Charter Q3 Miss Sparks Selloff, Subscriber Exodus!

Introduction

Charter Communications (NASDAQ: CHTR) rattled investors after reporting third-quarter results that fell short of expectations and exposed growing subscriber pressures. The headline numbers — a modest revenue decline, an earnings miss and material video and broadband churn — combined with increased capital spending to produce a swift market reaction and analyst downgrades.

What the Q3 Report Revealed

Revenue and earnings shortfalls

Charter posted revenue of roughly $13.7 billion in Q3, down about 0.9% year-over-year, and reported net income near $1.14 billion — an 11% drop versus the prior year. Reported EPS of $8.34 missed analyst expectations (around $9.27), which helped precipitate the immediate stock selloff.

Subscriber trends: a mixed bag

The quarter showed divergent trends across Charter’s product lines. Internet revenue edged up about 1.7% to roughly $6.0 billion, and mobile services—still a smaller but fast-growing business for the company—jumped nearly 20% to about $954 million. However, video revenue declined sharply (approximately 9.3% year-over-year to about $3.39 billion), and the company reported notable broadband customer attrition during the quarter. Charter lost more internet customers than investors expected, while gaining nearly half a million mobile lines — an important strategic bright spot but not enough to offset core declines.

Why investors reacted

Higher capex amid falling subscribers

Capital expenditures climbed about 19% year-over-year to more than $3 billion as Charter continues to invest in network upgrades and expansion. Heavy capex while subscriber counts decline raises near-term leverage and free cash flow concerns, even though free cash flow itself remained in the billion-dollar range. For investors, rising spend without clear, immediate subscriber stabilization is a red flag.

Analyst cuts and insider activity

Following the print, several firms trimmed forecasts and price targets; KeyCorp lowered EPS estimates for fiscal 2025 and 2026. Insider selling by a board member in early November added to the negative sentiment, and the stock fell to fresh 52-week lows in the days after the release.

Capital structure and strategic considerations

Debt moves and the Cox acquisition

Earlier this year Charter issued about $2 billion of senior secured notes to refinance near-term maturities and preserve strategic flexibility. That financing and the anticipated but still-not-closed acquisition of Cox Communications remain central to Charter’s outlook. The Cox deal promises scale and potential cost synergies, but it also raises questions about near-term integration costs and incremental leverage until synergies are realized.

Competitive pressure

Charter faces accelerating competition from fiber builders and fixed-wireless providers, which is pressuring video and broadband retention. The company’s mobile growth illustrates one defensive play: bundling wireless with broadband can offset churn. But mobile alone has yet to fully compensate for losses in higher-margin video and legacy broadband segments.

Conclusion — What to watch next

Immediate priorities for investors should include: (1) whether Q4 guidance tightens or improves, (2) next-quarter subscriber trends — particularly broadband net adds or losses — and (3) clarity on funding and timeline for the Cox transaction. Until Charter demonstrates stabilization in subscriber metrics or clearer payoff from network investments and strategic deals, volatility and analyst skepticism are likely to persist.

For active investors, the coming earnings cadence and any updates on merger progress will be the most concrete catalysts. For longer-term holders, the trade-off remains: a high-quality network and scale ambitions against the near-term realities of stiff competition, elevated capex and transitional leverage.