Cable One, Inc. Q2 FY2025 earnings call

• Residential broadband: Customer decline of 13,000 in Q2, but sequential month-over-month connect growth since start of year. ARPU up $2.39 QoQ due to segmented pricing, promo expirations, value-added service adoption, and AutoPayPlus rollout. - Billing conversion: Final phase completed, a key milestone in growth enablement platforms, expected to drive $ millions in annual cost savings from late 2025. - Mobile pilot: Signed MVNE agreement to pilot mobile service in markets, exploring complementarity with broadband. - AI tool: Ask Tommy AI-powered assistant automates tasks and aids tech expertise. - Tax savings: Expect ~$40M cash tax savings in 2025 and ~$120M aggregate through 2027 from tax bill.

Total revenues for Q2 2025 were $381.1 million, down from $394.5 million in Q2 2024. Residential video revenues decreased $9 million (-15.8%) year-over-year due to subscriber attrition. Residential data revenues decreased $1.1 million (-0.5%) year-over-year, but increased $4.2 million (+1.9%) sequentially, driven by a $2.39 ARPU increase. Business services data revenues grew 1.2% year-over-year. Consolidated adjusted EBITDA was $203.2 million (53.3% of revenues). Capital expenditures were $68.4 million, a 4.5% year-over-year decrease. Adjusted EBITDA less capital expenditures (free cash flow) was $134.8 million (66.4% of adjusted EBITDA).

• Residential broadband revenue for 2025 expected flat or modestly down vs 2024. - Billing migration expected to generate $ millions in annual cost savings starting late 2025. - Expect ~$40M cash tax savings in 2025 and ~$120M aggregate through 2027. - Will evaluate free cash flow deployment for long-term growth and balance sheet management.

• Competitive intensity, including fiber-to-the-home overbuild (53% overlap) and cellphone internet competition. - Elevated churn from promotional roll-offs, seasonal college market churn, and AutoPayPlus rollout. - Post-billing migration work streams remaining to fully realize benefits. - Uncertainties around mobile pilot success and market reception.

Q: Brandon Nispel asked about fiber competitive overlap and net adds/losses in fiber vs non-fiber markets.

A: Fiber overlap went from 50% to 53% this quarter. Losses from cellphone internet, with connects higher each month in 2025 and June had year-over-year connect increase. Mentioned pricing changes, promo roll-offs, value-added service adoption, and AutoPayPlus impact on ARPU and churn.

Q: Sam McHugh asked about broadband losses, ARPU priority, and FlexConnect.

A: Priority is balancing subscribers and ARPU. ARPU expected stable for rest of 2025. FlexConnect didn't meet expectations initially due to prioritizing billing system migration and website revamp, with relaunch planned in Q3.

Q: Nikhil Phanish Aluru asked about mobile pilot strategy as competitive response and go-to-market.

A: Mobile pilot driven by improving economics and stable mobile networks in markets. Seen as adding value to customers and enhancing profitability. Expect to be live in pilot markets by end of year, testing various go-to-market approaches.

Q: Frank Louthan asked about billing system conversion completion and issues.

A: Billing migration is done, no problems with first two phases. Still work to be done post-migration, but migration itself went well with no issues in billing, reporting, or provisioning.