Cable One(CABO) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Overview This section provides a high-level summary of Cable One's financial performance and key strategic insights for the second quarter of 2025 Q2 2025 Financial Highlights Cable One reported total revenue of $381.1 million, a 3.4% year-over-year decrease, with a net loss of $438.0 million primarily due to a non-cash asset impairment charge Q2 2025 Key Financial Data (USD in thousands) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :----------------------- | :------------- | :------------- | :------- | :------- | | Revenue | 381,072 | 394,461 | (13,389) | (3.4)% | | Net Income (Loss) | (437,976) | 38,152 | (476,128)| NM | | Net Income Margin | (114.9)% | 9.7% | | | | Cash Flow from Operating Activities | 144,942 | 155,548 | (10,606) | (6.8)% | | Adjusted EBITDA | 203,214 | 212,372 | (9,158) | (4.3)% | | Adjusted EBITDA Margin | 53.3% | 53.8% | | | | Capital Expenditures | 68,374 | 71,592 | (3,218) | (4.5)% | | Adjusted EBITDA less Capital Expenditures | 134,840 | 140,780 | (5,940) | (4.2)% | - Total revenue was $381.1 million, a 3.4% year-over-year decrease, with $9.0 million of the decline attributed to residential video revenue reduction[5] - Net loss of $438.0 million primarily included a $456.2 million (after-tax) non-cash asset impairment charge[5] CEO Commentary CEO Julie Laulis noted a slight sequential increase in residential data revenue and monthly growth in residential broadband customer connections, while implementing strategies for improved customer response - Residential data revenue saw a slight sequential increase, and residential broadband customer connections grew month-over-month in the first half of the year[3] - The company is simplifying pricing, segmenting marketing activities, and enhancing product and service value to improve customer response and operational performance[3] Detailed Financial Performance (Q2 2025 vs Q2 2024) This section provides a detailed comparison of Cable One's financial performance across various segments and metrics for Q2 2025 versus Q2 2024 Revenues by Segment Total revenue for Q2 2025 was $381.1 million, a 3.4% year-over-year decrease, with residential data slightly down and business data up due to carrier and enterprise fiber growth Q2 2025 Revenue Changes by Segment (USD in millions) | Revenue Category | Q2 2025 | Q2 2024 | Change ($ millions) | Change (%) | | :------------- | :------ | :------ | :------------------ | :------- | | Residential Data | 229.3 | 230.4 | (1.1) | (0.5)% | | Residential Video| 48.2 | 57.2 | (9.0) | (15.8)% | | Business Data | 57.4 | 56.7 | 0.7 | 1.2% | | Total Revenue | 381.1 | 394.5 | (13.4) | (3.4)% | - Residential data revenue decreased by 0.5%, primarily due to fewer subscribers, partially offset by a 2.4% increase in Average Revenue Per User (ARPU)[7] - Business data revenue grew by 1.2%, driven by continued growth in carrier and enterprise fiber businesses[7] Net Income (Loss) and Profit Margins The company reported a net loss of $438.0 million in Q2 2025, a significant shift from a net income of $38.2 million in the prior year, primarily due to a non-cash asset impairment charge Net Income (Loss) and Profit Margin Comparison (USD in millions) | Metric | Q2 2025 | Q2 2024 | Change ($ millions) | Change (%) | | :------------- | :------ | :------ | :------------------ | :------- | | Net Income (Loss)| (438.0) | 38.2 | (476.2) | NM | | Net Income Margin| (114.9)%| 9.7% | | | - The net loss was primarily due to a non-cash asset impairment charge totaling $456.2 million (after-tax)[8] Adjusted EBITDA and Margin Adjusted EBITDA for Q2 2025 was $203.2 million, a 4.3% decrease year-over-year, with the Adjusted EBITDA margin slightly declining to 53.3% Adjusted EBITDA and Margin Comparison (USD in millions) | Metric | Q2 2025 | Q2 2024 | Change ($ millions) | Change (%) | | :------------------- | :------ | :------ | :------------------ | :------- | | Adjusted EBITDA | 203.2 | 212.4 | (9.2) | (4.3)% | | Adjusted EBITDA Margin | 53.3% | 53.8% | | | Cash Flows and Capital Expenditures Net cash provided by operating activities decreased by 6.8% to $144.9 million in Q2 2025, primarily due to lower Adjusted EBITDA, while capital