SHEN earnings call analysis

NASDAQ:SHEN Q1 2026 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: Good morning, everyone. Welcome to Shenandoah Telecommunications' first quarter 2026 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Lucas Binder, VP of Corporate Finance for Shentel.

Lucas Binder | VP of Corporate Finance

Good morning, and thank you for joining us. The purpose of today's call is to review Shentel's results for the first quarter 2026. Our results were announced in a press release distributed this morning. We filed our Form 10-Q with the SEC. The presentation we will be reviewing is included on the investor page on our investor.chentel.com website. Please note that an audio replay of this call will be made available later today. The details are set forth in the press release announcing this call. With us on the call today are Ed McKay, President and Chief Executive Officer, and Jim Volk, Senior Vice President and Chief Financial Officer. After the prepared remarks, we will conduct a question and answer session. I refer you to slide two of the presentation, which contains our safe harbor disclaimer and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties and may cause our actual results to differ materially from these forward-looking statements. Additionally, we have provided a detailed discussion of various risk factors in our FCC filings, which you are encouraged to review. your caution not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements. With that, I will now turn the call over to Ed. Go ahead, Ed.

Ed McKay | President and Chief Executive Officer

Thanks, Lucas. Good morning, everyone, and thank you for joining us today. Starting on slide four, I'll share some of our first quarter highlights. During the quarter, we released 22,000 passives to sales, bringing our total Glowfiber expansion markets passives to 449,000. We added approximately 6,000 Glowfiber net customers in the first quarter and 9% improvement over the prior year period. And we now serve a total of 94,000 customers. Our commercial fiber business also delivered a strong quarter with 196,000 in sales bookings and revenue growth of 4.7% year over year. Collectively, these results demonstrate the excellent momentum we continue to see in our fiber businesses. We were also pleased with our first quarter financial results. Consolidated revenues and adjusted EBITDA grew 4.8% and 15% year over year respectively, and we remain on track to deliver positive free cash flow in 2027. Turning to slide five, we highlight our integrated broadband network that spans more than 19,000 fiber route miles across eight states with over 700,000 total broadband passings. As shown on the map, all planned glow fiber markets have now been launched, and our primary focus is adding passings in our existing Virginia, Pennsylvania, Maryland, and Ohio markets. We remain on track to complete our glow fiber expansion in 2026, reaching 510,000 passings. On slide six, our sales and marketing team continues to drive strong growth across our Glowfiber expansion markets. And during the first quarter, we added approximately 6,000 new customers and nearly 7,000 total video, voice, and data revenue generating units. Our five-year price guarantee rate card introduced in the second half of 2025 is gaining traction, supported by the expansion of our door-to-door sales channel. Over the past 12 months, we have added more than 23,000 new data customers, more than 26,000 total RGUs as well. Total Glow Fiber revenue generating units surpassed 110,000 in the first quarter, up 31% compared to the prior year. Moving to slide seven, first quarter construction was strong with over 22,000 passings added, bringing the total to more than 449,000. Coupled with the continued increase in homes passed, penetration rose to 20.9%, a 30 basis point increase over the fourth quarter, and 150 basis point increase year over year. Penetration trends across our Glowfiber cohorts are shown on slide eight and reflect blended penetration rates for both residential and small and medium business passings. We are expecting data penetration rates of approximately 37% five to seven years after launching a market, and our most mature cohorts launched in 2019 and 2020 have now exceeded this with an average penetration rate of 37.5%. In addition to providing the fastest speeds in our markets, we continue to focus on providing outstanding local customer service. As shown on slide nine, our average monthly return was 0.92% in the first quarter, which continues to be among the best in the industry. Broadband data average revenue per user for the first quarter was stable sequentially and year over year at more than $77. We continue to have success selling up the rate card with nearly 82% of our new residential customers in the first quarter selecting speeds of one gig or higher, including 18% choosing two gig service and 5% choosing five gig service. Our commercial fiber business is highlighted on slide 10. In the first quarter, incremental monthly sales bookings exceeded 196,000, driven by strong demand from wireless carriers, wholesale customers, and school systems. Our service delivery team installed 167,000 in new monthly revenue during the quarter, and the acquired Horizon backlog that drove elevated installation activity in 2025 is now substantially complete. Average monthly compression and disconnect churn remained very low at 0.4% in the first quarter, reflecting exceptional support from both our network operations center and sales team. Turning to slide 11, we show our operating results for our incumbent broadband markets. At the end of the first quarter, we served more than 111,000 broadband data customers. Data, voice, and video RGUs totaled more than 156,000 at year end, down 4% year over year, primarily due to video customers moving to online streaming services. Total broadband passings in our incumbent markets stayed steady compared to the fourth quarter, and we expect to complete 1,800 additional government-subsidized incumbent grant passings in 2026, primarily in West Virginia. As shown on slide 12, the recently constructed subsidized passings represent a strong growth segment for incumbent markets, with data penetration exceeding 40% within six quarters of a neighborhood launch. Average penetration in our 2023 cohorts is over 52%, with the oldest cohort reaching 71%. We've already achieved an aggregate penetration of 37% across 23,000 subsidized passings. Moving to slide 13, monthly broadband data churn was stable sequentially and up modestly year over year at 1.46% for the first quarter. The slight uptick in churn was due to promotional activity from satellite competition in some of our most rural markets without a fixed wireline competitor. In these markets, we implemented a speed increase late in the first quarter, providing customers with higher speeds at the same price to better differentiate our service from satellite offerings. Across approximately a third of our passings where we face another fixed broadband competitor, our rate card strategy of offering greater value with higher speeds at the same price continues to be effective at mitigating churn. As expected, broadband data ARPU declined 1.6% from a year ago to $82, driven by the addition of new customers with more aggressive pricing in our competitive markets. I'll now turn the call over to Jim to walk you through our first quarter financial results.

