Cable One Q3 2026 Earnings: Revenue Falls amid Refinancing Pressure

Cable One (NYSE: CABO) reported Q3 2026 revenue of $332.2 million, down 11.7% from $376.0 million a year earlier, and a net loss of $431.8 million versus net income of $86.5 million. The GAAP loss was driven largely by noncash charges, but adjusted EBITDA, margins, and operating cash flow also declined materially. Management highlighted improving customer activity, although lower subscriber counts and ARPU continued to weigh on residential and business data revenue.

Core Results

Revenue declined by $43.9 million year over year, with residential data accounting for more than half of the decrease. Adjusted EBITDA fell faster than revenue, reducing the adjusted EBITDA margin by 5.6 percentage points.

Cash generation also weakened while capital expenditures increased. Adjusted EBITDA less capital expenditures, a company-defined non-GAAP measure, declined 37.1%.

NM means the comparison is not meaningful because Cable One moved from a profit to a loss.

Business and Segment Performance

Residential data revenue, Cable One’s largest disclosed revenue category, fell 10.3% to $204.1 million from $227.6 million. The company attributed the $23.5 million decline primarily to fewer residential data subscribers and lower residential data ARPU.

Residential video revenue decreased by $9.3 million, or 20.7%, as subscriber losses more than offset a rate adjustment. Business data revenue declined 6.7% to $53.6 million because of lower business data subscribers and reduced business services ARPU.

Management nevertheless reported its best residential data subscriber result in seven quarters and its highest connect activity in three years. That indicates improving recent customer trends, but the improvement was not yet sufficient to prevent year-over-year declines in subscribers, ARPU, and revenue.

Noncash Charges Explain the GAAP Loss, Not the EBITDA and Cash Flow Declines

The $431.8 million net loss included $358.0 million of after-tax noncash asset impairment charges. Cable One recognized $412.1 million of underlying asset impairments, consisting of $159.0 million related to indefinite-lived franchise agreements and $253.1 million related to goodwill, after conducting an interim impairment assessment.

The quarter also included a $39.7 million after-tax noncash fair-value adjustment loss on the put option associated with the potential acquisition of the remaining Mega Broadband Investments Holdings, or MBI, equity stake, plus a $20.0 million after-tax impairment of Cable One’s MBI equity investment.

These charges explain most of the GAAP loss and did not directly use cash. However, they do not explain the 20.8% decline in adjusted EBITDA, the margin contraction, or the 40.8% drop in operating cash flow. Those measures show that underlying operating and cash-generation pressures remained significant even after excluding the major accounting charges.

Cash Flow, Liquidity, and the Balance Sheet

Operating cash flow fell while capital expenditures rose, narrowing the internally generated cash available after network and equipment investment. Capital spending increased primarily in customer premise equipment, support capital, and network upgrades, partly offset by lower spending on line extensions and scalable infrastructure.

Cable One ended September 2026 with $674.8 million of cash and equivalents, up from $152.8 million at December 31, 2025. The increase was supported by $500.0 million of net revolving-credit borrowings during the quarter rather than stronger operating cash flow. Gross debt increased to $3.55 billion from $3.21 billion, while $1.05 billion of the revolving facility was drawn and nominal availability stood at $200.0 million. The weighted average cost of debt was 4.8% for the quarter.

The company believes its liquidity can support operating needs, capital expenditures, the potential MBI acquisition, and debt repayment requirements expected within 12 months. Beyond that period, however, Cable One stated that existing liquidity and operating cash flow would be insufficient to repay scheduled 2027 and 2028 maturities without financing transactions or maturity extensions.

Those obligations include, subject to completion of the MBI acquisition, $22.0 million of MBI revolving borrowings due in August 2027 and $916.2 million of MBI term loans due in November 2027. Cable One also has its revolving facility due in February 2028, $345.0 million of convertible notes due in March 2028, and $694.3 million under a senior secured term loan due in May 2028.

Management Commentary

CEO Jim Holanda emphasized improving customer trends, including the strongest residential data subscriber performance in seven quarters and the highest connection activity in three years. Management’s confidence rests on extending that momentum while continuing to generate cash from the network.

The quarter’s financial results show that this customer improvement is still at an early stage. Revenue, adjusted EBITDA, and cash flow remained below prior-year levels, making stabilization in subscribers and ARPU important for both operating performance and the company’s financing plans.

Recent Insider Transactions

The supplied insider data showed no reported purchases or sales in the latest six-month summary period. Among the ten most recent transactions reported over two years, nine were stock grants and one was a purchase by CFO Todd M. Koetje.

All ten transactions were reported as direct holdings. The transaction data alone does not establish insiders’ views of Cable One’s prospects.

Risks Investors Need to Watch

• Subscriber and ARPU pressure: Residential and business data revenue declined because both subscriber counts and ARPU were lower. Continued pressure on either measure would make revenue stabilization more difficult.
• Lower operating leverage and cash generation: Adjusted EBITDA declined faster than revenue, while operating cash flow fell and capital expenditures increased. This reduces financial flexibility ahead of major debt maturities.
• Refinancing and covenant risk: Cable One said existing liquidity and cash flow would not be sufficient to repay its identified 2027 and 2028 maturities on schedule. The outcome depends on financing transactions or negotiated extensions that are not entirely within the company’s control.
• MBI acquisition obligations: If Cable One becomes obligated to complete the acquisition but cannot address related financing and maturities, it could face contractual claims and additional financial pressure.
• Potential default consequences: The company was in compliance with its financial covenants at quarter-end, but warned that weaker operating performance or financing difficulties could threaten future compliance. It stated that an inability to complete financing or cure a default could make Chapter 11 relief necessary.

Summary

Cable One’s Q3 2026 GAAP loss was largely the result of noncash impairments and MBI-related valuation charges, but the quarter also showed genuine operating weakness through lower broadband revenue, compressed adjusted EBITDA margins, and reduced cash generation. Improving connection activity provides an early sign of customer stabilization, while the central issue ahead is whether operating performance and external financing can provide enough flexibility to address the company’s substantial 2027 and 2028 obligations.