CABO

• Core Operational Priorities

  • Improving residential customer retention is the top operational priority, after elevated churn drove 17,000 residential subscriber losses in the quarter. Initiatives to improve retention include additional speed upgrades, more gradual promotional pricing roll-offs, broader product bundling, enhanced retention tools, and targeted segmented pricing tailored to local market competition.
  • Diversifying and balancing customer acquisition channels: Door-to-door sales' contribution to quarterly connects has more than doubled over the past year, and digital acquisition channels are seeing strong momentum. The company is building a more balanced channel mix compared to its historical inbound-only model.

• Product and Network Investments

  • Mobile service: Officially launched company-wide in March 2026. Early adoption growth is encouraging, and the offering is expected to improve customer acquisition, deepen customer relationships, and strengthen retention over time, though customer perception change is expected to take time.
  • Network upgrades: 100% of the existing network currently supports gigabit speeds, and the vast majority of customers will be served by multi-gig capable infrastructure by the end of 2026, built via years of disciplined capital-efficient investment.
  • SMB business expansion: Launched UCAS, a cloud-based communications solution that complements existing connectivity offerings to deepen customer relationships.
  • In-home customer experience: New investments in advanced Wi-Fi and home security technologies to drive higher satisfaction and loyalty.

• Capital Allocation Strategy

  • Prioritizes investments to improve customer experience and strengthen competitive position, while maintaining balance sheet flexibility and working toward long-term leverage reduction.
  • The company is evaluating potential monetization of remaining unconsolidated equity investments, with proceeds expected to be used for accelerated debt reduction, consistent with past practice.

Management did not provide explicit numerical guidance for full-year 2026 or upcoming quarters in this call. Qualitative forward-looking outlooks include:

• Management expects long-term penetration to rise meaningfully above current levels across the company's footprint, supporting long-term value creation.
• Digital customer acquisition as a share of total connects is expected to grow from 25% in Q2 2026 to 35-40% over the next 12 to 18 months.
• Overall customer acquisition cost (CAC) is expected to increase only slightly (not materially) as the channel mix shifts to a blend of more expensive direct/door-to-door sales and efficient digital channels, with no material expected impact on overall margins.
• ARPU is expected to face moderate ongoing pressure as the company pursues subscriber growth via more competitive introductory pricing for new customers, but this pressure will be balanced by incremental sell-through of higher-value add-on products, gradual promotional roll-offs, and adoption of higher-value plans to support stable long-term ARPU trends.
• Management expects sequential improvement in subscriber trends and year-over-year performance in Q3 2026, supported by seasonal strength and ongoing execution of acquisition and retention initiatives.

Total company revenue for Q2 2026 was $348.9 million, down from $381.1 million year-over-year (YoY).

• Residential Broadband (Data): Revenues decreased 7.3% YoY to $211.3 million (down 0.5% sequentially), driven by a 6.6% YoY subscriber decline (the company lost 17,000 residential broadband customers in the quarter). ARPU remained relatively flat YoY and increased sequentially. This segment is the core revenue contributor, representing approximately 60.6% of total Q2 2026 revenue.
• Residential Video: Contributed a $9.7 million YoY decrease to total revenue, continuing a long-term declining trend for the segment.
• Business Services: Results were impacted by the Q1 2026 sale of select Fiber to the Tower assets. The enterprise, wholesale, and carrier sub-segments (high-value fiber-based offerings with long-term recurring contracts) saw encouraging growth momentum, while the SMB broadband sub-segment remained under pressure. New product launches such as Unified Communications as a Service (UCAS) have expanded the segment's offering.

• Elevated churn in residential broadband continues to pressure subscriber results, particularly in markets with fiber overbuild competitive activity, which remains intense across portions of the company's footprint.
• The company's gross debt balance is $3.06 billion as of Q2 end, with a net leverage ratio of 4.2x, creating a need to strengthen the balance sheet and reduce leverage over the long term.
• Accounting impairment charges and fair value adjustments were recognized in the quarter related to franchise agreements, goodwill, and the company's MBI investment, though these are non-cash and do not impact operating strategy or liquidity.
• Satellite competition (primarily Starlink) currently holds an estimated 1% market share across the footprint, concentrated in rural edge areas, but is being monitored closely for potential growth.
• Fixed wireless access (FWA) competition already overlaps with over 80% of the company's footprint, a level largely unchanged from one year prior, and has historically pressured market share for the company.
• All forward-looking statements are subject to material risks that could cause actual results to differ, including competitive changes, customer retention trends, financing outcomes, and capital investment results.

Q: Given long-standing low penetration, what specific changes are you making to improve growth, and what is the update on planned financing transactions? / A: The company has rebalanced its sales channels: door-to-door and digital channels, which made up less than 10% of sales a year ago, now account for a much larger share. It also closed the gap in bundled mobile offerings, launching mobile across its footprint in March 2026 to better compete with FWA and improve retention. On financing, management is actively evaluating alternatives to strengthen the balance sheet but cannot provide additional details at this time.

Q: How will your shifting channel mix impact overall customer acquisition cost, and what is the expected ARPU trajectory amid new growth strategies? / A: Direct/door-to-door sales are more expensive, but efficient digital channels are growing quickly, so overall CAC will only increase slightly and will not materially impact margins. For ARPU, adjustments to AutoPay Plus programs and sell-through of higher-value add-ons (advanced Wi-Fi, security, tech assist) support ARPU growth. Moderate pressure comes from competitive introductory pricing for new customers, but gradual promotional roll-offs will offset this, leading to a balanced trajectory of stable ARPU alongside subscriber growth.

Q: Can you talk about expected near-term subscriber trends and the level of satellite competition? / A: Management is encouraged by improvements in acquisition momentum, and retention remains the highest priority. Q3 is seasonally stronger, and Q3 2025 was a weak comparison quarter due to prior billing system conversion churn, so improvement in year-over-year trends is a reasonable expectation. Satellite competition (Starlink) holds an estimated 1% third-party measured market share, mostly in rural edge areas, and has not had a material impact to date, though it is monitored closely.

Q: Would you consider exiting low-penetration rural markets like Optimum, and how does penetration vary by competitive market type? / A: Management views low-penetration markets as an opportunity, not a divestment target, and has no plans to exit these areas at this time. Penetration varies across markets based on historical investment and performance of prior acquired operations, with lower penetration in markets with multiple competing gig/fiber providers. Management is working to standardize performance and gain fair long-term market share across all footprint types.