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Hello, and welcome to the Altice USA Q2 2024 Results Conference Call and Webcast. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Sarah Freedman, Investor Relations. Please go ahead, Sarah.

Hello, and welcome to the Altice USA Q2 2024 earnings call. We are joined today by Altice USA's Chairman and CEO, Dennis Mathew, and CFO, Marc Sirota, who together will take you through the presentation and then be available for questions. As today's presentation may contain forward-looking statements, please carefully review the section titled forward-looking statements on Slide 2. Now, turning over to Dennis to begin.

Thank you, Sarah, and thanks everyone for joining today. As you've heard me say before, our mission at Optimum is to be the connectivity provider of choice in every community that we serve. To do that, we are putting the customer at the center of every decision, providing the best customer experience, best networks, best customer relationships and best products, all supported by the best team here at Optimum. Our focus on the customer underpins our strategy of returning the business to sustainable subscriber revenue, EBITDA and cash flow growth over time. Q2 was another quarter of progress in our transformation journey. We continued to deliver improved operational metrics, increased customer satisfaction, growth in our fiber, mobile and B2B businesses, elevated product quality and refreshed go-to-market strategies. And we are continuing to use artificial intelligence and data to enhance our capabilities and improve the customer experience. We are executing with financial discipline across every area of the business, and we are just getting started. We have an exciting, innovative and robust roadmap of future product and experience enhancements that we cannot wait to bring to our current and prospective customers this year and beyond. Before we get into the details, I do want to say thank you, thank you to our customers for choosing us as their provider for one of the most essential services in their lives, and thank you to our team mates across the country. It is your dedication to our customers that is driving the current and future success of our business. So now, let's turn to Slide 3 to get into some of the specifics. We delivered $2.2 billion in revenue and $867 million in adjusted EBITDA in Q2 2024. Revenue and adjusted EBITDA declines continued to improve compared to the prior year-over-year trends. This reflects our disciplined operational and financial execution, as we continue to face competitive and macro pressures, including higher interest rates, higher inflation and increased competition. We've invested in people, data and analytics and are starting to see returns in those investments. Looking back 12 months to 24 months ago, we had limited understanding of our customers. Through the formation of our centralized data and analytics teams and implementation of AI tools, we now have a robust understanding of our customers and their individual customer life-time value, and are proactively managing these relationships to benefit our customers and our business. The use of AI tools extends across the business, and we'll continue to scale them to transform our operations, drive inbound sales performance and improve processes at all touchpoints. On our subscriber trends, we saw impacts from both competitive and macro pressures, which were more pronounced in our west footprint, as the east had relatively stable trends. In addition, we saw gross addition pressure in our low-income customer segment, partially attributed to the sunset of ACP and aggressive pricing from ILECs, fiber overbuilders and FWA. Our hyper-local strategy, network quality and value combined with robust offerings across our base enables us to effectively compete over time. Overall, we remain well positioned with a healthy broadband customer base of 4.4 million customers and we continue to see growth in fiber subscribers and mobile lines, which are key drivers to strong and profitable long-term customer relationships. We also saw a positive B2B subscriber growth in Q2, momentum that we are excited to build on in the second half of the year. Overall, our focus on delivering better experiences for our customers is paying off. According to both internal and external customer satisfaction benchmarks, Optimum is on a significant climb, outpacing the NPS improvements of our peers over the last two years. Specifically, transactional NPS or customer satisfaction levels when interacting with Optimum, has grown 34 points over the last two years. Additionally, relationship NPS or overall customer sentiment toward the optimum brand has grown 18 points over the same period. This marks significant progress in stabilizing our business and establishing the optimum brand as one that customers can rely on and trust. Importantly, our focus on improving NPS scores helps us to enhance profitability while protecting ARPU and sustaining low churn. In Q2, we also saw brand awareness among prospective customers grow by 8 percentage points year-over-year in the east and by 13 percentage points in the west, supported by our customer experience improvements, brand platform launch and go-to-market strategies. We also continue to see third-party validation. Optimum fiber was once again recognized for having the fastest and most reliable Internet speeds in New York and New Jersey, according to Ookla Speedtest. And most recently, we were named the best Internet service provider in the Mid-Atlantic region, inclusive of our New York and New Jersey footprint by technology publication, PCMag. In addition, in 2024 we were named the Best Internet Provider by CNET in areas across our footprint. It is tremendous and validating to see the superiority of our product set and networks recognized across the industry. Let's dive into a few key programs that are driving these improved experiences and a positive impact on our brand reputation. Since November, we have upgraded over 700,000 qualified HFC customers to higher speeds. Almost half of these customers were previously on legacy lower-speed plans. This initiative enables us to phase out speed tiers, deliver improved service experiences and leaves considerable room for future upgrades. And we have seen improved churn with our speed rightsized population as well as higher satisfaction. Speed rightsizing demonstrates how we are passing the benefits of our network enhancements directly to our customers and it is just one component of our overall base management strategy aimed at creating more engaged, satisfied and stickier customer relationships. We are also increasing customer satisfaction through the broader availability of self-setups or self-installs, creating a better customer experience and reducing truck rolls. This quarter we saw 56% increase in eligible customers choosing self-setup and we will continue to improve this process. Across our base, we have seen 235,000 fewer truck rolls in the last 12 months as well as 1.7 million fewer service calls. As we deliver better customer experiences, total contact rates per customer have declined by almost 10% and repeat customer service visit rates have declined around 30% compared to the prior year. Our completion rates are approaching all-time highs and our repeat rates are approaching all-time lows. This is driven by our focus on quality, quality products, quality network and quality service. We are resolving product issues faster, driving first-time right on every interaction, expanding self-service tools such as My Optimum app and proactively communicating with our customers