expenditures also saw a decline Cash Flows and Capital Expenditures Comparison (USD in millions) | Metric | Q2 2025 | Q2 2024 | Change ($ millions) | Change (%) | | :--------------------------- | :------ | :------ | :------------------ | :------- | | Net Cash Provided by Operating Activities | 144.9 | 155.5 | (10.6) | (6.8)% | | Capital Expenditures | 68.4 | 71.6 | (3.2) | (4.5)% | | Adjusted EBITDA less Capital Expenditures | 134.8 | 140.8 | (6.0) | (4.2)% | - The decrease in net cash provided by operating activities was primarily attributable to lower Adjusted EBITDA[5] Asset Impairments Cable One recognized a total asset impairment of $586.0 million in Q2 2025, including indefinite-lived franchise agreements and goodwill, triggered by a decline in the company's stock price - The impairment assessment was triggered by a decline in the company's stock price during the second quarter[11] Asset Impairment Details (USD in millions) | Asset Category | Impairment Amount | | :----------------------------- | :---------------- | | Indefinite-Lived Franchise Agreements | 497.2 | | Goodwill | 88.8 | | Total | 586.0 | - The impairment charges do not affect the company's cash flows, operating strategies, growth plans, or ability to renew existing franchise agreements[11] Liquidity and Capital Resources As of June 30, 2025, the company held $152.9 million in cash, with total debt of $3.50 billion and $1.02 billion in committed excess liquidity under its revolving credit facility Liquidity and Debt Status (USD in millions) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Cash and Cash Equivalents| 152.9 | 153.6 | | Debt Balance | 3,500 | 3,620 | | Revolving Credit Facility Borrowings | 228.0 | N/A | | Revolving Credit Facility Committed Excess Liquidity | 1,020 | N/A | - The company repaid or retired $70.8 million of debt during the quarter, including $45.0 million in revolving credit facility repayments[5][13] - Total net debt repayments since March 31, 2023, amounted to $342.1 million[5] - The weighted average cost of debt for Q2 2025 was 3.9%[5] Capital Expenditures by Category Total capital expenditures for Q2 2025 were $68.4 million, a decrease from the prior year, with reductions in customer premise equipment, scalable infrastructure, line extensions, and upgrade/rebuilds Q2 2025 Capital Expenditures by Category (USD in thousands) | Category | Q2 2025 | Q2 2024 | | :------------------- | :--------- | :--------- | | Customer Premise Equipment | 11,104 | 15,411 | | Business | 5,499 | 2,955 | | Scalable Infrastructure | 7,211 | 9,472 | | Line Extensions | 17,366 | 18,372 | | Upgrade/Rebuild | 4,261 | 7,288 | | Support Capital | 22,933 | 18,094 | | Total | 68,374 | 71,592 | - Total capital expenditures decreased by 4.5% year-over-year[3] Operating Statistics This section presents key operational metrics including customer and Primary Service Unit (PSU) data, as well as Average Revenue Per User (ARPU) across different service categories Customer and PSU Data As of June 30, 2025, total customers decreased by 3.2% to 1.06 million, with residential customers down and business customers up, while total PSUs declined by 5.2% Customer and PSU Data (as of June 30, 2025, in thousands) | Metric | 2025 | 2024 | Change | Change (%) | | :------------------- | :---------- | :---------- | :------- | :------- | | Residential Customers| 955.8 | 992.9 | (37.1) | (3.7)% | | Business Customers | 104.7 | 102.8 | 1.8 | 1.8% | | Total Customers | 1,060.5 | 1,095.7 | (35.2) | (3.2)% | | Data PSUs | 1,031.3 | 1,062.8 | (31.5) | (3.0)% | | Video PSUs | 102.3 | 126.0 | (23.7) | (18.8)% | | Voice PSUs | 99.4 | 111.6 | (12.2) | (10.9)% | | Total PSUs | 1,233.0 | 1,300.4 | (67.4) | (5.2)% | ARPU Data In Q2 2025, residential data ARPU increased by 2.4% to $81.23, and residential video ARPU grew by 4.2% to $162.52, while residential voice and business services ARPU declined Q2 2025 ARPU Data (USD) | ARPU Category | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--------------- | :------ | :------ | :--------- | :------- | | Residential Data | $81.23 | $79.36 | $1.87 | 2.4% | | Residential Video| $162.52 | $155.95 | $6.57 | 4.2% | | Residential Voice| $35.41 | $36.75 | ($1.34) | (3.6)% | | Business Services| $234.93 | $244.52 | ($9.59) | (3.9)% | Condensed Consolidated Financial Statements This section provides a summary of the company's condensed consolidated statements of operations, balance sheets, and cash flows for the reported period Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For Q2 2025, the company reported total revenue of $381.1 million, an operating loss of $489.3 million, and a net loss of $438.0 million, significantly impacted by asset impairment Q2 2025 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Summary (USD in thousands) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :------------------------- | :------------- | :------------- | :------- | :------- | | Total Revenue | 381,072 | 394,461 | (13,389) | (3.4)% | | Operating (Loss) | (489,323) | 110,137 | (599,460)| NM | | Net Income (Loss) | (437,976) | 38,152 | (476,128)| NM | | Basic Net Income (Loss) Per Share | (77.70) | 6.79 | (84.49) | NM | - Asset impairment charges of $586.0 million were the primary cause of the operating and net losses[35] Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $5.77 billion, a decrease from December 31, 2024, primarily due to the impairment of intangible assets and goodwill Condensed Consolidated Balance Sheets Summary (USD in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Total Assets | 5,773,584 | 6,525,895 | | Total Liabilities | 4,436,190 | 4,729,863 | | Total Stockholders' Equity | 1,337,394 | 1,796,032 | | Intangible Assets, Net | 2,004,503 | 2,532,855 | | Goodwill | 840,826 | 929,609 | - The significant decrease in intangible assets and goodwill reflects the asset impairment recognized during the quarter[37] Condensed Consolidated Statements of Cash Flows In Q2 2025, net cash provided by operating activities was $144.9 million, with net cash used in investing activities of $74.0 million and financing activities of $67.1 million Q2 2025 Condensed Consolidated Statements of Cash Flows Summary (USD in thousands) | Cash Flow Category | Q2 2025 | Q2 2024 | | :--------------------- | :--------- | :--------- | | Net Cash Provided by Operating Activities | 144,942 | 155,548 | | Net Cash Used in Investing Activities | (74,037) | (92,766) | | Net Cash Used in Financing Activities | (67,117) | (71,997) | | Cash and Cash Equivalents, End of Period | 152,876 | 201,518 | - The decrease in cash flow from operating activities was primarily due to the net loss, offset by adjustments for non-cash items like depreciation, amortization, and asset impairment[39] Non-GAAP Financial Measures This section defines and explains the rationale for using non-GAAP financial measures such as Adjusted EBITDA and Adjusted EBITDA less Capital Expenditures to assess business performance and liquidity Definitions of Non-GAAP Measures The company utilizes non-GAAP metrics like Adjusted EBITDA and Adjusted EBITDA Margin to provide a clearer view of core operations by excluding non-cash or special items - “Adjusted EBITDA” is defined as net income (loss) plus net interest expense, income tax provision (benefit), depreciation and amortization, share-based compensation, severance and contract termination costs, acquisition-related costs, net (gain) loss on asset sales and disposals, system conversion costs, rebranding costs, net (gain) loss on equity method investments, asset impairment, executive search costs, other net (gain) expense, and any applicable special items[22] - “Adjusted EBITDA Margin” is defined as Adjusted EBITDA divided by total revenue[23] - “Adjusted EBITDA less Capital Expenditures” is a liquidity measure calculated as net cash provided by operating activities, excluding capital expenditures, net interest expense, amortization of debt discount and issuance costs, income tax provision (benefit), changes in operating assets and liabilities, changes in deferred income taxes, and any applicable special items[24] Rationale for Use These non-GAAP metrics help investors evaluate operational performance, measure the ability to fund operations and investments, and are commonly used for industry comparisons - The company uses these non-GAAP measures to evaluate its performance and as an indicator of its ability to fund operations and make additional investments with internally