Okay. I'm John Hodulik, the Media and Telecom Analyst here at UBS. I'm very pleased to introduce Chris Winfrey, the President and CEO of Charter. Chris, thanks for being here.
It's good to be here.
We've got 35 minutes for some Q&A. And if anybody has any questions, please log them in through the app, and I can filter them into the conversation. As we do every year, Chris, maybe you could start by setting the table by giving us a sense for the company's priorities as we look out into 2026.
Sure. Look, priority number one is to position the company to return to broadband growth. And that starts fundamentally with doing a better job of articulating the utility and the value that we bring in seamless connectivity, as well as seamless entertainment. I think the reality is that ubiquitously deployed, we do have the best products, and we save customers a tremendous amount of money. But we have to do a better job articulating the value and the utility that's there. The second piece I would say is repositioning ourselves from a service provider perspective. We've made that investment with 100% onshore U.S.-based sales and service. But positioning the company to really delight the customer and to execute on the investments that we've already made, that investment has already been completed.
But to put ourselves in a position to deliver on the customer commitment, the very public customer commitment that we've made, as well as moving towards a much better Net Promoter Score over time, and then I think in terms of priorities, I think about the ongoing investments that we have: network expansion, which is nearing its completion. Network evolution, which includes convergence, and that's working well. The video transformation, which is designed to support the connectivity services, and that's going well, and then really, as of late, more than just traditional AI, but moving towards agentic AI to fundamentally assist in that higher quality service, but also to potentially radically change our cost structure underneath.
And so you have the completion of these large capital programs, which is going to deliver a significant amount of free cash flow growth, but at the same time, returning to broadband growth, putting a priority on service excellence into our service, and then the opportunity to radically transform the cost structure as well and position the company for long-term growth.
Great. That's a great overview. And I think we're going to touch on a lot of those topics. But as you did, let's start with the broadband market.
Sure.
First, with fixed wireless, could you talk a little bit about sort of the impact you're seeing, especially from AT&T's entry? Then we talk about a lot. We get a lot of questions as to how long is this going to last. I think to a certain extent, we're in the same place you are, that just given the payload, it's eventually going to run into some headwinds. But we just don't know when. Maybe first talk about what you're seeing now and maybe how you see this playing out.
I mean, let's start with the longer term. I think the fundamental hypothesis is still correct, that it will be capacity constrained. But it's also true that it's gone on longer than we thought. And so it's incumbent on us to do all the things that I just mentioned in terms of positioning ourselves despite that. But I think in the end, the capacity is better used towards mobile, which has many, many times multiple of dollars per Gig asset utilization. In terms of the short term, if you take a look at the combination of Verizon 5G home internet as well as T-Mobile, it was actually a slight step down year- over- year. And had it not been for AT&T, that would have been the trend.
The good news is I actually take AT&T at their word, which is they've been very clear that they intend to use their spectrum with the best and most efficient use of the asset over time, and in their case, that's for copper replacement as well as preceding where they're going to go with fiber and recognizing that the best and most efficient use of that asset continues to be towards mobile, so I think to the extent that's true, and I take them at their word, I think that's true for the entire industry, which goes back to the long-term point.
Right. Right. And has it been a meaningful sort of change with AT&T's entry? And AT&T has a big footprint in the business market, and they're definitely more focused on sort of getting that business right because it's been a big drag for them for years. I mean, any impact on the business side?
On the business side, we've actually seen an improvement. So up until really the past four or five months, I would say that the small business sector really looked a lot like the residential space in terms of competitive opportunity set. And then we saw a pretty decent improvement and return to growth in the small business segment. Not a ton, but a reversal of the trend inside of small business. For us, it's difficult to see how much of the Fixed Wireless Access lines or cell phone internet lines into business are really just a secondary line or a backup line. Because the reality is we sell that service too. In business, it's a highly successful service. It's provided, called Wireless Internet Backup. We don't report it as a separate subscriber.