like never before. Now, last quarter, I talked about the launch of Optimum's where local is big-time brand platform, which emphasizes our ability to bring innovative, best-in-class technology and products to our customers, delivered with the approach and trust of a local business. This platform is backed by our hyper-local go-to-market strategy, which is a town-by-town approach to how we serve and support our customers. Optimum size, scale and local leadership teams put us in a unique position to operate at a hyper-local level, and we are already seeing the benefits of this tailored approach, with subscriber stabilization in nearly 100 markets where we focused our hyper-local segmentation efforts. In addition, residential customer wins per losses on competitive switching improved slightly compared to Q2 '23 levels. We are performing better amongst non-movers in the east footprint as well as in the west generally. Our hyper-local go-to-market strategy is just gaining momentum and we are confident that it will enable us to be more competitive in every market we serve. Next on Slide 4, I will review some of the exciting developments our teams are diligently working to deliver over the medium term. With our operational transformation well underway, we are excited about the upcoming evolution of the Optimum product and solutions portfolio, which focuses on driving innovation, flexibility and value for our customers. Let's start with value-added services, a new set of offerings that will bring our customers add-ons to help get them the most out of their experience with Optimum while expanding our opportunity to capture additional revenue per customer beyond our core products. We recently launched Total Care, which provides premium support for customer services and connected devices in the home at $15 per month for residential customers. Since the product’s soft launch in Q2, we've seen several thousand customers take this add-on, and marketing hasn't even started. We also offer device protection for our fixed services and just recently launched device protection for mobile. As consumer needs evolve, we are also exploring partnerships with third-party OTT app providers to resell services as part of the Optimum product suite. This is an untapped area for us, enabling us to meet changing customer behaviors while creating greater financial flexibility in managing content rights. On broadband, both our fiber and HFC footprints continue to be recognized for speed and reliability, coming in ahead of our peers in several key categories. In areas where we have fiber, we are focused on growing penetration through both customer additions and a renewed focus on migrations, a process that is now faster, easier and more cost-effective. We anticipate accelerating fiber migrations in the second half of the year. Performance on our HFC network continues to improve as well, as we make the right investments to provide best-in-class speeds, reliability with a durable network lifespan. Today we have 1 gig or higher speeds available to 95% of our total footprint and we are actively testing our ability to deliver 2 gig speeds using mid and high-split technology, and are reclaiming capacity from our video system as we expand our Optimum stream product. Next, we'll continue our speed rightsizing program as part of our broader base management strategy, identifying and upgrading qualified customers on an ongoing basis. And we're continuously enhancing our in-home Wi-Fi experience with software and hardware improvements to expand coverage and optimize performance. Our roadmap includes wireless backup, smart Wi-Fi solutions and next-generation gateways. Overall, our broadband strategy remains focused on delivering the best, highest quality service to our customers at a great value. We are well positioned with our current and future product roadmap to continue to improve that experience. On mobile, we'll continue to extend mobile sales to more channels and we'll expand our mobile device selection. We added tablets and mobile device protection to our portfolio in Q2, and expect to introduce wearables next year. And we recently started selling mobile in B2B, which will support future growth. On B2B, we are beginning to see more traction, reporting positive SMB broadband net additions in the quarter, and we have plans to add more managed services such as SD-WAN, Network-as-a-Service, LTE backup and richer security features in the coming months. In addition, our Lightpath enterprise business continued to see healthy revenue growth in Q2, driven by an increase in net installs. Lightpath continues to expand its footprint through tuck-in acquisitions. In June, Lightpath announced that it had entered into an agreement to acquire United Fiber & Data. UFD owns and operates high-fiber count networks between New York City and Ashburn, Virginia. If completed, this acquisition is expected to expand the serviceable market in Manhattan by over 20% and should align well with the existing footprint. And last, the moment on video, turning to Slide 5, over the last few years, we have learned a lot about our customers' TV viewing habits and have been preparing as a Company to address these changes. We are evolving and expanding our product set to provide our customers with the choice, flexibility and the advanced connectivity experience they demand. First, we launched Optimum Stream, our Android-based streaming video platform. And we continue to enhance its functionality. We plan to introduce pause and rewind for live TV and a new user interface in the months to come. Optimum Stream is available to all our New York tri-state area customers and this year, we expect to bring our premier video service to nearly 1.5 million more homes across our west footprint. In July, we announced the launch of Entertainment TV, a new Internet TV package and the first of several new video bundles to be rolled out by Optimum with a variety of content options. This TV package is priced at $30 per month and features over 80 top-rated channels, available both live and on demand only through Optimum Stream. Entertainment TV customers also have access to Optimum's News 12 service, the preeminent hyper-local news source across the New York tri-state area. Entertainment TV is coming at a time when we continue to see the landscape of sports and TV content changing dramatically. Roughly one in five of our video customers do not engage with broadcast, cable news, sports or premium channels regularly, and we are now able to provide these customers with optionality. Additionally, programmers continue to mandate bundles and raise prices for all customers, regardless of whether they watch the content, while also moving premium content to direct-to-consumer platforms without giving equal access to linear partners who pay a majority of their costs. This results in high TV bills for consumers and fragmented and confusing viewing options. Consumers should have the choice to pay fair and reasonable prices for the content they want and how they want it, without being forced to pay for what they don't want. Therefore, we will approach every renewal discussion with the customer at the forefront and we will collaborate with partners who are committed to providing flexibility, choice and value for our customers. As we look ahead to the rest of this year and beyond, we have a lot of exciting innovations and opportunities to continue to evolve the Optimum business. We are confident that our strategy is positioning us well and will lead to long-term customer, revenue and cash flow growth. With that, I'll now hand it over to Marc to review our Q2 performance in more detail.

