Optimum Communications (NYSE:OPTU) reported fourth-quarter and full-year 2025 results that management described as a “year of meaningful transformation,” as the company emphasized improved profitability and operating efficiency while navigating what executives repeatedly called an unprecedentedly competitive broadband environment.
Fourth-quarter results show revenue pressure but margin expansion
For the fourth quarter, Optimum said total revenue of approximately $2.2 billion declined 2.3% year-over-year, with pressure “mainly concentrated in video,” which fell almost 10%. News and Advertising revenue declined 8% due to tougher political comparisons; excluding political revenue, News and Advertising revenue grew 6%, helped by growth in advanced advertising agency services and higher national sales.
Despite top-line declines, Optimum posted a significant improvement in profitability. Adjusted EBITDA rose 7.7% year-over-year to $902 million, marking what management said was the first quarter of year-over-year adjusted EBITDA growth in 16 quarters. Adjusted EBITDA margin expanded 380 basis points to 41.3%, which executives described as the highest EBITDA margin in 16 quarters and the first time surpassing the 40% level in that span.
Gross margin reached 69.5%, up 180 basis points year-over-year. Management attributed margin gains to a mix shift toward higher-margin products such as broadband and new video tiers, disciplined programming negotiations, and lower operating expenses. Executives said operating expenses declined by nearly $60 million year-over-year in the quarter, including a strategic workforce optimization that reduced headcount by more than 6% year-over-year, along with tighter cost controls and marketing mix shifts intended to rationalize acquisition costs.
Optimum also reported free cash flow of approximately $200 million in the quarter and said cash capital expenditures stepped down 28% year-over-year, reaching about 13% capital intensity in the period.
Subscriber trends: broadband losses, improving mobile churn, and better video net losses
On broadband, Optimum reported a net loss of 62,000 subscribers in the fourth quarter, ending 2025 with 4.2 million broadband subscribers. CFO Marc Sirota said net losses were primarily driven by fewer gross additions amid low household move activity, heightened customer price sensitivity, and sustained competitive intensity. He added that Optimum’s “more measured and disciplined promotional approach,” combined with market conditions, contributed to higher churn year-over-year.
Residential broadband ARPU increased 2.8% year-over-year to $76.71, which management said was the highest quarterly broadband ARPU in 14 quarters. The company cited the timing of rate actions and “disciplined rate preservation” in care and retention. Residential ARPU overall rose 0.4% year-over-year to $134.49, as declines from video were offset by growth in broadband, mobile, and value-added services.
On speed tier mix, management said 52% of new customers selected 1 gig or higher tiers in the quarter, bringing 43% of the broadband base to 1 gig or higher by year-end.
Optimum’s fiber customer accounts reached 716,000 at the end of the fourth quarter, up 33% year-over-year. However, fiber net adds moderated to 12,000 in the quarter, which management said reflected an intentional decision in mid-2025 to slow fiber migrations to balance near-term margins and cash flow and to better manage ARPU erosion and migration costs.
On mobile, Optimum ended the quarter with 623,000 lines, up 35% year-over-year, and added 38,000 lines in the fourth quarter. Sirota said annualized mobile churn improved by more than 700 basis points in the quarter, reflecting initiatives launched in 2025 to strengthen customer quality.
Video subscribers totaled 1.7 million at year-end, down 13% year-over-year. Fourth-quarter video net losses were 49,000, which management said represented the lowest quarterly video net losses in more than five years. Executives pointed to lower video churn and adoption of new higher-margin video tiers launched in 2024; those tiers accounted for more than 15% of residential video customers by the end of 2025.
Full-year 2025: disciplined trade-offs and capital efficiency
For full-year 2025, Optimum reported revenue of approximately $8.6 billion and broadband ARPU growth of 1.6%. Adjusted EBITDA totaled $3.4 billion excluding the divested i24NEWS business, or $3.3 billion on a reported basis. The company said programming and direct costs were $2.6 billion for the year, with another $2.6 billion in other operating expenses.
