Charter Communications, Inc. (CHTR) Earnings Call Transcript & Summary

So good morning, and thank you for joining us, those of you in person and for those of you joining on the webcast, for the MoffettNathanson Annual Media & Communications Summit. This is our ninth annual summit, which means we're entering our tenth year. And Tom, I am delighted. I think you're the only person that I can say has been with us every one of those years on this stage. So for your ninth consecutive summit, thank you for being here. I'm really excited about this conversation.

So Tom, naturally, I want to start with the broadband business because that's where everybody's focus is these days. And I want to dig down into the conversation of diagnosis for a second because I think the real debate in the industry right now is what's the reason for the deceleration. Is it macro factors and approaching saturation? Or is it competition? So on your last earnings call, you attributed the slowdown to low market activity, low move churn more so than to increased competition. Can you just talk more about that?

Sure. As we said in the earnings call, that is what we think, and that's what the data show us. The activity levels have -- particularly at the beginning of the year were smaller than they've ever been in terms of activity. And churn rates were lower than they've ever been in every category, including voluntary churn, nonpay churn, move churn. Any kind of churn in any way you measure it was down. And as a seller, we sell them to a marketplace where churn is our biggest opportunity from a sales perspective because the customer is in a mode where they're making choices. And so that's the biggest issue we have. The actual competitive environment is not significantly different than it has been. So if you think about us and you think about broadband growth, we're 55% penetrated with broadband in the markets that we serve. We have great infrastructure and great products everywhere we operate. The opportunity for us to grow the broadband business is pretty similar to what it's been over the last 10 years. It's -- we have continued adoption of broadband by customers. And so it's now in the mid-80s, but it will get -- it will move up toward the vacancy rate. And so that opportunity to grow continues. There's still the opportunity to sell all the unserved passings that we pass with a fully paid for, fully operating high-capacity infrastructure that we don't have relationships with. There's new construction of new houses which is also down, by the way, because of the supply chain issues. So that activity is lower as well right now in terms of new occupied dwellings, but -- and we've been building about 1 million passings a year over the last 4, 5 years. And that's new housing and it's fill-in and it's stuff close to us on the edge. And then there's the rural development opportunity for broadband growth that we're also building out. So the -- and we've been doing that a little bit, but we're doing it at a bigger scale now. So that's some upside opportunity to the growth rate that we've historically had. So we've had a very unusual period where we have this massive growth associated with the pandemic settling in, people settling into wherever they were going to be, and it really hasn't quite unwound yet. And the activity levels of the marketplace are historically low. But it is -- so if you think about what we posted in the first quarter from a growth perspective in the last couple of quarters before that, a little lower than the average trend line over the last 4, 5 years. The quarters before that were higher, and so I think activity levels are beginning to return. I can see it in May a little bit. Our actual yields that we get from the activity that we do transact with are higher than they've ever been. The pace of construction of competitive overbuild -- about 38% of our plants is covered with a fiber overbuilder. So -- and the pace of that growth hasn't changed at all. And it hasn't changed in the last couple of quarters, and it hasn't changed much over the last couple of years.

And industry fiber net adds were no different than they were last year. There was no...

Right. So our view is that the marketplace isn't really that changed. What's changed is consumer behavior right now and household formation and supply chain issues with construction. And all of that together has limited the pace of growth, but I think my expectation is that the pace will accelerate over time.

So this move issue for a second, it's a really interesting one, right? Because what you just said in your answer a minute ago, you said that you're selling opportunities, essentially suggests that you're still gaining share and that in jump balls, your -- the share of wins is higher than your share of market. I think the market may see it the other way around. You probably -- you win moves when you're up against DSL. You lose some moves when you're up against fiber, particularly new fiber that has low starting penetration. Does a higher -- so it is both a positive and a negative. Net-net, is it more a positive or a negative?

The activity levels and our yields aren't -- relative to history aren't any different.

So you're -- which would say you're still taking share?

Yes, I think I am. Yes.

Yes. So higher move activity, even if it means some additional acceleration in fiber losses, it's still net-net a positive for your business.

That's right.

Got it. So you were really proactive. You mentioned targeting edge-outs and then participation in RDOF. You started that well before the deceleration. In fact, you really sort of started down that path even before the pandemic.

