Cable One(US:CABO)2022-11-05 19:52Financial Data and Key Metrics Changes - Total revenues for Q3 2022 were $424.7 million, a decrease of 1.3% from $430.2 million in Q3 2021, primarily due to divested operations [32] - Adjusted total revenues increased by 1.4%, with residential broadband revenue growing by 5.7% and business services revenue growing by 5% [6][33] - Adjusted EBITDA was $224.6 million, an increase of 1.9% year-over-year, with an adjusted EBITDA margin of 52.9% [35] - Capital expenditures totaled $100.5 million, equating to 44.7% of adjusted EBITDA, with adjusted EBITDA less capital expenditures increasing by 24.6% [36] Business Line Data and Key Metrics Changes - Residential Internet service added approximately 30,000 customers year-over-year, representing a 3.2% growth [11] - The percentage of customers on packages with download speeds of 300 Mbps or higher increased from 59% to 64%, with gig sell-in accelerating from 28% to nearly 32% [12] - Business services revenue growth was 5% when excluding divested operations, indicating resilience despite macroeconomic pressures [16] Market Data and Key Metrics Changes - As of Q3, 33% of markets had a wired competitor offering residential broadband download speeds of 100 Mbps or higher, a relatively low percentage [13] - Average data usage grew by 19% year-over-year, reaching over 580 gigabits per month, with nearly 20% of customers using more than a terabyte of data monthly [17] Company Strategy and Development Direction - The company focuses on rural markets, leveraging a high-capacity network and local associates to drive growth [7][8] - A strategic pivot away from video services towards high-speed data and business services is underway, with plans to enhance service offerings in the coming year [19] - The company is investing in partnerships, such as a $50 million investment in ZiplyFiber, to expand broadband services in rural areas [42] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in consumer move activity and pressures on small businesses due to a weakening economic environment [10] - Despite challenges, the company remains confident in its ability to grow, citing low customer churn and a strong demand for high-speed services [11][9] - Management emphasized the importance of adapting to the changing environment and exploring new tactics to attract customers [45] Other Important Information - The company increased its quarterly dividend from $2.75 to $2.85 per share, distributing $16.7 million in dividends during the quarter [37] - The company repurchased 89,000 shares for approximately $115 million in Q3, totaling nearly $307 million year-to-date [37] Q&A Session Summary Question: Can you provide insight on the dramatic decrease in move activity? - Management attributed the decrease to higher interest rates causing people to pause moving, affecting connects [44] Question: What are the drivers for ARPU acceleration? - Management indicated that selling higher-tier services and correcting previous pricing strategies would drive ARPU growth [48] Question: What are the plans regarding wireless products? - Management is monitoring the wireless market but has no immediate plans to enter, focusing instead on current growth opportunities [58] Question: How do you plan to ensure consistent growth in HSD adds over the next year? - Management emphasized the need to innovate and find new customer cohorts while maintaining service quality [61] Question: What are the impacts of inflation on costs? - Management acknowledged inflationary pressures on wages and fuel but noted that they have managed to keep margins consistent [68]