Charter beats estimates as mobile growth offsets broadband losses
Telecom provider returns $5.4B to shareholders in 2025 while free cash flow rises 16%
Charter Communications shares rose in pre-market trading after the telecommunications provider reported stronger-than-expected fourth-quarter earnings, boosted by robust mobile subscriber growth and continued share repurchases despite ongoing challenges in its core broadband business.
The company reported earnings per share of $10.34 for the quarter, exceeding analyst estimates and beating expectations by 11.2%. Revenue for the period declined 2.3% year-over-year to $13.6 billion, falling short of the $13.73 billion consensus.
The mixed performance comes after a challenging year for Charter, whose shares have lost nearly 50% of their value over the past 12 months as investors grew concerned about intensifying competition from fixed wireless access and fiber providers. The stock is trading well below its 52-week high of $437.06, having touched a low of $182.04 earlier this month.
Despite the revenue decline, Charter's cash generation remained robust. Full-year 2025 free cash flow grew 16% year-over-year to $5.0 billion, enabling the company to return $5.4 billion to shareholders through buybacks. The continued capital allocation has helped support the stock even as subscriber metrics face pressure.
Customer trends showed signs of stabilization across key segments. Internet customer losses narrowed to 119,000 in the fourth quarter, an improvement from 177,000 in the same period a year earlier, bringing total residential and small business internet customers to 29.7 million. The company continues to face headwinds from competitors offering lower-priced alternatives and bundled services.
Mobile emerged as a bright spot, with Charter adding 428,000 mobile lines during the quarter, representing a 19.4% increase compared to the prior year. The company now serves 11.8 million mobile lines, highlighting the success of its strategy to bundle mobile services with its core broadband offerings.
Perhaps most notably, Charter's video customer base returned to growth, adding 44,000 video subscribers compared to a loss of 123,000 in the year-ago quarter. The turnaround in video subscriber metrics reflects the company's efforts to position its traditional cable offering as a premium complement to streaming services rather than a direct competitor.
Ahead of the earnings release, analyst sentiment had grown increasingly cautious. Wells Fargo downgraded Charter from "Equal Weight" to "Underweight" on January 13, cutting its price target from $240 to $180. UBS maintained a "Neutral" rating but reduced its target from $355 to $233, while Barclays kept an "Underweight" rating with a target cut from $275 to $200.
Charter Chief Executive Officer Chris Winfrey emphasized the company's focus on delivering value to customers through its integrated service offering. In prepared remarks, Winfrey said the company is positioned to provide "guaranteed connectivity, service, and savings" and indicated that 2026 would focus on communicating the utility and quality of Charter's products to drive sustainable growth in customers, earnings and cash flow.
The immediate market reaction reflected some relief from investors, with shares initially surging as much as 7.2% following the earnings report before settling to more modest gains. Analysts will be scrutinizing management's 2026 guidance, particularly regarding expectations for mobile growth and whether broadband losses can continue to narrow.
For the full year 2025, Charter reported revenue of $54.8 billion, a 0.6% decrease from the prior year, while adjusted EBITDA edged up 0.6% to $22.7 billion. The company's ability to maintain profitability amid subscriber losses reflects pricing power in its core markets and the benefits of its scale as the second-largest cable operator in the United States.
Investors will be watching for signs that the improvement in internet customer trends can continue, given that broadband remains Charter's largest and most profitable business segment. The company's mobile growth strategy and video subscriber stabilization provide offsetting positive momentum, but the competitive landscape in the broadband market remains challenging.