Teleconferência de resultados do 3T 2026 da Cable One (CABO): perdas em banda larga diminuem com queda na receita

Principais destaques

• A receita no 3T26 caiu para US$ 332,2 milhões, frente aos US$ 376,0 milhões registrados um ano antes, puxada por recuos nas receitas de dados residenciais, vídeo residencial e dados corporativos.
• As perdas líquidas de clientes de banda larga residencial diminuíram para aproximadamente 7.500, ante cerca de 17.100 no 2T, marcando o melhor resultado de adições líquidas da Cable One em sete trimestres. O desempenho de novas conexões foi o mais forte em 12 trimestres.
• O EBITDA ajustado recuou para US$ 159,8 milhões, contra US$ 201,9 milhões, enquanto a margem EBITDA ajustada encolheu de 53,7% para 48,1%.
• A receita de dados residenciais caiu 10,3% em base anual, com a base de assinantes recuando 5,3% e o ARPU caindo 4,5%. O ARPU também diminuiu cerca de US$ 2 em relação ao trimestre anterior, em meio à intensa concorrência de preços e promoções.
• A receita contratada de Serviços Corporativos (Business Services) aumentou 17% na comparação trimestral. As receitas contratadas dos segmentos Enterprise e Carrier avançaram cerca de 26% e 21%, respectivamente.
• A Cable One encerrou o trimestre com US$ 674,8 milhões em caixa, dívida bruta de US$ 3,55 bilhões e um índice de alavancagem líquida dos últimos 12 meses de 4,1x.

Principais dados financeiros

Desempenho Comercial e Operacional

As tendências de banda larga residencial melhoraram, apesar das perdas contínuas de assinantes. As perdas líquidas diminuíram para aproximadamente 7.500, ante cerca de 17.100 no 2T. As vendas porta a porta quase dobraram na comparação trimestral, enquanto as conexões digitais aumentaram cerca de 9%. Juntos, esses canais geraram quase 44% do total de conexões, acima dos cerca de 38% no 2T e dos 27% registrados um ano antes.

A retenção continua sendo uma prioridade. A Cable One está implementando upgrades gratuitos de velocidade, uma nova plataforma de CRM e ferramentas de gestão de clientes habilitadas por IA. A empresa também está ajustando o término de períodos promocionais e expandindo serviços como telefonia móvel, Wi-Fi premium, cibersegurança e Tech Assist. Os pedidos de vendas do Tech Assist mais que dobraram em relação ao 2T, enquanto as assinaturas de Wi-Fi premium e as taxas de adesão aumentaram.

A concorrência de preços continuou a pesar sobre o ARPU e a receita de banda larga. A administração afirmou que sua estratégia de aquisição de clientes enfatiza serviços com velocidade gigabit ou superior na maior parte possível de sua área de cobertura, sustentada pela capacidade de rede disponível.

As vendas de Business Services melhoraram, com a receita contratada total avançando 17% em relação ao trimestre anterior. A receita contratada de Enterprise e Carrier aumentou cerca de 26% e 21%, respectivamente. A gestão declarou que a próxima prioridade é converter a receita contratada em receita instalada e faturável de forma mais rápida e consistente.

A empresa também reportou uma adoção inicial animadora de UCaaS e está testando serviços móveis para clientes corporativos. A telefonia móvel residencial continuou a expandir em linha com as expectativas da administração, embora o negócio ainda seja pequeno.

Guidance da Administração

A Cable One espera que as despesas de capital para o ano fechado de 2026 fiquem na faixa superior de US$ 200 milhões. Os investimentos continuarão apoiando iniciativas de crescimento, enquanto a empresa permanece focada na redução da dívida.

A administração espera que o ARPU trimestral continue irregular à medida que os preços, o fim de promoções e as ofertas concorrentes sofram alterações. O CEO James Holanda afirmou que a tendência de queda de US$ 2 a US$ 5 discutida anteriormente, em relação ao pico de ARPU de cerca de US$ 81 a US$ 82, permaneceu razoável ao longo do tempo, enquanto a Cable One equilibra o crescimento de assinantes, a retenção e a receita.

A empresa também espera que seus investimentos em plataformas gerem economias de custos adicionais e eficiências operacionais. A administração afirmou que a transição das operações de vendas de publicidade para um fornecedor terceirizado deve melhorar a contribuição para o EBITDA ajustado ao longo do tempo.