And we're about to launch wireless internet backup as a residential product as well, seamless connectivity with the same SSID, battery, and 5G backup. And that's not going to be a separate line, but it is a service that we do provide in business. We're going to provide in residential. And so parsing that out is difficult to see. Now, that's on the small business side. The enterprise, the medium and large business segment, less of an impact on that front. In fact, we continue to have very good growth on the medium and large enterprise growth. And when you think about Cox and the complementary set of assets that we have there, it's really not just the additional scale that we're going to get together with Cox on the B2B side, but really the set of products that we both have are really complementary.
More time goes by, I get more and more excited about that one.
I mean, Cox was always the leader in the business side. I remember a lot of people on the team, this is going back at least a decade, were sort of hired by Comcast to build that business.
Yes. I think there's a tremendous amount of stuff that we can learn from Cox on the B2B side. I also think there's things that we bring that they don't have, first and foremost being scale, but that business is going to be, in the combined company, nearly a $11 billion business. At some point, you're talking about real money and the ability to have a larger footprint with products that they have, rapid scale. They do really, really well in the hospitality segment, and when you think about Orlando, LA, and New York, that Spectrum brings to the table with that hospitality segment, as well as Segra, that was a B2B provider that they've acquired. There's a really interesting set of tools and scale that we have to, I think, accelerate the growth in commercial in a way that hasn't been done for a while.
Does the new MVNO with T-Mobile, I mean, is that a big part of the sort of?
Yeah. We were limited in terms of how far upscale we could go into the B2B sector with mobile. And so having an additional tool for acquisition and for retention, I think, opens up a brand new market for us, subject to getting regulatory approval on a larger footprint. So we're excited about that. Arguably, we should have been able to do that with Verizon, but we have a good partner in T-Mobile, and I'm excited about getting that launched. That probably won't be happening until the middle of 2026. But we're excited to get going on that.
Right. Could you talk about competition from fiber to the home? We had Mike Cavanagh earlier today who talked a little bit about seeing some more promotional pressure or promotional activity on the fiber side, especially around the holidays, but just anything sort of update, both in terms of reach and sort of promotional activity from those competitors?
Look, it continues to be highly competitive in the marketplace. I would say that there are ebbs and flows by operator in terms of who's getting a little bit more aggressive versus backing off, and so from that perspective, it's been consistent. Of course, in the holidays, you have different promotions that take place. That's also fairly normal. The level of fiber overbuild remains relatively consistent, and so there's not a big acceleration that's taking place there, but it continues to be competitive across the board.
I remember a couple of quarters ago, you guys announced or sort of laid out the $100 1 Gig internet and plus two mobile phone line promotions. Has that helped drive? First of all, it's certainly $100. It's sort of effectively 1 G ig for $60, which is very attractive.
Yes.
Just what impact has that had on the?
It's actually 1 G ig for $40.
I'm sorry. You're right. That's right.
It's 1 G ig for $40 plus two mobile lines at $30 each. And so it's $100 with tremendous value. It just goes back to the first point.
I don't think there's anybody.
Seamless connectivity. It connects everywhere you go. So if I'm here in New York City, my phone is attaching to Spectrum Mobile. Even if I'm in a car driving slowly down the road, I'm connecting at faster gigabit-enabled speeds. And at the same time, this $40 Gig plus two lines at $30 each, it's huge value. So the question is, has it made a big impact? We've certainly seen a whole lot more gig upsell, which drives customer satisfaction. We've seen a higher number of lines per connect. In terms of total acquisition level, hard for me to say because there's so much else going on in the macroeconomic environment and the competitive environment. But the mix that we're getting is a higher quality mix. And that's better for customers because it means there's more retentive value inside that package as well.
Right. Also, related to Comcast, they've announced, and we talked about it on their presentation, that they're not taking a price increase in the first half. Can you talk about now, Charter has always historically had lower prices?
Yes.
But just talk about your sort of pricing strategy and whether or not you still, with these competitive dynamics that you laid out, do you still have pricing power in the broadband market?
