Cable One (CABO) Q2 2024 earnings summary

Executive summary

• Revenue declined 7.0% year-over-year to $394.5 million in Q2 2024, with net income down 13.8% to $47.6 million; six-month revenue was $798.8 million, down 5.6%.

• Adjusted EBITDA fell 8.2% to $212.4 million, with a margin of 53.8%; capital expenditures decreased 12.2% to $71.6 million.

• Residential data and video revenues declined due to lower ARPU and subscriber losses, while business data revenues grew 1.6% year-over-year.

• Company executed a phased plan for long-term growth, focusing on market penetration, digital transformation, and organizational changes to empower local decision-making.

• Managed the end of the Affordable Connectivity Program with proactive customer engagement, resulting in a net loss of 4,000 ACP customers out of 48,000, but overall improved connects and disconnects year-over-year.

Financial highlights

• Q2 2024 total revenues were $394.5 million (down 7.0% YoY); net income was $47.6 million (down 13.8% YoY); Adjusted EBITDA was $212.4 million (53.8% margin); capital expenditures were $71.6 million, down 12.2%.

• Residential data revenues decreased by $16.4 million (6.7% YoY), driven by a 6.9% ARPU decline; business data revenues grew by $0.9 million (1.6% YoY).

• Operating expenses were $105.8 million (26.8% of revenues), down from $112.8 million (26.6%) last year, mainly due to lower programming costs.

• Net cash from operating activities was $155.5 million, down 8.3% year-over-year.

• Six-month net income was $95.0 million, down 15.7% year-over-year; cash and cash equivalents were $201.5 million as of June 30, 2024.

Outlook and guidance

• ARPU is expected to stabilize in the second half of 2024, supported by promotional roll-offs, competitive refinements, and a new autopay program.

• Management expects strategic initiatives to drive deeper market penetration and sustainable long-term growth, despite headwinds from ACP expiration and seasonal factors.

• Residential video and voice revenues are expected to decline further as focus shifts to higher-margin services.

• CapEx for the year projected at approximately $300 million.

• Management believes existing cash, credit facilities, and operating cash flows will support funding needs, including potential MBI put option purchase in 2025.