Jim Volk | Senior Vice President and Chief Financial Officer

Thank you, Ed, and good morning, everyone. I'll start on slide 15 with financial results for the first quarter. Revenues grew 4.8% to 92.2 million, driven by another quarter of strong low fiber expansion market revenue growth of 6.4 million, or 34.6%, due to a 33.7% increase in data subscribers and stable data arbitrage. Commercial fiber revenue grew 900,000 were 4.7% year-over-year, driven primarily by growth among existing customers in the enterprise and carrier verticals. Incumbent broadband markets revenue declined 2.2 million, primarily due to lower video revenue from a 14.6% decline in video RGUs as customers switched to streaming video services, and to a lesser extent, lower data revenues due to a 1.6% decline in data ARPU from a more aggressive rate card in competitive markets. RLEC revenues declined 800,000, primarily due to lower DSL revenue from a 28% decline in DSLRGUs and lower government grant support revenues. Approximately half of the decline in DSLRGUs was due to customer upgrades to our broadband service. Adjusted EBITDA grew $4.1 million, or 15%, to $31.7 million, driven by $4.3 million in revenue growth and slightly higher operating expenses. Adjusted EBITDA margins increased 300 basis points to 34.4% in the first quarter of 2026, as compared to the first quarter of 2025, due to a combination of high incremental margins in globe fiber fewer lower margin video customers, and a favorable true-up related to a government grant. Turning to slide 16, we reiterate our annual guidance for 2026. We expect revenues of $370 to $377 million, adjusted EBITDA of $131 to $136 million, and CAPEX net of grant reimbursements to be $220 to $250 million. Moving to slide 17, we invested $75.8 million in capital expenditures in the first quarter of 2026 and collected $11.5 million in government grants for net CapEx of $64.3 million. CapEx declined 16% compared to the first quarter of 2025 due to completing 91% of the incumbent broadband market's government subsidized bills to unserved areas in 2025. We have also completed construction of 88% of our target glow fiber passings as of March 31st and expect to complete the glow fiber expansion by the end of 26. I'd now like to update you on our liquidity and debt maturities on slide 18. As of March 31st, we had $707 million in outstanding debt and $636 million of net debt. We have no debt maturities until 2029. Total available liquidity was approximately 195 million as of March 31st, consisting of 44 million of cash and cash equivalents, 27 million in restricted cash, 18 million available under the VFN, 68 million available under the RCF, and 38 million remaining reimbursements available under government grants. In addition, the company has over 117 million of VFN commitments that are not available to draw as of March 31st. We expect the available VFN capacity to reach the commitment levels with continued growth in the secured fiber network revenues from the ABS entities. In summary, as noted on slide 19, we have three catalyst converging that we expect will lead us to generating and growing positive free cash flow in 2027 and beyond. Low double-digit adjusted EBITDA growth rates driven by our fiber businesses, declining capital intensity as we exit the construction phase of our business plan, and declining cost of capital after refinancing our debt in 2025. Thank you, and operator, we are now ready for questions.

Operator | Conference Operator

Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. One moment for questions. Our first question comes from Hamed Korsan with PWS Financial.

You may proceed. Hamed Korsan | Analyst, PWS Financial

Hey, good morning. First question is, are you seeing any changes or challenges in adding subscribers given the competitive nature that you're talking about in your markets?

Ed McKay | President and Chief Executive Officer

In our glow fiber markets, we're not. Our net ads were up 9% over the first quarter of 2025. So we're very pleased with our progress there. We did mention in our incumbent markets, we did see a little bit of churn to Starlink with some of the promotional offers they launched in the first quarter. But other than that, we're on plan as expected.

Hamed Korsan | Analyst, PWS Financial

Okay. And then as far as the changeup goes, you know, ending your construction phase and going into more of a subscriber growth phase here, are you going to be increasing marketing expense, or should we expect just CapEx to decline and it's just going to be incremental here to cash flow?

Ed McKay | President and Chief Executive Officer

Yeah, I would expect marketing expense to be similar, and the primary impact will be the decline in CapEx.

Hamed Korsan | Analyst, PWS Financial

Okay, great.

Thank you. Operator | Conference Operator

Thank you. Our next question comes from Christian Schwab with Craig Hallam.

You may proceed. Christian Schwab | Analyst, Craig Hallum

Yeah, congratulations on the solid results. On your ASP on the Glow Fiber business – And in the recent areas and trends of moving, you know, from just not just one gig speed or higher at 82%, but having people want two and 5%, do you think those trends are sustainable over a multi-year period? And do you have any target expectations for customers needs for higher speeds that, you know, two gigabytes, excuse me, and above as your penetration rates go to your target levels on the fiber that's been laid in the last few years. Meaning, you know, your blended ASP at 77, I think in most markets, your one gig product is Priced around $65. So do you see ASP trends in that business increasing over time, or is it too early to tell?

Ed McKay | President and Chief Executive Officer

I'd say, you know, medium term, we are offering five-year price guarantees on the higher speed tiers. But, you know, longer term, I think there's opportunity there. And we were very pleased with the speed mix in the past quarter. You know, the demand is out there for those higher speeds, and we do think that's sustainable going forward.

Christian Schwab | Analyst, Craig Hallum

Okay, fantastic. And then on the commercial fiber business, could you just – Remind us what your growth objectives are there and how you see that market over a multi-year timeframe doing for you and the potential for you to add additional subscribers?

Ed McKay | President and Chief Executive Officer

Well, I'll start and then I'll pass it over to Jim. One opportunity we do see is with data centers moving out to our more rural areas, we think that's an additional opportunity for incremental revenue. We're really not playing in the hyperscaler space today. There have been several data center announcements in our markets. We think we certainly have the opportunity to win our share of those services. And that would be additive to our current revenue. And I'll let Jim talk a little about the growth projections.

Jim Volk | Senior Vice President and Chief Financial Officer

Yeah, Christian, we're generally expecting mid single digit revenue growth rates from the commercial business over like a three or four year period. It's important to note this is a little bit of a lumpy business. Some of the larger deals like what Ed mentioned, you know, that we're working on on the hyperscalers and some of the carrier business tends to be a little lumpy.

But we do have Christian Schwab | Analyst, Craig Hallum

know each quarter we're adding more enterprise customers uh along the way as well um but uh but yeah we think there's a nice growth opportunity here in the mid single digit uh growth rates great and then in the follow-up on the data center for for clarity can you just remind us of of the the miles of fiber that you have and the connectivity um potential that you have in data center um So people can understand maybe potentially a little bit better why data center customers would be coming to you.

Ed McKay | President and Chief Executive Officer

So 19,000 plus route miles of fiber in total. Our fiber network stretches from Chicago all the way to the Washington, D.C., Ashburn, Virginia area. And we hit major markets in between like Columbus, Ohio, like Pittsburgh. uh you know and we have many you know unique fiber routes so as these data centers move out further from the metropolitan areas seeking you know areas with with land uh and power uh we we believe we have a the opportunity to take advantages of those unique fiber routes that that we have and you know gain some of that business can you give us an idea um Christian Schwab | Analyst, Craig Hallum: you know, what the revenue potential would be, not this year, but over a multi-year timeframe, given that trend, as data centers move out a little bit away from metro into rural areas that might want to take advantage of your 19,000 fiber miles. Can you give us an idea of the revenue potential, not an estimate, but, you know, maybe an aspiration or goal that you guys may have for that marketplace?

