- Wall Street didn’t react well when Charter reported that its broadband ARPU would remain flat for the year
- Charter’s CEO said he was “disappointed” in the reaction
- He said Charter has never managed the business for short-term ARPU metrics
MoffettNathanson analyst Craig Moffett didn’t pull his punches this morning when interviewing Charter’s CEO Chris Winfrey. His first question was: What happened when you reported first quarter 2026 earnings and your stock price immediately fell 25% and has continued to fall?
The day before earnings, Charter’s stock was trading at about $238 per share, and today it’s trading at about $149 per share.
MoffettNathanson attributed the fall in stock price to, not only the loss of broadband subscribers, but also the company’s expectations about future broadband average revenue per user (ARPU).
During its Q1 earnings, Charter reported monthly residential ARPU of $70.72 and said it expected it to remain flat through 2026.
Today, Winfrey said, “Clearly, the market reaction was centered very much around broadband ARPU. On one hand, it’s disappointing to see that kind of market reaction. But I don't think that more than a quarter of the value of the company was destroyed by an in-year ARPU outlook.”
He said Charter has never managed the business for short-term ARPU metrics. The company has focused on fixed network passings to drive the highest penetration of customer relationships and the highest amount of products (voice, video, data and mobile) in the household.
“By doing that, you lower the operating cost per household, and you lower the capital expense that's associated with that customer. We have the highest penetrations in the marketplace as a result of that strategy,” Winfrey said. “And depending on how you allocate the revenue inside the bundle, you know your single-play product ARPU is going to be all over the place from time to time, particularly as you're trying new things and going to market.”
Fiber overbuilding
Winfrey was asked about all the fiber that is being deployed across the U.S. and whether that might end badly in terms of the return on investment.
“So, in our footprint, it's all I can speak to, we're seeing a steady pace of build," he said. "I think it should be coming down because I don't think they're going to make any money off of it. Density is going down dramatically, and so the costs are going up. And it is more competitive because of FWA. So, I don't think there's a return there to begin with.”
He noted that there have already been a lot of mergers and acquisitions in the fiber space. “The people that were in it, they timed it right, and they got out. I think there's something to be said for that,” Winfrey said.
Competition from satellite
In terms of Starlink competing with Charter in rural areas, Winfrey said, Starlink is “a fantastic product” for low-density rural areas. “We're still hitting our penetration targets in the most recent rural builds, but it's taking a little bit more time than it was early on.”
But in urban and suburban areas, Starlink still runs into capacity constraints. “But I also understand they are very well capitalized today and tomorrow," Winfrey said. "They're incredibly technologically savvy. They have a tremendous amount of governmental support, and we don't take that for granted. And so we're watching them very closely and try to keep a close eye and make sure we stay a step ahead."