Cable One(CABO)2023-05-07 08:54Financial Data and Key Metrics Changes - Total revenues for Q1 2023 were 426.7 million in Q1 2022, primarily due to declines in low-margin residential video and voice revenues [36] - Adjusted EBITDA was 96.1 million for Q1 2023, equating to 42% of adjusted EBITDA, compared to $99.4 million or 43.9% in the prior year quarter [6] Business Line Data and Key Metrics Changes - Residential broadband revenue grew by 5.5% year-over-year, with an increase in both customers and ARPU [21] - Business services revenue grew by 2.9% on an adjusted basis, driven by stronger growth in SMB and enterprise broadband offerings [22] - Residential broadband ARPU increased by 4.5% year-over-year, with significant demand for higher speed tiers [24] Market Data and Key Metrics Changes - The company reported a decrease in new customer starts due to a slow pace of home move activity, although churn rates remained low, indicating strong customer retention [23] - Approximately 21% of residential customers now exceed a terabyte of usage each month, reflecting a 20% increase from the previous year [28] - Average network utilization during peak hours improved, with downstream and upstream utilization decreasing from 23% to 21% [28] Company Strategy and Development Direction - The company continues to focus on managing its balance sheet to support long-term investments while navigating a challenging economic environment [8] - Ongoing investments in advanced broadband networks and high-return projects are prioritized to extend networks to underserved areas [6] - The company is exploring new product offerings and pricing strategies to enhance customer value and defend market share against competition [53] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the impact of economic conditions on customer growth but remains optimistic about the company's ability to grow broadband adds throughout the year [90] - The company is committed to investing in network upgrades and enhancing service offerings to meet increasing data demands [25] - Management noted that while competition from mobile fixed wireless exists, it does not significantly impact the existing customer base [26] Other Important Information - The company successfully completed a financing transaction that extended maturities and provided strategic flexibility, with the next scheduled maturity date in 2026 [11] - The company received recognition for its workplace culture, being ranked by Forbes and Newsweek for its inclusive environment [33] Q&A Session Summary Question: How do you think about seasonal impacts and the effect of slowing housing growth? - Management noted that while economic indicators suggest challenges, customer demand for higher speed tiers remains strong, and they expect to follow typical seasonality cycles [15] Question: Can you discuss M&A activity in the current market? - Management indicated that it is too soon to assess M&A activity due to changing market conditions and rising interest rates, but they continue to be a preferred aggregator for smaller businesses [14][2] Question: What is the company's strategy regarding pricing and promotions? - Management stated that promotions were not significantly heavier and emphasized a focus on higher-end product offerings while testing various strategies [40] Question: What is the company's exposure to the ACP program? - Management indicated that less than 30,000 customers are dependent on the ACP program, suggesting limited exposure if it is not reauthorized [68] Question: What are the plans for wireless offerings in the future? - Management emphasized that their current focus is on growing market share in existing areas and that wireless offerings will be considered based on customer demand and profitability [64]