Look, our pricing historically has always been less than our peers and generally less than our competitors. And the idea that taking up rates and at the same time you can have higher acquisition and less churn goes against every grain of economics. And so our goal is to remain competitive, to minimize the amount of price increases that we can take on broadband. That's always been our strategy, and that hasn't really changed. We're going to stay competitive. We do have, because of the larger video base that we have, we have programming rate increases that unfortunately the programmers have taken, and we'll be passing that through to customers. We can't afford not to. And we need to do that. The timing of that's a little unfortunate because we've got so much momentum in the video space.
But we're not in a position where we can avoid passing through the rate increases that programmers have taken. So you'll see when we do what we do in 2026, it'll be much more focused on the video space than the broadband space as we try to maintain our competitiveness in broadband and not let programmer rate increases somehow impact our ability to grow inside of broadband. Now, because we're doing that, I know it's come up amongst others. We see ourselves going to grow EBITDA in 2026. That's our operating plan. And I'm sure we'll get into more of that later. But that's assisted by some of that just passing through as opposed to eating the rate increases.
Maybe we'll talk a little bit about wireless convergence and then touch on video. Obviously, you've been selling wireless and broadband bundles for several years. You're the fastest growing wireless company in the U.S. And the carriers are now sort of seemingly much more focused than they certainly were 12 months ago. Do you expect?
Focused on us?
Focused on selling converged bundles and wireless.
Oh, yes. Yes. Yes.
Do you think that has any impact on the competitive market, maybe even on the broadband or wireless?
Yeah. We have seen an increasing focus of selling home internet services together with mobile. The reality is that the big difference is that we can do it everywhere we operate. So we provide gigabit broadband internet plus mobile in 100% of the homes that we service. And as a result, in not being an incumbent in mobile, we have the ability to price it very attractively, which you just highlighted. So the ability to save customers hundreds or thousands of dollars, I think, sets us apart in terms of convergence capability. The ability to go do it everywhere means that if I wanted to be an optimist, I'd say somebody's actually doing the marketing for us and telling customers really the benefit of convergence when the reality is in 80% of their footprint, they can't and probably won't be able to provide that level of service.
All else equal, I'd probably rather it didn't take place. But if somebody's going to market for us and we can do it in 100% of our footprint, we'll take it.
Right. And I think cable in general sort of has started out more of one line accounts, two lines accounts. Could you talk about sort of how that's evolving and efforts to move up market?
Yeah. So we started out with customers wanting to take one line or two line. Why? Because they're trapped inside of device financing contracts, or they wanted to give us a try, or there was a new line coming inside the household, and we gave free mobile line for free, which has really stuck. Now, when we've moved into an environment where we're trying to get four lines, and so we've had the phone balance buyout, the ability to take customers out of their existing contract, and even new ways to innovatively price and package, getting four mobile lines at the time of acquisition, and we'll give you a baseline of internet service for free forever.
And so somebody looks at that and says, "Oh my goodness, what is that?" The reality is the RPU and the margin on that product set is higher than what we typically sell today, even without adding in higher speed upgrades or having unlimited plus built into it. So it's just another way to go to the market and to sell and save customers significant amounts of money and to drive both broadband and mobile into the footprint. And it's working. So we're getting more as we get more mature and as customers have additional lines come off financing or at the time of acquisition, we're increasing our lines per account.
And maybe talk about the overall sort of economics of the wireless business and maybe tie that into the MVNO with Verizon. I mean, how's the relationship there? And do you expect things to change if and when that contract's renewed?
Look, the Verizon contract and the relationship is rock solid. And they've been a great partner. I wish we could have done a little bit more on the B2B side, but they've been a great partner. They've got a great network. It's been highly successful for us. And I know it's very important to them as well. And so I think that relationship has been and continues to be very strategic. In terms of the profitability, we put out a slide last quarter on their earnings call that I'm not sure got full attention, but we continue to have much higher EBITDA margin increases. And it's a really profitable business for us. It's growing and it's contributing to the bottom line at Charter, even as a standalone product and without including the benefits that you get through churn. And it has a meaningful improvement on churn to internet broadband relationships.
You mentioned the MVNO on the business side with T-Mobile. That was a bit of a surprise to me when that was announced. Was that just an effort to sort of dual source your sort of RAN connectivity, or was it?
