AI Takeaway
Charter Communications' Q2 FY2026 revenue declined 1.7% YoY to $13.53B and operating income fell 6.6% to $3.06B amid continued Internet and video customer losses, though diluted EPS rose 16.1% to $10.66 driven by aggressive share buybacks that shrank diluted shares outstanding by ~14%.
Revenue
$13.53B
-1.74% YoY
EPS (Basic)
$10.76
++14.35% YoY
Operating Income
$3.06B
-6.59% YoY
Filed · Source: SEC EDGAR 10-Q filing
Charter Communications (CHTR) reported Q2 FY2026 revenue of $13.53B, down 1.7% year over year. The company posted net income of $1.29B, down 0.7% from a year earlier, with diluted EPS of $10.66.
Total revenue decreased $240M (three months) and $378M (six months) YoY, primarily due to a higher seamless entertainment allocation and fewer customer relationships, partly offset by mobile line growth. Adjusted EBITDA fell $244M and $370M for the respective periods, driven by lower revenue and higher transition expenses incurred preparing to integrate Cox Communications.
Source: 10-Q Item 2 MD&A
Charter lost 172,000 Internet customers in Q2 FY2026, while mobile lines grew by 406,000 (total mobile lines up to 12.54M from 10.86M YoY). Residential Internet customers decreased by 510,000 YoY, and video customer losses improved versus the prior year (residential video customers down only 77,000 YoY) due to bundling and seamless entertainment offerings.
Source: 10-Q Item 2 MD&A
Under the May 16, 2025 Transaction Agreement, Charter will pay Cox Enterprises $3.5B in cash for the Equity Sale plus $650M cash and $6.0B of convertible preferred units (6.875% dividend, $477.41 conversion price) plus ~33.6M Charter Holdings common units for the Contribution. The combined entity will assume approximately $12.4B of Cox Communications' net debt and finance leases, and Charter must fund approximately $4.2B of cash purchase price at Closing.
Source: 10-Q Item 2 MD&A
Charter repurchased approximately 2.1M shares for $433M in Q2 and 5.5M shares for $1.2B YTD (excluding Liberty Broadband purchases), versus $1.1B and $1.6B in the prior-year periods. The company spent $391M in Q2 (and $818M YTD) on its subsidized rural construction initiative, activating approximately 127,000 (216,000 YTD) subsidized rural passings.
Source: 10-Q Item 2 MD&A
Charter's net debt to LTM Adjusted EBITDA leverage ratio was 4.18x as of June 30, 2026, within its stated 4.0-4.5x target range pending the Liberty Broadband Combination closing, after which the long-term target will be adjusted to 3.5x. Total principal debt was $93.8B, including $12.5B credit facility debt, $54.7B investment grade secured notes, and $26.7B high-yield unsecured notes.
Source: 10-Q Item 2 MD&A
Charter carries $93.8B in principal debt with a leverage ratio of 4.18x net debt to Adjusted EBITDA, and long-term debt of $93.96B against only $16.95B of stockholders' equity. The company must also fund approximately $4.2B in cash at the Cox Transactions closing and assume ~$12.4B of Cox's net debt, increasing leverage risk during a period of declining operating income.
Source: 10-Q Item 2 MD&A
Charter lost 172,000 Internet customers and residential Internet customers fell 510,000 YoY, while residential video customers and voice customers also declined (down 77,000 and 667,000 YoY respectively), pressuring the core connectivity revenue base. Continued competitive pressure in the broadband market could further erode revenue if not offset by mobile growth.
Source: 10-Q Item 2 MD&A
Charter is incurring transition expenses to prepare for the Cox Communications integration, which contributed to the Adjusted EBITDA decline, and is simultaneously pursuing the Liberty Broadband Combination merger. Complex, concurrent large-scale M&A integrations carry execution risk and could strain management resources and capital structure.
Source: 10-Q Item 2 MD&A
Management noted that due to the decline in Charter's stock price during the quarter ended June 30, 2026, it continues to monitor factors that could impact the fair value of franchises and goodwill, and may need to perform a quantitative impairment assessment if the lower stock price persists. While fair value exceeded carrying value by more than 10% as of Q4 2025, a sustained decline could result in future impairment charges.