Thank you, Dennis. Turning to Slide 7, total revenue was $2.2 billion in Q2 and declined 3.6% year-over-year, a notable improvement from the Q2 2023 trend, which was down 5.6%. Residential revenue declined 4.4% year-over-year, driven by a smaller customer base and continued losses of video subscribers. Despite this volume pressure, the 4.4% decline is a marked improvement from the Q2 2023 trend of down 5.7% year-over-year. Of note, within our residential revenue trends, residential mobile service revenue saw its third consecutive quarter of over 50% year-over-year growth. As we continue to ramp up on mobile, this should contribute to more of our residential revenue trends over time. As we assess sales opportunities across our footprint, we have observed fewer shoppers across sales channels, especially among our low-income segments. Although we have improved our channel conversion rates, the top-of-the-funnel opportunities are lower due to increased competition in recent quarters and a challenging macroeconomic backdrop. Despite these challenges, we see underlying strength and stable churn, stable ARPU and growing customer satisfaction. However, the current market dynamics are limiting our ability to grow subscribers and consequently topline growth in the near term. Over the long term, we are confident that our superior network, product suite and customer experience will outperform both fixed wireless and fiber overbuilders. We expect this competitive advantage will enable Optimum to achieve sustained growth over time. In business services, we grew revenue 1.3%, which was driven by growth in our Lightpath enterprise business, and we continue to grow customer relationships and sell in ancillary services to our base. News and advertising revenue declined 7.2% in the quarter, primarily tied to non-recurring prior year one-time items. We expect political revenue to become more of a tailwind in the second half of this year and anticipate double-digit full year growth. In Q2, despite pressures on our video base, we continue to maintain a relatively stable and healthy residential ARPU of $135.95. Recall when we began implementing new rate card pricing for cohorts across our base at the beginning of this year, we signaled that this would not impact residential ARPU, and this has proven to be the case. This trend is tied to continued selling of incremental services like mobile and fiber, as well as enhancements in our base management and discipline around rate erosion. Notably, all of our operational improvements we have made in the last few quarters are translating into higher customer satisfaction as Dennis mentioned. With already low churn rates, we've been able to keep churn near all-time lows and have maintained better rates per customer retention through tailored offers at the customer level using new advanced AI data and tools. In addition to sales and retention, we are now introducing our AI tools for use by our care agents, consolidating dozens of legacy capabilities into one user-friendly interface. This enhances efficiency and equips our team with the insights needed to swiftly resolve issues and suggest offers and actions tailored to each customer based on the specific reason for contacting us. Turning to Slide 8, total adjusted EBITDA declined 5.9% in Q2 year-over-year, a marked improvement from the trend of Q2 last year, which was down 8.5%. Adjusted EBITDA margins were 38.7% in Q2, which was just down under 1 percentage point from the prior year. Adjusted EBITDA decline was primarily a result of low single-digit revenue declines and elevated sales and marketing and transformation expenses in the quarter. Of note, we have continued to act with discipline, controlling what we can control, and we have maintained stable operating costs, slightly down from the first quarter of this year. As we continue on our journey of improving operations, bringing in the best-in-class talent and rolling out advanced tools, our overall costs have remained stable. We have achieved savings in some areas of the business through operational and process improvements. This efficiency allows us to reinvest in other areas such as data analytics and sales and marketing, which are expected to drive positive subscriber growth and topline results over time. Q2 free cash flow was negative $41 million, which includes $57 million of higher cash taxes compared to the prior-year quarter due to timing of first--half estimated taxes. We anticipate cash taxes will be significantly lower in the second half of the year and we expect full year cash taxes to be in the range of $250 million to $300 million and we continue to target positive free cash flow for the full year. Next on Slide 9, we'll review our subscriber trends. We added 40,000 fiber customers in the quarter, on pace with the prior year quarter, and grew fiber customer penetration to over 15%, representing growth of 1.1 percentage points in the quarter. Approximately 60% of our fiber net-adds were from migrations of existing customers. If you recall, we mentioned there would be a bit of a slowdown in the pace of migrations this quarter, as we continue to refine the operational process. And I am pleased we expect to accelerate migrations in the back half of the year. In Q2, mobile line net additions were 33,000, more than double