Right.

Is it fair to say you saw sort of the coming saturation of the market and said it makes sense for us to put some additional fuel in the tank for broadband. That's kind of the way I see it, is bankrolling some future growth.

Well, you can look at it that way. And I look at it a couple of ways. I thought that it would be wise for us to be part of the solution. Politically, the unserved area is a significant issue, and it needs to be dealt with from a policy perspective. And we think that we should be part of that solution and that ultimately, our relationship with the community would be better if we did that, and that was our motivation partially. But the motivation also is if you can build low-density construction economically, you can grow. And it's like building a new cable system, and it's essentially an untouched territory. And you have a high expectation of success, and -- but you have to execute, you have to construct. You have to -- it takes a long time to get a return to the capital, but it's a very good return ultimately. And it's good for the country, and it's good for us. But I didn't look at it as directly related to how we were performing in the market or what broadband would be doing.

It was just an investment opportunity that was a good one and therefore, you did it.

That's right.

We'll come back to that -- those edge-outs and particularly the rural build under the JOBS Act in a minute. But you mentioned that you're 30% -- 38% overbuilt today by fiber. Where does that get to based on...

Well, that's a good question. If you go back -- just back 15 years ago, and I remember Ivan Seidenberg said what AT&T was doing was -- doing DSL was too slow and uncompetitive. And...

He wasn't wrong.

And -- yes. And AT&T said it was uneconomic to build fiber, so they both...

And they weren't wrong.

Right. So they were both right, and it turned out they were both right in a weird way. Now that position has flipped a little bit, which is kind of interesting.

Yes. Verizon does say that they think the economics of all this fiber building are going to be awful, and they know better than anybody.

Right. And now AT&T is building some. So it is kind of weird.

But -- so I don't know if you have a formal internal forecast or just some kind of North Star in your head, but do you see it as sort of getting to 50% and then petering out? Do you see it getting to 60% and...

I don't know. I think some macroeconomics -- capital has been cheap, but the landscape is littered with the detritus of failed overbuilders.

Yes. You've seen a lot of these come and go over your career. Does this time feel different? Or does this time feel like yes, we've seen this movie before?

I feel like I've seen the movie before. I think it's -- we have a very efficient capital structure. And the more penetrated we are, the lesser cost to operate. The upgrade path that we have from a capital investment perspective is very efficient. We took -- we went to 1 gig service by doing the 3.1 DOCSIS rollout, which cost $9 a passing from an upgrade perspective. The next upgrade, the spectrum split upgrades that we'll be doing going forward, it will cost more than that but not nearly the kind of cost that it takes to build a new network. So I think it's very difficult to get a return. And so -- and the higher the cost of capital, the quicker you find that out. So I don't know how big or how long, and there's some macro forces that determine that. But I think too, like wireless -- like wireline phone, which was a great business 20 years ago, in this metro area, the average phone bill for wireline phone was $72 with taxes and fees and all the stuff in it per month. That isn't really a business anymore. And it's a function or a feature of communications -- broadband communications. And mobile in a lot of ways is -- has similar attributes. It's very expensive from a consumer perspective. The average home in our footprint spends about $132 a month on mobile. Our average revenue per broadband customer all in is about 60...

About half of that, yes.

So the opportunity from a household spend perspective -- and our penetration from a household spend perspective is that we're 24% penetrated if you measure it that way. So we have a lot of upside in the ecosystem of communications.

I'm going to come back to the mobile opportunity in a minute, but I want to stay with one of the things you said where you were talking about the macro constraints for fiber build. One of those macro constraints is labor availability, and to some extent, you compete for the same labor pool. And if -- to the extent that you start participating in JOBS Act extensions at the state level, you're going to be competing even more for that labor pool.

That's right.

What's your reading of that labor pool, the availability of labor to build as much fiber as is supposedly going to be built?

Well, there isn't one. There is no labor pool there. I mean that -- for all the construction that has to be done, that -- there is no skilled labor force that's currently out there doing it that can be repurposed so it has to be built and trained. And these areas of construction are low-density areas so they don't have big populations. You actually have to put a labor force in to...

