Shentel(US:SHEN)2025-02-20 19:14Financial Data and Key Metrics Changes - Revenue grew 22% to $328.1 million in 2024, with the former Horizon markets contributing $47.7 million during the nine months of Shentel ownership [12][13] - Adjusted EBITDA increased 20% to $94.6 million, with the former Horizon markets contributing $10.7 million [16] - Excluding the former Horizon markets, adjusted EBITDA grew $4.9 million or 6% from 2023 [16] Business Line Data and Key Metrics Changes - Glo Fiber revenue grew $21.4 million or 61%, driven by a 50.9% increase in subscribers and a 7.3% increase in ARPU [14] - Commercial Fiber revenue declined $5.8 million due to T-Mobile revenue churn, while Incumbent Broadband Markets revenue declined $5 million due to cord cutting and a decline in data RGUs [15][16] - The total number of data, video, and voice revenue-generating units reached 78,000 at the end of 2024, up approximately 53% year-over-year [24] Market Data and Key Metrics Changes - The broadband data penetration rate in Glo Fiber expansion markets climbed to 18.8% at the end of 2024, up one percentage point from the prior year [25] - Average broadband data ARPU increased by 2.5% year-over-year to almost $85 [31] - The overall broadband data penetration rate decreased to 46.6% at the end of 2024 due to the addition of acquired Horizon passings [31] Company Strategy and Development Direction - The company aims to complete Glo Fiber's seven-year construction phase by the end of next year, with expectations for customer net additions and revenue to drive growth for the next six to seven years [11] - The company plans to invest $175 million to $190 million in Glo Fiber to extend fiber to approximately 95,000 new passings [37] - Long-term capital intensity is expected to decline dramatically after the completion of Glo Fiber build-out and government grant projects in 2026 [39][40] Management's Comments on Operating Environment and Future Outlook - Management views 2024 as a transition year due to the sale of the Tower business and the acquisition of Horizon, with expectations for long-term revenue and adjusted EBITDA growth rates to return to previous levels [18] - Management anticipates adjusted EBITDA margins to improve in future years as the full impact of synergy savings is realized [18] - The company expects to see significant growth opportunities in incumbent broadband markets as they complete subsidized projects over the next two years [31] Other Important Information - The company had liquidity of $400 million at the end of 2024, including $46 million in cash and $418 million of outstanding debt [19][20] - Capital expenditures in 2024 totaled $300 million, with projections for 2025 in the range of $250 million to $280 million [34][36] Q&A Session Summary Question: What is the percentage of Horizon's revenue that is amortized versus recurring? - Management indicated that about 8% of Horizon's revenues were amortized revenue [58] Question: When will T-Mobile churn be finished and what is the cash impact? - Management confirmed that T-Mobile churn is behind them, with most disconnects occurring in 2023, and the churn primarily affected EBITDA and net income [46][47] Question: What is the source of competition in incumbent markets? - Management noted that there is no cannibalization from Glo Fiber, and competition comes from local cable companies and some fiber overbuild activity [53][54] Question: Are competitors becoming more aggressive recently? - Management observed that the pace of construction has slowed down, and they expect competition overlap to decrease over the next couple of years [56] Question: What kind of pressures are seen from other service providers? - Management reported that competitors are offering promotional discounts on lower-end products, but they continue to succeed in the middle to high-end range [63]