-gigabit Internet speeds across our entire footprint in the next several years. Advanced WiFi, a managed WiFi service that provides customers an optimized home network while providing greater control of connected devices with enhanced security and privacy, is available to all of our Internet customers. Spectrum Mobile® is available to all new and existing Spectrum Internet customers and offers plans that include 5G access, do not require contracts and include taxes and fees in the price. We continue to innovate our video product and have transformed all of our affiliation agreements with major programmers. These new agreements give us greater overall packaging flexibility and the ability to include the ad-supported versions of key programmer streaming applications, at no extra cost, within our video packages, along with the ability to upgrade to ad-free versions and to sell those applications to customers a la carte for a seamless entertainment experience. Together with our Xumo Stream Boxes (“Xumo”), our goal is to deliver utility and value for our customers, irrespective of how they want to view content, and better and more stable economics for our programming partners and us.
Pricing & Packaging and Customer Commitments
Our fully deployed fiber-powered network offers ubiquitous and seamless connectivity products. It removes barriers and creates opportunities for customers, in every aspect of their lives. Our brand platform, Life Unlimited™, emphasizes the power of our advanced network and cutting-edge connectivity products and services, and our simplified pricing strategy better utilizes our seamless connectivity and entertainment products to offer lower promotional and persistent bundled pricing to drive growth. Additionally, our customer commitments focus on reliable connectivity, transparency, exceptional service and always improving. Through reliable connectivity, we are committed to keeping our customers connected 100% of the time and promptly resolving issues. Transparency at every step means we provide clear and simple pricing and timely service updates, and we take responsibility when things go wrong. Through exceptional service, we provide exceptional customer experiences. And finally, always improving means we act on our customers' feedback to improve our products and customer service.
Network Evolution
Our network and product evolution plan continues to progress, with a clear path to delivering symmetrical and multi-gig speeds to customers across our footprint, meeting the needs of today and anticipating the growing demand for faster speeds for years to come. We continue to expand the capacity of our fiber-powered network using a number of technologies, including
•spectrum expansion, initially to 1.2 GHz and then to 1.8 GHz;
•changing the bandwidth allocation to a "high split" to increase upstream speeds;
•Distributed Access Architecture ("DAA"); and
•DOCSIS 4.0 technology.
Through this process, which we expect to be largely complete by the end of 2027, we will transform our network to offer much faster Internet speeds. Those faster Internet speeds will be offered in conjunction with our Spectrum Mobile product and
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Advanced WiFi, providing customers seamless and convenient, ultra-fast converged connectivity in attractively priced packages.
Expansion
Since inception in the beginning of 2022, we have spent $7.7 billion on our subsidized rural construction initiative and activated approximately 1.3 million passings. Rural footprint builds present strategic network expansion opportunities to deliver service to unserved and underserved passings. Our rural investments allow us to offer a suite of broadband connectivity services, including fixed Internet, WiFi and mobile to unserved areas in states where we currently operate. To accomplish all of this, we have invested in new construction teams and new equipment. These investments will allow us to generate long-term infrastructure-style returns by taking further advantage of our scale efficiencies, network quality and construction capabilities, while offering our high-quality products and services to more homes and businesses.
Our principal executive offices are located at 400 Washington Blvd., Stamford, Connecticut 06902. Our telephone number is (203) 905-7801, and we have a website accessible at ir.charter.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and all amendments thereto, are available on our website free of charge as soon as reasonably practicable after they have been filed. The information posted on our website is not incorporated into this annual report.
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Corporate Entity Structure
The chart below sets forth our entity structure and that of our direct and indirect subsidiaries. The chart does not include all of our affiliates and subsidiaries and, in some cases, we have combined separate entities for presentation purposes. The equity ownership percentages shown below for Charter Communications Holdings, LLC (“Charter Holdings”) are approximations. Indebtedness amounts shown below are principal amounts as of December 31, 2025. See Note 9 to the accompanying consolidated financial statements contained in “Part II. Item 8. Financial Statements and Supplementary Data,” which also includes the accreted values of the indebtedness described below.
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Footprint
We operate in geographically diverse areas which are managed centrally on a consolidated level. The map below highlights our footprint along with our planned rural expansion over the span of the initiative based on grants awarded as of December 31, 2025.
