Core Insights - Holzer & Holzer, LLC is investigating Cable One, Inc. for potential compliance issues with federal securities laws following a decline in residential data revenues reported on May 1, 2025 [1] - The decline in revenues was attributed to a decrease in residential data subscribers and a reduction in average revenue per unit (ARPU) due to targeted pricing and product offerings in certain markets [1] - Following the announcement of the first quarter results, Cable One's stock price experienced a drop [1] Company Performance - Cable One reported a decline in residential data revenues in the first quarter of 2025 [1] - The decrease in residential data subscribers contributed significantly to the revenue decline [1] - The implementation of targeted pricing and product offerings negatively impacted the average revenue per unit (ARPU) [1]

Core Insights - The communication services sector has several oversold stocks, presenting potential buying opportunities for undervalued companies [1][2] Company Summaries - **Fubotv Inc (FUBO)**: Reported a revenue of $405.96 million for the quarter, an 8.1% year-over-year increase, but missed the analyst consensus estimate of $415.45 million. The stock fell approximately 20% in the past five days, with a 52-week low of $1.10. The RSI value is 26.9, and shares closed at $2.42, down 17.4% [7] - **Cable One Inc (CABO)**: Announced disappointing first-quarter results, with a significant drop in residential data subscribers. The stock decreased around 43% over the past five days, reaching a 52-week low of $150.00. The RSI value is 12.2, and shares closed at $152.51, down 42.4% [7] - **Anterix Inc (ATEX)**: Launched the AnterixAccelerator initiative with an investment of up to $250 million. The stock fell about 9% over the past month, with a 52-week low of $27.37. The RSI value is 28.6, and shares closed at $29.84, down 0.4% [7]

Core Insights - Cable One (CABO) reported revenue of $380.6 million for the quarter ended March 2025, a decrease of 5.9% year-over-year, and an EPS of $12.32, up from $8.11 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $390.68 million, resulting in a surprise of -2.58%, while the EPS exceeded the consensus estimate of $12.21 by +0.90% [1] Revenue Breakdown - Residential Video revenue was $50.81 million, below the average estimate of $52.33 million, reflecting a year-over-year decline of -15.8% [4] - Residential Data revenue stood at $225.12 million, slightly below the $230.58 million estimate, marking a -4.5% change year-over-year [4] - Other revenues totaled $23.46 million, compared to the average estimate of $24.13 million, indicating a -1.2% year-over-year change [4] - Business services revenue (Business data + Business other) was $74.18 million, under the estimated $76.33 million, representing a -2.2% change from the previous year [4] - Residential Voice revenue reached $7.04 million, below the $7.32 million estimate, showing a year-over-year decline of -17.7% [4] Stock Performance - Over the past month, Cable One shares have returned -3.2%, compared to a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Cable One reported quarterly earnings of $12.32 per share, exceeding the Zacks Consensus Estimate of $12.21 per share, and showing a significant increase from $8.11 per share a year ago, indicating a positive earnings surprise of 0.90% [1] Financial Performance - The company posted revenues of $380.6 million for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 2.58% and decreased from $404.31 million year-over-year [2] - Over the last four quarters, Cable One has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once as well [2] Stock Performance - Cable One shares have declined approximately 26.2% since the beginning of the year, contrasting with the S&P 500's decline of 5.3% [3] - The current Zacks Rank for Cable One is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $9.81, with expected revenues of $386.37 million, while the estimate for the current fiscal year is $41.77 on $1.55 billion in revenues [7] - The trend of estimate revisions for Cable One has been unfavorable leading up to the earnings release [6] Industry Context - The Cable Television industry, to which Cable One belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting that companies in the top half tend to outperform those in the bottom half significantly [8]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $380.6 million, down from $404.3 million in Q1 2024, representing a decrease of 5.5% year over year [19] - Residential data revenues decreased by $10.7 million or 4.5% year over year, with residential data subscribers and ARPU both declining by 1.1% [19] - Net income for Q1 2025 was $2.6 million compared to $37.4 million in Q1 2024, driven by lower income from operations and increased non-cash equity method accounting loss [21] - Adjusted EBITDA was $203 million in Q1 