Jim Volk | Senior Vice President and Chief Financial Officer

Yeah, Christian, I think it would be a little premature to get into revenue expectations, but I can tell you there is about 20 data centers being either built or being built close to our fiber in the eight states that we operate in. So not clear to me whether all of them are actually going to get built, but if they do get built, we think we're in a prime position to win some business here.

Christian Schwab | Analyst, Craig Hallum

Great. Fantastic.

No other questions. Thank you. Operator | Conference Operator

Thank you. And as a reminder, to ask a question, please press star 1-1 on your telephone. Our next question comes from Vikash Harlalka with Newstree Research.

You may proceed. Vikash Harlalka | Analyst, Newstree Research

Hi. Thanks so much for taking my question. There's a lot of concern among broadband investors based around pricing power and broadband output growth for the industry. Do you think that broadband businesses have pricing power today or are we entering a period of deflation for the business? And then I have a follow-up.

Ed McKay | President and Chief Executive Officer

So I'll say in our glow fiber business, we're expecting fairly flat ARPU in the near term. I think over time, we do gain that pricing power. And in our incumbent business, we mentioned earlier, as we've seen some competition in our markets, we have seen a slight decline in ARPU there. So I think it's a bit of a mix depending on which business you're looking at.

Jim Volk | Senior Vice President and Chief Financial Officer

If I could add to that, in our incumbent business, about two-thirds of the passings, we are the only fixed wireline provider. So we do think we have some pricing power there as well.

Vikash Harlalka | Analyst, Newstree Research

Got it. That's helpful. And then I just wanted to go back to your comment about increased competition from Starlink during the quarter. It sounds like the competition was mainly because Starlink is had some promotions. And so did you lose customers in the growth ad side or churn or both? And do you see this competition as continuing from here? And if so, what's your plan on addressing this increased competition?

Thank you. Ed McKay | President and Chief Executive Officer

So we only saw the impact in the most rural areas of our incumbents broadband market we saw really no impact in glow fiber and no impact in the majority of our incumbent passings so so what they started offering in the first quarter was fifteen dollars off for four months as a promotion but i think the biggest factor was they offered free equipment it was previously 350 dollars um you know so we'll we'll see how long this this lasts you know they could be offering these promotions you know in preparation for a potential ipo later this year. But we have the ability to increase speeds. So we've done that. Late in the first quarter, we increased speeds significantly in our rural incumbent areas. Most of those customers that left were on legacy rate cards. So we've given those customers more value for the same price, and we think that will help mitigate it.

Vikash Harlalka | Analyst, Newstree Research

Very helpful.

Thanks so much. Ed McKay | President and Chief Executive Officer

Thank you.

Operator | Conference Operator

Thank you. Our next question comes from Christian Schwab with Craig Hallam.

You may proceed. Christian Schwab | Analyst, Craig Hallum

Yeah, just a quick follow-up on that. Just on the Starlink promotion in your most rural markets, these are very slow speeds. Can you just quantify a little bit more clarity around your commentary to compete with Starlink, how you increased sales? Give us an idea of what speed you were operating at, to what speed you can move customers to compete with Starlink, because this really isn't a competition for fiber at 1, 2, and 5 gig speeds.

Ed McKay | President and Chief Executive Officer

So in all of these markets, we have the ability to offer gigabit speeds. And I think it was customers were looking for a potentially lower-priced alternative. But when you compare our pricing to Starlink's pricing, after that promotional discount expires, we're actually favorable from a pricing standpoint and a speed standpoint. So we'll see how long these customers stay on Starlink. We certainly think we have the opportunity to win some of those back as well.

Christian Schwab | Analyst, Craig Hallum

Okay.

Thanks for the clarity. Ed McKay | President and Chief Executive Officer

You're welcome.

Thank you. Operator | Conference Operator

Thank you. I would now like to turn the call back over to Ed McKay for any closing remarks.

Ed McKay | President and Chief Executive Officer

Thank you for joining us today. We look forward to updating you on our progress in the future quarters. And, operator, that concludes our call.

Operator | Conference Operator

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. jsPDF 3.0.3 D:20260606090423-00'00'

NASDAQ:SHEN Q4 2025 Earnings Call Transcript Generated on 6/6/2026 Liz | Conference Operator: Thank you for standing by. My name is Liz and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Shenandoah Telecommunications Company fourth quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Lucas Binder, Vice President of Corporate Finance for Chantel.

Please go ahead. Lucas Binder | Vice President of Corporate Finance

Good morning and thank you for joining us. The purpose of today's call is to review Chantel's results for the fourth quarter and full year 2025. Our results were announced in a press release distributed this morning. In addition, we filed our Form 10-K and also a Form S-3 with the SEC to fulfill our Horizon merger contractual requirements to GCM. The presentation we will be reviewing is included on the investor page on our investor.chentel.com website. Please note that an audio reply of this call will be made available later today. The details are set forth in the press release announcing this call. With us on the call today are Ed McKay, President and Chief Executive Officer, and Jim Volk, Senior Vice President and Chief Financial Officer. After the prepared remarks, we will conduct a question and answer session. I refer you to slide two of the presentation, which contains our safe harbor disclaimer, and remind you that this conference may include forward-looking statements subject to certain risks and uncertainties that may cause our actual results to differ materially from these forward-looking statements. Additionally, we have provided a detailed discussion of various risk factors in our SEC filings, which you are encouraged to review. You are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements. With that, I will now turn the call over to Ed. Go ahead, Ed.