Products and Services
We offer our customers subscription-based Internet, mobile, video and voice services, with prices and related charges based on the types of service selected, whether the services are sold as a “bundle” or on an individual basis, and based on the equipment necessary to receive our services. Bundled services, including some combination of our Internet, mobile, video and/or voice products are available to substantially all of our passings.
To better reflect the converged and integrated nature of our business and operations, in the fourth quarter of 2025, we revised our customer relationship statistics to include all mobile customers, including mobile-only customers, and have added information on total connectivity customers, which represent all customers receiving our Internet and/or mobile connectivity services. In addition, in the fourth quarter of 2025, certain reporting policies related to mobile lines were revised to better align with other Charter services. Other minor changes were made to small business Internet customers and mid-market & large business primary service units (“PSUs”) to standardize reporting methodologies. Prior periods have been revised accordingly.
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The following table summarizes our customer statistics for connectivity, Internet, mobile, video and voice as of December 31, 2025 and 2024 (in thousands except per customer data and footnotes).
| Approximate as of | |||||||||||
| December 31, | |||||||||||
2025 (a) | 2024 (a) | ||||||||||
Customer Relationships (b) | |||||||||||
| Residential | 29,609 | 29,964 | |||||||||
| Small Business | 2,237 | 2,250 | |||||||||
| Total Customer Relationships | 31,846 | 32,214 | |||||||||
Monthly Residential Revenue per Residential Customer (c) | $ | 119.05 | $ | 118.71 | |||||||
Monthly Small Business Revenue per Small Business Customer (d) | $ | 161.50 | $ | 161.97 | |||||||
| Connectivity | |||||||||||
| Residential | 28,563 | 28,763 | |||||||||
| Small Business | |||||||||||
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
General
Charter Communications, Inc. (together with its controlled subsidiaries, “Charter”) is a leading broadband connectivity company with services available to nearly 59 million homes and small to large businesses across 41 states through our Spectrum brand. Founded in 1993, we have evolved from providing cable TV to streaming, and from high-speed Internet to a converged broadband, WiFi and mobile experience. Over the Spectrum Fiber Broadband Network and supported by our 100% U.S.-based employees, we offer Seamless Connectivity and Entertainment with Spectrum Internet, Mobile, TV and Voice products.
Charter is a holding company whose principal asset is a controlling equity interest in Charter Communications Holdings, LLC (“Charter Holdings”), an indirect owner of Charter Communications Operating, LLC (“Charter Operating”) under which substantially all of the operations reside. All significant intercompany accounts and transactions among consolidated entities have been eliminated.
The Cox Transactions
On May 16, 2025, Charter, Charter Holdings, and Cox Enterprises, Inc. (“Cox Enterprises”) entered into a Transaction Agreement (the “Transaction Agreement”) pursuant to which (i) Cox Enterprises will sell and transfer to Charter 100% of the equity interests of certain subsidiaries of Cox Communications, Inc. (“Cox Communications”) that conduct Cox Communications’ commercial fiber and managed IT and cloud services businesses (the “Equity Sale”), (ii) Cox Enterprises will contribute the equity interests of Cox Communications and certain other assets (other than certain excluded assets) primarily related to Cox Communications’ residential cable business to Charter Holdings (the “Contribution”), and (iii) Cox Enterprises will pay $1.00 to Charter (collectively, the “Cox Transactions”). Under the Transaction Agreement, Charter and Cox Enterprises may designate one or more wholly owned subsidiaries to take actions with respect to Charter and Cox Enterprises, respectively.
Pursuant to the Transaction Agreement, at the closing of the Cox Transactions (the “Closing”):
•in consideration of the Equity Sale, Charter will pay $3.5 billion in cash to Cox Enterprises;
•in consideration of the Contribution, Charter Holdings will (i) pay to Cox Enterprises $650 million in cash and (ii) issue to Cox Enterprises convertible preferred units of Charter Holdings with an aggregate liquidation preference of $6.0 billion, which will pay a 6.875% dividend per annum, and approximately 33.6 million Charter Holdings common units. The Charter Holdings convertible preferred units will be convertible into Charter Holdings common units, with an initial conversion price of $477.41, subject to certain adjustments. The Charter Holdings common units will be exchangeable by the holder, in certain circumstances, for cash or, at the election of Charter, Charter Class A common stock on a one-for-one basis, subject to certain adjustments; and
•in consideration of the $1.00 payment from Cox Enterprises to Charter, Charter will issue to Cox Enterprises one share of the newly created Charter Class C common stock. The Charter Class C common stock will be equivalent, economically, to the outstanding Charter Class A common stock and the Charter Class B common stock but will have a number of votes per share that reflect the voting power of the Charter Holdings common units and the Charter Holdings convertible preferred units held by Cox Enterprises on an as-converted, as-exchanged basis.