generated funds[26] - Adjusted EBITDA is generally consistent with the measure used in the company’s credit agreement and non-convertible senior unsecured notes indenture for leverage ratio calculations to determine compliance with covenants[26] - These measures are commonly used by investors, analysts, and peers to compare performance within the company’s industry[28] Reconciliations of Non-GAAP Measures This section provides detailed reconciliation tables from GAAP net income (loss) to Adjusted EBITDA and from net cash provided by operating activities to Adjusted EBITDA less Capital Expenditures Net Income (Loss) to Adjusted EBITDA Reconciliation (USD in thousands) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--------------------------------- | :------------- | :------------- | :------- | :------- | | Net Income (Loss) | (437,976) | 38,152 | (476,128)| NM | | Add: Net Interest Expense | 33,905 | 34,964 | (1,059) | (3.0)% | | Income Tax Provision (Benefit) | (117,575) | 14,069 | (131,644)| NM | | Depreciation and Amortization | 86,118 | 85,314 | 804 | 0.9% | | Share-Based Compensation | 10,048 | 7,111 | 2,937 | 41.3% | | Asset Impairment | 586,017 | — | 586,017 | NM | | Adjusted EBITDA | 203,214 | 212,372 | (9,158)| (4.3)% | Net Cash Provided by Operating Activities to Adjusted EBITDA less Capital Expenditures Reconciliation (USD in thousands) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--------------------------------- | :------------- | :------------- | :------- | :------- | | Net Cash Provided by Operating Activities | 144,942 | 155,548 | (10,606) | (6.8)% | | Capital Expenditures | (68,374) | (71,592) | 3,218 | (4.5)% | | Net Interest Expense | 33,905 | 34,964 | (1,059) | (3.0)% | | Income Tax Provision (Benefit) | (117,575) | 14,069 | (131,644)| NM | | Changes in Deferred Income Taxes | 140,217 | 9,333 | 130,884 | NM | | Adjusted EBITDA less Capital Expenditures | 134,840 | 140,780 | (5,940)| (4.2)% | Company Information This section provides an overview of Cable One, details regarding the conference call, and important disclosures about forward-looking statements and associated risk factors About Cable One Cable One, Inc. (NYSE:CABO) is a leading broadband communications provider serving over one million residential and business customers across 24 states through its Sparklight® brand - Cable One is a leading broadband communications provider, serving over 1 million residential and business customers across 24 states through its Sparklight® brand[29] - The company is committed to innovation, reliability, and customer experience, connecting communities and bridging the digital divide through robust infrastructure and cutting-edge technology[29][30] Conference Call and Additional Information Cable One will host a conference call on July 31, 2025, to discuss Q2 results, with webcast and replay available on its investor relations website, and further details in the 10-Q report - The company will host a conference call to discuss Q2 results on July 31, 2025, at 5:00 p.m. ET[17] - A webcast and replay of the conference call will be available on the Cable One investor relations website at ir.cableone.net[17][18] - Investors should read this press release in conjunction with the company’s Q2 2025 Form 10-Q quarterly report filed with the SEC[19] Forward-Looking Statements and Risk Factors This press release contains forward-looking statements subject to risks and uncertainties, including competition, technological changes, AI use, programming costs, supply chain disruptions, and asset impairment - Forward-looking statements are based on current expectations, estimates, assumptions, and projections, and actual results may differ materially from these statements[32] - Significant risk factors include increased competition from historical and new entrants, technological changes, risks associated with AI use, ability to grow residential and business data revenue and customer base, increased programming costs and retransmission fees, supply chain disruptions, and impairment of intangible assets and goodwill[32] - Additional risks include regulatory changes, debt levels and their impact on the business, ability to pay dividends, and ability to retain key employees[32][34]