Sparklight Business Launches Partner Solutions Program Sparklight® Business launches new Partner Solutions Program to expand the company’s reach through a growing ecosystem of technology brokerages and technology advisor partners. PHOENIX, Dec. 08, 2025 (GLOBE NEWSWIRE) -- Sparklight® Business, a leading provider of fiber-powered internet and managed connectivity solutions, today announced the launch of its new Partner Solutions Program, a strategic initiative designed to expand the company’s reach thr ...

Company Performance - Cable One's shares fell 6.2% after the third-quarter report revealed a significant loss of broadband subscribers and revenue that missed Wall Street expectations, despite a large earnings beat [1][2] - The company's revenue for the quarter was $376 million, representing a 4.5% decline from the previous year and falling short of analyst forecasts [2] - Cable One lost 149,100 residential data subscribers year-over-year, indicating underlying weakness in demand [2] Market Reaction - The stock market's reaction suggests that the news is considered meaningful but not fundamentally altering the perception of Cable One's business [4] - Cable One's shares have shown extreme volatility, with 35 moves greater than 5% over the last year, indicating a sensitive market environment [4] Broader Market Context - Recent comments from President Trump regarding trade relations with China have injected volatility into the broader markets, particularly affecting sectors sensitive to economic sentiment [5] - China's announcement of new export controls on critical minerals has raised concerns about economic headwinds and potential impacts on consumer spending, which could affect revenues in various sectors [6]

Core Insights - Cable One (CABO) reported a revenue of $376.01 million for the quarter ended September 2025, reflecting a year-over-year decline of 4.5% and an EPS of $5.17, down from $7.92 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $379.9 million, resulting in a surprise of -1.02%, while the EPS surprise was -44.11% against a consensus estimate of $9.25 [1] Financial Performance Metrics - Residential Video revenue was $44.97 million, below the estimated $45.51 million, marking a year-over-year decline of 16.2% [4] - Other revenues totaled $24.15 million, compared to the average estimate of $25.5 million, representing a year-over-year change of -9.1% [4] - Residential Voice revenue was reported at $6.69 million, slightly above the estimated $6.57 million, but still down 13.8% year-over-year [4] - Residential Data revenue was $227.6 million, closely aligning with the average estimate of $227.62 million, showing a year-over-year decline of 1.2% [4] Stock Performance - Over the past month, Cable One shares have returned -16.1%, contrasting with the Zacks S&P 500 composite's increase of +1.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

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Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $376 million, down from $393.6 million in Q3 2024, primarily due to a decline in residential video revenues, which decreased by $8.7 million or 16.2% [14] - Residential data revenues decreased by $2.8 million or 1.2% year-over-year, driven by a 5.1% decline in subscribers, partially offset by a 3.2% increase in ARPU [14] - Adjusted EBITDA for Q3 2025 was $201.9 million, representing 53.7% of revenues, compared to $213.6 million or 54.3% of revenues in Q3 2024 [16] - Free cash flow was $130.1 million in Q3 2025, equating to a conversion ratio of 64.4% of adjusted EBITDA [17] Business Line Data and Key Metrics Changes - Residential broadband customers declined by 21,600 in Q3 2025, but there were modest improvements in connects compared to the prior year [6][7] - Business data revenues grew by 0.4% year-over-year, driven primarily by fiber and carrier segments, while SMB segment faced subscriber and pricing softness [15] - The LIFT product, aimed at cost-conscious customers, is showing promise with strong sell-in among premium tiers, with about half of new customers choosing gig or faster speeds [9][41] Market Data and Key Metrics Changes - The company experienced increased churn due to macroeconomic factors, competitive pressures, and promotional rollouts, but churn improved in October [6][8] - Average monthly usage is around 775 gigabits per customer, indicating sustained demand for high-capacity service [9] Company Strategy and Development Direction - The company is focusing on execution, retaining existing customers, and retooling go-to-market approaches to position for long-term growth [6][12] - Simplified pricing and segmented marketing campaigns are part of the strategy to improve financial performance over time [6][9] - The launch of mobile services is expected to reduce churn and deepen service adoption, with plans to refine the strategy post-pilot [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macro environment but expressed optimism about improved connect trends and churn reduction in October [12][28] - The leadership transition is underway, with a focus on ensuring a smooth transition while continuing to execute the long-term growth strategy [12] Other Important Information - The company paid down nearly $200 million of debt during Q3 2025, with a focus on disciplined debt repayment [18] - The estimated NBI purchase price is projected to be between $475 million and $495 million [20] Q&A Session Summary Question: Update on leverage targets and addressing broadband ARPU issues - Management indicated a focus on maintaining leverage between two and a half to four and a half times, with disciplined debt repayment as a priority [22][24] Question: Impact of competition and promotional rolloffs on churn - Management noted that multiple factors contributed to increased churn, including billing migration and competitive pressures, but improvements were seen in October [32][34] Question: Fiber overlap and competitive impact of AT&T's fixed wireless rollout - Fiber overlap remains consistent in the low to mid-50% range, with AT&T's fixed wireless rollout being a competitive factor [58][60] Question: Clarification on sale proceeds and tax implications - Sale proceeds from divestitures are pre-tax, and the company expects to continue monetizing strategic investments to pay down debt [64][68]

