SHEN — Shenandoah Telecommunications Company

Summary of Shenandoah Telecommunications Company (SHEN) Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenue: Increased by 7.2% to $91.6 million, driven by a 39% growth in Glo Fiber expansion market revenue.
• Adjusted EBITDA: Rose 31.3% to $33.5 million, with adjusted EBITDA margins improving to 36.5%.
• ARPU: Broadband data ARPU increased to over $77, a 2.3% year-over-year rise, while incumbent broadband data ARPU declined by 2.4% to $82.
• Churn Rates: Average monthly churn for broadband data was 1.01% in Q4 and 1.07% for the full year.
• Debt: Successfully refinanced debt, saving approximately $11 million annually in cash interest.

2. Strategic Updates and Business Highlights

• Fiber Expansion: Passed approximately 427,000 homes and businesses, with 81,000 new passings in 2025. Glo Fiber data RGUs grew 35% to 88,000.
• Market Dynamics: 88% of Glo Fiber passings are in duopoly markets, while 70% of incumbent markets have no fixed broadband competitor.
• Cost Management: A decision was made to forgo investments in certain Ohio markets due to rising costs, focusing on areas with better ROI.
• Customer Growth: Added 5,300 new customers in Q4 and approximately 23,000 for the full year.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Expected to be between $370 million and $377 million, representing a growth of approximately 4.4%.
• Adjusted EBITDA Guidance: Projected between $131 million and $136 million, indicating a growth of 12.1%.
• CapEx Guidance: Anticipated to decline to $220 million to $250 million, a 21% reduction at the midpoint, as the company nears the end of its expansion phase.

4. Bad News, Challenges, or Points of Concern

• Declining Metrics: Incumbent broadband markets saw a revenue decline of $1.7 million, primarily due to a drop in video RGUs and competitive pricing pressures.
• Workforce Reduction: Announced a 10% workforce reduction to align staffing with the completion of Glo Fiber construction, incurring approximately $3.1 million in restructuring costs.
• Competitive Pressures: Increased competition led to the introduction of a 5-year price guarantee, which may temporarily impact ARPU.

5. Notable Q&A Insights

• CapEx Savings: The decision to not enter certain Ohio markets is expected to save CapEx, with costs per passing around $1,400.
• Market Dynamics: The competitive landscape remains challenging, with one major cable competitor increasing prices on their 5-year guarantee.
• M&A Strategy: While there is interest in M&A, the focus remains on completing the current build plan and achieving positive free cash flow by 2027, with interest primarily in pure-play fiber providers.

Overall, Shentel is positioned for growth with a strong focus on fiber expansion, but faces challenges from competitive pressures and the need to manage costs effectively as it transitions towards positive free cash flow.