The biggest driver for that was really trying to address a piece of the market that we hadn't been able to sell into. And if you think about everything I said before, we really like having ubiquitous service capabilities across our entire footprint, gigabit everywhere, now symmetrical and multi-gig everywhere, DMA complete. When we upgrade the network, we take it everywhere. We have products we want to be able to deliver to all parts of the marketplace. And so it was really moving into the larger business segment, medium and large-sized business segment with the ability to sell the same products as opposed to anything else.
Makes sense. Okay. So let's pivot to the video side. I enjoyed seeing the product at the demo you guys did about a month, month and a half ago. You've got all the major media D2C services included and the Spectrum App Store. What's been the uptake? What can you tell us about the sort of receptivity of the product?
For those customers who have access to those direct-to-consumer inclusion apps for free, the uptake now is close to 50%, and on average, they take well over three apps included, activated into their service. On one hand, you could say, "Well, that's pretty good and that's pretty rapid," given that we just started to market this fully when we had the digital video store, the video app store, as well as the activation process really smoothed out. On the other hand, you would say at over $100 of value of Peacock, Paramount+ , Disney+ , Hulu, ESPN, HBO Max, ViX, Tennis Channel, and now we'll be adding Discovery+ and BET. It's a huge, I'm sure I forgot somebody there, which I apologize to any programmer that I left out, huge amount of value. So why wouldn't it be 100%?
There comes the rub, which is customers have become so accustomed to a promotional offer or, for lack of a better word, a temporary gimmicky type offer that getting them to understand and buy in that this is permanently included as part of your subscription, as included for free, has required the help of programmers and to going out to customers and convincing them that it isn't a gimmick, that it isn't a promotion, it is included as part of your service. You have seamless entertainment inside and outside the home with tremendous value. We've positioned, you've probably seen some of the marketing, to actually saying over $100 or $120 of apps at a discount, and your live video is for free. For a younger audience, that's going to resonate a little bit differently than people of our age.
For my house, we have YouTube TV and then all the apps. It would be a massive savings.
Think how much we could save you.
Yeah. We're just down the road from your service territory.
Yeah.
And then the three apps that have been adopted, so that means people that have access to 10 apps only take three?
It's just the beginning, and so as they tend to, once the first app is activated, they tend to pretty quickly start moving up the chain because they see, one, it's pretty easy to activate. Two, it is for free. It's not a gimmick, and so I think you'll see that go up over time, and I think to the extent we have the continued partnership and support of the programmers who can bring their IP, who can bring their talent to bear and to convince customers that it is real, I think this is going to continue to be a big success.
Right. And is there any, well, I guess the next logical question is, have these sort of seamless entertainment bundles had an impact on. It appears to be what's driving the video business because the video trends have obviously improved. But what about ISP data? And then over time, I would imagine the more apps that people have, the more they're using it, it's going to lower churn.
Yeah. Well, churn you can already see across all different tenures. It's a pretty big benefit. At first, I thought it was self-selection. But the reality is when you take a look at a customer who's been with us for 20 years, 10 years, or 0- 6 months, it's a pretty dramatic churn reduction across the board. And so that argues that it's not just self-selection. And because the vast majority, nearly all of our video customers are also internet customers, it means that it's helpful to internet as well. So I think from a churn perspective, to the connectivity business, big benefit. On the acquisition side, it hasn't gone viral yet.
You just need people in the neighborhoods telling other people you get everything for free.
I agree, and I think it's a combination of just waiting and being patient, which isn't really my personal strength of doing that. On the other hand, also continuing to beat the drum on the attractiveness of the value and the utility that's in seamless entertainment as well as seamless connectivity. I would argue that Spectrum Mobile and Spectrum One, we've done a good job there. But I think the ability to use seamless entertainment and seamless connectivity as a way not just to have churn improvement, but to drive acquisition, we haven't yet seen that, and I think that's a real opportunity.
All right. Let's turn to the cost structure. You talked about it a little bit in your sort of opening comments, but can you discuss the investments you've made over the last several years in terms of training systems and what you're doing on AI?