Customer Base and Revenue - As of September 30, 2025, the company served approximately 1.0 million residential and business customers out of 2.9 million passings, with 60.0% of revenues generated from residential data services[116] - For the three months ended September 30, 2025, revenues decreased by 4.5% to $376,012,000 compared to $393,555,000 in the same period of 2024[125] - Total revenues for the three months ended September 30, 2025, were $376.0 million, a decrease of $17.5 million or 4.5% compared to $393.6 million in 2024[132] - For the nine months ended September 30, 2025, total revenues were $1.14 billion, a decrease of $54.6 million or 4.6% from $1.19 billion in 2024[146] - Total revenues for MBI for the twelve months ended September 30, 2025, were approximately $310 million, with around 210,000 residential and business data customers[169] Net Income and Expenses - The company experienced a net income increase of 95.7%, reaching $86,532,000 for the three months ended September 30, 2025, compared to $44,215,000 in 2024[125] - Net income for the three months ended September 30, 2025, was $86.5 million, compared to $44.2 million in 2024[144] - Net loss for the nine months ended September 30, 2025, was $348.8 million, a significant decline from net income of $119.7 million for the same period in 2024, primarily due to non-cash asset impairments totaling $456.2 million[157] - Adjusted EBITDA for the nine months ended September 30, 2025, was $607.8 million, down 5.5% from $643.0 million in 2024[164] - Operating expenses (excluding depreciation and amortization) were $96.0 million, a decrease of $8.6 million or 8.2% compared to the prior year, with operating expenses as a percentage of revenues at 25.5%[137] - Selling, general and administrative expenses increased by $12.4 million, or 14.0%, totaling $100.8 million, with expenses as a percentage of revenues rising to 26.8%[138] Customer Metrics - Residential data PSUs decreased by 5.1% to 910,400 as of September 30, 2025, while residential video PSUs declined by 20.0% to 89,600[126] - The total number of customer relationships decreased by 4.4% to 1,042,300 as of September 30, 2025, compared to 1,089,800 in 2024[126] - Residential data service revenues decreased by $2.8 million, or 1.2%, primarily due to a decrease in residential data subscribers, despite a 3.2% increase in ARPU[132][133] - Residential video service revenues decreased by $8.7 million, or 16.2%, due to a decrease in residential video subscribers, partially offset by a rate adjustment[133] - Business data revenues increased by $0.2 million, or 0.4%, driven by growth in the fiber and carrier segments[134] Capital Expenditures and Investments - Capital expenditures for the three months ended September 30, 2025, were $71,765,000, a decrease of 6.8% from $76,970,000 in 2024[125] - Capital expenditures for the nine months ended September 30, 2025, totaled $211.3 million, with significant investments in customer premise equipment and scalable infrastructure[189] - The company has rolled out multi-Gigabit download data service to over 40% of its markets, enhancing network capacity and supporting future growth[120] Debt and Financing - The company authorized up to $450.0 million for share repurchases, with $143.1 million remaining as of September 30, 2025, and has repurchased 646,244 shares at a total cost of $556.9 million since going public in 2015[174] - The company suspended its quarterly cash dividend on common shares, resulting in annual savings of approximately $67 million, totaling over $200 million in the next three years, to be allocated for debt repayment and organic growth initiatives[175] - As of September 30, 2025, the company had $55.0 million in borrowings under the Revolving Credit Facility at an interest rate of 6.0%, with $1.195 billion available for borrowing[179] - The company repaid $173.0 million and $258.0 million of outstanding borrowings under the Revolving Credit Facility during the three and nine months ended September 30, 2025, respectively[179] - The company completed a $650.0 million offering of Senior Notes due 2030, bearing interest at 4.00% per annum, with semiannual payments starting May 15, 2021[180] Asset Impairments - Asset impairments totaled $586.0 million for the nine months ended September 30, 2025, primarily related to indefinite-lived franchise agreements and goodwill[152] - As of June 30, 2025, the company recorded a non-cash impairment charge of $497.2 million for its indefinite-lived franchise agreements intangible asset, with a carrying value of $2.1 billion[196] - The company also recognized a non-cash goodwill impairment charge of $88.8 million, with the implied fair value of goodwill falling below its carrying value of $929.6 million[197] - No additional impairments were identified during the third quarter of 2025, but future impairments may occur if cash flows decline or discount rates increase[198] Cash Flow and Liquidity - Net cash provided by operating activities decreased by 15.9% to $417.8 million for the nine months ended September 30, 2025, compared to $496.5 million in 2024[171] - Cash and cash equivalents at the end of the period were $166.6 million, down 26.5% from $226.6 million at the end of September 2024[171] - The company experienced a $108.2 million year-over-year increase in net cash used in financing activities, primarily due to a $142.1 million increase in debt repayments[173] Interest and Tax - Interest expense, net, for the nine months ended September 30, 2025, was $100.4 million, a decrease of $4.6 million or 4.4% compared to the previous year[153] - Income tax benefit for the nine months ended September 30, 2025, was $91.6 million, while the provision for 2024 was $47.5 million, resulting in effective tax rates of (26.9)% and 20.4%, respectively[155] Market and Risk Assessment - The decline in fair value of the franchise agreements was attributed to increased competition and a higher discount rate[196] - Market risk disclosures remain unchanged from the 2024 Form 10-K, with no material changes noted[200]

