Cable One, Inc. Q3 FY2025 earnings call

• Subscriber results were weaker than expected due to macroeconomic factors, competition, promo roll-offs, and billing migration; however, connects showed year-over-year growth in Q3 and continued into October.
• Launched a new go-to-market pricing structure enabled by billing platform transformation to improve customer experience.
• Churn improved in October following significant customer-impacting activities; ARPU expected to remain stable for the rest of the year, driven by segmented pricing and promotional expiration but partially offset by retention initiatives.
• Tech Assist program exceeded adoption expectations, with new products introduced; mobile pilot launched with unlimited plans starting at $25 per line in select markets.
• Leadership transition: Julie Laulis retiring, Board in CEO search process to ensure seamless transition.

Total revenues for the third quarter of 2025 were $376 million, down from $393.6 million in the third quarter of 2024. Residential video declined by $8.7 million (16.2%) due to video subscriber churn. Residential data revenues decreased $2.8 million (1.2%) year-over-year, with a 5.1% decline in subscribers partially offset by a 3.2% increase in ARPU. Business data revenues grew 0.4% year-over-year, driven by fiber and carrier segments. Adjusted EBITDA for Q3 2025 was $201.9 million (53.7% of revenues), down from $213.6 million (54.3% of revenues) in Q3 2024. Capital expenditures totaled $71.8 million in the third quarter, a decrease of $5.2 million year-over-year. Full-year CapEx is now expected in the high $200 million range.

• Full-year CapEx expected in the high $200 million range vs. prior $300 million estimate.
• Anticipate ARPU to remain stable for the remainder of 2025.
• Focus on deleveraging, targeting a high 2% to low 3x net leverage ratio.
• Estimated MBI put purchase price $475 million to $495 million, with MBI's net indebtedness between $845 million and $895 million.

• Macroeconomic factors and competitive pressures impacting subscriber results.
• Impact of billing platform transformation on churn, including temporary spikes due to migration-related factors.
• Uncertainty around capital markets and ability to retire convertible notes maturing in 2026.
• Competition from cell phone Internet and fixed wireless access (FWA) services affecting connects and churn.

Q: Todd, update on leverage target and strategic approaches to address broadband issues?

A: Todd discussed targeting a high 2% to low 3x net leverage ratio through disciplined debt repayment, and Julie noted progress in go-to-market strategies despite competitive challenges.

Q: Greg Williams on competition, promo roll-offs, and 2026 outlook?

A: Julia Laulis explained confluence of factors affecting Q3 churn, and Todd mentioned non-pay attrition in October was half of August/September levels, with focus on deleveraging and execution.

Q: Sebastiano Petti on low-end pressure, FlexConnect rollout, and leverage post-MBI?

A: Julia Laulis talked about low-end pressure from cell phone Internet, FlexConnect expanding in Q4, and Todd expressed confidence in remaining below 4x net leverage post-MBI.

Q: Brandon Nispel on fiber overlap and AT&T Air competitive impact?

A: Todd stated fiber overlap consistent, with AT&T Air rolling out in areas where Copper is present, affecting competition in relevant markets.

Q: Sam McHugh on gross adds, churn, and sale proceeds?

A: Todd noted October connects and disconnects improved, sale proceeds pretax, and focus on debt repayment and tax-efficient allocations.

Q: Rob on successful products and video decline trajectory?

A: Julia Laulis discussed successful products like Tech Assist and multi-gig offerings, with video decline attrition rate consistent due to focus on IP conversion and reallocating spectrum.