the pace of mobile additions year-over-year,, and we increased penetration of our broadband base to 5.8%. We have a lot of runway to continue to grow the mobile attachment rate and penetration to create stickier customers. We anticipate accelerating mobile growth in the second half of the year through sales productivity and exciting new offerings. Total broadband subscriber net losses were 51,000 in the quarter, driven by seasonal university disconnects, continued competitive and macro pressures and the impact of ACP sunset. Specifically, the difference in Q2 broadband net add performance versus the prior year can mainly be attributed to pressure in our low income segment. Contributing to this is the sunset of ACP, which has temporarily impacted both gross adds and disconnects in this segment on a year-over-year basis. We continue to manage these customers with tailored offers to repackage them into best value products and services that fit their connectivity needs and price sensitivity, from low income offerings for qualified customers to adding mobile to save more on their bills plus added discounts. As Dennis mentioned earlier, we have seen green shoots throughout our hyper-local go-to-market efforts and these efforts are just starting to take form. Aside from our low-income segment, we see improved gross add activity year-over-year. Further, in July we see stabilizing broadband subscriber trends compared to the prior-year July. We continue to see pressure from the low-income segment, but we are pleased with the underlying stabilization of the business, which gives us confidence that we are well positioned to return to long-term growth. Overall, as we continue to enhance our base management strategies such as improved customer communication and speed rightsizing, we have the opportunity to deepen our customer relationships and maximize CLV by retaining long-tenured customers and selling additional products. We have a strong base of broadband customers, the majority of whom have been with us for five years or more, take multiple products and churn less compared to early-tenured customers. Turning to Slide 10, we will review our capital expenditures and network investments. Cash capital expenditures were $348 million, which was down 27% year-over-year in Q2. In capital intensity, our cash CapEx as a percentage of total revenue in the quarter was 15.5%, down about 5 percentage points versus Q2 last year. Recall in 2023, our capital spent was weighted more towards the first half of the year. Therefore, we are comparing to higher CapEx which included a greater investment in fiber passing construction. In Q2 2024, we added 62,000 additional fiber passings and we expect to end the year with around 3 million fiber passings. Additionally, we expanded our total passing footprint by 67,000 in the quarter and we expect to add over 175,000 total passings this year. As Dennis mentioned, our HFC plant continues to perform well and we are maximizing this network with quality enhancements in a capital-efficient manner. For example, we are increasing broadband capacity for over 2.5 million customers by allocating bandwidth more efficiently to improve both upload and download speeds. We continue to split nodes to create more capacity on our network and we are doing this at a lower cost. We have strengthened our efforts around proactive and preventative network maintenance, with enhanced processes and tools to identify in fixed network and equipment issues before a customer would ever notice. All of these enhancements regarding recognition, from improved customer experience to third-party published awards and improved Google review scores, validating that we are making the right investments to strengthen our networks. We remain focused on network enhancements with capital efficiency to prioritize the highest returns and benefits to our customers while remaining disciplined around capital intensity. Please note we expect capital intensity to increase slightly in the back half of this year as we migrate more customers to fiber and continue to invest in our network. As we have remained disciplined in the first half of this year, we now anticipate full year CapEx to come under $1.6 billion, which is slightly lower than the range of our initial guidance. And finally, on Slide 11, I would like to review our debt maturity profile. We are well positioned with a clear runway of maturities until 2027. At the end of Q2, our weighted average cost of debt is 6.5% and our weighted average life is 4.6 years. 85% of our total debt stack is fixed, inclusive of floating to fixed interest rate swaps. Our leverage ratio is 7.2 times the last two quarters annualized adjusted EBITDA. We will continue to be proactive in managing our debt maturities and evaluate how to best ensure that our capital structure supports our long-term operating goals. While we are well positioned in the near term, we are looking at all options to maintain a capital structure that supports our long-term strategic objectives. In conclusion, we have the right strategy in place with a focus on profitability, financial discipline and enhancing the customer experience, with a segmented go-to-market approach, all of which positions us on a path to sustainable long-term growth. With that, we will now take any questions.

