Cable One(US:CABO)2020-05-12 03:46Financial Data and Key Metrics Changes - Revenues for Q1 2020 were $231.2 million, a 15.3% increase compared to $278.6 million in the prior year quarter, driven by a 19.4% increase in residential HST revenue and a 22.7% increase in business services revenue [36] - Net income for Q1 2020 was $69.3 million, with a net income per share of $12.05 [37] - Adjusted EBITDA was $157.7 million, an 18.5% increase year-over-year, with an adjusted EBITDA margin increase of 130 basis points from 47.8% to 49.1% [38] Business Line Data and Key Metrics Changes - Residential agency sales saw an uptick, adding more than 18,000 customers in Q1 2020, with a year-over-year growth rate of 4.2% [24] - Business services revenue grew by 22.7% year-over-year, but faced pressure from the COVID-19 pandemic, particularly affecting small business customers [29] - The average data consumption per customer increased by more than 34% year-over-year, reaching nearly 390 gigabits per month [26] Market Data and Key Metrics Changes - The company experienced a significant increase in demand for reliable high-speed data connections due to the pandemic, with residential agency sales continuing to grow into Q2 2020 [24] - The company added more residential agency customers in the first month of Q2 than in the entire first quarter [24] - Monthly recurring revenue for commercial customers decreased by approximately 1% due to paused or downgraded services [29] Company Strategy and Development Direction - The company has shifted its strategic focus to prioritize residential agency and business services while deemphasizing video, which has proven beneficial during the pandemic [22] - The company is committed to maintaining connectivity for customers during the pandemic, implementing various initiatives to support communities [13][19] - The company plans to continue pursuing acquisitions and investments in broadband-related opportunities, particularly in rural markets [45] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty of the current environment but expressed confidence in the company's ability to weather the storm and emerge stronger [21] - The company anticipates negative impacts in Q2 2020 from lower data overage fees, late charges, and increased expenses due to COVID-19 [43] - Management believes that the critical importance of high-speed internet will continue to grow, positioning the company well for future growth [33] Other Important Information - The company has invested over $600 million in the past three years to enhance its infrastructure and support increased data consumption [27] - The company has implemented a 25% premium pay for hourly associates required to work during the pandemic [9] - The company has opened over 140 free Wi-Fi hotspots for public use during the crisis [15] Q&A Session Summary Question: Can you quantify the number of subscribers on the FCC pledge or the $15 megabit offer? - The company reported that less than 2% of customers are on the $15 megabit plan, while all customers are covered under the FCC pledge [48] Question: How many accounts are in arrears? - The company indicated that there are about 10,000 more accounts past due than usual [50] Question: What is the impact of M&A in the current environment? - The company is making joint venture investments in two fixed wireless companies, with no immediate new opportunities arising due to market conditions [52] Question: What is the status of the SMB business? - SMB represents about half of business services revenues, with 1% of recurring revenues paused or downgraded [78] Question: What is the interest level from private equity in acquisitions? - Private equity and infrastructure funds remain interested in the telecommunications space, with ongoing discussions about potential opportunities [71]