10-QPeriod: Q2 FY2021

CHARTER COMMUNICATIONS, INC. /MO/ Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 30, 2021For Securities:CHTR

Summary

Charter Communications, Inc. reported solid financial results for the second quarter and the first half of 2021. Revenue increased by 9.5% year-over-year for the quarter and 8.1% for the six-month period, primarily driven by growth in residential internet and mobile subscribers, along with price adjustments and increased advertising sales. Net income attributable to Charter shareholders saw a significant increase, reaching $1.02 billion for the quarter and $1.83 billion for the first six months, up from $766 million and $1.16 billion in the prior year periods, respectively. This growth is supported by strong operational performance and effective cost management. The company's focus on expanding its broadband and mobile services continues to be a key driver of its financial success, while also investing in network infrastructure for future growth. Despite ongoing investments in new product lines like mobile services, which are currently impacting profitability, Charter demonstrates a robust operational and financial position.

Financial Highlights

47 data points
Beta

Revenue

$12.80B

Net Income

$1.02B

8.0% Net Margin

EPS (Diluted)

$5.29

Total Assets

$144.03B

Cash & Equivalents

$1.71B

Free Cash Flow

$2.12B

Financial Statements
Beta
Revenue$12.80B
Operating Expenses$10.23B
Operating Income$2.58B
Net Income$1.02B
EPS (Basic)$5.48
EPS (Diluted)$5.29
Shares Outstanding (Basic)185.92M
Shares Outstanding (Diluted)199.08M

Key Highlights

  • 1Total revenues for Q2 2021 increased by 9.5% to $12.8 billion, and by 8.1% to $25.3 billion for the first six months of 2021, compared to the same periods in 2020.
  • 2Net income attributable to Charter shareholders rose to $1.02 billion in Q2 2021 and $1.83 billion in the first six months of 2021, a significant increase from the prior year.
  • 3The company experienced strong growth in residential internet revenue, up 15.2% for the quarter and 15.3% for the six-month period, driven by customer growth and price adjustments.
  • 4Mobile revenue showed substantial growth, increasing by 67.5% in Q2 and 78.0% for the first six months of 2021, reflecting the expansion of its mobile subscriber base.
  • 5Free cash flow increased by $202 million to $2.1 billion for Q2 and by $686 million to $3.9 billion for the first six months of 2021, demonstrating improved cash generation capabilities.
  • 6Charter's total debt remains substantial at $87.5 billion as of June 30, 2021, but the company maintains adequate liquidity with $1.7 billion in cash and cash equivalents and significant availability under its credit facilities.
  • 7The company repurchased approximately 5.1 million shares of Class A common stock for $3.4 billion in Q2 2021, continuing its share buyback program.

Frequently Asked Questions

Charter's revenue growth in Q2 2021 was primarily driven by an increase in residential internet and mobile customers, alongside price adjustments and a rise in advertising sales. Specifically, internet revenue grew by 15.2% and mobile revenue by 67.5% year-over-year for the quarter.

Charter's mobile business is experiencing significant revenue growth, with mobile revenue increasing by 67.5% in Q2 2021. However, the company notes that the mobile product line is incurring growth costs, leading to negative Adjusted EBITDA and free cash flow impacts from device-related cash flows, sales and marketing, and capital expenditures for network build-out.

As of June 30, 2021, Charter reported total debt of $87.5 billion. The company maintains adequate liquidity with $1.7 billion in cash and cash equivalents and approximately $4.7 billion available under its credit facilities. Charter's strategy includes using free cash flow, cash on hand, and credit facility availability to manage its debt, including refinancing and potential debt retirement.

Net income attributable to Charter shareholders increased significantly in Q2 2021 due to higher revenues, effective cost management, and a reduction in certain expenses such as depreciation and amortization compared to the prior year's comparable period. The company also benefited from increased income from operations.