Cable One (CABO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue declined 6.4% year-over-year to $393.6 million, mainly due to lower residential data and video revenues, while net income rose 45.9% to $44.2 million, driven by lower interest expense, non-cash gains, and cost reductions.

• Adjusted EBITDA decreased 7.1% to $213.6 million, with margin stable at 54.3%.

• Residential ARPU stabilized sequentially; customer base remained steady after adjusting for ACP expiration and a small acquisition.

• Business broadband growth accelerated, with business data revenue up 2.9% year-over-year, driven by strong demand in enterprise segments and new go-to-market tactics.

• Achieved milestones in digital transformation, AI integration, strategic rebranding, and organizational alignment.

Financial highlights

• Q3 2024 total revenues were $393.6 million (down 6.4% year-over-year); net income was $44.2 million (up 45.9%); Adjusted EBITDA was $213.6 million (down 7.1%).

• Capital expenditures were $77 million, flat year-over-year; Adjusted EBITDA less CapEx was $136.6 million, down 10.2% year-over-year.

• Operating expenses for Q3 fell 4.6% due to lower programming and franchise costs.

• Interest expense for Q3 decreased 11.3% to $34.2 million.

• Cash from operations for nine months: $496.5 million; capital expenditures: $214.4 million.

Outlook and guidance

• ARPU stabilization expected to continue through year-end, with broadband revenue growth as a key imperative.

• Confident that accelerated churn from ACP expiration is behind, with future churn considered part of normal lifecycle.

• OpEx investments expected to mitigate by mid-2025.

• Sufficient liquidity and cash flow to fund potential MBI put option exercise in 2025 without raising incremental capital.

• Residential video and voice revenues are expected to decline further due to industry trends and customer preferences.