Ed McKay | President and Chief Executive Officer

Thanks, Lucas, and good morning, everyone. Thank you for joining us today. This past year marked another important step forward for Centel as we continue to execute on our Fiber First strategy. Strong year-over-year growth in both glow fiber and commercial fiber drove a notable shift in our revenue mix with our fiber-based lines of business surpassing our incumbent broadband revenue in the fourth quarter. Throughout 2025, we remained disciplined and focused on our four strategic pillars that continue to guide our operational and financial priorities. Building on our long history of success, completing our fiber network expansion, accelerating growth, and positioning the business to inflect to positive free cash flow in 2027. I'm pleased with the way our team delivered on each of these priorities, strengthening our position, and keeping our strategy firmly on track. Starting on slide four, we share some of our four-year highlights. At year-end 2025, we passed approximately 427,000 homes and businesses in our low-fiber expansion markets, an annual increase of 81,000 passings. Our government subsidized passings in the government broadband markets more than doubled year over year to 22,000, and penetration in these areas has already reached 31%. We are well on our way to substantially completing construction for these capital intensive expansion projects by the end of 2026. Glow fiber data RGU's grew 35% in 2025 to 88,000, and we maintain data RPU by driving customers to higher speed tiers. Lastly, we successfully refinanced our debt with our inaugural ABS financing in December that will save us approximately 170 basis points in cash interest expense and extend our maturities to 2030. We finished 2025 with strong momentum, driving customer growth, expanding our high-value fiber business, and strengthening our balance sheet. This performance gives us confidence in our trajectory as we move into 2026. Turning to slide five, we show our integrated broadband network that spans more than 19,000 fiber route miles across eight states with over 679,000 total broadband passings. Our markets have compelling competitive dynamics that differentiate us from our peers in the broadband industry. Eighty-eight percent of our glow fiber passings are duopoly markets with only one fixed broadband competitor, and in our incumbent markets, 70 percent of our passings have no fixed broadband competitor. As we enter the home stretch of our Glowfiber expansion, we remain focused on return on investment. Due to rising aerial make ready costs in some areas, we have recently decided to pass on investments in certain Ohio markets where the cost to pass increased, reducing our ability to earn a return on our investments above our hurdle rate of 15%. As you can see on the map, all of the planned Glowfiber markets have been launched. And our primary focus in 2026 is adding passings in our Virginia, Pennsylvania, Maryland, and Ohio markets. Despite the reduction in targeted passings, we remain confident in our plans to achieve positive free cash flow in 2027. On slide six, our sales and marketing team continues to drive growth in our Glowfiber expansion markets. In the fourth quarter, we added 5,300 new customers and more than 6,000 total data, video, and voice revenue generating units. For full year 2025, we added approximately 23,000 new customers and 26,000 total RGUs. As a result, total Glow Fiber revenue generating units surpassed 103,000 by year end, up 33% compared to the prior year. Moving to slide seven, the fourth quarter marked our strongest construction period of the year, with more than 26,000 low-fiber passings completed, bringing total passings to just under 427,000. While the significant increase in new passings kept penetration flat quarter over quarter at 20.6%, penetration improved 1.8 percentage points year over year. Penetration trends across our Glowfiber cohorts are shown on slide eight and reflect blended penetration rates for both residential and small and medium business passings. Business passings account for about 8% of our total passings and they typically exhibit a slower penetration ramp than residential passings. However, business customers generate data ARPU that is more than 40% higher than residential customers. Due to the slower business ramp, cohorts with a higher concentration of business passings can show lower penetration. This dynamic is evident in the Q4 2023, Q1 and Q4 2024, and Q1 2025 cohorts, which have a significantly higher mix of business passings than other cohorts. Excluding the differences in residential and business mix, Penetration growth in our Glowfiber expansion markets has followed a consistent and predictable pattern with steady increases as cohorts mature. Our earliest cohorts launched in 2019 and 2020 now have an average data penetration rate of more than 37%. On slide nine, we highlight our most recent Net Promoter Score Customer Satisfaction Survey where we received an outstanding score of 61. This result compares very favorably with cable competitors that often have single digit scores. Our continued focus on customer service is a key driver of our low churn, with average monthly churn of 1.01% in the fourth quarter and 1.07% for full year 2025. Broadband data average revenue per user increased to more than $77 in the fourth quarter, representing a 2.3% year-over-year increase. Midway through the third quarter, we introduced new promotional rate plans offering higher speeds with a five-year price guarantee. With these plans available for a full quarter, more than 75% of our new residential subscribers selected speeds of one gig or higher, including 20% choosing two gig service and 5% choosing five gig service. The increase in ARPU was driven by our shift away from a first-month free promotion in prior periods, along with strong adoption of the five-year price guarantee plans in the fourth quarter. As these plans continue to roll through our base, we expect data ARPU to decline by approximately 1% over the next few quarters before stabilizing. Turning to slide 10, we show our operating performance for the incumbent broadband markets. At the end of 2025, we served about 112,000 broadband data customers, reflecting a year-over-year increase of over 600. Data voice and video RGUs totaled more than 158,000 at the end of the year, down 3% year-over-year, primarily due to video customers moving to online streaming services. Total broadband passings in our incumbent markets grew to 252,000 at year-end, up about 13,000 compared to the prior year. This increase was driven by the construction of government subsidized passings in previously unserved areas. We've substantially completed construction and fulfilled our grant obligations in Virginia, and we expect to complete the remaining 1300 government subsidized incumbent grant passings in West Virginia in 2026. As a result of our government grant fiber construction, approximately 21% of our incumbent broadband passings are now equipped with fiber to the home technology. As shown on slide seven, these new subsidized passings represent a strong growth catalyst for our incumbent markets, with data penetration exceeding 45% within six quarters of a neighborhood launch. Our earliest cohort from the first quarter of 2023 has reached 61% penetration, and we've already achieved an aggregate penetration of 31% across more than 22,000 subsidized passings. Moving to slide 12, monthly broadband data churn improved sequentially and remaining steady year over year at 1.47% for the fourth quarter. Our rate card strategy, offering greater value with higher speeds at the same price, continues to be effective at mitigating churn. As expected, broadband data ARPU declined 2.4% from a year ago to $82, given by the addition of new customers with more aggressive pricing in competitive markets. Our commercial fiber business is highlighted on slide 13. In the fourth quarter, incremental monthly bookings exceeded 155,000 in line with the prior year period. After record bookings in the first half of 2025, second half bookings increased almost 9% compared to the second half of 2024. We're seeing strong performance across a broad and diverse customer base, including wireless carriers, mid-market and enterprise customers, wholesale partners, educational institutions, and state and local governments. Our service delivery team installed $191,000 in new monthly revenue in the fourth quarter, modestly as we continue to work through the backlog and move bookings to revenue more quickly. Average monthly compression and disconnect churn remained very low at 0.6% in the fourth quarter, driven by exceptional support from our network operations center and sales team. Before I turn the call over to Jim, I want to briefly address a recently announced reduction in force. On February 23rd, we announced a workforce reduction of approximately 10% of our employees to better align our staffing levels with the planned completion of the construction phase of Glow Fiber. Impacting employees will have a standard departure date through the end of 2026, with the longest impact in the fourth quarter. All affected employees are eligible for severance pay and benefits, as well as career transition services. We expect to incur approximately $3.1 million in restructuring costs and anticipate annual savings of roughly $12.3 million starting in 2027, split evenly between operating expenses and capitalized labor. While our major Glow Fiber market expansion is nearing completion by year-end, we remain firmly focused on driving continued growth in Glow Fiber and commercial fiber and delivering the high level of service our customers expect and deserve. I'll now turn the call over to Jim to walk you through our 2025 financial results and our outlook for 2026.

