Shenandoah Telecommunications Company (SHEN) Citi’s 2026 Global TMT Conference summary

Strategic priorities and business evolution

• Transitioned from a local telephone company to a fiber-first operator, focusing on Glo Fiber network expansion and commercial fiber growth.

• Targeting over 510,000 fiber passings by year-end and emphasizing efficient operations to maintain steady operating costs as revenue grows.

• Fiber business now represents 51% of total revenue, surpassing incumbent operations, with this trend expected to continue.

• No plans to exit current markets; construction winding down as all desired markets have been claimed.

• Market selection driven by being first fiber provider, demographics, and cost to pass, with disciplined avoidance of high-cost markets.

Financial outlook and growth drivers

• 2026 guidance targets 4% revenue growth and 12% EBITDA growth at midpoint, driven by organic growth and increasing fiber penetration.

• Glo Fiber penetration at 21%, aiming for 37% in mid-term and over 40% long-term in some markets.

• Combined fiber businesses saw 21% revenue and 31% subscriber growth over the past 12 months.

• Free cash flow positive targeted for 2027, supported by revenue growth, reduced CapEx, and lower interest expense after debt refinancing.

• Capital intensity projected at 25–30% in 2025, declining as business scales.

Competitive landscape and market dynamics

• Limited impact from satellite and fixed wireless competitors, with terrain and technology providing advantages.

• Fiber competition minimal in most Glo Fiber markets; 87–88% of passings are duopolies with cable.

• Commercial segment faces more competition, but higher ARPU and returns compared to residential.

• Incumbent cable operators focus on bundling with mobile, but lack of wireless offering has not impacted churn or sales.

• Churn primarily driven by customer moves, with high customer satisfaction and Net Promoter Scores in the 60s.