Company Overview - Cable One (NYSE:CABO) is a provider of high-speed internet, cable television, and telephone services, primarily serving smaller markets across the United States [3] Q3 CY2025 Financial Performance - In Q3 CY2025, Cable One reported revenue of $376 million, which represents a 4.5% year-on-year decline and fell short of analyst estimates of $378.9 million [6][8] - The company's GAAP profit was $14.52 per share, exceeding analysts' consensus estimates of $7.46 by 94.5% [6] - Adjusted EBITDA was $201.9 million, slightly below the expected $203 million, with a margin of 53.7% [6] - Operating margin decreased to 25.2% from 28% in the same quarter last year, while free cash flow margin also declined to 22.5% from 25.2% [6] Subscriber Metrics - Cable One reported 910,400 residential data subscribers, a decrease of 149,100 year-on-year [6][7] - The number of residential video subscribers was 58,400, with a significant average decline of 23.9% year-on-year over the last two years [7] Revenue Growth Trends - The company has experienced sluggish long-term revenue growth, with an annualized growth rate of only 3.1% over the past five years, which is below the benchmark for the consumer discretionary sector [4] - Revenue has fallen by 5.1% annually over the last two years, indicating a loss of previous gains [5] - Analysts project a further revenue decline of 2.8% over the next 12 months, although this is an improvement compared to the two-year trend [8]