Jim Volk | Senior Vice President and Chief Financial Officer

Thank you, Ed, and good morning, everyone. I'll start on slide 15 with the financial results for the fourth quarter of 2025. Revenues grew 7.2% to 91.6 million, driven by another quarter of strong low fiber expansion market revenue growth of 6.5 million, or 39%, driven by a 37% increase in data subscribers and a 2% increase in data ARPU. Commercial fiber revenue grew 2 million, or 10.8% year-over-year, driven primarily by a negative deferred revenue adjustment in the fourth quarter of 2024. Incumbent broadband markets revenue declined 1.7 million, primarily due to lower video and data revenues from a 14.8 percent decline in video RGUs as customers switched to streaming video services, and a 2.4 percent decline in data ARPU due to a more aggressive rate card in competitive markets. Broadband data subscribers did grow 0.6% in the year-over-year. RLEC revenue declined 500,000, primarily due to lower DSL revenue from a 24.4% decline in DSL RGUs, partially due to customers migrating to our broadband data service in the recently constructed passings supported by government grants. Adjusted EBITDA grew $8 million, or 31.3% to $33.5 million, driven by $6.2 million in revenue growth and $1.8 million in lower expenses from a combination of horizon synergy savings, higher capitalized labor from a strong quarter of fiber construction, and lower bad debt. Adjusted EBITDA margins increased significantly. 670 basis points, 36.5% in the fourth quarter, due to a combination of recurring synergy savings, seasonality due to a strong quarter of fiber construction favorably impacting higher capitalized labor and lower network compensation expenses, and non-recurring debt expense adjustments. We expect adjusted EBITDA margin to decline slightly in the first half of 2026 before expanding again in the second half of 2026. On slide 16, we share our last five-year financial results. Revenues in adjusted EBITDA grew at a compounded annual growth rate of 10 percent and 16 percent respectively. We believe these growth rates are industry-leading among publicly traded broadband companies. Please note that we acquired 19 million of annual run rate EBITDA when we acquired Horizon in 2024. This was fully offset by 12 million of lower EBITDA when we sold our tower business in the same year and 7 million in lower EBITDA from backhaul revenue churn due to the one-time network rationalization event following T-Mobile's acquisition of Sprint. While we are proud of our team's performance over the past five years, we are even more excited about our growth prospects over the next five years when we expect low double-digit EBITDA growth rates combined with significantly lower capital intensity starting in 2027. Turning to slide 17 for our annual guidance for 2026, we expect 2026 revenues of $370 to $377 million, or 4.4% growth based upon the midpoint. We are guiding to adjusted EBITDA of $131 million to $136 million or 12.1% growth based upon the midpoint. We expect 2026 CapEx net of grant reimbursements to be $220 to $250 million or a 21% decline at the midpoint. Moving to slide 18, we invested $359 million in capital expenditures in 2025 and collected $63 million in government grants for net CapEx of $296 million. We have completed construction of 84% of target global fiber passings and 94% of target incumbent government grant passings in unserved areas. In summary, capital intensity is trending down as we get closer to the end of the expansion phase. Capital intensity intensity declined from 91% in 24 to 83% in 25 and to a range of 59 to 67% in 26 based upon our guidance. For 2027, we are currently trending to the high end of the long-term target capital intensity range we provided a year ago. We expect our residential businesses to be in the 25% range and our commercial business in the 30% range initially, before declining further over time as our businesses scale. I'd now like to update you on our refinance credit facilities and liquidity on slide 19. As previously announced in December, we successfully refinanced our $675 million term loan and revolving credit facility with a hybrid capital structure featuring asset-backed securitization, or ABS notes, supported by most of our fiber business, and a revolving credit facility backed primarily by our incumbent business. The ABS notes include $567 million of privately placed investment grade notes to institutional investors due December 2030 with a weighted average interest rate of 5.69% and $175 million variable funding note facility or VFN with a group of financial institutions. The VFN has a maturity date of December 2029 and bears interest at SOPR plus 175 basis points. The VFN is a revolving facility within the ABS special purpose entities that is also investment graded and securitized by the same fiber assets and customer contracts. It is also governed by the same ABS indenture as the ABS notes. We did not borrow from the VFN as of December 31st, 2025. Concurrently, we established the new $175 million revolving credit facility, or RCF, with a group of financial investors maturing December 2030. The RCF bears interest at SOPR plus 250 to 300 basis points, depending upon net leverage as defined in the RCF agreement. We borrowed $75 million from the RCF as of December 31, 2025. Please note that these are two discrete credit facilities separated legally by special purpose entities established for ABS. Chantel and the non-ABS entities have no recourse to the loans of the ABS entities. Likewise, the ABS entities have no recourse to the loans of the RCF. As of December 31st, we have $642 million in outstanding debt with a weighted average interest rate of 5.75%. This compares favorably to September 30th weighted average interest rate of our prior credit facility of 7.47%, saving us 172 basis points in cash interest driven by the investment grade rated ABS notes. Based on our current debt levels, this will save us $11 million annually in cash interest. Total available liquidity was approximately $235 million as of December 31st. consisting of $27 million of cash and cash equivalents, $21 million in restricted cash as required by the ABS indenture, $44 million available under the VFN, $93 million under the RCF, and $50 million available under government grants. In addition, the company has over $130 million of VFN commitments that are not available to draw as of December 31st. The available capacity of the VFN will increase based upon fiber revenue growth from the ABS entities multiplied by a net operating income margin as defined in the ABS indenture and a 6.25 multiple. We are very pleased with our new credit facilities and the financial flexibility they will provide us in future years. In summary, As noted on slide 20, we have three catalysts converging that we expect will lead us to generating and growing positive free cash flow in 2027 and beyond. Low double-digit adjusted EBITDA growth rates driven by our fiber businesses, declining capital intensity as we exit the construction phase of our business plan in 2027, and declining cost of capital after refinancing our debt in December 2025 with primarily investment-grade ABS notes. This is a very exciting time for Centel and our shareholders. Thank you, operator. We are now ready for questions.