And bring crews in.

Bring crews in. You've got transportation issues and time issues. So it's difficult and it's challenging. And we are a big operator, and we can manage through these big projects. And we've invested already a lot of money in new construction equipment, hired a couple of thousand people just to manage the contract process of building out these new assets. So it's going to be challenging. And I don't know what -- again, there are some macroeconomic issues, and right now, there is no labor force anywhere for any job.

Yes. I mean do you find it difficult to fill positions at Charter at the ground level?

We have thousands of unfilled positions.

Yes, yes. Because it does make one wonder, with the kind of projections that are out there, how they can possibly be met if they just aren't people to do the work.

Yes. Well, there aren't. And -- but obviously, you can get it done if you pay enough or you...

Right. But then the ROI gets even worse.

Yes, yes. So you have to keep that in mind in the bidding of the subsidies and all of that. But -- and also, if you're an efficient builder and how you use expensive labor is a management function, you can be better at it than someone else.

So that notwithstanding, I still assume you will be a meaningful participant in the JOBS Act extension programs.

Yes. Yes, we're very interested. I mean there's $42 billion of money there. It's a lot of money.

Yes. And that will be levered, I would guess, 5:1 by private capital so you're just talking about...

In the RDOF process which preceded this, we won a little over 1.1 million passings. We're going to spend $4 billion and we're getting $1 billion of subsidy.

Yes. So a 4:1 leverage ratio.

Yes. And that -- and so I -- it depends on the density, it depends on the last job, so to speak, what -- how the economics work. But there's a significant amount of opportunity out there in that kind of leverage range.

So when I put all of that together, the conversation -- and sorry, we haven't talked about the topic that is maybe top of mind for almost everybody, and that's fixed wireless. So talk about what you're seeing with respect to fixed wireless broadband. You described on your conference call, it doesn't sound like you're seeing a lot of it.

We aren't. We don't -- even if you do all the math and -- where people say they are selling and what they're getting, we -- it's very difficult and small to find anything inside of our footprint. And so as I said, we're at historic low churn levels, so we're not seeing voluntary churn...

To fixed wireless?

To fixed wireless in any meaningful way, any measurable way. So I'm sure there is some but it's pretty small.

You know a thing or 2 about capacity management. One of the conversations that people inevitably have about capacity management is that fixed wireless will simply not have the bandwidth, literally and figuratively, to serve a lot of customers. Is that your view as well that there's a...

Well, if we take all the mobile customers, maybe then we will have some more bandwidth.

Although they'll be on Verizon's network so Verizon still will be serving the customers.

Yes, yes, which is an opportunity for them. I actually think it's accretive to them.

No doubt. As long as it doesn't bring prices down in the industry, which is a conversation we'll have in a couple of minutes. So when I put all those pieces together, your -- the competition that you're seeing from fiber and from fixed wireless, the move activity that is currently suppressed might be starting to come back or might come back...

A little bit. I've noticed it's up.

And then edge-outs and RDOF and all of that, how should investors think about the broadband growth rate going forward? How confident are you, first, that it stays positive, meaningfully positive? And how do you think about how those pieces sort of fit together?

Well, I -- for one thing, I don't live in the day-to-day of today. I'm always thinking about where we're going to be in 3 years or 4 years or 5 years and think about the kind of penetrations that you have over time. And I think -- when I think in those kind of time frames, I think the -- my view of what our growth rate opportunity is, is pretty much unchanged. Now I expect that we'll continue to be in a competitive environment. We've been in one for a significant period of time, have had pretty good growth. And so I don't really see over the longer term that our growth rate is going to change much. It will have some ins and outs based on macroeconomic forces like home construction and household formation and how much labor force we can get and how much -- how fast we can build plant and that kind of thing, how fast we can activate it. But when I think about value creation and penetration and creating customers, I think about that over a longer-term horizon than quarters. And I don't see a significant difference today than I would have said I saw 3 years ago.

Interesting. The market obviously does, judging by your stock price.

Well, multiples, yes, they've changed dramatically. And yet, when I -- I think my free cash flow 5 years from now is what I thought it would have been a couple of years ago.