The combined entity will assume Cox Communications’ approximately $12.4 billion in outstanding net debt and finance leases.
Overview
The competitive environment continued to challenge Internet customer growth in the first quarter of 2026 with a loss of 120,000 Internet customers. Mobile lines grew by 368,000 while video and voice customer losses improved versus the prior year period as customers find value in bundling our seamless connectivity and entertainment products. Our core strategy is to deliver great products, at a great value, while continuously improving service. We remain focused on improving customer results through the power of our advanced fiber-powered network and cutting-edge connectivity products and services, and our simplified pricing and packaging strategy that better utilizes our seamless connectivity and entertainment products to offer lower promotional and persistent bundled pricing to drive growth. Our Internet and mobile product bundles provide a differentiated connectivity experience by bringing together Spectrum Internet, Advanced WiFi and Unlimited Spectrum Mobile
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to offer consumers fast, reliable and secure online connections on their favorite devices at home and on the go in high-value packages. We have completed deals with major programmers to deliver better flexibility and greater value to our customers by including seamless entertainment applications with certain of our Spectrum TV packages at no additional cost. We offer the sale of these seamless entertainment applications to customers on an à la carte basis, and through our digital storefront, the Spectrum App Store, customers can easily activate, upgrade, buy and manage their streaming applications in one place. We also continue to develop other elements of our video product and are deploying Xumo stream boxes to new video customers.
Our customer commitments focus on reliable connectivity, transparency, exceptional service and always improving. By continually improving our product set and offering consumers the opportunity to save money by switching to our services, we believe we can continue to penetrate our expanding footprint and sell additional products to our existing customers. We see operational benefits from the targeted investments we made in employee wages and benefits to build employee skill sets and tenure, as well as the continued investments in digitization of our customer service platforms, all with the goal of improving the customer experience, reducing transactions and driving customer growth and retention.
We currently offer Spectrum Internet products with speeds up to 1 Gbps across our entire footprint and multi-gigabit data speeds in a portion of our footprint. Our network evolution initiative remains on track to deliver symmetrical and multi-gigabit speeds across our entire footprint with convergence everywhere we operate. We spent $427 million on our subsidized rural construction initiative during the three months ended March 31, 2026 and activated approximately 89,000 subsidized rural passings.
We realized revenue, Adjusted EBITDA and income from operations during the periods presented as follows (in millions; all percentages are calculated using whole numbers; minor differences may exist due to rounding):
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||||||||||||||||
| Revenues | $ | 13,597 | $ | 13,735 | (1.0) | % | |||||||||||||||||||||||||
| Adjusted EBITDA | $ | 5,637 | $ | 5,763 | (2.2) | % | |||||||||||||||||||||||||
| Income from operations | $ | 3,208 | $ | 3,237 | (0.9) | % | |||||||||||||||||||||||||
Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, interest expense, net, income taxes, depreciation and amortization, stock compensation expense, other income (expenses), net and other operating (income) expenses, net, such as special charges, merger and acquisition costs and (gain) loss on sale or retirement of assets. See “Use of Adjusted EBITDA and Free Cash Flow” for further information on Adjusted EBITDA and free cash flow.
Total revenues decreased $138 million during the three months ended March 31, 2026 compared to the corresponding period in 2025 primarily due to higher seamless entertainment allocation, partly offset by growth in connectivity revenue. Adjusted EBITDA and income from operations were also negatively impacted by one-time favorable adjustments of $75 million in the first quarter of 2025.