Optimum highlighted “strategic and sometimes difficult programming decisions” designed to improve video economics while focusing on customer needs. Management said programming cost initiatives helped drive improved video churn and higher gross margins, and later noted that programming costs were down 16% in the fourth quarter and 15% for the full year.
Cash capital expenditures were roughly $1.3 billion, and the company added 177,000 new passings in 2025, slightly exceeding its target. Capital intensity was less than 16% for the year, which management said was the most efficient in the last four years; excluding Lightpath, capital intensity would have been approximately 14%.
Optimum said it expanded fiber passings by 134,000 for the full year, including 43,000 new fiber passings in the fourth quarter. Executives also noted that the company can offer 1 gigabit or higher download speeds to approximately 96% of its footprint.
2026 priorities: simplify go-to-market, protect margins, and invest in fiber and AI
Looking ahead, CEO Dennis Mathew said Optimum’s 2026 priorities center on simplifying operations and improving the broadband trajectory. Planned actions include simplifying the product portfolio with fewer speed tiers, “transparent pricing,” greater attachment of value-added services, a refreshed mobile offer to deepen convergence, and more emphasis on new video tiers. Management said trials in select markets in late 2025 produced “encouraging results in December” that will help inform broader 2026 strategy.
Optimum also described several base-management tools it expects to use in 2026, including proactive churn reduction, targeted competitive responses in high-pressure areas, a customer loyalty program, and price locks for certain cohorts. Executives said they are not providing specific 2026 guidance for adjusted EBITDA or free cash flow on the call, but indicated they would share more on the first-quarter earnings call.
Technology and automation were another theme. The company said it is deploying AI tools in network operations, customer service, marketing, and sales. Management highlighted a partnership with Google in which “millions of customer calls” are routed through Google CCAI to analyze sentiment and agent interactions. Optimum also described using access network automation that ingests telemetry and operational data and applies AI to identify root causes of network issues, aiming to resolve problems faster, reduce repeat issues, and lower contact rates and service visits.
On fiber, Mathew said Optimum remains “very bullish,” citing churn and Net Promoter Score benefits. For fiber migrations, he said the company slowed the process to refine its approach and maximize customer lifetime value and minimize ARPU erosion and costs, with an expectation to “hit the accelerator in the second half of the year” after further strategy work.
Lightpath momentum and balance sheet actions
Optimum highlighted ongoing momentum at Lightpath, which it called a provider of “AI-grade digital infrastructure and connectivity.” Management said Lightpath’s awarded AI-driven contract value totaled $362 million at the end of 2025, up 240% from $110 million in 2024. Lightpath revenue reached $468 million for full-year 2025, up 13% year-over-year, and Lightpath adjusted EBITDA grew 17% year-over-year.
In February, Lightpath priced an inaugural asset-backed securities transaction of approximately $1.7 billion, which management said is expected to close in early March, with proceeds primarily expected to repay existing Lightpath debt.
Optimum also outlined recent corporate-level financings: in the fourth quarter it closed a refinancing transaction that provided $2 billion of new financing from JPMorgan to voluntarily prepay its existing incremental B6 term loan in full. After quarter-end, Optimum secured about $1.1 billion of additional financing from JPMorgan to refinance a $1 billion asset-backed facility.
Pro forma for transactions discussed, Optimum reported a weighted average cost of debt of 6.8%, weighted average life of 3.3 years, and said 81% of its debt stack is fixed. Consolidated liquidity was approximately $1.4 billion, and leverage was 7.3x the last two quarters’ annualized adjusted EBITDA. Management reiterated that “meaningful debt reduction and a reset of the balance sheet” are essential but declined to provide additional detail on future plans.
About Optimum Communications (NYSE:OPTU)
Altice USA, Inc, together with its subsidiaries, provides broadband communications and video services in the United States, Canada, Puerto Rico, and the Virgin Islands. It offers broadband, video, telephony, and mobile services to approximately five million residential and business customers. The company’s video services include delivery of broadcast stations and cable networks; over the top services; video-on-demand, high-definition channels, digital video recorder, and pay-per-view services; and platforms for video programming through mobile applications.
