Optimum Communications to Restate 2025–2026 Financials Over Tax Errors

What happened

Optimum Communications, Inc. (NYSE: OPTU), a Delaware-incorporated cable and pay-television operator headquartered in Long Island City, New York, disclosed in a Form 8-K filed September 21, 2026, that its previously issued financial statements should no longer be relied upon.

The filing states that on September 16, 2026, the Audit Committee of the company's board, in consultation with management, concluded that errors exist in previously issued consolidated financial statements related to understatements of deferred tax benefits and overstatements of a related deferred tax liability.

The affected statements are the audited consolidated financial statements for the fiscal year ended December 31, 2025, contained in the company's Annual Report on Form 10-K, and the unaudited consolidated financial statements in the Quarterly Reports on Form 10-Q for the interim periods ended September 30, 2025, March 31, 2026, and June 30, 2026.

According to the filing, the company identified that it "inadvertently failed to recognize non-cash deferred tax benefits associated with two previous non-cash impairment charges of its indefinite-lived cable franchise rights" during those periods. The company said the restatement will not affect previously reported cash balances, revenues, capital expenditures, cash flows, EBITDA or loss before income taxes.

The filing states the company intends to restate these financial statements by amending its Form 10-K for 2025 and the applicable Forms 10-Q "as soon as reasonably practicable." It also states that the errors affect the consolidated financial statements of its wholly-owned subsidiary, CSC Holdings, LLC, which the company intends to restate for the corresponding periods.

Optimum said the Audit Committee and management discussed these matters with KPMG LLP, the company's independent registered public accounting firm.

The company's Class A common stock closed at $1.08 on the event date, unchanged from the prior close, according to the price data provided.

The numbers involved

The filing states the restatements are expected to reduce previously reported net losses by correcting the tax-benefit understatements and deferred tax liability overstatements by approximately $430 million for the three- and nine-month periods ended September 30, 2025, and for the year ended December 31, 2025, and by approximately $720 million for the quarter ended March 31, 2026, and the six-month period ended June 30, 2026.

The filing says the corrections will have corresponding impacts to total liabilities, accumulated deficit and total stockholders' deficiency.

The company describes the identification of the errors as "preliminary, unaudited and may be subject to change (including the potential identification of additional errors)" as it completes its procedures and prepares the restated filings.

Internal control weakness expected

The filing states that management is assessing the effect of the restatements on the company's internal control over financial reporting and disclosure controls and procedures, and that it expects to report in its amended filings that "a material weakness in its internal control over financial reporting related to accounting for income taxes existed during the affected periods."

The company also states that the Audit Committee concluded that management's report on internal control over financial reporting as of December 31, 2025, and KPMG LLP's opinion on the effectiveness of that internal control as of December 31, 2025, should no longer be relied upon.

What this means

A Form 8-K is a "current report" that public companies file with the Securities and Exchange Commission to disclose material events between their regular quarterly and annual reports. Item 4.02 of the form is the specific disclosure line that a company uses when it concludes that previously issued financial statements — or an audit report covering them — should no longer be relied upon. The filing itself is the trigger: the obligation is to tell the market promptly, not to wait for the corrected numbers.

A restatement is the process of reissuing financial statements to fix an error. Here, the company says the error is in its accounting for income taxes rather than in its cash-generating operations. That distinction is why the filing says cash balances, revenues, capital expenditures, cash flows, EBITDA and loss before income taxes are unaffected: those line items are calculated before the deferred tax adjustments that the company says it got wrong.

The instrument at the center of the error is not a security but an accounting entry. When a cable company concludes that the value of an asset such as its cable franchise rights has fallen, it records an impairment charge — a non-cash write-down of the asset's carrying value on the balance sheet. Impairments can also create deferred tax benefits, because the tax deduction associated with the write-down may be recognized in a different period than the accounting charge itself. A deferred tax liability is the mirror image: a tax obligation recorded now that is expected to be settled in a later period. Optimum says it failed to record the deferred tax benefits from two prior impairment charges and correspondingly overstated the related deferred tax liability.

A material weakness is not an allegation of fraud. It is a control deficiency serious enough that there is a reasonable possibility that a material misstatement of the financial statements would not be prevented or detected on a timely basis. The company says it expects to report that a material weakness related to accounting for income taxes existed during the affected periods.

The filing does not state why the deferred tax benefits were not recognized, and it does not quantify the cost of the restatement or give a specific date for the amended filings. It says the company intends to complete the restated filings "as soon as reasonably practicable" and that the preliminary figures may change.