[Operator Instructions] Our first question today is coming from Frank Louthan from Raymond James. Your line is now live.

Great, thank you. Can you give us an idea of the current run rate savings from the truck rolls and the call center inbounds? And then as a follow-up, where do you think you are as far as integrating AI in your business for efficiencies and so forth? What kind of -- give us tonight kind of what inning you're in or something like that. Thank you.

Hey, Frank, we're really excited about the improvements that we're seeing in our operations. As I mentioned, 1.7 million fewer calls, 235,000 fewer truck rolls and there's more opportunity. We're leaning into self-install. We're leaning into just more proactively communicating with our customers. 56% increase in self-install this past quarter. And we're sending messages proactively when folks are having outages or service interruptions, service visits, installs, and this is all driving savings, this is all driving fewer calls, fewer truck rolls, just less noise in the system and that's translating into improved customer experience. We are taking those savings and optimizing our OpEx structure, and I'll let Marc talk to that a bit in a second, but then we're investing as well, and we're being disciplined about that investment. We talked a bit about AI, and our first step in that direction was launching a tool in our retention queues to help our agents more effectively manage call volumes coming in based on the customer's lifetime value, the product set, and really provide them offers that were accustomed to their needs. And it also takes into consideration the competitive intensity in the market so that it's not a one-size-fits-all when we're taking those calls. And that is allowing us to have -- drive better save rates and drive ARPU -- drive improvements in ARPU erosion. And so, we're continuing on this journey. We're running pilots in our care centers. We're running pilots with our field teams, and we're seeing real opportunity to just help us elevate our customer experience, make it simpler for our employees to have easier tools, find the solutions faster, solve the issues faster, to ultimately deliver a more effective experience and drive even further efficiency as we go into the second half of the year and into '25. Marc?

Yeah, Frank, I would just add, you see in our OpEx costs, we've been able to make these investments that Dennis has mentioned and keep our operational costs flat. We were down sequentially quarter-over-quarter, which we were pleased about. And so, while we drive out the truck rolls and the phone calls, we're able to reinvest in this type of technology. I would characterize it, Frank, as early innings with AI. We've -- as Dennis mentioned, we have it in front of all of our retention agents today. By the end of the third quarter, we'll have it in front of all of our care agents, and again, tailored actions at the individual customer level. So, really excited about where AI is going to take this company, and it's really helping us guide the operations. And you see it in the stable ARPU. Despite the video pressures that we see, we're able to maintain our video ARPU, so really pleased on our progress, but still early innings.

All right, great. Thank you very much.

Thank you.

Thank you. Next question today is coming from Kutgun Maral from Evercore ISI. Your line is now live.

Good morning, and thanks for taking the questions, one on the outlook for EBITDA and one on the strategic value of legacy Optimum. First, on EBITDA, I appreciate that you don't provide explicit guidance and that there are a number of moving pieces across what you can and cannot control. But can you talk to some of the moving pieces we should be mindful of for the back half and how we should think about the full year? And second, on the strategic value of the legacy Optimum footprint, there have been some headlines recently around fiber assets and various partnerships. I know the focus for the management team and the board has perhaps shifted over the years more towards improving underlying operations of the business as opposed to asset monetization. But given legacy Optimum is in the top DMA with meaningful progress on the fiber build, are you now at a point where maybe there's any interest or willingness to engage in monetizing it in some capacity? Thank you.