Sure. The investment is largely complete. I mean, we've been 100% US-based service and sales in-house for many, many years. But that's expensive. Also, we've taken minimum wages over $20 in any market. And in a market like New York or LA, the minimum wage is actually higher than that. Investing in our benefits, investing in our training systems, using AI, all of our employees and the service and field sales functions, whether they know it or not, have AI supporting them along the way. Many times it's seamless. They don't even know that it is AI that's helping make the job easier. Why would we do that, all these investments? Because we want people who have great craft, who have passion for what they do because they're committed to the company. They get a paycheck from the company. They have career progression with the company.
They care about the customers as a result. If the technology using AI is better and it makes the job easier, then I'm a happier agent. It's pretty clear that a happier agent, a more qualified agent, leads to happier customers and longer customer lifetime value. The investment is worth it. The investment's now all been made. It's kind of built into the base. It's really upon us now to start really go harvest and get the value of what we've done. It's a unique competitive advantage. 24 by 7 call centers, nobody else does that. The customer commitment we have, it was the first across wireline and mobile. Nobody else goes and does that. The ability to tell you that if you call us today before 5 o'clock and you have a service issue, I'm going to have a truck there.
We're now internally focusing on for residential customers within two hours. Forget about same-day commitment. You want to make a new internal commitment, we'll be there within two hours, and that's a product of a competitive environment being pushed to what we're doing and maybe doing a better job on the softer side as well so that we can actually be perceived and get that into our Net Promoter Scores.
I was going to say, you started off mentioning the Net Promoter Scores. I mean, when do you—I mean, how—I'm not sure there's an answer to this, but how long does it take to sort of turn that perception? It seems like you're doing everything.
One customer at a time. And so you've got to delight every single customer. You know the rules. For every customer that you make mad, there's eight that talk bad about you and every one that you please. It's only one or two. And so that's the math that we fight through. It's the basis for NPS as well. And so we got to win them over one at a time and be committed to that.
You got it. It seems like the customer service side, you guys are very focused on it. The product side, you're obviously very focused both on broadband and wireless and video. It's just going to take time to sort of come together.
Doing a better job of articulating those messages that we do have the better products. We can save you all this money. That we are 24/7 U.S.-based service and you can depend on us and we're a more reliable, faster, cheaper product altogether.
Right. Maybe quickly on the Cox acquisition, just any sort of update in terms of the process? And then we're not privy to sort of what's happening at Cox, but how have the fundamentals held up? And is it similar to what we're seeing in the rest of Cable?
Yeah. Look, we're well into the process answering all kinds of questions from the regulators. And we're committed to getting them comfortable as quickly as we can, both at a federal and a state level. So the process is going well. We still expect mid-next year to be in a position where we could close. And really, as time goes on, more and more excited about the upside opportunity that exists. If you think about Cox, given where they're coming from and the scale that we bring, the opportunity to drive mobile in a pretty significant way, video, very low penetration today, and the ability for us to bring the product that we just talked about into the Cox footprint. The B2B side, before I go there, advertising.
I know that doesn't sound like much, but because of a potentially growing video environment and because of the technology that we have for addressable advertising and the IPTV environment that we have with addressability and monetization of long-tail inventory and connected TV, CPMs, there's real upside that's there. And then we talked a little bit before, you talk about the commercial or the B2B space. The more time that we spend looking at this, I think there's a real opportunity to accelerate the growth rate of B2B for both of the companies when put together and be more competitive for that space too. I think that's what you asked.
Yeah. Yeah. Exactly. I guess beyond that.
I'm so excited that I forgot what you needed.
Exactly. I'd say beyond the Cox deal, do you expect more? There's not much left, frankly, but do you expect more consolidation within cable or maybe even between wireless and cable, just sort of given all this convergence theme?
Ask me next year. We've got our hands full right now, and we're very focused on doing that. But it's not a crazy question or thought. It's a competitive space out there right now, and we're competing as regional cable operators. We're competing against national and global competitors, and so I think the opportunity to have additional scale is not a crazy question, but today, we're really just focused on what we're doing and properly close, make sure we address all the regulatory questions, close on Cox, and integrate that.
