Summary of OPTU Q2 2026 Earnings Call

1Key Financial Results and Metrics

Total Revenue: Approximately $2 billion, down 5.8% year-over-year (5.1% decline excluding the divested advertising agency).

Adjusted EBITDA: $786 million, a decline of 2.2% year-over-year, with an adjusted EBITDA margin of 38.8%, up 140 basis points.

Gross Margin: Reached an all-time high of 71%, an increase of 180 basis points year-over-year.

Broadband Subscribers: Net losses improved to 40,000, totaling approximately 4 million subscribers.

Mobile Lines: Added 50,000 lines, marking a 33% year-over-year increase, totaling 724,000 lines.

Video Subscribers: Net losses of 46,000, with improved performance noted as the best in six years.

Fiber Customers: Added 20,000 customers, totaling 749,000, reflecting a 13% year-over-year increase.

2Strategic Updates and Business Highlights

Customer Experience Initiatives: Continued rollout of AI-powered tools and operational improvements to enhance customer service and retention.

Convergence Strategy: Focus on integrating broadband, mobile, and video services to strengthen customer relationships and drive higher average revenue per user (ARPU).

Divestitures: Completed the sale of a noncore advertising agency and exited low-density markets to streamline operations.

Network Investments: Ongoing investments in fiber expansion and network modernization, with a focus on multi-gig capabilities.

Long-Range Plan: Published to provide stakeholders with insights into strategic priorities and financial outlook.

3Forward Guidance and Outlook

Revenue Expectations: Anticipate mid-single-digit revenue decline for the full year 2026, excluding the impact of the advertising agency divestiture.

ARPU Trends: Expect challenges in ARPU comparisons, particularly in Q4, due to competitive pricing pressures.

Adjusted EBITDA: Projected to decline low- to mid-single digits for the full year 2026.

Capital Expenditures: Expected to be between $1.2 billion and $1.5 billion for the year, with a focus on fiber growth and network upgrades.

4Challenges and Points of Concern

Competitive Pressures: Continued elevated churn rates and subscriber losses attributed to aggressive promotional activities from competitors, particularly in broadband.

Subscriber Growth: Although there are signs of stabilization, the company acknowledges the ongoing challenges in regaining broadband growth.

Market Dynamics: Increased competition from fiber overbuilders and fixed wireless providers, especially in the West footprint, where penetration remains low.

Operational Efficiency: While operational improvements are noted, the company recognizes the need for ongoing enhancements in customer service and experience.

5Notable Q&A Insights

Subscriber Retention: Management indicated that a significant portion of churned customers do not proactively reach out, complicating retention efforts.

Market Performance: Some markets with longer-standing fiber competition show improved performance, providing insights into effective strategies for stabilization and growth.

5-Year Price Lock Offers: These offers are driving customer engagement but require careful management to ensure they lead to higher-value plans.

Starlink Competition: Minimal impact noted in Q2, but management is vigilant regarding its expansion and pricing strategies in rural markets. Overall, while OPTU has made strides in improving operational efficiency and customer engagement, it faces significant competitive pressures and challenges in subscriber growth, particularly in its broadband segment. The company remains focused on strategic initiatives aimed at long-term growth and stability.