Thanks, Kutgun. I'll take the second question first and then I'll throw it over to Marc. But we are continuing to be laser-focused on transforming this organization, and we're really excited about the progress that we're making. And the legacy cable vision or the east footprint is one that we're laser-focused on. We've launched our new hyper-local go-to-market playbooks in the past quarter, and we are seeing incredible stabilization across our footprint in over a 100 of the markets that we've launched, which includes the east. And we're seeing improved performance, particularly in our fiber footprint and particularly where we overlap with Verizon. We are seeing our ability to compete improve, and we're going to continue to lean into that. We're still in the early innings. I'm really proud of what the team has accomplished. We have won award after award by third-party independent organizations. As I mentioned, Ookla named us the fastest and most reliable in New York and in New Jersey in that DMA that you're discussing. PCMag named us the top ISP in the Mid-Atlantic, which includes New York and New Jersey. But there's more work to do, and we know that the competitive pressures continue to ramp up. But we have the products, we have the service, we have the tools to compete effectively in the east, and we want to continue to drive improvements and continue to accelerate our transformation. So, that's what we're focused on today. Marc, you want to talk about the EBITDA piece?

Yeah. Kutgun, on a full year basis, we expect our year-over-year EBITDA declines to moderate versus the prior year. This is really driven by all the operational improvements that we've talked about, that we've made over the past year. This includes all the investments we made in our customers, such as the speed rightsizing activities, all the investments in our network. And you see that really transforming our truck rolls and our service calls, which we just talked about, and then just really pleased on the stabilization of ARPU. And we do see a path for growth there. And again, that's mainly tied to discipline and use of AI to drive each conversation with our customers. So, it's these investments that give us confidence that we will drive EBITDA improvements over this year and then in the long term. And that's really what we're focused on, is long-term sustainable EBITDA growth. And so, that's where we feel things are heading and feel good about it.

Perfect. Thank you both.

Thank you.

Thank you. Next question is coming from Michael Rollins from Citibank. Your line is now live.

Thanks, and good morning. I'm just curious if you could provide more specifics on how ACP impacted broadband performance in the second quarter and your expectations for how it may specifically impact the performance in the second half. And then, just taking a step back, can you share where you are today on the percent of the broadband base that now has that simplified rate card and the timing to get to the rest of the customers? Thanks.

Thanks, Michael. On ACP, as Marc mentioned just broadly, as we look at the low-income segment, we did see a bit of a slowdown in some headwinds as it relates to that segment in particular, both from a growth add and from a disconnect perspective. ACP specifically, we're really happy with our performance. We saw a very nominal increased churn from our baseline. And I think that's really attributable again to the incredible work the team did to prepare and to be able to offer our customers options. We've leveraged our tools and leveraged offers and packages to help rightsize people in terms of their needs, getting them into packages that rightsize their speeds, rightsize their package with optimum mobile and really making sure that they had the right products that they needed. So, incredible performance on the disconnect side, but we have seen that the subsidy and just generally a bit of a slowdown in terms of gross adds. And when I look at our general performance, that is where I see our headwinds that occurred in the second quarter. But we feel that we do have the right products and the right services to compete long term. We have incredible value. Our focus remains -- quality and value. And when we look at value and we look at Optimum complete, we now have Optimum stream that is launching across the footprint. Entertainment TV is an incredible value. As I mentioned, a new video package. We believe that long term we do have now the right products and the capabilities to be able to compete across every segment. In terms of our broadband retail pricing, I'll throw that over to Marc to just provide a little bit more color.

Yeah, Michael, we're pleased with overall ARPU trajectory and our stabilization that we've talked about. From a rate card perspective, all of our fiber rate card is now fixed and reset. And then, we will over time -- and this will be a multi-year journey, we will set the HFC rate card. So, still fairly early days on that side of the house. Again, we did not see any material impact from the change here. And we'll continue to manage ARPU on an individual customer basis and feel that there's a path to real growth as we continue to accelerate selling in more products like fiber, like mobile and other ancillary services.

Yeah, I'll just continue to reiterate that our -- the philosophy or strategy around our pricing strategy has been providing transparency, predictability and just eliminating a bit of the confusion that existed with the old rate cards and promo roll strategy. And we're seeing real benefits from that. We're seeing that we're able to continue to implement that strategy and provide the clarity that our customers are looking for.

Thank you.

Thank you.

Thank you. Your next question today is coming from Craig Moffett from Moffett Nathanson. Your line is now live.

Hi, good morning. Let me ask about some of the green shoots that you've pointed to. Can you quantify for us a real change in the trajectory of, in particular, broadband, I guess broadband retention and net adds in any of these kind of green shoot cohorts, whether it's the customers who've had the pricing rightsize that you just talked about, the customers who are in your fiber markets, the customers who are in your mobile converged bundles or even just in your hyper-local segmented market, so that we can kind of do something a little more tangible so that we can see once this is done and then as it rolls out that we can have more confidence in the trajectory of broadband in particular.