Yes. Interesting. We'll come back to that topic at the end for what you do about that. I want to stay with -- so one of the other debates that has captivated the market is, I suppose, skepticism about the physical plant strategy that you described of high splits to DOCSIS 4.0. There's this thesis that the only answer is to eventually have a big capital cycle to move to fiber. How confident are you that the HFC plant really can stay competitive with fiber?

Well, I think it has tremendous capacity in it. All network -- we have a lot of fiber in our network, and it's really a question of where do you end fiber and what technology do you use to maximize the connectivity with the end device. And you think about even a fiber feed directly to a house doesn't actually deliver fiber to a device, and what delivers fiber to -- or delivers connectivity to the device is actually WiFi in most cases -- in almost all cases now in housing. And so what is the WiFi capacity of the house? And we have built an advanced WiFi capacity which is backed by fiber backbone and uses coaxial cable in the neighborhood at very short relative distances to deliver it. Even a fiber wired connect in a house is delivered over an Ethernet cable. So it's not delivered over fiber optic cable. So the idea that this technology is transformative and superior is just dead wrong. It's just another form of transmission. And you can use other wires and other medium -- media like WiFi, like LTE on CBRS. You can -- or 5G on CBRS to connect the device. There's 450 million devices connected -- almost 500 million devices connected to our network today. When you think about how they're connected, virtually, none of them are optically connected. Right.

So yes. That's...

And anyone else's network for that matter.

It's one of the conversations we have all the time, is, look, at some point in the network, you're terminating optical and going to electromagnetic and so where that happens doesn't really matter...

And where you should do that is really a function of cost. And when that cost -- you push fiber deeper if you needed to, if that medium where you -- between you and the device needs to be upgraded. So...

The other thing you mentioned was that -- you talked about the DOCSIS 4.0 transition, that it will cost more than the DOCSIS 3.0 transition. But I think in some ways, the -- or the 3.1. But I think the benchmark most people have in their heads is just does capital intensity rise or fall. So as I think about the high splits substituting for physical node splits, to some degree, and then eventually, with higher throughput amplifiers using that as a step on the migration path to DOCSIS 4.0, when I put all of that together, does that sort of fit inside the same capital envelope as where you've been for the last few years? Or is there a step up to get through that transition?

Yes. Pretty much in percentage terms particularly or even the percentage because of the video mix and everything else is a little bit not an appropriate way to measure it. But if you look at capital per customer relationship or capital per home passed or capital per dollar of EBITDA, which is a better way, in some ways, to measure it, I don't think it is significantly different particularly over time. Sometimes -- again, sometimes capital is a little lumpy relative to if you're measuring things on a quarterly basis. But if you're looking at it over a multiyear period, it's not necessarily so. And so I don't think it significantly or in any material way changes the capital intensity of the business, which continues to become less capital intensive.

Yes. It was interesting, in the last conversation with Dexter, he talked about in his vision of going to all fiber, he might go from 750,000 active network elements down to just 5,000 to 10,000. Even your high split strategy still takes the number of -- as you go to N plus 0 or approach it, takes the number of active elements down by a good 2/3 in the network. I mean I would think that over time, the network is cheaper to operate, both from capital and OpEx, than it is today.

I think that's right. But it's not as -- the active electronics in an all-fiber network aren't as low as you think because you have a lot more nodes. And so it's -- I was shocked when I first did the analysis of how little electronics you actually save. So it's interesting, in the high split technologies that we're deploying, we don't think we have to go to node 0. And even with DOCSIS 4.0, which is much higher capacity, we don't think we have to go to node plus 0. There's -- so there's a big step in between node 0 and today, which is 4.0. And that -- so it gives you another window of high capacity back to the device again before you have to take that fiber deeper. But that's just -- that's a math question.

Yes. It's -- as I say, it's all in the context of -- for whatever reason, maybe it's just sort of the general bearishness around cable at the moment, that -- of people thinking there has to be a giant capital project approaching. And it's interesting to sort of suss out what the roots of that fear are.

Well, the wall of worry that happens in our industry, I guess it happens in the world in general, but it happens to us every once in a while. And we've been through a few cycles. And -- but I -- so I think it's a good time to buy.