Now, a few questions on network evolution and expansion. High splits are largely done in step one markets. Can you talk about the services you're able to provide in these areas?
So the step one markets are about 15% of the footprint. We're offering 2 Gig by 1, 2 Gig down, 1 Gig up. The other markets will go 5 by 1 and 10 by 1. And we're well on our way to delivering those markets. Inside the 15% that were step one markets, we're not actively advertising the symmetrical and multi-gig speeds until we get further along with the broader footprint. So it's a little too early to tell you the impacts. Although, even though we're relatively passive in making it just available online, for example, the take-up of 2 by 1, it's been higher than what I would have expected just given the people opting into taking that service. I think the real benefit won't even be about what we're doing in high split.
The real benefit is I've spent some time going out to Silicon Valley and trying to articulate the quality of the network that's in front of software developers and app developers because I think the real opportunity for us is to actually just make use of the existing speed that's fully deployed across the footprint and to really convince developers to not develop to the least common denominator. And by that, I mean to fixed wireless access or to DSL and to understand that today, already today, you have a gigabit fully deployed network across the entire country through cable plus the fiber overbuilders. And so let's stop building products that are spec'd out to 100 Mbps and start doing it to 1 Gig and take us at our word that between Comcast, Charter, Cox, cable industry, we're going multi-gig and symmetrical across the entire footprint.
And that allows the opportunity to have products that people aren't even thinking about today because they think they're constrained by the network. And I don't think you saw it. The Lakers.
This is awesome.
The Lakers. Did you see it?
Yeah. Okay. I mean, is there more stuff like that?
That's what we're trying to promote. For the benefit of others, we have the regional sports network with the Lakers and the Dodgers. We've done a partnership with the NBA and Apple and obviously the Lakers to do a courtside, filmed in 16K, but only 8K delivery per eye to the Apple Vision Pro. We're going to distribute a number of different games live this season and do it over the Apple Vision Pro, but that could be portable to just about any other device over time. Are we doing that because we want to be the owner of immersive content or we're enamored with RSNs? Not exactly. I do think showing the way of having a product that is, I mean, you liked it.
Phenomenal.
Yeah.
I would love it on all sports.
You would pay for a ticket. You would love to have that service. That service has 150-200 Mbps of consistent bandwidth consumption at all times for each particular device. That's where our network excels and others would struggle to be able to support that. Whether it's holographic images, whether it's that type of immersive content for education, healthcare, or entertainment, sports is a great example. I'd like to see a lot of the sports providers really jump into that space together with big tech, Silicon Valley, to know that these networks are there and they're there for people to use. We're encouraging it.
Yeah. I mean, it seems like the fastest way to sort of get over this fixed wireless hump is to drive the broadband product as aggressively, drive that. And you guys give the traffic numbers. Comcast gives the traffic numbers. But to do what you can to drive that as aggressively.
There's a shallow capacity today that's sitting there for somebody to use it, and so we're begging developers and investors to promote that type of capabilities because it's there for you today.
One question on the rural stuff before we move to sort of use of cash. You've expanded your network by almost 1.5 million passings in the last 12 months. So what's the plan going forward, both in the sort of existing footprint and sort of expansion, and then how have the economics been?
So we've forecast where we're going to be on capital. When we put out a guidance or an outlook like that, we have every intention to meet it. And so the network expansion, you can see it's on the back end now. That was the most attractive stuff that we built. You could see in BEAD, we'd really built most of the stuff that was around us already. So we weren't a large participant in BEAD because what we intended to do had already been done through RDOF, state grants, ARPA. So I think that'll come back to a normalized level, which is dramatically we'll continue to build greenfield, market fill-in, but the rural expansion that we've had, which is the higher cost per passing and that kind of volume, is baked into the outlook that we've provided.
And just to be clear, when we say that, we're going to deliver it. We understand how important that is. And so people can really, I think I said it on an earnings call, bank on or take it to the bank, the free cash flow takeoff that we're going to have. The returns have been fantastic, mid to high teens. And so certain variables have moved around all over the place. But in the end, the business plan proved to be solid. And it's great.
