Shenandoah Telecommunications Company Q1 FY2026 earnings call

• During the quarter, 22,000 passives were released to sales, bringing the total Glowfiber expansion markets passives to 449,000. • Added approximately 6,000 Glowfiber net customers in the first quarter with a 9% year-over-year improvement. • Commercial fiber business had 196,000 in sales bookings and 4.7% revenue growth year over year. • Consolidated revenues grew 4.8% and adjusted EBITDA grew 15% year over year. • Integrated broadband network spans over 19,000 fiber route miles across eight states with over 700,000 total broadband passings. • Sales and marketing team drove growth with the five-year price guarantee rate card gaining traction. • First quarter construction added over 22,000 passings, and penetration rose to 20.9%. • Commercial fiber business had incremental monthly sales bookings exceeding 196,000, with the acquired Horizon backlog substantially complete.

During the first quarter, Glowfiber added approximately 6,000 net customers with a 9% improvement compared to the prior year period, serving 94,000 customers in total. The commercial fiber business had sales bookings of 196,000 with a 4.7% year-over-year revenue growth. Consolidated revenues grew 4.8% year over year and adjusted EBITDA grew 15% year over year. Incumbent broadband markets ended the first quarter serving more than 111,000 broadband data customers, with data, voice, and video RGUs totaling over 156,000, a 4% year-over-year decline. RLEC revenues declined by 800,000 primarily due to a 28% decline in DSL RGUs and lower government grant support revenues.

Reiterated 2026 guidance: expects revenues of $370 to $377 million, adjusted EBITDA of $131 to $136 million, and CAPEX net of grant reimbursements of $220 to $250 million. In the first quarter of 2026, invested $75.8 million in capital expenditures and collected $11.5 million in government grants for a net CapEx of $64.3 million. As of March 31st, had $707 million in outstanding debt and $636 million of net debt, with no debt maturities until 2029, and total available liquidity approximately $195 million.

• Competition risk, such as Starlink promotions in some rural incumbent broadband markets causing slight churn. • Potential changes in government grant support affecting the business.

Q: Are you seeing any changes or challenges in adding subscribers given the competitive nature?

A: In our Glowfiber markets, we're not. Our net ads were up 9% over the first quarter of 2025. In our incumbent markets, we did see a little bit of churn to Starlink with some of the promotional offers they launched in the first quarter.

Q: On your ASP on the Glow Fiber business and commercial fiber growth objectives?

A: In Glowfiber business, expecting fairly flat ARPU in the near term with longer term opportunity for higher speeds. Commercial fiber generally expecting mid single digit revenue growth rates over a three or four year period.

Q: Concern among broadband investors based around pricing power and broadband output growth?

A: In Glowfiber business, expecting fairly flat ARPU near term with potential for pricing power over time. In incumbent business, about two-thirds of the passings are the only fixed wireline provider having some pricing power.

Q: About increased competition from Starlink during the quarter?

A: Only saw impact in most rural areas of incumbent broadband market, offered speed increase late in first quarter to mitigate competition.