2025, representing a 53.3% margin compared to $217 million and a 53.7% margin in Q1 2024 [21] - Capital expenditures were $71.1 million in Q1 2025, an increase of $5.2 million or 8% compared to Q1 2024 [21] Business Line Data and Key Metrics Changes - Business data revenues grew by 1.2% compared to Q1 2024, with strong performance in carrier and enterprise fiber businesses [20] - Residential video revenues decreased by $9.6 million or 15.8% year over year due to losses in video subscribers [19] Market Data and Key Metrics Changes - The company reported a historically low churn rate, with proactive measures in place to maintain customer retention [10][11] - The introduction of new products like FlexConnect and Internet Lift is expected to enhance customer acquisition and retention [12][13] Company Strategy and Development Direction - The company is executing a multiyear plan aimed at achieving sustained profitable growth in a competitive environment [6] - A decision was made to suspend the quarterly cash dividend to accelerate debt reduction and invest in organic growth initiatives [18][24] - The focus remains on long-term residential broadband customer and revenue growth while maintaining financial discipline [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to broadband revenue growth in 2025, despite a challenging first quarter [9][37] - The company is implementing a comprehensive plan to improve customer connects and retention, with early signs of improvement noted [11][46] - Management highlighted the importance of data-driven decision-making and strategic marketing to enhance customer acquisition [46][49] Other Important Information - The company has a debt balance of approximately $3.6 billion, with a commitment to reducing leverage below four times [25] - The anticipated monetization of investments is expected to generate over $100 million in after-tax proceeds [27] Q&A Session Summary Question: What led to the decision to eliminate the dividend? - Management clarified that the decision was based on capital allocation strategies and not due to any going concern or debt covenant issues [32] Question: When can the company expect to see broadband subscriber growth? - Management indicated that while they cannot specify an exact timeline, they believe they will deliver broadband revenue growth in 2025 [37] Question: What were the unusual churn events in the quarter? - Management identified several factors including billing migration activities and weather-related events as contributors to unusual churn [43] Question: What is the ARPU for the new products FlexConnect and Lyft? - Management stated that while specific ARPU figures are not available yet, they are seeing positive customer uptake in trials [55] Question: What percentage of the footprint is overbuilt with fiber? - Management confirmed that just over 50% of their footprint is overbuilt with fiber, consistent with previous reports [56]

Customer Metrics - As of March 31, 2025, the company served approximately 1.1 million residential and business customers out of 2.8 million passings, with 1,045,000 subscribing to data services, 108,000 to video services, and 103,000 to voice services[100]. - The company experienced a decline in residential data PSUs by 2.3% to 945,000 and a significant drop in residential video PSUs by 19.4% to 101,300[109]. - Business data PSUs increased by 0.8% to 99,800, indicating continued growth in this segment[109]. Financial Performance - Total revenues for the three months ended March 31, 2025, were $380.6 million, a decrease of 5.9% from $404.3 million in the same period of 2024[108]. - Net income for the same period was $2.6 million, down 93.0% from $37.4 million in 2024[108]. - Adjusted EBITDA for the three months ended March 31, 2025, was $202.7 million, a decrease of 6.6% from $217.1 million in 2024[108]. - Residential data service revenues decreased by $10.7 million, or 4.5%, primarily due to a decrease in subscribers and a 3.1% decrease in ARPU[115]. - Residential video service revenues decreased by $9.6 million, or 15.8%, mainly due to a decrease in subscribers, partially offset by a rate adjustment[115]. - Business data revenues increased by $0.7 million, or 1.2%, due to an increase in business data subscribers[116]. - Operating expenses (excluding depreciation and amortization) were $99.9 million, a decrease of $6.7 million or 6.3% compared to the prior year[117]. - Selling, general and administrative expenses increased by $5.0 million, or 5.6%, totaling $95.4 million for the three months ended March 31, 2025[118]. - Net income for the three months ended March 31, 2025, was $2.6 million, a significant decrease of $34.7 million or 93.0% compared to $37.4 million in 2024[124]. - Adjusted EBITDA for the three months ended March 31, 2025, was $202.7 million, a decrease of $14.3 million or 6.6% from $217.1 million in 2024[130]. Capital