Yeah, Craig, what I'll say is that we're really excited about the stabilization of churn. You know, we were really, prior to me joining and launching these playbooks, we were really struggling as fiber overbuilders came into our footprint, the impact that those folks were having was fairly outsized in terms of taking share and these local playbooks have stabilized that. And when I look at our performance in Q2, we saw a meaningful stabilization and improvement in churn. And really, the headwinds, when we look at the performance, was on the gross add side and really tied to the low income segment. And so, when I look at the speed rightsizing, and I'll let Marc add a bit of color, across these tactics, we are seeing improvements in churn. 50% of those folks are just being moved off of legacy speeds and we're seeing their satisfaction improve, we're seeing call volumes decrease, and we're seeing a level of loyalty and stickiness tied to that improvement. Similarly, for those customers that are taking mobile, their churn profile is also better. And then as we go market by market and we're able to compete and we're able to drive our base management strategies, we're seeing that we are able to stabilize and even see record level of improvement in churn. And so, now, our job is to continue to drive that go-to-market in a more meaningful way across every town, across every market, both in terms of base stabilization as well as driving our acquisition and go-to-market. And we're seeing some improvements there as well. When we look at our win share and our ability to drive win share and bend the curve town by town, we are seeing our ability to do that, particularly as I look at some of these towns where we're competing against these fiber overbuilders. Marc, anything you'd like to add?

Yeah, just around speed rightsizing in fiber in particular, we're seeing that these tactics are working. We see combined double-digit churn improvements coming out of customers that take their fiber product or speed rightsized. So, we feel that these types of tactics in addition to our individual customer treatments that we're doing are stabilizing the base. And again, as Dennis mentioned, we do see acceleration in our non-low-income segments around gross ad performance. And so, that gives us optimism around where the business is -- from a core base is heading. Coupled with the investments we've made on customer experience and driving churn to all-time lows, we feel like there's a real path to sustainable growth over time.

Yeah. And the other piece that we're leaning into, as I mentioned, was the value-added services, where we have an opportunity, a real opportunity, to further drive services into the base. We launched our new total care solution and within a few weeks, without any marketing, we've already added several thousand customers. And so, just having a much more proactive, strategic base management strategy, as we launch these new services and sell that into the base, we believe that, that will further accelerate our transformation.

All right, thank you.

Thanks, Craig.

Thank you. The next question is coming from Sebastiano Petti from JPMorgan. Your line is now live.

Hi, thank you. If I could just maybe ask a quick follow-up to Mike's question earlier, just, thinking about the second quarter, you talked about the majority of the decline, right, that could be attributed to the low-income segment. But help us perhaps think about, in light of that, you talked about June there was some stabilization there. As we think about the ACP impact, thinking about what your peers have messaged in terms of non-pay disconnect as well pressure coming through, would the expectation be, considering June was, quote-unquote, stable on a year-on-year basis, do you expect to see additional non-paid disconnects? Should we be thinking about the third quarter of 2024 looking something like 2023 in terms of losses whereas perhaps maybe non-pay disconnect pressure from an ACP could be offset by some of the base management and other strategies you just kind of articulated? I'm just trying to get a better sense on how we should think about the impact flowing through because messaging from peers and competitors has been, there's probably still more to come in the back half of the year in terms of ACP headwinds.

Yeah. Sebastiano, the comment on stabilization was in July. We are seeing stabilization in July, and we anticipate further stabilization in the second half of the year. We've launched our new local --- hyper-local playbooks in the second quarter, and we do believe that they're going to continue to provide us meaningful acceleration as we look at implementing them town by town, offers at the town level and having marketing tactics at the town level and being able to compete more effectively head-on with these fiber overbuilders and fixed wireless. We're still in the early innings and we're seeing some benefit. We started to see some of those benefits, particularly in stabilizing churn, and now it's helping us compete more effectively from an acquisition perspective. But I'll throw it over to Marc to add any color he'd like on ACP and the low-income segment.

Yeah. In addition to some of the conversations we've already had this morning, we are launching AI tools within our non-pay segment as well. It's too early to tell exactly what's going to happen with the ACP population, but we feel confident that we have the right offers and the right strategy to manage these customers through that conversation. Again, too early to say, but we feel like we have the playbook in place to manage through it.

Yeah -- go ahead.

I was going to ask a quick follow-up on a different topic, but go ahead.

Yeah, please go ahead.

Okay, sorry about that. So, just thinking about the migration rate on the fiber side, can you perhaps, you know, help us think about -- or give us the migration rate this quarter and how we should perhaps think about how that could change as you perhaps, you know, accelerate migrations in the back half of the year? Thank you.

