Optimum Flags Tax Restatement Across 2025 and 2026
The company said restatements are expected to cut previously reported net losses by about $720 million for the quarter ended March 31, 2026 and the six months ended June 30, 2026.
Optimum Communications (OPTU) said it failed to recognize non-cash deferred tax benefits tied to two earlier non-cash impairments of indefinite-lived cable franchise rights, and that previously issued financial statements for the year ended December 31, 2025, and the quarters ended September 30, 2025, March 31, 2026, and June 30, 2026, should no longer be relied upon.
On September 16, 2026, the Audit Committee, in consultation with management, concluded that the errors understated deferred tax benefits and overstated a related deferred tax liability. The company intends to restate those periods by amending its 2025 Form 10-K and the applicable 10-Qs as soon as reasonably practicable, and to restate the corresponding statements of wholly owned subsidiary CSC Holdings, LLC.
The restatements are expected to reduce previously reported net losses by about $430 million for the three- and nine-month periods ended September 30, 2025, and for the year ended December 31, 2025, and by about $720 million for the quarter ended March 31, 2026, and the six-month period ended June 30, 2026. The corrections will not affect previously reported cash balances, revenues, capital expenditures, cash flows, EBITDA, or loss before income taxes. Identification of the errors is preliminary and unaudited and may change as the company completes its procedures.
Management is assessing the effect on internal control over financial reporting and expects to report in the amended filings that a material weakness related to accounting for income taxes existed during the affected periods. The Audit Committee concluded that management’s report on internal control as of December 31, 2025, and KPMG LLP’s opinion on that control as of that date should no longer be relied upon. The company discussed the matters with KPMG.
The tax error sits on top of a second-quarter operating print that already showed a faster drop in sales. Total revenue was $2.02 billion in the quarter ended June 30, 2026, down 5.8% from a year earlier, a steeper decline than the 4.0% year-over-year drop to $2.07 billion in the first quarter. Residential revenue was $1.54 billion. Residential ARPU was $132.22. Convergence ARPU was $79.80.
Net loss attributable to stockholders was $291.8 million, or $0.67 a share, in the second quarter, compared with $96.3 million, or $0.21 a share, a year earlier. Adjusted EBITDA was $785.7 million, with a 38.8% margin. Gross margin was 71.0%.
Broadband primary service units declined 40,000 in the second quarter, reflecting the benefit of a bulk agreement, versus a 64,000 loss in the first quarter that included an 8,000 prior-period adjustment. Broadband subscribers totaled 4.0 million. Mobile line net additions were 50,000, the company’s best second-quarter performance, bringing mobile lines to 724,000. Residential mobile service revenue was $53 million. Mobile penetration of the broadband base was 8.9%.
New tiered video packages reached 18% of the residential video base. Fifty-three percent of the residential broadband base took 1 Gig or higher speeds. The company added 68,000 new passings. Operating cash flow was $228.1 million. Free cash flow was a $91.9 million deficit. Cash capital expenditures were $320.0 million, with capital intensity of 15.8%.
Consolidated net debt was $25,333 million at June 30, 2026, with net leverage of 8.0 times last-twelve-quarter Adjusted EBITDA. Combined Class A and Class B shares outstanding were 392,560,390.
The company will file the restated statements as soon as reasonably practicable, and the identification of errors is preliminary. Management expects the amended filings to disclose the material weakness in income-tax accounting for the affected periods.