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The following table summarizes our customer statistics for connectivity, Internet, mobile, video and voice as of March 31, 2026 and 2025 (in thousands except per customer data and footnotes).
| Approximate as of | |||||||||||
| March 31, | |||||||||||
2026 (a) | 2025 (a) | ||||||||||
Customer Relationships (b) | |||||||||||
| Residential | 29,452 | 29,914 | |||||||||
| Small Business | 2,231 | 2,246 | |||||||||
| Total Customer Relationships | 31,683 | 32,160 | |||||||||
Monthly Residential Revenue per Residential Customer (c) | $ | 118.44 | $ | 120.07 | |||||||
Monthly Small Business Revenue per Small Business Customer (d) | $ | 162.71 | $ | 161.31 | |||||||
Connectivity (e) | |||||||||||
| Residential | 28,446 | 28,758 | |||||||||
| Small Business | 2,074 | 2,080 | |||||||||
| Total Connectivity Customers | 30,520 | 30,838 | |||||||||
| Internet | |||||||||||
| Residential | 27,524 | 27,979 | |||||||||
| Small Business | 2,036 | 2,045 | |||||||||
| Total Internet Customers | 29,560 | 30,024 | |||||||||
Mobile Lines (f) | |||||||||||
| Residential | 11,714 | 10,031 | |||||||||
| Small Business | 420 | 334 | |||||||||
| Total Mobile Lines | 12,134 | 10,365 | |||||||||
Video (g) | |||||||||||
| Residential | 12,021 | 12,160 | |||||||||
| Small Business | 524 | 551 | |||||||||
| Total Video Customers | 12,545 | 12,711 | |||||||||
| Voice | |||||||||||
| Residential | 4,665 | 5,372 | |||||||||
| Small Business | 1,207 | 1,234 | |||||||||
| Total Voice Customers | 5,872 | 6,606 | |||||||||
Mid-Market & Large Business Primary Service Units ("PSUs") (h) | 360 | 344 | |||||||||
(a)We calculate the aging of customer accounts based on the monthly billing cycle for each account in accordance with our collection policies. On that basis, as of March 31, 2026 and 2025, customers include approximately 87,600 and 92,200 customers, respectively, whose accounts were over 60 days past due, approximately 7,800 and 10,700 customers, respectively, whose accounts were over 90 days past due and approximately 13,600 and 17,000 customers, respectively, whose accounts were over 120 days past due.
(b)Customer relationships include the number of customers that receive one or more levels of service, encompassing Internet, mobile, video and voice services, without regard to which service(s) such customers receive. Customers who reside in residential multiple dwelling units (“MDUs”) and that are billed under bulk contracts are counted based on the number of billed units within each bulk MDU. Total customer relationships exclude mid-market & large business customer relationships.
(c)Monthly residential revenue per residential customer is calculated as total residential quarterly revenue divided by three divided by average residential customer relationships during the respective quarter.
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(d)Monthly small business revenue per small business customer is calculated as total small business quarterly revenue divided by three divided by average small business customer relationships during the respective quarter.
(e)Connectivity customers represent all customers receiving our Internet and/or mobile connectivity services.
(f)Mobile lines include phones and tablets which require one of our standard rate plans (e.g., "Unlimited" or "By the Gig"). Mobile lines exclude wearables and other devices that do not require standard phone rate plans.
(g)Video customers only include customers that purchase Spectrum traditional or streaming linear video packages and exclude customers that only purchase streaming applications.
(h)Mid-market & large business PSUs represent the aggregate number of fiber service offerings counting each separate service offering at each customer location as an individual PSU.
Critical Accounting Policies and Estimates
For a discussion of our critical accounting policies and the means by which we develop estimates, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report on Form 10-K. There have been no material changes from the critical accounting policies described in our Form 10-K.