Liz | Conference Operator

At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Hamed Khorasan with BWS Financial.

Please go ahead. Hamed Khorasan | Analyst, BWS Financial

Hey, good morning. About the markets that you've decided not to enter in Ohio, how much CapEx are you looking to save? And is it all being – was it all planned for 26? So it already brings down the CapEx that you're projecting for 26?

Jim Volk | Senior Vice President and Chief Financial Officer

Yeah, Ahmed, the CapEx per passing – you know, in this last year is roughly going to be around $1,400 per passing. Now, some of that money has been previously spent in prior years, and we're now really focusing primarily on just placing the fiber. So it's mainly construction labor at this stage, which will probably be about 75% of the $1,400 or call it, you know, $1,000 per passing. Yeah, the markets that we decided to pass on wasn't, wasn't an issue of timing as much as it was an issue of return on investment. As Ed mentioned in his scripted comments, the cost of aerial make ready has gone up significantly, like 2 and 3x in some markets, and it just made it uneconomical for us to build these markets and get a return on investment as we've expected of roughly 15%.

Hamed Khorasan | Analyst, BWS Financial

Okay. From a competitive standpoint, you introduced this five-year guarantee, I think, last quarter. Have you seen any step down as far as competitive pressures go, or is it still the same?

Ed McKay | President and Chief Executive Officer

Ahmed, recently one of our large cable competitors actually increased their prices on their five-year guarantee. That just happened recently here in the first quarter. Other than that, we haven't seen significant changes since we launched the five-year price guarantee.

Hamed Khorasan | Analyst, BWS Financial

Okay. And then you had said, if I heard you right, that it takes a bit longer on the business down the residential. How fast – I don't think I heard you say how fast it takes for a residential to sign up.

spk06

Sorry.

Ed McKay | President and Chief Executive Officer

Say it again. For a residential customer – To sign up?

Hamed Khorasan | Analyst, BWS Financial

Yeah, to sign up for service. I know you were talking about how there's a delayed factor when it comes to business customers.

Ed McKay | President and Chief Executive Officer

Yeah, so with the business customers, in many cases they're under contract. We have to wait for that contract to roll off. And in some markets there are actually multiple providers going after business customers. So we expect terminal penetration on business customers to be lower than residential customers. But then residential customers that ramp to our target, you know, 37% plus penetration rate, we're tracking five to seven years after we launch a market.

spk06

Okay.

Thank you. Liz | Conference Operator

Your next question comes from the line of Vikash Harlalka with New Street Research.

Please go ahead. Vikash Harlalka | Analyst, New Street Research

Hi, thanks so much for taking my question. I just have a couple of questions. Why did you feel the need to offer a five-year price guarantee plan? Was it because competition was going in that direction? And then how does that impact ARPU growth? And I'll ask my second after you answer this one.

Ed McKay | President and Chief Executive Officer

Yeah, so it was in response to competition. One of our large cable competitors launched a five-year price guarantee plan. we did initially see some impact on gross ads when they launched it. Didn't see any impact on churn, but once we launched our own five-year price guarantee, that impact on gross ads we felt was mitigated. And as I mentioned in my script, we do expect short-term impact on ARPU as those five-year price guarantees roll through about 1% over the next few quarters, but we expect it to stabilize after that in our global fiber markets.

Vikash Harlalka | Analyst, New Street Research

Got it. And I have one strategic question. We recently met with many small private fiber operators. There seems to be a lot of appetite for M&A. Could you just remind us how you're thinking about M&A? And if you're looking to buy fiber assets out there, what characteristics are you looking for in any potential targets?

Ed McKay | President and Chief Executive Officer

Well, I'll say we've certainly seen consolidation start. We believe consolidation will continue. At this point in time, we're focused on successfully completing our build plan, accelerating customer growth, and then reaching that positive free cash flow inflection point in 2027. So that's really our main focus right now. As we look ahead further into the future, from an M&A standpoint, we'd be most interested in a pure play fiber provider less interested in a cable provider and not interested at all in a copper provider.

spk06

Got it. Thanks so much.

You're welcome. Thank you. Liz | Conference Operator

We have no further questions at this time. I will now turn the call back over to Jim Volk for closing remarks.

Jim Volk | Senior Vice President and Chief Financial Officer

Well, thanks everyone for joining our call this morning. As I mentioned earlier, this is a very exciting time for Chantel. And we look forward to updating you on our progress in future quarters. Thank you.

Have a good day. Liz | Conference Operator

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. jsPDF 3.0.3 D:20260606090424-00'00'

NASDAQ:SHEN Q3 2025 Earnings Call Transcript Generated on 6/6/2026 Michelle | Conference Operator: Good afternoon, everyone. Welcome to the Shenandoah Telecommunications Third Quarter 2025 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Mr. Lucas Bender, VP of Corporate Finance for Shentel. Shentel\ Thank you, Michelle. Good afternoon, and thank you for joining us. The purpose of today's call is to review Shentel's results for the third quarter of 2025. Our results were announced in a press release distributed after the market closed this afternoon, and the presentation we will be reviewing is included on the investor page on our investor.chentel.com website. Please note that an audio replay of this call will be made available later today. The details are set forth in the press release announcing this call. With us on the call today are Ed McKay, President and Chief Executive Officer, and Jim Volk, Senior Vice President and Chief Financial Officer. After the prepared remarks, we will conduct a question and answer session. I refer you to slide two of the presentation, which contains our safe harbor disclaimer, and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties that may cause our actual results to differ materially from these forward-looking statements. Additionally, we have provided a detailed discussion of various risk factors in our SEC filings, which you are encouraged to review. your caution not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements. With that, I will now turn the call over to Ed. Go ahead, Ed.