Expenditures and Investments - Capital expenditures increased by 8.0% to $71.1 million compared to $65.9 million in the previous year[108]. - The company plans to continue investing in infrastructure improvements and expanding high-speed data services in existing and newly acquired markets[104]. - The company has ongoing capital expenditure requirements, with total capital expenditures for the three months ended March 31, 2025, amounting to $71.1 million, an increase from $65.9 million in the same period of 2024[152]. Cash Flow and Debt Management - Net cash provided by operating activities decreased by $48.4 million year-over-year to $116.3 million, a decline of 29.4%[136]. - Net cash used in investing activities decreased by $13.4 million year-over-year to $56.6 million, primarily due to $10.7 million from the sale of an equity investment[137]. - Net cash used in financing activities decreased by $10.0 million year-over-year to $64.3 million, mainly due to lower debt repayments[138]. - The company had $149.1 million in cash and cash equivalents at the end of the period, down 29.3% from $210.7 million a year earlier[136]. - As of March 31, 2025, the company had $273.0 million in borrowings under the Revolving Credit Facility at an average interest rate of 6.2%[143]. - The company is party to two interest rate swap agreements to convert $1.2 billion of variable rate SOFR indebtedness to fixed rates, with fixed base rates of 2.595% and 2.691%[150]. - The unamortized debt discount associated with the Convertible Notes was $6.7 million as of March 31, 2025[148]. - As of March 31, 2025, the company had outstanding Senior Notes of $650.0 million, 2026 Notes of $575.0 million, and 2028 Notes of $345.0 million[160]. - The fair market values of the Senior Notes, 2026 Notes, and 2028 Notes were $514.3 million, $545.5 million, and $274.3 million, respectively[160]. Dividend and Share Repurchase - A quarterly dividend of $2.95 per share was approved, resulting in a total distribution of $17.2 million, but the company plans to suspend future dividends, saving approximately $67 million annually[140]. - The company has repurchased 646,244 shares of common stock at an aggregate cost of $556.9 million since becoming publicly traded, with $143.1 million remaining under the share repurchase authorization[139]. Strategic Focus - The strategy focuses on growing higher-margin residential and business data services while de-emphasizing the video business due to escalating programming costs[101]. - The company aims to achieve long-term growth in Adjusted EBITDA and profit margins through disciplined cost management and targeted pricing strategies[105]. Overall Revenue Summary - MBI's total revenues for the twelve months ended March 31, 2025, were approximately $320 million, with around 220,000 residential and business data customers[134]. - Total revenues for the three months ended March 31, 2025, were $380.6 million, a decrease of $23.7 million or 5.9% compared to $404.3 million in the same period of 2024[114].

Financial Data and Key Metrics Changes - For Q1 2025, total revenues were $380.6 million, down from $404.3 million in Q1 2024, representing a decrease of 5.6% year over year [18] - Residential data revenues decreased by $10.7 million or 4.5% year over year, with residential data subscribers and ARPU both declining by 1.1% [18] - Net income for Q1 2025 was $2.6 million, compared to $37.4 million in Q1 2024, driven by lower income from operations and increased non-cash equity method accounting loss [20] - Adjusted EBITDA was $203 million in Q1 2025, representing a 53.3% margin, compared to $217 million and a 53.7% margin in Q1 2024 [20] - Capital expenditures were $71.1 million, an increase of $5.2 million or 8% from Q1 2024 [20] Business Line Data and Key Metrics Changes - Business data revenues grew by 1.2% compared to Q1 2024, with strong performance in carrier and enterprise fiber businesses [19] - Residential video revenues decreased by $9.6 million or 15.8% year over year, driven by losses in video subscribers [19] Market Data and Key Metrics Changes - The company reported a churn rate that remained historically low, despite unusual churn events in Q1 2025 [7][8] - The company is experiencing competitive pressure from mobile operators in nearly all markets, which has not changed significantly [57] Company Strategy and Development Direction - The company is executing a multiyear plan aimed at achieving sustained profitable growth in a competitive environment [5] - A revised capital allocation strategy has been implemented, including the suspension of the quarterly cash dividend to accelerate debt repayment and invest in organic growth initiatives [17][22] - New product offerings such as FlexConnect and Internet Lift are being piloted to attract value-conscious customers and drive growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to