Results of Operations
The following table sets forth the consolidated statements of operations for the periods presented (dollars in millions, except per share data):
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Revenues | $ | 13,597 | $ | 13,735 | ||||||||||||||||
| Costs and Expenses: | ||||||||||||||||||||
Operating costs and expenses (exclusive of items shown separately below) | 8,163 | 8,194 | ||||||||||||||||||
| Depreciation and amortization | 2,211 | 2,181 | ||||||||||||||||||
| Other operating expenses, net | 15 | 123 | ||||||||||||||||||
| 10,389 | 10,498 | |||||||||||||||||||
| Income from operations | 3,208 | 3,237 | ||||||||||||||||||
| Other Income (Expenses): | ||||||||||||||||||||
| Interest expense, net | (1,256) | (1,241) | ||||||||||||||||||
| Other expenses, net | (124) | (142) | ||||||||||||||||||
| (1,380) | (1,383) | |||||||||||||||||||
| Income before income taxes | 1,828 | 1,854 | ||||||||||||||||||
| Income tax expense | (465) | (445) | ||||||||||||||||||
| Consolidated net income | 1,363 | 1,409 | ||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | (200) | (192) | ||||||||||||||||||
| Net income attributable to Charter shareholders | $ | 1,163 | $ | 1,217 | ||||||||||||||||
| EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS: | ||||||||||||||||||||
| Basic | $ | 9.27 | $ | 8.59 | ||||||||||||||||
| Diluted | $ | 9.17 | $ | 8.42 | ||||||||||||||||
Weighted average common shares outstanding, basic | 125,488,486 | 141,591,396 | ||||||||||||||||||
Weighted average common shares outstanding, diluted | 126,849,271 | 144,574,684 | ||||||||||||||||||
Revenues. Total revenues decreased $138 million during the three months ended March 31, 2026 compared to the corresponding period in 2025. The decrease was primarily due to higher seamless entertainment allocation, partly offset by growth in connectivity revenue.
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Revenues by service offering were as follows (dollars in millions; all percentages are calculated using whole numbers; minor differences may exist due to rounding):
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||||||||||||||||
| Internet | $ | 5,852 | $ | 5,930 | (1.3) | % | |||||||||||||||||||||||||
| Mobile service | 1,052 | 914 | 15.1 | % | |||||||||||||||||||||||||||
| Connectivity | 6,904 | 6,844 | 0.9 | % | |||||||||||||||||||||||||||
| Video | 3,252 | 3,580 | (9.2) | % | |||||||||||||||||||||||||||
| Voice | 338 | 356 | (5.0) | % | |||||||||||||||||||||||||||
| Residential revenue | 10,494 | 10,780 | (2.7) | % | |||||||||||||||||||||||||||
| Small business | 1,090 | 1,088 | 0.2 | % | |||||||||||||||||||||||||||
| Mid-market & large business | 749 | 734 | 2.1 | % | |||||||||||||||||||||||||||
| Commercial revenue | 1,839 | 1,822 | 1.0 | % | |||||||||||||||||||||||||||
| Advertising sales | 358 | 340 | 5.3 | % | |||||||||||||||||||||||||||
| Other | 906 | 793 | 14.2 | % | |||||||||||||||||||||||||||
| $ | 13,597 | $ | 13,735 | (1.0) | % | ||||||||||||||||||||||||||
The decrease in Internet revenues from our residential customers is attributable to the following (dollars in millions):
| Three months ended March 31, 2026 compared to three months ended March 31, 2025 | |||||||||
| Decrease in average residential Internet customers | $ | (87) | |||||||
| Increase related to rate and product mix changes | 9 | ||||||||
| $ | (78) | ||||||||
Residential Internet customers decreased by 455,000 customers from March 31, 2025 to March 31, 2026. The increase related to rate and product mix was primarily due to promotional rate step-ups, rate adjustments, and a favorable change in bundled revenue allocation.
The increase in mobile service revenues from our residential customers is attributable to the following (dollars in millions):
| Three months ended March 31, 2026 compared to three months ended March 31, 2025 | |||||||||
| Increase in average residential mobile lines | $ | 164 | |||||||
| Decrease related to rate | (26) | ||||||||
| $ | 138 | ||||||||
Residential mobile lines increased by approximately 1.7 million mobile lines from March 31, 2025 to March 31, 2026. The decrease related to rate was primarily due to less favorable bundled revenue allocation, partly offset by rate adjustments.
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Video revenues consist primarily of revenues from video services provided to our residential customers, as well as franchise fees, equipment service fees and video installation revenue. The decrease in video revenues is attributable to the following (dollars in millions):
| Three months ended March 31, 2026 compared to three months ended March 31, 2025 | |||||||||
| Increase in seamless entertainment allocation | $ | (171) | |||||||
| Decrease related to rate and product mix changes | (103) | ||||||||
| Decrease in average residential video customers | (54) | ||||||||
| $ | (328) | ||||||||
Seamless entertainment allocation represents costs allocated to programmer streaming applications and netted within video revenue. The increase in seamless entertainment allocation is due to growth in seamless entertainment applications and higher activations. The decrease related to rate and product mix was primarily due to a higher mix of lower priced video packages within our video customer base and more unfavorable bundled revenue allocation, partly offset by promotional rate step-ups and video rate adjustments that pass-through programming rate increases. Residential video customers decreased by 139,000 from March 31, 2025 to March 31, 2026.
