Cable One’s first quarter results prompted a significant negative market reaction, with the company missing Wall Street’s revenue expectations and facing a notable year-on-year decline in residential broadband subscribers. Management attributed the underperformance to a combination of lower-than-expected new customer additions and a series of unusual churn events, including billing system migrations, the shutdown of unprofitable fixed wireless towers, and weather-related disruptions. CEO Julia Laulis acknowledged the disappointing subscriber metrics, emphasizing that "a closer look at how the quarter unfolded along with multiple green shoots of growth now emerging presents a more promising path forward."
Is now the time to buy CABO? Find out in our full research report (it’s free).
Cable One (CABO) Q1 CY2025 Highlights:
- Revenue: $380.6 million vs analyst estimates of $386.3 million (5.9% year-on-year decline, 1.5% miss)
- Adjusted EBITDA: $202.7 million vs analyst estimates of $206.2 million (53.3% margin, 1.7% miss)
- Operating Margin: 25.1%, down from 29.6% in the same quarter last year
- Residential Data Subscribers: 1.04 million, down 21,700 year on year
- Market Capitalization: $739.1 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Cable One’s Q1 Earnings Call
- Frank Louthan (Raymond James) asked about the rationale behind suspending the dividend and whether it was related to debt covenants or going concern issues. CFO Todd Koetje clarified that the decision was driven by long-term capital allocation priorities, not by covenant breaches or financial distress.
- Frank Louthan (Raymond James) followed up on the timeline for returning to broadband subscriber growth. CEO Julia Laulis declined to specify a month but reaffirmed confidence in achieving both customer and revenue growth in 2025.
- Sebastiano Petti (JPMorgan) requested details on one-time churn events and the sources of management’s confidence in future growth. Laulis cited billing migrations, fixed wireless shutdowns, and weather as nonrecurring churn drivers, and pointed to pilot results from new products and improved retention as reasons for optimism.
- Brandon Nispel (KeyBanc Capital Markets) inquired about the early performance and ARPU for FlexConnect and Lift, as well as the competitive landscape regarding fiber and fixed wireless overbuild. Laulis described FlexConnect’s tiered pricing and noted that about half of Cable One’s footprint is now overbuilt with fiber; fixed wireless is available in nearly all markets.
- Brandon Nispel (KeyBanc Capital Markets) also asked for updates on market overlap with wireless broadband, to which Koetje and Laulis confirmed that mobile operator broadband competition remains widespread and unchanged from prior quarters.
Catalysts in Upcoming Quarters
In future quarters, StockStory’s analysts will be tracking (1) the uptake and performance of FlexConnect and Internet Lift as they scale beyond pilot markets, (2) the effectiveness of AI-driven retention strategies in sustaining low churn rates, and (3) the pace of business services growth and commercial contract wins. Progress on debt reduction and further updates to capital allocation policies will also be important markers of execution.
Cable One currently trades at $129.50, down from $262.71 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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