Riscos e pontos de atenção

• A concorrência de preços e a atividade promocional continuam elevadas, pressionando o ARPU e a receita de banda larga.
• A sobreposição de fibra óptica até a residência (FTTH) ficou ligeiramente acima de 11% do total de domicílios cobertos (passings), enquanto a sobreposição competitiva geral de cabo gigabit situou-se na faixa média a alta dos 60%. Um ou dois provedores de conexão fixa sem fio (fixed-wireless) operam em quase todos os mercados da Cable One.
• As perdas de assinantes continuaram, apesar da melhora nas tendências de captação de clientes, deixando a retenção como uma prioridade-chave de execução.
• A dívida bruta totalizou US$ 3,55 bilhões, e a Cable One realizou saques líquidos de US$ 500 milhões em sua linha de crédito rotativo durante o 3T. A empresa está avaliando alternativas de financiamento para preservar a flexibilidade no longo prazo.
• A Cable One registrou encargos de impairment sem efeito em caixa e ajustes a valor justo relacionados a contratos de franquia, ágio (goodwill) e ao seu investimento na MBI. A administração afirmou que essas despesas não afetaram o fluxo de caixa, a liquidez ou a estratégia operacional.

Destaques da sessão de perguntas e respostas com analistas

A administração afirmou que preços promocionais de entrada mais baixos podem pressionar o ARPU e o EBITDA no curto prazo, mas vê o crescimento de assinantes e uma maior penetração como fontes mais sustentáveis de valor no longo prazo. As ferramentas de retenção têm como objetivo complementar o ritmo aprimorado de novas conexões de clientes.

Sobre as condições concorrenciais, a gestão afirmou que os preços variam amplamente entre os provedores de fibra, de conexão fixa sem fio e de satélite. A Cable One planeja se concentrar em serviços de velocidade gigabit ou superior a preços competitivos, em vez de reagir a cada oferta individual do mercado.

Em relação a Business Services, a gestão destacou que a venda de ativos no início de 2026 representou aproximadamente US$ 9 milhões em receita anual e cerca de US$ 6 milhões em fluxo de caixa. Ajustado por essa venda, o desempenho de dados corporativos foi classificado como praticamente estável a em crescimento, com a expectativa de que o ritmo recente de vendas se torne mais visível nos trimestres seguintes.

A administração não forneceu novas atualizações sobre a MBI e afirmou que continua avaliando os próximos passos adequados.

Transcrição completa da teleconferência de resultados

Transcrição completa da teleconferência de resultados

Comentários da administração

Operator

Hello everyone. Thank you for joining us, and welcome to the Cable One Inc. third quarter earnings release. [Operator Instructions] I will now hand the conference over to Jordan Morkert, Vice President of Investor Relations. Jordan, please go ahead.

Jordan Morkert

Good afternoon, and welcome to Cable One's Third Quarter 2026 Earnings Call. We're glad to have you join us as we review our results. Before we proceed, I would like to remind you that today's discussion contains forward-looking statements relating to future events that involve risks and uncertainties, including statements regarding future revenue, customer growth, connects churn rates and ARPU, future competition, the anticipated benefits of our mobile service offering, new product rollouts, future customer retention trends, future benefits from our cost savings initiatives, anticipated cost savings and other benefits to be derived from our investments in growth enablement platforms, the expected benefits to be derived from the transition of our advertising sales operations to a third-party provider, our plans to expand our multi-gig capabilities in more markets, future cash flow and capital expenditures, potential uses for our cash flow, MBI's future operating or financial performance future tax savings, our expectations for monetizing our remaining equity investments and our future financial performance, capital allocation policy, leverage ratios and related targets and potential financing plans.

You can find factors that could cause Cable One's actual results to differ materially from the forward-looking statements discussed during today's call in today's earnings release and in our SEC filings, including our 2025 annual report on Form 10-K and our forthcoming third quarter 2026 quarterly report on Form 10-Q. Cable One is under no obligation and expressly disclaims any obligation, except as required by law, to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, today's remarks will include a discussion of certain financial measures that are not presented in conformity with U.S. generally accepted accounting principles or GAAP.

