Charter Q3 2026 Earnings: Cox Lifts Reported Revenue as Pro Forma Results Decline

Charter Communications (NASDAQ: CHTR) reported Q3 2026 actual revenue of $14.92 billion, up 9.1% year over year, while diluted EPS swung to a loss of $20.50 from earnings of $8.34 a year earlier. The reported revenue increase primarily reflected the Cox acquisition; on a pro forma basis, revenue and adjusted EBITDA declined, while a $6.3 billion franchise impairment drove a substantial GAAP net loss.

Core Financial Results

Charter completed the Cox transactions on August 19, so actual Q3 results include Cox operations only from August 20 through September 30. Consequently, actual year-over-year growth is not directly comparable, while pro forma results—which treat Cox as acquired from January 1, 2024—provide a clearer view of the combined company’s operating direction.

Actual adjusted EBITDA increased 6.9% because of Cox, but its margin declined 0.9 percentage points to 39.8%. On a pro forma basis, adjusted EBITDA fell 4.0% and the margin contracted by 1.0 percentage point to 39.9%, as revenue declined while operating costs were nearly unchanged.

The $6.3 billion noncash franchise impairment was the primary reason for the net loss. A $1.4 billion gain from extinguishing debt, lower income taxes and lower income attributable to noncontrolling interests provided partial offsets. Adjusted EBITDA and free cash flow are non-GAAP measures.

Business and Segment Performance

Internet remained the largest source of pressure. Pro forma Internet revenue fell 3.7% to $7.10 billion as customer losses and pricing and packaging mix outweighed promotional step-ups, rate adjustments and more favorable bundled revenue allocation. Internet customers declined by 233,000 during the quarter, compared with a loss of 171,000 a year earlier, leaving Charter with 34.3 million Internet customers.

Mobile remained the clearest growth business. Pro forma mobile service revenue increased 17.3% to $1.16 billion, supported by line growth and rate adjustments. Charter added 508,000 mobile lines, close to the 514,000 added a year earlier, and ended the quarter with 13.5 million lines, up 15.4% year over year.

Video customer trends improved even as revenue continued to decline. Charter lost 77,000 video customers on a pro forma basis, narrower than the 121,000 loss in Q3 2025. However, pro forma video revenue fell 9.8% to $3.61 billion because of customer losses, a greater mix of lower-priced packages, bundled revenue allocation and $286 million of streaming application costs netted against revenue, versus $106 million a year earlier. Excluding that cost allocation, video revenue declined 5.2%.

Pro forma residential revenue decreased 4.1% to $12.23 billion, reflecting a 2.7% decline in residential customer relationships and a 1.6% decrease in monthly residential revenue per customer to $117.85. Excluding streaming application costs netted against video revenue, residential revenue fell 2.6% and monthly revenue per residential customer was nearly flat, declining 0.1%.

Commercial revenue increased 0.3% to $2.69 billion on a pro forma basis. Advertising revenue rose 21.0% to $487 million because of political advertising, but declined 5.2% when political advertising was excluded, as weaker linear advertising more than offset streaming advertising growth.

Profitability, Cash Flow and Balance Sheet

Pro forma operating costs and expenses increased 0.2% while revenue declined 1.5%. Other costs of revenue rose 15.0%, driven by mobile device sales, mobile service costs and advertising costs associated with political revenue. Field and technology expenses increased 3.8% because of fuel, labor and pole-rental costs.

Programming costs fell 10.3%, reflecting the accounting treatment of streaming application costs, fewer video customers and a greater mix of lower-cost packages. Charter also recorded $76 million of Cox integration-related transition expenses. Excluding those transition costs, pro forma adjusted EBITDA still declined 3.0%.

Actual operating cash flow fell by $453 million to $4.03 billion because of the timing of cash tax payments and one-time Cox transaction costs. Free cash flow declined by $947 million to $674 million, reflecting lower operating cash flow and an unfavorable change in accrued capital expenditure liabilities. Actual capital expenditures were nearly unchanged at $3.03 billion, while pro forma capital expenditures fell 11.2% to $3.24 billion because of lower line-extension and scalable infrastructure spending.

Charter ended the quarter with $108.6 billion of debt, $573 million of cash and approximately $2.4 billion of additional liquidity under its credit facilities. During the quarter, it exchanged $5.5 billion of secured notes in a transaction that produced approximately $1.5 billion of deleveraging and repaid $1.0 billion of legacy Cox notes at maturity.

Internet Losses Raise the Execution Bar for the $2 Billion Savings Plan

Charter’s new operating model is intended to address both sides of the pro forma decline: persistent Internet customer losses and operating costs that did not fall with revenue. The company plans to reformulate its Internet marketing and distribution strategy, use mobile and video products to support customer acquisition and retention, and simplify internal decision-making.

The company is targeting $2 billion in annualized run-rate operating expense savings over the next 18 months, in addition to more than $1 billion of anticipated Cox transaction synergies. Planned measures include eliminating nonessential activities, simplifying organizational structures and increasing efficiency through vendor partnerships.

Charter introduced Spectrum products and pricing across the legacy Cox footprint on September 16, covering more than 11 million homes and businesses. Management reported strong demand and improving customer trends after the launch, but the quarter included only a brief post-launch period and did not quantify the improvement. Legacy Cox still lost 77,000 Internet customers during the full quarter, making subsequent customer data important for evaluating whether the rollout is changing the trend.

Guidance

Charter expects pro forma full-year 2026 capital expenditures, excluding transition capital expenditures, to be approximately $13.0 billion. The final amount will depend on the pace of network upgrades and expansion, supply-chain timing and growth in residential and commercial operations.

Risks Investors Need to Watch

• Continued Internet customer losses: Quarterly Internet losses widened to 233,000 from 171,000, contributing to lower residential revenue and reduced customer penetration.
• Cost-reduction execution: Pro forma costs were nearly flat despite lower revenue. Achieving the $2 billion savings target without undermining customer service or growth initiatives will be central to restoring margins.
• Cox integration: Charter must integrate the acquired operations while delivering more than $1 billion of anticipated synergies. Transition expenses were already $76 million in the quarter.
• Cash flow and leverage: Free cash flow fell 58.4% while total debt stood at $108.6 billion, increasing the importance of operating cash generation, disciplined capital spending and successful integration.
• Residential monetization pressure: Customer relationships and monthly residential revenue per customer both declined, while video revenue remained under pressure despite narrower customer losses.

Summary

Charter’s Q3 2026 reported growth was primarily acquisition-driven, while the combined business showed lower revenue, weaker adjusted EBITDA and continued Internet customer losses on a pro forma basis. Mobile growth and improving video customer trends provided offsets, but did not overcome residential pressure and lower free cash flow. The next operating tests are whether the Spectrum rollout improves customer trends in legacy Cox markets and whether the new cost program and Cox synergies can support margins and cash generation.