Source: 10-Q Item 2 MD&A
Charter's current ratio is 0.36, with current liabilities of $13.78B far exceeding current assets of $4.97B, and cash on hand of only $509M as of June 30, 2026. The company relies heavily on free cash flow, credit facility availability (~$3.7B), and capital markets access to meet obligations, which could be constrained in adverse market conditions.
Source: 10-Q Balance Sheet (XBRL) and 10-Q Item 2 MD&A
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $13.53B | $13.77B | -1.74% |
Operating Income | $3.06B | $3.28B | -6.59% |
Net Income | $1.29B | $1.3B | -0.69% |
EPS (Basic) | $10.76 | $9.41 | +14.35% |
EPS (Diluted) | $10.66 | $9.18 | +16.12% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $155.62B | $151.59B | +2.66% |
Current Assets | $4.97B | $4.81B | +3.35% |
Current Liabilities | $13.78B | $14.56B | -5.34% |
Stockholders' Equity | $16.95B | $16.21B | +4.58% |
Cash & Equivalents | $509M | $606M | -16.01% |
Long-Term Debt | $93.96B | $94.41B | -0.48% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $8.23B | $7.84B | +5.02% |
Investing Cash FlowYTD | $-6.17B | $-5.42B | -13.79% |
Financing Cash FlowYTD | $-2.06B | $-2.27B | +9.39% |
Share Buybacks | $852M | $1.45B | -41.28% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 22.6% | 23.8% | -1.17% |
Net Margin | 9.6% | — | — |
ROE | 7.6% | — | — |
ROA | 0.8% | — | — |
Current Ratio | $0.361 | — | — |
Expected release date, analyst estimates & what to watch
Charter Communications reported a modest revenue decline of 1.0% YoY to $13.60B in Q1 2026, but EPS surged 8.9% to $9.17 (diluted) driven by share buybacks, while operating cash flow grew 1.6% to $4.30B despite ongoing high leverage.
Charter Communications (CHTR) reported a modest revenue decline of 0.6% to $54.77B in FY2025, but delivered strong operating cash flow growth of 11.4% to $16.08B and significantly accelerated share buybacks of $5.13B, driving EPS higher by 3.9% despite lower net income.
Other companies in Cable & Satellite
The filing does not disclose analyst consensus estimates, so a beat/miss cannot be confirmed from this data. What is known is that revenue was $13.526B (down 1.7% YoY) and diluted EPS was $10.66 (up 16.1% YoY), with EPS growth driven primarily by share buybacks rather than earnings growth.
Charter reported revenue of $13.53B (down 1.7% YoY) and operating income of $3.06B (down 6.6% YoY), driven by continued Internet customer losses (172,000 lost in the quarter) and a higher seamless entertainment allocation, partly offset by mobile line growth of 406,000. Diluted EPS rose 16.1% to $10.66 mainly due to aggressive share buybacks that reduced diluted shares outstanding to 121.3M from 141.7M a year ago.
Per the MD&A, Charter is incurring transition expenses to prepare for integrating Cox Communications and must fund approximately $4.2B in cash at Closing, plus assume ~$12.4B of Cox's net debt. The combined entity's terms include Charter paying $3.5B cash for the Equity Sale and Charter Holdings issuing $6.0B of convertible preferred units plus $650M cash for the Contribution.
Charter's filing highlights ongoing Internet and video subscriber losses (510,000 residential Internet customers lost YoY), high leverage (4.18x net debt to Adjusted EBITDA on $93.8B of principal debt), and potential goodwill/franchise impairment risk if its stock price decline persists. Integration risk from the pending Cox Communications and Liberty Broadband transactions was also noted given transition expenses already impacting Adjusted EBITDA.
Charter shows a low current ratio of 0.36 (current assets of $4.97B vs. current liabilities of $13.78B) and only $509M of cash on hand, reflecting reliance on continuous cash generation rather than working capital buffers, which is typical for capital-intensive telecom operators. Six-month operating cash flow was $8.229B (up 5.0% YoY) and free cash flow was $2.341B YTD, providing liquidity alongside ~$3.7B of available credit facility capacity to fund debt service and pending Cox Transaction cash requirements.