When we refer to free cash flow during today's call, we mean adjusted EBITDA less capital expenditures as defined in our earnings release. Reconciliations of non-GAAP financial measures discussed on this call to the most directly comparable GAAP measures can be found in our earnings release or on our website at ir.cableone.net. Joining me on today's call is our CEO, Jim Holanda; and CFO, Todd Koetje.

With that, I'll turn the call over to Jim.

James Holanda

Thank you, Jordan, and good afternoon, everyone. We appreciate you joining us today. Q3 reflected meaningful progress in customer trends. We delivered our strongest quarterly connect performance in 12 quarters and our best net adds in 7 quarters. While net adds remained negative, the trend improved meaningfully. Today, I'll provide updates on residential broadband and business services, the work underway to improve retention and the customer experience, recent additions to our senior leadership team and the steps we're taking to manage our cost structure. Todd will provide more detail on our financial performance and ongoing balance sheet management initiatives.

Turning to residential broadband. Our connect performance was our strongest in 12 quarters. While we still experienced subscriber losses, net losses narrowed to approximately 7,500 from approximately 17,100 in Q2, representing our best net add result in 7 quarters. Our more balanced acquisition approach continues to show results. Our door-to-door sales efforts nearly doubled from the second quarter, while digital connects grew approximately 9%. Together, these channels accounted for nearly 44% of total connects, up from approximately 38% in the second quarter and approximately 27% a year ago.

Retention remains an opportunity and a priority. We're making progress on the initiatives discussed on prior calls. These include free speed upgrades and equipping our retention teams with new tools, including a CRM platform and implementation of AI into our customer management tools. We're also taking a more deliberate approach to promotional roll-offs to help manage true. Alongside those efforts, we remain focused on broadening the value we offer customers through products and services such as mobile, premium WiFi, cybersecurity and tech assist. In Q3, tech assist sales orders more than doubled from the prior quarter while premium WiFi subscriptions and attachment rates also increased. These offerings can help deepen customer relationships, support retention and contribute to ARPU. Competitive pricing and promotional activity remained elevated and put pressure on ARPU and revenue. ARPU declined approximately $2 sequentially in Q3. We do not expect ARPU to move in a straight line from quarter-to-quarter as we respond to competition and customer needs. Our focus remains on balancing subscriber growth, retention and revenue over time.

Moving on to Business Services. We're encouraged by improving sales momentum. Overall, sold revenue increased 17% in the third quarter with growth across each of our primary sales channels, making Q3 our strongest sales quarter of the year. Enterprise and Carrier were important contributors with sold revenue increasing approximately 26% and 21% respectively, compared with the second quarter. We're also broadening our product portfolio. Following the introduction of UCaaS, our cloud-based business communications solution we've seen encouraging early customer adoption, helping increase the value of those customer relationships. Additionally, we're piloting mobile for business customers creating another opportunity to meet more of the needs beyond core connectivity. Together, these offerings support our strategy to deepen customer relationships and grow revenue over time. Our focus now is on scaling these opportunities while improving the speed and consistency with which sold revenue converts to installed billable revenue.

Turning to residential mobile. We continue to scale the offering with performance in line with our expectations. Our focus remains on building awareness of Sparklight as a mobile provider and growing adoption amongst our broadband customers. While the business is still small, we continue to see mobile as an opportunity to strengthen those relationships and increased customer lifetime value. Since our last call, we strengthened our senior leadership team with the addition of Heather McCallion as Chief Operating Officer; Mike Carrosquilla and Jared Sonne as Senior Vice President of Operations; and Courtney Long is Senior Vice President of Customer Experience. Together, they bring extensive experience across broadband operations, customer care and business transformation, including leadership roles at several major providers. These appointments add depth to our team and provide more direct support for our regional operations with a focus on consistent execution and stronger customer relationships.

As these leaders build on the work already underway, our priorities remain consistent: sustain our momentum in customer acquisition and use the tools we've put in place to improve retention and the customer experience. Over time, we expect their experience and leadership to help us operate more efficiently and deliver stronger performance. That work also includes aligning our cost structure with the revenue trends while maintaining the quality of service our customers expect. We continue to expect our key platform investments to deliver additional cost savings and operating efficiencies. We're also taking further steps to align our cost base with the needs of the business including an early retirement offering launched this quarter. Across customer service, sales and operations, we're using AI tools and simplifying processes to improve productivity and efficiency while making it easier for customers to do business with us.

