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Hey there, bargain hunter. Charter Communications just reported Q3 2026 results, its first quarterly report since the $34.5 billion Cox acquisition closed on August 20. The numbers that matter most are not on the income statement. They are the subscriber counts.
Scoreboard
Pro forma revenue, which counts Cox in both years, fell 1.5% to $16.5 billion. Reported revenue rose 9.1% to $14.9 billion, mainly because of Cox. Charter posted a net loss of $2.4 billion, or $20.50 per basic share, driven primarily by a $6.3 billion franchise impairment charge. Adjusted EBITDA rose 6.9% as reported to $5.9 billion but fell 4.0% on a pro forma basis.
The Real Reason This Report Matters
The broadband bleed continues. On a pro forma basis, Charter lost 233,000 internet customers, compared with 171,000 a year earlier. Legacy Charter lost 156,000, better than the 172,000 it lost in Q2 but worse than the 109,000 a year ago. Legacy Cox lost another 77,000. Management had promised Q3 would look better as the most aggressive retention discounts rolled off. The result is mixed at best.
Meanwhile, Charter added 508,000 mobile lines on a pro forma basis, taking the total to 13.5 million. Reported mobile service revenue rose 18.9% to $1.1 billion. That is a real business. The question is whether it is big enough, and fast enough, to plug the hole in the core.
How Charter Actually Makes Money
Charter sells broadband, video, and voice to 34.3 million internet customers across the U.S. under the Spectrum brand. Mobile is an MVNO layered on top: Charter resells capacity from Verizon's network but offloads about 87% of its mobile traffic primarily through its Wi-Fi footprint, which keeps unit costs low. The bundle is the strategy. Customers who take both internet and mobile churn about 40% less than internet-only customers. That retention math is what makes the mobile push more than a revenue line; it is a churn firewall for the core.
The Cox deal, now closed, expands Charter’s Spectrum footprint to more than 70 million homes and businesses across 45 states. Management now points to $2 billion in annualized run-rate operating expense savings over the next 18 months, plus more than $1 billion in anticipated synergies from the Cox deal.
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Key Metrics From the Quarter
- Internet customers: down 233,000 pro forma, versus down 171,000 a year earlier.
- Mobile lines: up 508,000 pro forma, versus 514,000 a year earlier. Legacy Charter added 440,000, down from 482,000.
- Revenue per residential customer: $117.85 a month pro forma, down 1.6%.
- Adjusted EBITDA: down 4.0% pro forma, or 3.0% excluding transition expenses.
- Free cash flow: $674 million, down from $1.62 billion a year earlier. Full-year pro forma capital spending is expected at about $13.0 billion, excluding transition capex.
- Debt: total principal of $108.6 billion. Charter has flagged a long-term leverage target of 3.5x Adjusted EBITDA.
- Buybacks: $19 million in Q3, down from $838 million in Q2.
Is It Cheap?
Heading into this report, the trailing P/E on CHTR was roughly 3.3x and the forward P/E roughly 2.7x. That is not a typo. The impairment will distort trailing GAAP earnings from here, so treat those multiples with care. The stock has been crushed, and with shares recently in the low-to-mid $120s, the market cap is roughly in the mid-teens of billions. For context, Comcast trades at a comparable discount for similar reasons. T-Mobile, which is taking some of Charter's broadband customers with fixed-wireless offers, trades at a meaningfully higher multiple because it is growing.
Comcast is the clearest parallel — same broadband erosion, same compressed multiple, same market skepticism about whether the losses are cyclical or permanent. Comcast's valuation has collapsed even as its free cash flow and subscriber base remain among the largest in the country.
The valuation is low because the market is not sure whether broadband losses stabilize or become structural. If they stabilize, this is deeply cheap. If they keep widening, the cheap multiple is a trap.
Bull / Base / Bear
Bull: Broadband losses narrow from here as revenue per customer recovers, mobile adds stay above 400,000, and Cox synergies arrive faster than modeled. Free cash flow ramps as capex falls, funding deleveraging and eventual buyback resumption. The stock re-rates toward a 5-6x earnings multiple.
Base: Broadband losses stabilize but do not reverse. Mobile continues growing at a mid-teens rate. Revenue is roughly flat. The Cox integration proceeds without major disruption. Leverage declines slowly. The stock grinds sideways.
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Bear: Fiber overbuilders and T-Mobile fixed wireless continue stealing broadband customers at a faster clip. Revenue per customer fails to recover. Heavy leverage becomes a liability if rates stay higher for longer. The stock re-tests lows.
Action Plan
Do not chase the headline. Legacy Charter's internet losses narrowed from Q2, but pro forma losses widened from a year ago, revenue per customer fell, and free cash flow dropped. That is not yet a clean signal. If you want exposure, keep any starter position small and add only if Q4 shows losses narrowing again and revenue per customer stabilizing.
If losses worsen, stay patient. The valuation is compelling in isolation, but a business in structural decline can always get cheaper.
Cheap Investor Checklist for Q4
- Internet losses: better than 233,000 pro forma
- Revenue per residential customer: stabilizing after a 1.6% decline
- Mobile lines: adds holding above 500,000 pro forma
- Free cash flow: recovering from $674 million
- Cost savings: progress on the $2 billion target
- Buybacks: any timeline for a pickup from $19 million
Bottom Line
Charter at about 3x pre-report trailing earnings looks like a bargain until you remember what the market is actually pricing: a broadband business that keeps losing customers and a mobile business that grows fast but resells someone else's network. Q3 showed legacy Charter's bleed narrowing from Q2, but not enough to call a turn. If Q4 confirms it, the discount is excessive and this becomes one of the more interesting value plays in large-cap telecom. If the losses widen again, the cheap multiple is exactly what it deserves.
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