And one of the questions I get, especially when we talk about rural, is the impact that these LEO projects are going to have, whether it's Starlink, which always seems to have a—we're talking about more capabilities or sort of next-gen satellites. And now I think it's called Amazon LEO. Just what's your thoughts, especially in that part of the market? Do you think these services or these new offerings really make a dent in the broadband market?
I think it's a great product for a low-density or mobile environment. And I think there are ways that we really should be thinking about how to cooperate, whether it's Amazon or Starlink, whether it's D2D or whether it's backup services or B2B applications. I think they're complementary. We're obviously keeping a very close eye on it, but by all accounts, it's limited based on density. And so we do well in those more dense environments. And it's a great product for the right use case.
Got it. Wrapping up on the sort of CapEx side, how do you see longer-term capital intensity trending post the subsidized rural and the network evolution?
I think we said that it's coming down below $8 billion, which means using today's revenue, it means less than or around 14% as a percentage of revenue capital intensity. The thing I would leave you with is when we say less than $8 billion, that essentially means less than 14% capital intensity. I don't see anything in front of us from a network investment that's going to knock us off that path. The numbers that I just mentioned incorporate new products, new business development, continued CBRS, and ROI-based fiber-powered DAS deployment, all of which will provide new legs of growth.
Right. So wrapping up, what you've laid out, EBITDA growth in the plan for 2026, CapEx maybe coming down a bit in 2026, but much more meaningfully 2027.
2027 is a real takeoff.
It's a real big year. So you've laid out sort of dramatic growth in free cash flow.
Operating cost improvement.
Yeah. So putting that all together in terms of the use of that cash, historically and even now, you've been taking a lot of cash and buying back stock. John Malone, in a recent interview, suggested maybe pivoting from buybacks to a dividend, which is a complete departure from not just Charter, but Malone, Liberty companies in the past in general. Just what's your thoughts on sort of use of cash going forward and whether or not there's sort of any reason to change at this point?
For me, to say it's a privilege is an understatement. A privilege to really be able to have conversations with John on a somewhat regular basis. It's fascinating. It's fluid. It can very much change from one week to the next because he's trying different things. I think John is, by background, he would say, a scientist. And so he's trying on new hypotheses. And sometimes he's doing that very openly in a public space. And they're really challenging thoughts and thought-provoking. And so it's good and it's healthy. And I've enjoyed all that. We sit down on a regular basis with our board and review capital allocation strategies. And we do that based on long-term shareholder value, the reality of what you're doing in terms of accretion, but also perception based on what your investor base feedback is and what the demand is from there.
And so we take all that on board and take a look at a capex model and where do you want to be on the WACC curve. We do that together with our board on at least an annual, if not semi-annual basis. When conditions dictate, we do it even more frequently to come up with the right solution for shareholders in terms of value creation. You can rest assured that we're going to do that. Fundamental to all that is making sure that rock solid, staying committed to the investment grade that we have across our debt structure. I think the hubbub right now is, what do you do with this really significant takeoff in free cash flow? It'll be an explosion of free cash flow. If that's what we're debating, that's a first-class problem to have.
I would argue that there are things that you can do from a capital allocation, particularly if you're putting in organic investment, but from a capital allocation that'll have a marginal impact on the return to shareholders. So I'm not going to knock that. But the biggest issue we have right now isn't the allocation of that free cash flow or even, I gather, convincing people the free cash flow is going to be there. Our biggest issue is people don't believe that we're going to have terminal growth. And so when I think about capital allocation, I say, "Well, that's great. We'll do that as well." But the biggest thing that we're focused on, the biggest thing I'm focused on, is making sure that we can convince investors appropriately and do the right things to make sure that we have terminal growth.
If you have that and you have this free cash flow explosion, then the decision around how you allocate capital in terms of a capital return to your shareholders really is just the icing on the cake.
Makes a lot of sense. Chris, thanks for being here.
Thank you very much.
Take care.