Ed McKay | President and Chief Executive Officer, Shentel

Thanks, Lucas, and good afternoon, everyone. So thanks for joining us today. So as we begin the call, I'd like to share our vision for Shentel. We're focused on four key pillars that are driving operational execution and positioning us for long-term value creation. First, we're focused on building on our success. We have a proud history of delivering exceptional local customer service and deploying high quality networks in smaller markets. We're enhancing that foundation by integrating advanced technology and AI to boost operational efficiency. For example, we're currently using AI to streamline our technical support operations and optimize digital marketing, ensuring that the right offer reaches the right customer at the right time. Our second pillar is successfully completing our build. Finishing our network expansion remains a top priority, and I'm very proud of our team's achievements over the past six years. At the end of Q3, Glowfiber reached a major milestone, passing 400,000 homes and businesses in our greenfield expansion markets. We remain on track to substantially complete our build by the end of 2026. Our third pillar is accelerating growth. We're focused on driving penetration rates in glow fiber markets and expanding our commercial fiber business. We're growing the size of our direct sales team, and we've simplified our online purchase experience and launched targeted digital marketing with compelling rate plans. Our 100% fiber optic glow network gives us a clear competitive edge, and our many unique commercial fiber routes connect our smaller markets back to major metropolitan data centers. Finally, we're focused on achieving positive free cash flow. Prior to our heavy investment cycle in Glow Fiber expansion markets, Shentel consistently delivered positive free cash flow. Returning to that position is a key milestone, and we remain on track to reach positive free cash flow for the full year of 2027, driven by declining capital intensity and continued customer growth. To support this transition, we plan to refinance our credit facilities through a hybrid structure, asset-backed securitization for our glow fiber and commercial fiber businesses, paired with a new credit facility for our incumbent broadband business. We expect this approach to lower our cost of debt, strengthen our credit profile, and increase financial flexibility. These improvements will position us to capitalize on opportunities in a consolidating industry and deliver greater value to our investors. We anticipate completing the refinancing in the coming months. Thank you for your continued trust in Chantel. We remain focused on operational excellence, strategic agility, and delivering value to our customers and shareholders. Starting on slide four, we share some of our key highlights from the quarter. We reached the milestone of 400,000 total Glow Fiber passings driven by 21,000 homes released to sales in the third quarter. Glow fiber data revenue generating units grew to 83,000 at the end of the quarter, representing year-over-year growth of 39.5%, and glow fiber revenues grew 41.1%, reaching 21.3 million. Consolidated revenues reached 89.8 million, an increase of 2.5% year-over-year growth. Adjusted EBITDA climbed to $29.7 million, up 11.7% year-over-year, and our margins expanded 300 basis points to 33%. Jim will provide you with more details on the key drivers of our fine hour-to-hour results in a few minutes. Moving to slide five, we show our integrated broadband network that spans more than 18,000 fiber route miles across eight states. Our markets have compelling competitive dynamics that differentiate us from our broadband peers. 92% of our Glowfiber passings are duopoly markets with only one fixed broadband competitor. And in our incumbent markets, 70% of our passings have no fixed broadband competitor. On slide six, our sales and marketing team continues to drive growth in our Glowfiber expansion markets. In the third quarter, we added 6,400 new customers and approximately 7,200 total data, video, and voice revenue generating units. 600 of the new customer additions were from our recent Blacksburg, Virginia acquisition that we closed and integrated in July. Over the last 12 months, we've added more than 23,000 data RGUs across the Glowfiber expansion markets. We ended the third quarter with approximately 83,000 Glowfiber customers, 39% increase year-over-year. Our total Glowfiber revenue generating units reached more than 97,000 at the end of the quarter, up 37% from the same period a year ago. Moving to slide seven, Glowfiber passings exceeded 400,000 at the end of the third quarter, an increase of 81,000 year-over-year. Broadband data penetration in our Glowfiber expansion markets climbed 2.1 percentage points to 20.6% at the end of the third quarter. As shown on slide eight, growth in our Glowfiber expansion markets has followed a consistent predictable pattern with steady increases in data penetration rates as cohorts mature. We typically achieve 15% data penetration rates within the first year and 25% by year three. Our earliest cohorts, which launched in 2019 and 2020, have now reached an average data penetration rate of 37%. We're also pleased with our sales and marketing team's ability to quickly engage customers when launching new neighborhoods, as demonstrated by our 8% penetration rate for communities introduced in the third quarter. On slide 9, monthly broadband data churn for the quarter remains steady at 1.17%. As a reminder, third quarter is the seasonally highest churn quarter due to greater move churn, especially around schools and universities. Our broadband data average revenue per user remains strong in the third quarter at roughly $77, supported by customer adoption of higher speed tiers. In the middle of the third quarter, we introduced new promotional rate plans that offer enhanced speeds with a five-year price guarantee. As a result of this new plan, we saw an increase in subscriber gross additions in the second half of the quarter, with 68% of our new residential customers choosing speeds of one gig or higher, including 12% choosing speeds of two gig and 3% choosing speeds of five gig. As a Greenfield overbuilder and share taker, we have not raised broadband service prices since we launched Glow Fiber six years ago. In addition, our fiber networks have ample excess capacity and are superior to our competitors' DOCSIS networks in providing faster, symmetrical speeds. Our new promotional plans leverage our competitive advantage as well, and we believe they will be a key driver in accelerating growth. As more customers select these new plans, we expect minimal impact to Data ARPU in the next couple of quarters and a decline of approximately 1% for 2026. Turning to slide 10, we show our operating performance for the incumbent broadband markets. At the end of the third quarter, we served about 112,000 broadband data customers, reflecting a year-over-year increase of 580. Data voice and video RGUs totaled 160,000 at the end of the third quarter, down 3% year-over-year, primarily due to video customers moving to online streaming options. Total broadband homes and businesses passed in our incumbent markets grew to 248,000 at the end of the quarter, up about 14,000 over the same period a year ago. This increase was driven by construction of new government subsidized passings in previously unserved areas. As a result, approximately 20% of our incumbent broadband passings are now equipped with fiber-to-the-home technology. As shown on slide 11, these new passings represent a strong growth catalyst in our incumbent markets, and we're seeing data penetration exceed 45% five quarters after a neighborhood is launched. Our oldest cohort from first quarter of 2023 has reached 61% penetration, and we've achieved an aggregate penetration of 30% across more than 19,000 subsidized passings. Moving to slide 12, monthly broadband data churn improved six basis points year over year, reaching 1.61% in the third quarter. Our rate card strategy of offering higher speeds and more value for the same price continues to be effective in mitigating churn. Broadband data ARPU declined 1% from a year ago as expected to $82. Our commercial fiber business is highlighted on slide 13. In the third quarter, we continued to execute with sales of almost 157,000 in incremental monthly revenue, an increase of 19% over the prior year quarter. This followed record-setting sales in the first half of the year. We're seeing strong performance across a broad and diverse customer base, including wireless carriers, mid-market and enterprise customers, wholesale partners, educational institutions, and state and local governments. Our service delivery team installed 215,000 in new monthly revenue in the third quarter, similar to prior periods. Average monthly compression and disconnect churn remain very low at 0.4% in the third quarter, driven by exceptional support from our network operations center and our sales team. So I'll now turn the call over to Jim to walk you through our financials and outlook for the rest of 2025.

