Cable One (CABO) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenues declined 5.9% year-over-year to $380.6 million, with net income dropping 93% to $2.6 million, impacted by lower residential broadband and video subscribers, ARPU declines, and a $28 million non-cash impairment charge.

• Adjusted EBITDA fell 6.6% to $202.7 million (53.3% margin), reflecting lower subscriber counts and higher costs.

• The company suspended its quarterly dividend in Q2 2025 to accelerate debt reduction and invest in organic growth, freeing up over $200 million in discretionary free cash flow over three years.

• Strategic focus is on building a scalable customer acquisition engine, enhancing retention with AI-driven tools, and rolling out new products for value-conscious and value-by-need customers.

• Customer base contracted 2.5% year-over-year, with notable declines in video and voice subscribers, but leadership remains confident in long-term growth due to emerging positive trends and new product initiatives.

Financial highlights

• Q1 2025 total revenues were $380.6 million, down from $404.3 million in Q1 2024.

• Net income was $2.6 million, down from $37.4 million in Q1 2024, due to lower operating income and increased non-cash equity method losses.

• Adjusted EBITDA was $202.7 million (53.3% margin), compared to $217 million (53.7% margin) in Q1 2024.

• Capital expenditures were $71.1 million, up 8% year-over-year, with investments in new market expansion and integration.

• Net cash from operating activities was $116.3 million, down 29.4% year-over-year.

Outlook and guidance

• Leadership expects a return to broadband subscriber and revenue growth in 2025, supported by improved churn, new product rollouts, and enhanced customer acquisition strategies.

• ARPU is expected to improve through higher-tier product adoption, discount roll-offs, and growth in ancillary products like Secure Plus.

• Full-year capital expenditures are projected to be in the low $300 million range.

• Sufficient liquidity is projected for the next 12 months, with flexibility for acquisitions and investments.

• Leverage ratio is expected to remain below four times, even with potential MBI consolidation in late 2026.