The decrease in voice revenues from our residential customers is attributable to the following (dollars in millions):
| Three months ended March 31, 2026 compared to three months ended March 31, 2025 | |||||||||
| Decrease in average residential voice customers | $ | (49) | |||||||
| Increase related to rate adjustments | 31 | ||||||||
| $ | (18) | ||||||||
Residential wireline voice customers decreased by 707,000 customers from March 31, 2025 to March 31, 2026.
The increase in small business revenues is attributable to the following (dollars in millions):
| Three months ended March 31, 2026 compared to three months ended March 31, 2025 | |||||||||
| Increase related to rate and product mix changes | $ | 9 | |||||||
| Decrease in average small business customers | (7) | ||||||||
| $ | 2 | ||||||||
Small business customers decreased by 15,000 from March 31, 2025 to March 31, 2026.
Mid-market & large business revenues increased $15 million during the three months ended March 31, 2026 compared to the corresponding period in 2025 primarily due to an increase in Internet PSUs. Mid-market & large business PSUs increased 16,000 from March 31, 2025 to March 31, 2026.
Advertising sales revenues consist primarily of revenues from commercial advertising customers, programmers and other vendors, as well as local cable and advertising on regional sports and news channels. Advertising sales revenues increased $18 million during the three months ended March 31, 2026 as compared to the corresponding period in 2025 primarily due to an increase in political and streaming advertising revenue, partly offset by a decrease in linear advertising revenue.
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Other revenues consist of revenue from mobile and video device sales, processing fees, regional sports and news channels (excluding intercompany charges or advertising sales on those channels), subsidy revenue, home shopping, wire maintenance fees and other miscellaneous revenues. Other revenues increased $113 million during the three months ended March 31, 2026 compared to the corresponding period in 2025 primarily due to higher mobile device sales.
Operating costs and expenses. The decrease in our operating costs and expenses, exclusive of items shown separately in the consolidated statements of operations, are attributable to the following (dollars in millions):
| Three months ended March 31, 2026 compared to three months ended March 31, 2025 | |||||||||
| Programming | $ | (214) | |||||||
| Other costs of revenue | 181 | ||||||||
| Field and technology operations | (24) | ||||||||
| Customer operations | (6) | ||||||||
| Marketing and residential sales | (30) | ||||||||
| Transition expenses | 24 | ||||||||
| Other | 38 | ||||||||
| $ | (31) | ||||||||
Programming costs were approximately $2.1 billion and $2.3 billion for the three months ended March 31, 2026 and 2025, representing 26% and 28% of total operating costs and expenses, respectively. Programming costs consist primarily of costs paid to programmers for basic, premium, video on demand, and pay-per-view programming. Programming costs decreased as a result of a $171 million increase in costs allocated to seamless entertainment applications and netted within video revenue as well as a higher mix of lower cost video packages within our video customer base and fewer video customers, partly offset by contractual rate adjustments, including renewals and increases in amounts paid for retransmission consent.
Other costs of revenue increased $181 million during the three months ended March 31, 2026 compared to the corresponding period in 2025 primarily due to higher mobile service direct costs and mobile device sales due to an increase in mobile lines as well as higher advertising sales costs given higher political revenue.
Depreciation and amortization. Depreciation and amortization expense increased $30 million during the three months ended March 31, 2026 compared to the corresponding period in 2025 primarily due to an increase in depreciation as a result of more recent capital expenditures, partly offset by certain assets becoming fully depreciated.
Other operating expenses, net. The decrease in other operating expenses, net is attributable to the following (dollars in millions):
| Three months ended March 31, 2026 compared to three months ended March 31, 2025 | |||||||||
| Special charges, net | $ | (34) | |||||||
| Merger and acquisition costs | 15 | ||||||||
| Loss on disposal of assets, net | (89) | ||||||||
| $ | (108) | ||||||||
See Note 10 to the accompanying consolidated financial statements contained in “Item 1. Financial Statements” for more information.