Yeah, in our fiber performance, we had 60% migrations. We had an all-time high in Q1 and that really helped us understand some of the challenges that we were dealing with in terms of operational and technical issues tied to the migrations. As I had mentioned in earlier calls, we have purposely took a little bit of a slowdown so that we could solve those technical issues. And I'm pleased to report those technical issues have been solved. And so, our goal is to integrate this now into all of our channels to drive a much more meaningful pace of migration in the second half of the year. Now that we have a much more seamless process to migrate customers, we're integrating strategies and tactics into our care channels, into our retail centers, into our retention channels. Every time we have an opportunity to interact with these -- with our customers, we will now be able to confidently present them with a migration option and get them into the best products. And we also feel very comfortable now that we have the right video solutions to pair along with our broadband fiber product. As I mentioned, we've launched Stream across the entire tri-state. That was also a critical element of being able to accelerate. As you know, in the east footprint, we do have customers that take both broadband and video and have broadband and video. And so, we needed to make sure we had a full solution set that we could confidently present our existing customers. And we do have that now. And so, our pace will accelerate -- the goal is to accelerate our pace meaningfully in the second half.

Thank you.

Yeah.

Thank you. Our next question today is coming from MaryAnne

Thank you. I guess two questions, one on advertising. Second quarter was disappointing, down 7%. But you sound super optimistic about second half. Can you give us some color on, expectations, if you can parse out political, which clearly should be strong versus what you're seeing in the underlying advertising market? And then secondly, it didn't really come up on the call, but you are overbuilding a couple of markets. Can you give us an update on what you're seeing, both in your efforts to overbuild and then others who are also coming into your markets, what you're seeing?

Hey, Jessica, I'll cover the overbuilding and then I'll throw it over to Marc to talk about the advertising trends. We are building out in New Jersey, in Montclair and West Orange, and we're on track to launch later in Q3. We have -- when we look at that opportunity in particular, we look at the overall return on investment and we look at the cost, and given our footprint, it was an opportunity for us to continue to build out our plant and offer incredible -- our incredible fiber network and fiber product to these customers and in these towns in a cost-effective way, which we're excited about. We'll be launching broadband and mobile and the full product portfolio. We have teams and go-to-market strategies ready and the teams are actively working to prepare us for launch later in the quarter. We're continuing to see overbuild activities and build activities throughout the footprint, and we know that the competitive intensity is only going to continue to increase and that's why we have to control what we can control. We are looking at how we want to deploy capital in the most cost -- in the most effective way to provide the most meaningful return on investment. When we look at our opportunity, we're continuing to focus on newbuild, particularly within our footprint, we're on pace to deliver 175,000 passings. A lot of that is going to come in the west. When we look at -- we're privileged to be in some of the fastest-growing towns in the West. And so, we're laser-focused on driving our newbuild strategy and making sure that we're doing that effectively and monetizing it more effectively as well. We've stood up a team to really ensure that, that end-to-end process is working seamlessly. Marc, you want to talk about advertising?

Yeah, Jessica, for the quarter, certainly, as we talked about, we were hampered by one-time items from the prior year that really do not recur. Excluding those one-time items, we're actually growing just over 2% in the segment. And we do feel bullish. We see our national sales teams really operating at a high level. We have seen some pressure in our local sales teams and I think that's really tied to the interest rate environment that we still find ourselves in. But from a political perspective, based on what we see coming in and the orders that have been placed today, we feel bullish about the strength of political this season, and gives us confidence on a full year basis that the news and advertising group will be growing over double-digit this full year.

Thank you.

Thank you. Our final question today is coming from MaryAnne

Sorry. Are you able to hear me now?

Yes.

Okay. Sorry about the technical difficulties and thanks for taking the question. Just on the competitive landscape, can you please update us perhaps on what you're seeing on the pace of incremental fiber builds in both your eastern and western footprints? And then on fixed wireless, any difference in the competitive impact between your two footprints? Thank you.

Thanks, MaryAnne. We continue to see in the east a little under 70% overbuilt by our fiber competitors, Verizon being the bulk of that and Frontier being a small portion of that as well. When we look at the west, we have seen an uptick over the last six months. We're now revising our approach, leveraging the BDC data, which has been very helpful. And so, we do see about a 40% overbuilt by fiber -- by fiber overbuilders, AT&T and others. We think about a third of that is AT&T and two-thirds of that are other fiber overbuilders. That grew about -- by about 5 percentage points in the last six months. And so, we know that, that is going to continue to grow, continue to increase. And so,, we need to have the best quality, the best value, the best products, so that we can compete most effectively town by town. Fixed wireless, we continue to see across the footprint, availability varies again based on their network availability and capacity. We see Teemo primarily in the east, as we think about the primary fiber competitor there. We are starting to see pockets of AT&T. We're not seeing as much Verizon, given their presence with fiber. And then in the west, depending on the town, depending on where we are in the country, we see pockets of Teemo, AT&T and Verizon.

Thank you.

Thank you.

Thank you. We've reached end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Thank you all for joining. Please reach out to Investor Relations if you have any follow-up questions.

Thank you.