To close, we made meaningful progress in customer trends this quarter with stronger connect performance and our best net add performance in 7 quarters. Building on this momentum remains a priority as we work to improve retention, expand the value we deliver to customers and manage our cost structure. The experienced leaders we've added to the team will help advance these priorities. We have more work ahead, but I remain confident in the long-term opportunity for our business. That confidence is grounded in the strength of our network, the cash flow the business generates and the opportunities we see to deepen customer relationships and improve execution across our markets.

With that, I'll turn it over to Todd to provide more detail on our financial performance and ongoing balance sheet management activities.

Todd Koetje

Thanks, Jim. Total revenues for the third quarter of 2026 were $332.2 million compared to $376 million for the third quarter of 2025. Residential data revenues decreased by $23.5 million or 10.3% year-over-year, due primarily to a 4.5% decline in ARPU and a 5.3% decrease in subscribers. Business data revenues decreased by $3.9 million year-over-year or 6.7% with $2.3 million of the decline attributable to the tower contracts divested in early 2026. Residential video declined by $9.3 million or 20.7%.

Advertising sales, which are included in other revenues decreased approximately $2.8 million year-over-year reflecting the July 1 transition of our advertising sales operations to a third-party provider. Under this arrangement, advertising revenues are reported net of agency fees with a corresponding reduction in expenses. The revenue decline was largely offset by lower costs, and we expect the arrangement to improve the business' contribution to adjusted EBITDA over time. Operating expenses increased by $2.7 million or 2.8% compared to the third quarter of last year due to higher software and contract labor costs, partially offset by lower programming costs. OpEx represented 29.7% of revenues in Q3 of 2026 and 25.5% in Q3 of 2025.

Selling, general and administrative costs for the third quarter of 2026 decreased by $18.5 million or 18.4% year-over-year, due primarily to lower labor expense and reduced billing system conversion costs. SG&A was 24.8% of revenues in Q3 of 2026 compared to 26.8% in the prior year quarter. Adjusted EBITDA for the third quarter of 2026 was $159.8 million or 48.1% of total revenues compared to $201.9 million and 53.7% in Q3 of 2025. Capital expenditures totaled $77.9 million in the third quarter, representing 48.8% of adjusted EBITDA. The $6.1 million year-over-year increase in CapEx was driven by the increased momentum in new connect activity as well as our investments in the latest in-home advanced WiFi technologies and security solutions to drive increased customer satisfaction and related loyalty. We expect full year CapEx to be in the high $200 million range as we continue to invest in future growth while simultaneously remaining focused on debt reduction initiatives. Adjusted EBITDA less CapEx was $81.9 million in Q3 of 2026 versus $130.1 million in Q3 of last year.

During the third quarter, we recognized several noncash impairment charges and fair value adjustments related to our franchise agreements, goodwill and our investment in MBI. These accounting charges do not impact our cash flow, liquidity, operating strategy or long-term growth initiatives. Additional details are included in our earnings release and Form 10-Q. During the quarter, we drew a net of $500 million under our revolver. As of September 30, our cash balance was $674.8 million, while our gross debt totaled $3.55 billion, consisting of approximately $1.65 billion of term loans, $1.05 billion of revolver borrowings, $503 million of unsecured notes, $345 million of convertible notes and $3 million of finance lease liabilities. We also had $200 million undrawn under our $1.25 billion committed revolver at the end of the quarter. Taking into account our net debt and Q3 results our net leverage ratio was 4.1x on a trailing 12-month basis.

Our balance sheet continues to be supported by a substantial cash balance and strong operating liquidity. We remain focused on strengthening it and continue to actively evaluate a range of financing alternatives with the objective of maintaining financial flexibility over the long term. With respect to MBI, we continue to evaluate the appropriate next steps and do not have any additional updates to announce today.

With that, we can open it up for questions.

Operator

The first question is from the line of Greg Williams of TD Cowen.

