Cable ONE, Inc ((CABO)) has held its Q1 earnings call. Read on for the main highlights of the call.
Cable ONE, Inc. recently held its earnings call, revealing a mixed sentiment about its financial health and strategic direction. The company is actively introducing new products and focusing on debt repayment, yet it faces significant challenges, including declining revenues and the suspension of dividends. Despite these hurdles, Cable ONE is making efforts to drive future growth.
Introduction of New Products
Cable ONE is launching FlexConnect and Internet Lift, products designed for value-conscious customers. FlexConnect targets those who choose value, while Internet Lift caters to those who need it. These offerings are expected to drive growth and enhance customer acquisition.
Increased Adoption of SecurePlus
The SecurePlus product has seen a 15% increase in adoption since the start of 2025. Additionally, the Ultimate WiFi bundle is gaining traction, with 17% of new customers opting for it this quarter, indicating a positive reception in the market.
Business Data Revenue Growth
Business data revenues experienced a modest growth of 1.2% in Q1 2025 compared to Q1 2024. This growth is attributed to strong performances in the carrier and enterprise fiber sectors, highlighting a positive trend in this segment.
Debt Repayment and Financial Strategy
Cable ONE repaid approximately $45 million of debt during the quarter. The company plans to use funds from the suspended dividend to accelerate debt reduction and invest in growth, reflecting a strategic shift towards financial stability.
Decrease in Total Revenue
The company’s total revenue decreased to $380.6 million from $404.3 million in Q1 2024. Residential data revenues also saw a decline of 4.5% year-over-year, posing a challenge to the company’s financial performance.
Decline in Residential Video Revenues
Residential video revenues dropped by 15.8% year-over-year, primarily due to a loss in video subscribers. This decline underscores the challenges faced in maintaining subscriber numbers in a competitive market.
Suspension of Dividend
Cable ONE has suspended its quarterly cash dividend to prioritize debt repayment and organic growth investments. This decision reflects the company’s focus on long-term financial health and strategic growth.
Net Income and EBITDA Decline
Net income fell sharply to $2.6 million from $37.4 million in Q1 2024, and adjusted EBITDA decreased to $203 million from $217 million. These declines highlight the financial pressures the company is currently facing.
Forward-Looking Guidance
Looking ahead, Cable ONE is focusing on long-term broadband revenue and customer growth strategies. The company aims to enhance customer acquisition through products like FlexConnect and Internet Lift, targeting different value-conscious segments. Despite a decline in residential data revenues, Cable ONE remains optimistic about growth, supported by low churn rates and strategic infrastructure innovations. The company plans to maintain a leverage ratio below 4x, emphasizing its commitment to financial stability.
In summary, Cable ONE’s earnings call presented a mixed outlook, with efforts to introduce new products and reduce debt amidst declining revenues and suspended dividends. The company is strategically focusing on growth and financial stability, aiming to overcome current challenges and drive future success.