SHEN — Shenandoah Telecommunications Company

Summary of Shenandoah Telecommunications Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Consolidated Revenue: $93.5 million, up 5.5% year-over-year.
• Adjusted EBITDA: $32 million, a 12.9% increase from the previous year, with an EBITDA margin of 34.3%.
• Fiber Revenue: Grew 21.4% year-over-year, now representing 51% of total revenue, surpassing incumbent broadband and RLEC revenue.
• Glo Fiber Net Additions: Achieved a record of 6,200 new customers, totaling over 100,000 data customers, reflecting a 31.3% year-over-year growth.
• Broadband Data ARPU: Slight decline to just under $77, with a 2.6% year-over-year decrease in incumbent broadband markets to $81.

2. Strategic Updates and Business Highlights

• Glo Fiber Expansion: Completed nearly 97,000 fiber passings in the last 12 months, with a target of 510,000 passings by year-end 2026.
• Customer Growth: Total Glo Fiber revenue-generating units surpassed 117,000, a 30% increase year-over-year.
• Churn Rate: Average monthly churn for Glo Fiber was 1.21%, among the best in the industry, with most churn attributed to customer relocations rather than competition.
• Commercial Fiber Growth: Incremental monthly sales bookings exceeded $180,000, driven by demand from enterprise customers.

3. Forward Guidance and Outlook

• 2026 Guidance: Revenue expected between $370 million and $377 million, with adjusted EBITDA between $131 million and $136 million. CapEx projected at $220 million to $250 million.
• Free Cash Flow: Anticipated to turn positive in 2027, driven by low double-digit EBITDA growth and declining capital intensity.

4. Bad News, Challenges, or Points of Concern

• Incumbent Market Decline: Revenue from incumbent broadband markets decreased by $2.5 million, primarily due to a 14.1% decline in video RGUs as customers shift to streaming services.
• Churn in Incumbent Markets: Broadband data churn increased to 1.73%, driven by seasonal moves and competition, particularly in rural areas with weaker demographics.
• ARPU Pressure: Continued decline in ARPU due to competitive pricing strategies and market dynamics, particularly in rural areas.

5. Notable Q&A Insights

• Data Center Opportunities: Progress is being made with a master service agreement with a major hyperscaler, but no specific updates were provided.
• Competitive Landscape: The company is competitively priced against wired competitors, and the new pricing strategy has helped mitigate churn from satellite competitors.
• Sales Efforts: Increased resources are being allocated to the commercial and SMB sectors, with optimism about growth opportunities in these areas.

Overall, Shentel reported strong growth in its fiber business, with strategic initiatives in place to enhance customer acquisition and retention. However, challenges remain in the incumbent broadband markets, particularly regarding churn and ARPU pressures. The company maintains a positive outlook for future growth and profitability.