Perguntas e respostas

Gregory Williams

The data sub losses improved better than expected as you noted, but the broadband ARPU was down 4.5% to $78.48, I think. Is that the sort of strategy going forward to sort of trade subscriber gains for maybe downside ARPU or trading P for Q, if you will? Or should we see a more balanced approach going forward? And when would we see that? The second question is understanding you're still evaluating next steps in MBI and you can't really say much, but any commentary on the timing and resolution anything you can do from a balance sheet perspective while you're in limbo here.

James Holanda

It's Jim. And let me start with the second question first and just point to the 10-Q. As it relates to where everything is at Item 17 under subsequent events lays out pretty much exactly where we are. And so I would refer folks there for any additional details. And clearly, balancing overall ARPU and subscriber gains and longer-term penetration gains given the opportunity here is something we remain focused on. As I mentioned, it's not linear. It's going to bounce around, I think, from quarter-to-quarter based on promo roles and go-to-market strategies and offers as well as rate adjustments from time to time. And the idea, I think, as I mentioned, gosh, I guess, 2 quarterly calls ago was -- I think over the long term, our expectation is that ARPU is going to come down a little bit as we try and balance out our opportunity in terms of titration gains. And so we made meaningful progress in Q3 in that regard, and we look forward to those trends continuing. It's mainly come on the connect side, as I mentioned in my remarks, and I think the additional opportunity that we're highly focused on is on the retention side. We have a lot of new tools at our disposal now that we are using day to day. And hopefully, that can help results over time as well.

Operator

[Operator Instructions] The next question is from the line of Frank Louthan of Raymond James.

Frank Louthan

Walk us through kind of the sub growth there still sort of missed EBITDA, I assume there's a pricing issue there? Or what exactly are you doing to kind of get that going? And then give us an update on the fiber overlap and the fixed wireless overlap in the market.

Todd Koetje

Frank, it's Todd. I appreciate the question. On the sub growth and the pricing dynamic. I think Jim addressed that pretty well on the previous answer as it relates to we have an opportunity on that penetration side of the equation that we've talked about quite extensively now for a while. We're starting to see very good progress around that in terms of new customer connects given the dynamics in the industry, both broadband and throughout the telecom dynamics, the pricing dynamics do sell in at a lower rate than obviously what our enterprise ARPU is. So EBITDA, while it is impacted from a lower ARPU on a more immediate basis, our view is value creation over the long term is much more sustainable for our stakeholders by growing subscribers and a lot of the initiatives that we put in place and are continuing to put in place our focus not only on the new subscriber side of the equation, but as Jim said, on the retentive side of the existing base. We do have some new tools that we feel confident about for that. And then as it relates to your second question here, remind me exactly what you were looking for there.

Frank Louthan

Yes. Can you give us an update on how much fiber coverage you have and overlap to fixed wireless in your market currently?

Todd Koetje

Yes. I just want to make sure it was related to the fiber. The fiber overlap really didn't move much in the quarter. I mean a little bit. It's definitely still increasing. And so you're in that kind of mid- to high as a percent overlap there, which is consistent with what we discussed in the past, our fiber-to-the-home percentage of our total passings. It's a little over 11%. As we've talked about in the past. It's a little bit higher than what it was before. So you get basically an overall what I'd call gig cable competitive overlap that's kind of in the mid- to high 60s. And then fixed wireless is very ubiquitous across our footprint. It doesn't mean that's all 3 of the major wireless providers in every market, but there is 1 or 2 in nearly every market we operate in.

Frank Louthan

Great. Sorry for the redundancy, juggling, 2 different earnings calls.

James Holanda

That's all right.

Operator

The next question is from the line of Craig Moffett of MoffettNathanson.

Craig Moffett

Let's stay with the operating side of the business for a second. There were so many changes in the broadband market during the quarter with really aggressive pricing from especially AT&T early in the quarter and then the price increases late in the quarter and then obviously, Starlink ramping up through the course of the quarter. I wonder if you could just talk a little bit about kind of how the quarter progressed given all those big changes? And maybe in particular, given your relatively rural footprint, what are you seeing from Starlink? And is the fear that a lot of investors have that, that's kind of FWA 2.0 appropriate?