Interest expense, net. Net interest expense increased by $15 million for the three months ended March 31, 2026 compared to the corresponding period in 2025 primarily due to an increase in weighted average debt.
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Other expenses, net. The change in other expenses, net is attributable to the following (dollars in millions):
| Three months ended March 31, 2026 compared to three months ended March 31, 2025 | |||||||||
| Loss on equity investments, net | $ | 2 | |||||||
| Loss on financial instruments, net (see Note 8) | 20 | ||||||||
| Loss on extinguishment of debt (see Note 4) | (4) | ||||||||
| $ | 18 | ||||||||
See Note 10 and the Notes referenced above to the accompanying consolidated financial statements contained in “Item 1. Financial Statements” for more information.
Income tax expense. We recognized income tax expense of $465 million and $445 million for the three months ended March 31, 2026 and 2025, respectively.
Net income attributable to noncontrolling interest. Net income attributable to noncontrolling interest for financial reporting purposes represents Advance/Newhouse Partnership's (“A/N”) portion of Charter Holdings’ net income based on its effective common unit ownership interest. For more information, see Note 7 to the accompanying consolidated financial statements contained in “Item 1. Financial Statements.”
Net income attributable to Charter shareholders. Net income attributable to Charter shareholders decreased $54 million during the three months ended March 31, 2026 compared to the corresponding period in 2025 primarily as a result of the factors described above.
Use of Adjusted EBITDA and Free Cash Flow
We use certain measures that are not defined by U.S. generally accepted accounting principles (“GAAP”) to evaluate various aspects of our business. Adjusted EBITDA and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net income attributable to Charter shareholders and net cash flows from operating activities reported in accordance with GAAP. These terms, as defined by us, may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA and free cash flow are reconciled to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, below.
Adjusted EBITDA eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of our businesses as well as other non-cash or special items, and is unaffected by our capital structure or investment activities. However, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and our cash cost of financing. These costs are evaluated through other financial measures.
Free cash flow is defined as net cash flows from operating activities, less capital expenditures and changes in accrued expenses related to capital expenditures.
Management and Charter’s board of directors use Adjusted EBITDA and free cash flow to assess our performance and our ability to service our debt, fund operations and make additional investments with internally generated funds. In addition, Adjusted EBITDA generally correlates to the leverage ratio calculation under our credit facilities or outstanding notes to determine compliance with the covenants contained in the facilities and notes (all such documents have been previously filed with the Securities and Exchange Commission (the “SEC”)). For the purpose of calculating compliance with leverage covenants, we use Adjusted EBITDA, as presented, excluding certain expenses paid by our operating subsidiaries to other Charter entities. Our debt covenants refer to these expenses as management fees which were $366 million for both the three months ended March 31, 2026 and 2025.
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A reconciliation of Adjusted EBITDA and free cash flow to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, is as follows (dollars in millions):
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Net income attributable to Charter shareholders | $ | 1,163 | $ | 1,217 | ||||||||||||||||
| Plus: Net income attributable to noncontrolling interest | 200 | 192 | ||||||||||||||||||
| Interest expense, net | 1,256 | 1,241 | ||||||||||||||||||
| Income tax expense | 465 | 445 | ||||||||||||||||||
| Depreciation and amortization | 2,211 | 2,181 | ||||||||||||||||||
| Stock compensation expense | 203 | 222 | ||||||||||||||||||
| Other, net | 139 | 265 | ||||||||||||||||||
| Adjusted EBITDA | $ | 5,637 | $ | 5,763 | ||||||||||||||||
| Net cash flows from operating activities | $ | 4,304 | $ | 4,236 | ||||||||||||||||
| Less: Purchases of property, plant and equipment | (2,855) | (2,399) | ||||||||||||||||||
| Change in accrued expenses related to capital expenditures | (77) | (273) | ||||||||||||||||||
| Free cash flow | $ | 1,372 | $ | 1,564 | ||||||||||||||||
Liquidity and Capital Resources
Overview
We have significant amounts of debt and require significant cash to fund principal and interest payments on our debt. The principal amount of our debt as of March 31, 2026 was $94.3 billion, consisting of $11.7 billion of credit facility debt, $55.4 billion of investment grade senior secured notes and $27.3 billion of high-yield senior unsecured notes. Our split credit rating allows us to access both the investment grade debt and the high yield debt markets. Additionally, our bankruptcy remote special purpose vehicle is the borrower of a senior secured revolving credit facility to finance the purchase of equipment installment plan receivables with a number of financial institutions (the “EIP Financing Facility”). As of March 31, 2026, the carrying value of the EIP Financing Facility was $1.6 billion. For more information on the EIP Financing Facility, see Note 5 to the accompanying consolidated financial statements contained in “Item 1. Financial Statements.”
