Shentel(US:SHEN)2022-08-05 21:06Financial Data and Key Metrics Changes - Broadband revenue grew 9.2% to $61.4 million, driven by an 8.9% increase in residential and SMB revenue, primarily due to a 138.9% increase in Glo Fiber data RGUs [13][14] - Consolidated revenue grew 8.8% to $66 million, attributed to growth in Broadband and Tower revenues of 9.2% and 1.9% respectively [16] - Consolidated adjusted EBITDA increased 16.4% to $18.6 million, driven by a 10.2% increase in Broadband adjusted EBITDA and an 8.6% decline in corporate expenses [17][18] Business Line Data and Key Metrics Changes - Glo Fiber data net additions were approximately 3,300, increasing sequentially almost 39% [9][10] - Glo Fiber represented over half of residential and SMB revenue growth, with almost 19,000 new Glo Fiber passings added in the quarter [11][13] - The Tower segment revenue grew by $100,000 to $4.7 million, primarily due to a 3.8% increase in tenants [16] Market Data and Key Metrics Changes - Glo Fiber customer relationships more than doubled over the past year to over 17,000 [28] - The broadband data penetration rate across all markets remained steady at 15.2% [27] - Incumbent cable broadband data RGUs grew approximately 4.3% year-over-year, with a data penetration increase from 49.1% to 51% [32][34] Company Strategy and Development Direction - The company continues to focus on its Fiber First strategy, expanding its fiber network and customer acquisition [8][10] - Plans to ramp up construction to over 100,000 additional fiber passings in 2023, with a goal of 150,000 total fiber passings by the end of 2022 [24][45] - The company has secured over $68 million in state and local grant funds to bring gigabit broadband to over 19,000 unserved homes [25] Management's Comments on Operating Environment and Future Outlook - Management noted that the T-Mobile network turndown is progressing slower than expected, impacting revenue expectations [50] - The company expects adjusted EBITDA margins to improve modestly in the second half of the year [15] - Management remains confident in executing construction goals despite delays in state and grant contracts [44][45] Other Important Information - Free cash flow and cash on hand declined by approximately $50 million, ending the quarter with a liquidity position of $433 million [18] - The company plans to decommission 20 unprofitable Beam cell sites, expecting Beam to be EBITDA breakeven in the second half of the year [35] Q&A Session Summary Question: Can you talk to us a little bit about the funding that you've gotten? - Management expects the grants will be dispersed on a cost recovery basis with a lag of three to six months on average [48] Question: How is T-Mobile progress relative to expectations? - Management indicated that the progress is probably slower than expected regarding the turndown of the legacy Sprint network [50] Question: Any plans to sell the spectrum related to Beam? - Management plans to continue operating remaining cell sites but has started exploring options for selling the spectrum holdings [55] Question: Update on backhaul systems upgrades? - Management reported significant progress on ERP system upgrades and other operational improvements [58] Question: What's driving the increase in voice subscribers? - The increase is attributed to significant success with commercial voice customers [60]