James Holanda

Good question, Craig. For the third quarter, to be honest with you, we were not focused on competitive pricing. And because we have a lot of little fiber companies across 20% of the footprint. We have 1, 2 or 3 FWA providers that have pricing kind of all over the map let alone, Starlink, let alone than what our larger competitors like AT&T are doing. Our focus on the third quarter was to really balance out our sales channels and focus on our go-to-market offer strategies, which basically, we're focused on selling gig or higher speeds across as much of the footprint as we possibly can. We think that serves us best over the long run because so many of our and Starlink competitors can't compete with those speeds today. We have the ability to have it competitively priced across 100% of our footprint regardless of the competitive landscape there. And that strategy served us well in the third quarter in terms of our results. And so we continue to lean into that. We have a very robust network with a lot of excess capacity. And so certainly, one of my early observations was merely taking advantage of that capability and that capacity and have an improved product experience for our customers. And we'll continue to stay kind of focused on that. Interestingly, already, we're seeing cyber offer, right? I think you are right to point out that everyone kind of reset pricing at the beginning of the fourth quarter, it lasted all of 30 days near site can tell. We're already seeing cyber offers in the market from some competitors. And so we certainly expect and plan for the pricing dynamic to remain kind of very up and down and various competitive constituents have to do what they need to do, whether you're a fiber over builder trying to drive penetration, whether you're the AT&T FWA provider that's trying to get a hold now in these markets and being aggressive. It's just all over the map and the best course for us is to focus on a price point that makes sense both for our existing customers and especially our new customers as we compete for these customers. and given the absolute highest quality service that the network can deliver.

Operator

The next question is from the line of Sam McHugh of BNP Paribas.

Samuel McHugh

Jim, just a follow-up on your comments about and come down a little bit. I think in the past, you talked about this 2% to 5% reduction may be needed to stabilize the subscriber losses. I think we're down 3.5% from peak, how -- like how much further down from here do you think we need to go? If you could maybe give a bit more of an update on what you said before? And then secondly, in business data revenues, I think last couple of quarters, it has inflected pretty negatively. Can you talk a bit about what's happening now on pricing? Is it FWA competition, fiber? Any help there would be helpful, too.

James Holanda

Yes. On your first question, I still think the comments I made, I think that was 2 calls ago are still pretty directionally accurate in terms of how we think about the business and where competitors are at. Having said that, to Craig's question just before, will people start to act irrationally potentially, but then all of a sudden, as aggressive as Starlink had been. Now we see the surge pricing and people complaining all over the place in the Midwest. And who knows where that's going to ultimately land. But if we kind of stick to the principles and the game plan that I just outlined in terms of just focusing on we have control over I still think that kind of $2 to $5 range is off of that kind of $81, $82 peak is probably still directionally correct. And just to clarify, was your second question on business services revenue?

Samuel McHugh

Correct. Business paid revenues.

Todd Koetje

Yes. And Sam, it's Todd. I can take that one. One of the things I had in my prepared remarks, but I can elaborate on a little bit more again is as it relates to business data, business data was impacted by that asset sale that we completed in the first quarter. That was about a $9 million full year run rate of revenue, approximately $6 million of cash flow on that. So when you pro forma that, business services was down on slightly, but business data has actually been effectively flat to growing. And what Jim talked about in his prepared remarks was the sell-in into enterprise and carrier actually selling across the entire business services segment, but specifically business -- specifically enterprise and carrier were both up plus 20 points just on a sequential quarter, which gives us a lot of confidence in how that team is really starting to hit its stride. That's the highest quarter from a sold revenue perspective. since 2023. So the momentum is there. It will begin to show more on what I'd say in some of the subsequent quarters. But there has been pretty flat as well. It was a little softer at the beginning of the year in SMB, as we've talked about in the past, with enterprise and carrier seeing some good sell-in. But for the third quarter, both were relatively flat on the ARPU side of the equation. I just want to make sure that you adjusted for the asset sale that impacts the reported figures there.

Operator

There are no further questions at this time. We have reached the end of our Q&A session. I will now turn the call back to Jim for closing remarks.

James Holanda

Yes. Thanks, Conor. Let me just close by thanking our teammates all across the country for the work they do every day to earn our customers' business. Obviously, there is a lot underway across the company in terms of operational initiatives and execution, and I just appreciate all the effort that it takes from our teammates to move these priorities forward. while keeping our customers and our teammates kind of front and center of all of that work. This quarter's progress is encouraging, and our task is now to build on it and translate better customer trends into stronger results. So thank you all for your time today. We appreciate it.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.