broadband revenue growth in 2025, despite a slow start in Q1 [36] - The company is focused on improving customer acquisition and retention through enhanced strategies and new product offerings [9][12] - Management highlighted the importance of a disciplined and strategic approach to customer engagement and retention [46] Other Important Information - The company has a debt balance of approximately $3.6 billion, with a weighted average cost of debt at 3.9% [24] - The company plans to maintain a balanced approach to capital allocation while focusing on long-term growth initiatives [22] Q&A Session Summary Question: What led to the decision to eliminate the dividend? - Management clarified that the decision was based on capital allocation strategies and not due to any going concern or debt covenant issues [31] Question: When can the company expect to see broadband subscriber growth? - Management indicated that while they cannot specify an exact timeline, they believe they will deliver broadband revenue growth in 2025 [36] Question: What were the unusual churn events in the quarter? - Management explained that the unusual churn was due to several factors, including billing migration activities and weather-related events [43] Question: What is the ARPU for the new products FlexConnect and Lyft? - Management stated that while they cannot provide specific ARPU figures yet, they are seeing positive trends in customer satisfaction and data usage for these products [55]

Financial Performance - Total revenues for the first quarter of 2025 were $380.6 million, a decrease of $23.7 million or 5.9% compared to $404.3 million in the first quarter of 2024[3]. - Net income for the first quarter of 2025 was $2.6 million, down 93.0% from $37.4 million in the prior year quarter, resulting in a net profit margin of 0.7%[3][8]. - Adjusted EBITDA for the first quarter of 2025 was $202.7 million, a decrease of $14.3 million or 6.6% from $217.1 million in the first quarter of 2024, with an Adjusted EBITDA margin of 53.3%[3][9]. - The company reported a comprehensive loss of $12.4 million for Q1 2025, compared to a comprehensive income of $55.6 million in Q1 2024, marking a decline of 122.3%[31]. - Basic net income per share decreased to $0.46, a decline of 93.1% from $6.65 in the same period last year[31]. - The net profit margin for Q1 2025 was 0.7%, down from 9.2% in Q1 2024[38]. Revenue Breakdown - Residential data revenues decreased by $10.7 million or 4.5% year-over-year to $225.1 million, primarily due to a reduction in subscribers and a 3.1% decrease in average revenue per unit (ARPU)[6][7]. - Residential video revenue fell by 15.8% to $50.8 million[31]. - Business data revenues grew by 1.2% year-over-year, indicating durable growth in the carrier and enterprise fiber segments[6]. - Average Revenue Per User (ARPU) for residential data decreased by 3.1% to $78.84 from $81.33[41]. - The percentage of total non-video services increased to 89.7% from 87.6% year-over-year[41]. Cash Flow and Debt Management - Cash flows from operating activities were $116.3 million in the first quarter of 2025, down 29.4% from $164.8 million in the first quarter of 2024[3][10]. - The company repaid $40.0 million under its revolving credit facility during the first quarter of 2025, with total net debt paydowns since March 31, 2023, amounting to $271.3 million[6][12]. - The company plans to suspend the quarterly cash dividend, which represents approximately $67 million annually, to allocate funds for debt repayment and organic growth initiatives[14]. - As of March 31, 2025, the company had $149.1 million in cash and cash equivalents and a debt balance of $3.57 billion[11]. - Long-term debt decreased to $2.95 billion from $3.57 billion at the end of 2024[34]. Customer Metrics - Total residential customers decreased by 3.0% to 970.1 thousand from 999.8 thousand year-over-year[41]. - Total customers declined by 2.5% to 1,075.1 thousand from 1,102.4 thousand in the previous year[41]. Operating Expenses - Operating expenses (excluding depreciation and amortization) decreased by 6.3% to $99.9 million[31]. - Capital expenditures for the first quarter of 2025 totaled $71.1 million, an increase of 8.0% from $65.9 million in the first quarter of 2024[3][10]. - Capital expenditures increased by 8.0% to $71,130 compared to $65,887 in Q1 2024[39]. Investment Income - Equity method investment income (loss) showed a significant decline, with a loss of $57.0 million compared to a loss of $22.0 million in Q1 2024, representing a 158.6% increase in losses[31]. - Equity method investment income increased significantly by 158.6% to $56,990 from $22,036 year-over-year[38]. Asset Overview - Total assets as of March 31, 2025, were $6.42 billion, down from $6.53 billion at the end of 2024[34]. - Cash and cash equivalents were $149.1 million, slightly down from $153.6 million at the end of 2024[34].