Jim Volk | Senior Vice President and Chief Financial Officer, Shentel

Thank you, Ed, and good afternoon, everyone. I'll start on slide 15 with the financial results for the third quarter 2025. Revenue grew 2.5% to $89.8 million, driven by another quarter of strong global fiber expansion market revenue growth of $6.2 million, or 41.1%. The global fiber revenue growth was partially offset by declines in our other lines of business. Incumbent broadband markets revenue declined $1.6 million, primarily due to a 15% decline in video RGUs due to customers switching to streaming video services. The commercial fiber revenue declined 1.1 million, primarily due to 900,000 in non-cash deferred revenue adjustments for one of our national wireless carrier customers, and a 500,000 decline in early termination fees earned in 2024. Excluding these variances, Commercial fiber revenue grew 2.3% over the same period in 2024. RLAC revenue declined $1.3 million, primarily due to lower government support revenue and a 21% decrease in DSL subscribers, as many of these customers have migrated to our recently constructed broadband Internet service. Adjusted EBITDA grew $3.1 million, or 11.7%, to $29.7 million, driven by the previously mentioned revenue growth and $900,000 and lower operating expenses as we recognize synergy savings from the Horizon acquisition. Adjusted EBITDA margins increased 300 basis points to 33% in the third quarter of 2025. Moving to slide 16, we invested $212 million in capital expenditures year to date, net of 39.9 million in government subsidies collected. We constructed over 1,700 route miles of fiber in the last year, and we have completed construction on 89% of the planned 22,000 government subsidized unserved passings in our incumbent markets. We expect to complete this construction in mid-2026, and this will be a driver of lower capital intensity in future years. Turning to slide 17, we are reiterating our annual guidance. We expect 2025 revenues of $352 to $357 million and adjusted EBITDA of $113 to $118 million. CapEx net of grant reimbursements of $55 to $65 million is expected to be $260 million to $290 million. I'd now like to update you on our liquidity and debt positions on slide 18. Liquidity was $230 million on September 30th, including $23 million in cash, $118 million in available revolver capacity, and $72 million in remaining reimbursements under available government grants. At the end of the third quarter, we had $535 million of outstanding debt. Our first Our first material maturity is July 2027. Thank you, and operator, we are now ready for questions.

Michelle | Conference Operator

Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment for our first question. Our first question will come from the line of Frank Loudon with Raymond James and Associates. Your line is open.

Please go ahead. Frank Loudon | Analyst, Raymond James & Associates

Great, thank you. So I want to get your thoughts on creating longer term shareholder value, either through M&A, either as a buyer or seller. Is that on the table? And then if not, what else can you do to drive higher shareholder returns? And that's the first question. And then I have a follow up.

Thanks. Ed McKay | President and Chief Executive Officer, Shentel

Sure, Frank. This is Ed. Appreciate the question. You know, the industry is consolidating, and we want to be a player in that. We think the refinancing we're working on gives us the flexibility to be a player there, and we're looking for opportunities to expand our footprint. We're also looking to drive efficiencies in our business. Some of the technology we're deploying will help us there, and also we'll be getting to efficiencies as we wind down our construction process.

Jim Volk | Senior Vice President and Chief Financial Officer, Shentel

Yeah, Frank, if I could add to that, you know, the global fiber expansion is coming to an end in 2026, and we expect the positive free cash flow inflection point is a significant accomplishment, and we will be generating several years in front of us of significant free cash flow in 2028 and beyond. So, I think that will be another driver, you know, based upon our organic plan.

Frank Loudon | Analyst, Raymond James & Associates

Okay. All right. And then, so, I think you mentioned you're at 30% penetration in your subsidized passings. Can you remind us how many subsidized passings have you been granted and what you get? And then ultimately, what's sort of the target penetration for those builds?

Ed McKay | President and Chief Executive Officer, Shentel

Yes. In our incumbent cable markets, about 22,000 is what we're targeting. And we expect penetration in the high 60% range.

Frank Loudon | Analyst, Raymond James & Associates

Okay.

Ed McKay | President and Chief Executive Officer, Shentel

And we also have several thousand other passings in closed fiber markets as well.

Frank Loudon | Analyst, Raymond James & Associates

Okay. All right, great. Okay, thank you very much.

Michelle | Conference Operator

Thank you, and one moment for our next question. Our next question comes from the line of Hamid Khorasan with BWS Financial Inc. Your line is open.

Please go ahead. Hamid Khorasan | Analyst, BWS Financial Inc.

Hi, I just want to say that you're – Pricing actually took with Glow Fiber. What sparked that? Are you seeing increased competition or just a lack of consumer willingness to take on the new service that you had to feel like you had to do a new pricing scheme?

Ed McKay | President and Chief Executive Officer, Shentel

Ahmed, good afternoon. Good question there. So Comcast launched a five-year price guarantee in our markets in June. We did see a little bit of impact there on the gross ad side. No impact on the churn side, though, but we decided to respond with our own five-year guarantee. We've got enhanced bandwidth speeds, and that five-year guarantee started in mid-August, and we've seen a significant lift in gross ads since then. In fact, they're above the levels we experienced before Comcast launched their five-year plan. But we continue to believe we have a competitive advantage there, not only with speed, but with our local customer service and our network reliability as well.

Unidentified Analyst | Analyst

Why isn't this growth leading to you raising your guidance? Ahmed, this is Jim.

Jim Volk | Senior Vice President and Chief Financial Officer, Shentel

I can respond to that one. It takes several quarters of for growth to accumulate here. So it's not something that you get in the first quarter. But our customer churn is very low, as you're aware. Generally, we've been averaging about 1% per year. So we think these customers will be with us for 100 plus months. So it'll take an accumulation of higher gross ads for a couple of quarters before you see a significant lift in our revenues.

Unidentified Analyst | Analyst

Okay.

Thank you. Michelle | Conference Operator

Thank you, and I'm showing no further questions, and I would like to hand the conference back over to Jim Volk for any further remarks.

Ed McKay | President and Chief Executive Officer, Shentel

Yes, thank you all for joining.

Jim Volk | Senior Vice President and Chief Financial Officer, Shentel

We're at a very exciting point in our evolution, and we look forward to updating you at our next quarterly call.

Have a good evening. Michelle | Conference Operator

This concludes today's conference call. Thank you for participating. You may now disconnect. jsPDF 3.0.3 D:20260606090425-00'00'