We'll come back to that, too, I promise, because I know that's on a lot of people's mind. But I want to talk about mobile for a second. And before we get into the nitty gritty questions about mobile, I want to think about the big picture, which is I think a lot of people sort of dismiss your wireless business as it's "just an MVNO," and therefore, it's sort of a hobby rather than a real business. How do you think about it? And how do you think about the convergence question of kind of what role strategically it plays in your business?

Well, I think it's huge. And as I said, there's a lot of cash flow in the household being spent on that.

Yes. I mean it is, after all, twice as big a business as broadband.

Right. And most of the bits are on us and more and more every day. And interestingly, if you think about Internet usage and you think about -- or broadband usage and you look at the projected curves and the historic rate of growth in usage per device and you think about, "Well, what is that usage going to be? And how does it work?" And the device, it's not really -- the mobile part of the business is the MVNO, but the bulk of the business is broadband on devices that also are mobile.

So it sounds like you conceptualize it as, in some ways, maybe not exactly as an application on the -- but in the way you described the wired voice business, as simply an app on the wired network. Wireless is sort of half and half. It's sort of half an app on the wired...

Yes, it's half and -- no, all wireless use when you're in a mobile environment, which is rare, and it's mostly telephony in the mobile environment. If you're -- I mean you can't drive and not -- in a traditional mobile phone device, you're not supposed to use them while you're driving. So you can use the phone part but not the broadband part. So when you think about what -- future use and if you look at that usage curve and think about, well, "What is that?" What are people going to be doing?" They're not -- they're sedentary activities with devices. They're not mobile activity.

And so you think the usage on fixed networks as a share of the total will continue to rise?

I do. And I think we can make the mobile device work better based on the way our network and our WiFi works and also have a great mobile platform. But all mobile devices work on multiple networks, too. Just because you own a fixed wireless network -- a mobile network, you're an MVNO or...

An MNO.

An MNO, a mobile network operator. Just because you're one of those doesn't mean all your customers are on your network all the time. So you have roaming and you have a different kind of relationship with that device and where it goes. So you really create the customer, you provide some of the network but not all of the network.

So we published some interesting data from Opensignal that you probably saw at some point that suggested you're offloading an awful lot more of your cellular traffic onto WiFi than Verizon is, even though it is the same underlying cellular network. Why is that? Why have you been so successful in offloading traffic today onto WiFi because you haven't started CBRS yet?

Right. Well, we have smart WiFi, and we've been building it. And so we can actually manage traffic in a way that makes WiFi work better on mobile devices. And as a result of that, we can move traffic onto our network in higher proportions. And there's more to come there.

That's sort of even before CBRS -- and we'll talk about CBRS in just a second. But even before CBRS, that's transformational to the cost structure. I mean, I think when we looked at the cost structure, we started from the framework, I think like a lot of investors do, of this is sort of an MVNO business and therefore, it should have a cost structure sort of like a traditional MVNO. My guess is that was probably wrong and that the better offload says this is a better business than anybody thinks it is. Is that fair? Is this...

Well, we think it's a great business.

And with what level of profitability?

If you just look at it as a mobile business and I think, put your mobile hat on and say you're in charge of mobile revenues, it's a good business. But it's -- I look at it as part of the entire customer relationship that we create through the high-capacity network that we provide in the home and in the office. And it's just an attribute of that relationship. And so how you allocate revenue and how you call -- what you call a business is -- I would redefine the business...

As just connectivity of homes, yes.

Yes. And so I think that's our opportunity. But if you just look at it from an analysis point of view and just look at the individual component pieces and say they're stand-alone components, it's still very good because of our ability to take cost out of the business, because of our ability to ride an existing marketing infrastructure that's already out in the marketplace with high-touch marketing, selling products that now you sell together in the same touch. And that -- so you have operational integration. You have offload of data from the mobile device onto your network, which is fairly inexpensive relative to the cost of a leased network. And you have the ability through time and through the growth of the use of the product to have more and more of that offload on your own network. So it's a very attractive thing as a stand-alone product.

One of the interesting and maybe astonishing developments in the most recent quarter was if I count the 3G shutdown subscribers at T-Mobile and Verizon as real people, and after all, presumably, they were real people with real devices, so leaving them out of the numbers, it's probably...