Financial Performance - Total revenues for the third quarter of 2025 were $376.0 million, a decrease of $17.5 million or 4.5% compared to $393.6 million in the same quarter of 2024[6] - Net income increased to $86.5 million in the third quarter of 2025, up 95.7% from $44.2 million in the prior year quarter[8] - Adjusted EBITDA for the third quarter of 2025 was $201.9 million, down 5.5% from $213.6 million in the third quarter of 2024, with an Adjusted EBITDA margin of 53.7%[9] - Comprehensive income for Q3 2025 was $83,439,000, a significant increase from $13,056,000 in Q3 2024[32] - Net income for the three months ended September 30, 2025, was $86,532,000, a 95.7% increase from $44,215,000 in 2024[38] - The net profit margin improved to 23.0% from 11.2% in the previous year[38] Revenue Breakdown - Residential data revenues were $227.6 million, a decrease of $2.8 million or 1.2% year-over-year, while business data revenues increased by $0.2 million or 0.4%[6] - Residential video revenue declined by 16.2% to $44,971,000 from $53,650,000 year-over-year[32] - The average revenue per user (ARPU) for residential data increased by 3.2% to $82.17 from $79.61[43] Cash Flow and Operating Activities - The company experienced a net cash provided by operating activities of $156.5 million, down from $176.2 million in the same quarter of 2024[10] - Net cash provided by operating activities decreased by 11.2% to $156,519,000 from $176,209,000 year-over-year[40] Capital Expenditures and Debt Management - Capital expenditures for the third quarter of 2025 totaled $71.8 million, a decrease of 6.8% compared to $77.0 million in the prior year quarter[10] - Payments on long-term debt increased significantly to $194,545,000 from $54,704,000 year-over-year[40] - The company paid down $197.9 million of debt during the third quarter of 2025, bringing total debt paydowns for the year to $313.2 million[6] - Long-term debt reduced to $2,687,106,000 from $3,571,536,000[34] Customer Metrics - Total residential customers decreased by 5.4% to 934,200 from 987,100 in the prior year[43] - Total customers declined by 4.4% to 1,042,300 from 1,089,800 year-over-year[43] Operating Expenses - Operating expenses (excluding depreciation and amortization) decreased by 8.2% to $96,038,000[32] - Selling, general and administrative expenses increased by 14.0% to $100,835,000[32] Liquidity and Financial Position - As of September 30, 2025, the company had $1.195 billion of committed excess liquidity under its $1.25 billion capacity Revolver[6] - The weighted average cost of debt was 3.9% for the third quarter of 2025[6] - Total assets decreased to $5,694,391,000 from $6,525,895,000 as of December 31, 2024[34] - Equity investments decreased to $651,645,000 from $815,812,000[34] Strategic Focus - The company continues to focus on a multi-phase strategy to return to sustainable growth despite higher than expected churn in residential data customers[6]

Core Insights - Cable One Chief Operating Officer Ken Johnson has been inducted into the Cable TV Pioneers Class of 2025, highlighting his significant contributions to the cable and broadband industry [1] Industry Recognition - The Cable TV Pioneers, founded in 1966, honors leaders who have made lasting contributions to the cable industry and the communities they serve [1] - Ken Johnson's career is noted for reflecting the best practices in the industry, particularly his commitment to innovation [1]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Cable One (CABO) as a strong candidate for value investors due to its favorable financial metrics and Zacks Rank [1][2][7]. Company Analysis - Cable One (CABO) currently holds a Zacks Rank of 2 (Buy) and has a Value grade of A, indicating strong potential for value investors [4]. - The stock has a P/E ratio of 4.01, significantly lower than the industry average P/E of 7.26, suggesting it may be undervalued [4]. - CABO's Forward P/E has fluctuated between 3.61 and 11.51 over the past year, with a median of 7.87, indicating variability in market perception [4]. - The company has a P/B ratio of 0.64, which is also lower than the industry average P/B of 1.54, further supporting the notion of undervaluation [5]. - Over the past 12 months, CABO's P/B ratio has ranged from 0.40 to 1.27, with a median of 0.88, reflecting its market value relative to book value [5]. - The P/S ratio for CABO is 0.6, compared to the industry's average P/S of 0.73, reinforcing its position as a potentially undervalued stock [6]. - Overall, these metrics suggest that CABO is likely undervalued and presents an impressive value opportunity for investors [7].