Financial Data and Key Metrics Changes - For Q4 2024, total revenues were $387.2 million, a decrease of 6% year-over-year from $411.8 million in Q4 2023 [36] - Residential data revenues decreased by 5.4%, while business data revenues increased by 2.3% year-over-year [37] - Net loss for Q4 2024 was $105.2 million compared to a net income of $103.5 million in Q4 2023, primarily due to non-cash charges related to MBI investments [39] - Adjusted EBITDA was $211 million, a decrease of 7% compared to the prior year quarter, with an adjusted EBITDA margin of 54.5% [41] - For the full year 2024, total revenues were $1.58 billion, a decrease of 5.9% from 2023 [43] - Net income for 2024 was $14.5 million compared to $224.6 million in 2023, impacted by a combined $186.5 million non-cash loss associated with MBI [47] Business Line Data and Key Metrics Changes - Residential data PSUs decreased by 5,500 during 2024, including approximately 10,000 ACP customers who disconnected due to the program ending [43] - Business data revenue increased by 2.6%, driven by a gain of over 1,400 PSUs and strong demand from high-value carrier, wholesale, and enterprise customers [45] - ARPU for residential data customers was $80.39 for 2024, a decrease of 4.9% from 2023, but stabilized in the second half of the year due to various initiatives [44] Market Data and Key Metrics Changes - The company experienced above-average churn activity among remaining ACP customers in early Q4 2024 [37] - The competitive landscape is evolving, with new competition from third-party overbuilders moderating in the company's markets [16] - The company believes incumbent fiber builds reduce the chance of new third-party entrants, maintaining a two-party market favorable to its long-term economics [18] Company Strategy and Development Direction - The company is executing a phased plan for long-term growth, focusing on broadband revenue growth as a top priority [10] - Strategic initiatives include migrating acquired operations to a unified billing system and enhancing customer experience through intelligent Wi-Fi and cybersecurity solutions [26][30] - The company aims to leverage its network capabilities and customer experience to differentiate itself in a competitive landscape [20][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth of business data services and the ability to navigate competitive dynamics effectively [16][18] - The company anticipates that the foundational actions taken in 2024 will lead to smart, balanced, and sustainable growth in 2025 [34][58] - Management highlighted the importance of customer experience and operational efficiencies as key drivers for future growth [22][31] Other Important Information - The company completed the rebranding of acquired companies and achieved 100% aided awareness for its Sparklight brand [27] - Capital expenditures for 2024 totaled $286.4 million, with a focus on new market expansion and integration activities [48] - The company distributed $67.9 million in dividends to shareholders and repaid $238.1 million of debt in 2024 [52] Q&A Session Summary Question: Thoughts on addressing the MBI call option and 2026 converts - Management discussed the flexibility gained from the strategic amendment to the MBI partnership, which enhances liquidity for near-term refinancing strategies [65][66] Question: Future ARPU trends and growth strategies - Management indicated that various strategies will be employed to grow units and expand ARPU, depending on market conditions [70][72] Question: Churn dynamics and subscriber growth - Management clarified that churn was actually the second lowest in the last three years for Q4 2024, despite some unique headwinds affecting performance [94] Question: Insights on competitive dynamics and market share - Management noted that the competitive landscape is changing, with less independent overbuilding and a focus on defending their market position [106][110] Question: Expectations for fiber overlap and market share - Management expects fiber overlap to increase, particularly from incumbent telcos, but remains confident in their competitive positioning [117][120]

Cable One (CABO) came out with quarterly earnings of $1.53 per share, missing the Zacks Consensus Estimate of $9.91 per share. This compares to earnings of $10.66 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -84.56%. A quarter ago, it was expected that this telecommunications company would post earnings of $9.93 per share when it actually produced earnings of $7.92, delivering a surprise of -20.24%.Over the last four quarte ...