Some are elevators but...

But if I leave that in, cable between you and Comcast and then a little bit from Altice took 90-plus percent of the net adds in the wireless industry this quarter. The -- it raises an interesting question with Verizon now taking price up in wireless. AT&T arguably did but probably didn't, but Verizon certainly did yesterday or day before yesterday. What do you do? Do you -- with already taking 92% of the growth in the industry at your current pricing, do you take -- did you say -- do you let prices float up? Or do you say we can take even more?

Well, we'll see. Look, I think -- what I would like to do is continue to develop relationships and add lots of customers onto our network inside our footprint, inside of our customer base and make the total customer experience a better experience. And so I think we can give our customers mobile broadband at relatively less expensive price than what the market is going to -- what the rest of the industry is going to provide. And so it's dependent on where they price, where we price obviously. And so it really is -- it depends.

Let's talk about business services because that's been another bright spot for you lately. You went through a really long repricing of the legacy TWC base in SMB. Are you now completely through that to the point that you can now sort of see the business as a more regular growth rate?

Yes. Now there's 2 -- we have an enterprise piece and an SMB piece, and we run them separately. We run the SMB piece in our -- what we think -- call our residential business.

The mass markets, yes.

Our mass market business, right. And yes -- but it's distinct, and it's actually growing quite nicely. It's -- it came out of the pandemic, which really challenged it initially, quite well. And we've done really well with video interestingly in business, selling appropriate packages to businesses. And so yes, the pricing is appropriate. The market growth is good. Our penetration is lower than in residential so there's more upside long term.

And in the enterprise segment, I know virtually all the cable operators are seeing some pressure on the wholesale segment for what was, at one time, a sort of side business almost of...

Yes, cellular backhaul.

Cellular backhaul. But that -- some of that is going away. But the enterprise business, it sounds like you're sort of reaccelerating coming out of COVID.

It has and we've done well with that. And we've added some new managed features onto the product mix, and we're changing the product mix as enterprise needs change. But yes, our individual -- our growth rate from a customer relationship perspective is higher than it's ever been in enterprise. Now enterprise is challenged as a whole category.

It's -- there's a lot of price compression and commoditization.

But we're doing well. And -- but we have the drag in that line of business of the cellular backhaul, which is going away. And when it goes away, you'll be able to see the...

The underlying growth rate, yes.

The underlying growth rate, which is good.

Yes. It's funny. That's another part of your business that is a pretty big contributor to overall growth that has sort of dropped off of people's radar screens a little bit.

Even advertising is doing well.

Well -- and one thing that is doing well is video. For reasons that -- I have to admit I've been surprised how much stickier video has turned out to be for you relative to your peers. Why is that? Why is the rate at which you are losing video subscribers so much more modest than it is for everyone else in the industry?

Well, we've been working at packaging video into smaller, cheaper services where we can. And there are all sorts of rights structure issues around that. But we've been working at that and selling -- and trying to get less expensive packages where we can into the marketplace and broader packages where we can, and we continue to market it. We think that having a good video business is important. It's important for a lot of reasons. One, I think in the long run, there's some upside in it. I think it's still full of challenges over the next few years as -- because the fundamental drivers that have made it difficult haven't changed. Content costs go up. It's like stepping on a marshmallow because you raise the price and you lose the subs and there's no revenue gain for anybody.

So everybody raises their prices.

And yet, people continue to raise prices to us on a wholesale basis. So now that -- and they're trying to build direct-to-consumer businesses which have their own challenges. And where the content is and how you move that content into consumer businesses is going to be a challenge because you could destroy your underlying opportunity if you do that, which is where all the money still is.

Well, all those forces, you've been saying for a long time that they were really going to reshape the way you have negotiations and that eventually the leverage would swing pretty dramatically to you as the distributor. It's not clear that it really -- that all that much has changed.

It hasn't. It changes very slowly. And it's just -- it's -- I think 2 years from now, if we look at it, it will look a lot like it does.

Is it just that the stakes in those negotiations are lower than they used to be because it's going to be a smaller business and so it doesn't feel as existential to fight for every last penny anymore?