Our projected cash needs and projected sources of liquidity depend upon, among other things, our actual results, and the timing and amount of our expenditures. Free cash flow was $1.4 billion and $1.6 billion for the three months ended March 31, 2026 and 2025, respectively. See the table below for factors impacting free cash flow during the three months ended March 31, 2026 compared to the corresponding prior period. As of March 31, 2026, the amount available under our credit facilities was approximately $4.6 billion and cash on hand was approximately $517 million. We expect to utilize free cash flow, cash on hand and availability under our credit facilities as well as future refinancing transactions to further extend the maturities of our obligations. The timing and terms of any refinancing transactions will be subject to market conditions among other considerations. Additionally, we may, from time to time, and depending on market conditions and other factors, use cash on hand and the proceeds from securities offerings or other borrowings to retire our debt through open market purchases, privately negotiated purchases, tender offers or redemption provisions. We are also required to fund approximately $4.2 billion of cash purchase price at the closing of the Cox Transactions. We believe we have sufficient liquidity from cash on hand, free cash flow and Charter Operating’s revolving credit facility as well as access to the capital markets to fund our projected cash needs.
We continue to evaluate the deployment of our cash on hand and anticipated future free cash flow, including investing in our business growth and other strategic opportunities, including expanding the capacity of our network, the expansion of our network through our rural broadband construction initiative, the build-out and deployment of our CBRS spectrum, and mergers and acquisitions as well as stock repurchases and dividends. Charter's leverage ratio of net debt to the last twelve months Adjusted EBITDA was 4.15 times as of March 31, 2026. Charter plans to maintain a leverage ratio, pro forma for the closing of the Liberty Broadband Corporation (“Liberty Broadband”) Combination near the midpoint of its stated range of 4.0 to 4.5 times Adjusted EBITDA in the period leading up to the Closing, and up to 3.5 times Adjusted EBITDA at the Charter Operating first lien level. Charter plans to adjust its long-term target leverage range after the Closing to 3.5 to 3.75 times Adjusted EBITDA. As Adjusted EBITDA grows, we expect to increase the total amount of our indebtedness to maintain leverage within Charter's target leverage range.
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-05-15 | Ramos Mauricio | Director | Buy | +9,929 | $140.93 | $1,399,308 |
| 2026-04-28 | Davis Wade | Director | Buy | +5,728 | $173.72 | $995,068 |
| 2026-04-28 | Nair Balan | Director | Buy | +1,000 | $175.46 | $175,460 |
| 2026-04-28 | Winfrey Christopher L indirect | President and CEO | Buy | +3,468 | $172.23 | $597,311 |
| 2026-04-28 | Winfrey Christopher L | President and CEO | Buy | +3,468 | $172.23 | $597,311 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-07-24 10-Q expected by 2026-08-06 (in 43 days)
- ~2026-10-30 10-Q expected by 2026-11-12 (in 141 days)
- ~2027-01-29 10-K expected by 2027-02-27 (in 232 days)
- ~2027-04-23 10-Q expected by 2027-05-06 (in 316 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-19 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-04-24 10-Q Quarterly Report
- 2026-04-24 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-24 S-8 Employee Benefit Plan Registration
- 2026-04-23 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2026-02-25 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-01-30 10-K Annual Report
- 2026-01-30 8-K Earnings Release; Financial Statements and Exhibits
- 2026-01-28 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-01-22 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-01-14 8-K Material Agreement Entered; Material Financial Obligation; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-01-06 8-K Other Events; Financial Statements and Exhibits
- 2025-12-12 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-12-05 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-10-31 10-Q Quarterly Report