I don't think of it that way, but to some extent, it's less material. And there -- and to some extent, we say to the customer base, "This is really expensive television. It has to be sold this way in a really big fat package. That's the way the owners of the content want to sell it, and this is what it costs." And I think there's less -- I mean, I think a lot of customers understand that. And there's competition now with virtual MVNO -- or MVPDs, and those virtual MVPDs have very high prices as well. And then someone tried to price low but they had to raise the prices. It sort of is what it is and consumers understand what it is. So it has -- and it's less significant as a part of the business. That said, there's -- the advertising business is good. Television needs to be broadly distributed. Sports rights need to be broadly distributed for the underlying value of those assets. And so I think we can help make television work better and broadly distribute it and use advertising to drive value into the business and use transaction revenues to drive value into us doing that. And I think over the long term, we can use video as a way of making the total value of all the services we provide better than alternatives.

One part of that equation is Flex. You, for a long time, talked about developing your own streaming video platform. What made you decide to do it with Comcast in the new streaming platform with Flex and the stream TVs?

Well, Comcast built a very good platform, and it's a real platform in the sense that it's not an Android-based platform or some variant of an already existing platform. It is separate and distinct. And so it gives you strategic opportunity to differentiate on a platform basis that you might not get going on your own. We just simply didn't -- I thought it was a better opportunity for us to do that with them and to use our joint creative capabilities on that platform to build a new business opportunity.

Well, we look forward to seeing what you do with that. I want to go back to now -- sort of back to the higher level picture of the business for a second. I guess one of the obvious questions is -- because you've sounded very confident about the opportunity to grow the business, to take more wallet share, that 24% of the wallet share of homes in your footprint, you were buying back a lot of stock at $650-ish. And for people that sort of watch every tick of the Form 4s from Advance/Newhouse and what have you, why not accelerate the repurchases now given how cheap your stock is?

Well, we -- first of all, the stock we bought at $650 we thought was a good buy and we still do, by the way. So we...

Okay. But it's an even better buy now then.

Yes, it's even better now. And pretty much, we've been using all of the excess cash that we have to do buybacks.

You said on your last call that -- or in the fourth quarter, I think, that you expected 2022 to look something like a return to normal post COVID as the year progressed. Do you still think that that's what the end of this year looks like?

Yes. Well, it hasn't -- there's no -- I don't have any data to prove that yet. I said May had a little activity in it more than we were having in April and more than March and definitely more than January, but it's still not normal. And -- but I think it normalizes, yes. I don't know the exact date you'd say, well, it's normal.

And for investors that have sort of been confounded by this incredible compression in multiples, what's your sense internally of what the market is missing the most? It's no secret that the market is extremely focused on broadband net adds and what the trajectory is for broadband net adds. I think as you said, that's not where you live every day of your existence, but...

Well, I think about it, and -- but I don't want to. And I don't want to because it doesn't really -- I mean if you have a macroeconomic force like this, it doesn't -- there's not much you can do about it except sell your way through it and wait for forces to change. But like I said at the beginning -- it's really interesting. We came into this year significantly above where we thought we would be from an EBITDA perspective because we had so much built in...

If you think about pull forward, yes.

Yes, pull forward. So the cash is there. The business is performing quite well that way, and it's still performing quite well in terms of the available opportunity in the activity base such as it is. We're doing quite well. So I'm very confident that the company is worth -- that the free cash flow 5 years from now is what it was going to be anyway, that there's not a change. I mean there's minor changes around the edges, but the fundamentals of the business are still what they are. And so people just have to see the results ultimately.

And wireless is -- if I think about what that picture is like 5 years from now, wireless is a big part of that story.

It is. Wireless is -- again, there's a lot of opportunity there from both a revenue and EBITDA perspective incrementally even on the existing base. We would have a great business if we never grew another broadband customer just on the opportunity of creating that incremental revenue and EBITDA opportunity that comes from mobile.

Yes. Well, it's been a delight to talk to you. Thank you for taking the time with us this morning.

My pleasure. Good to see you live.

It's good to see people in person. This is great. So Tom, thank you. And next year will be our tenth. I hope we can count you as our first 10-time visitor to our conference when you come back next year.

It's a date. Thanks.

All right. Thank you very much.