Cable One Q3 Earnings Call Highlights

Cable One (NYSE:CABO) narrowed its residential broadband subscriber losses in the third quarter of 2026, but revenue and adjusted earnings fell as competitive pricing and a smaller customer base weighed on results.

The broadband provider lost approximately 7,500 residential data subscribers, compared with about 17,100 in the second quarter. CEO Jim Holanda said the company recorded its strongest quarterly customer connection performance in 12 quarters and its best net subscriber result in seven quarters, even though the figure remained negative.

Total revenue fell to $332.2 million from $376 million a year earlier. Adjusted EBITDA declined to $159.8 million from $201.9 million, while the adjusted EBITDA margin narrowed to 48.1% from 53.7%.

Customer gains come with pricing pressure

Holanda said Cable One has been working to balance customer acquisition, retention and revenue. Residential broadband average revenue per user, or ARPU, fell approximately $2 from the second quarter amid elevated competitive pricing and promotional activity.

Residential data revenue declined $23.5 million, or 10.3%, from a year earlier. CFO Todd Koetje attributed the decrease primarily to a 4.5% decline in ARPU and a 5.3% reduction in subscribers.

During the question-and-answer session, Holanda said he expects ARPU to decline somewhat over the long term as the company seeks to increase market penetration. He said his earlier estimate of a $2 to $5 decline from a peak of roughly $81 to $82 remained “directionally correct,” while noting that pricing could fluctuate with promotions, offers and rate adjustments.

Koetje said lower pricing affects EBITDA more immediately, but management believes growing the subscriber base can create more sustainable value over the long term.

Cable One’s door-to-door sales efforts nearly doubled from the second quarter, while digital connections grew approximately 9%, Holanda said. Together, those channels accounted for nearly 44% of total connections, up from approximately 38% in the prior quarter and 27% a year earlier.

To improve retention, the company is offering free speed upgrades, equipping teams with new customer-management tools and taking a more deliberate approach to expiring promotions. Holanda also said the company is promoting services including mobile, premium Wi-Fi, cybersecurity and TechAssist.

Business sales improve despite revenue decline

Business data revenue fell $3.9 million, or 6.7%, year over year. Koetje said $2.3 million of that decline was attributable to tower contracts divested in early 2026. Adjusting for the asset sale, he said business data revenue was effectively flat to growing.

Holanda said overall business services sold revenue increased 17% from the second quarter, including gains of approximately 26% in enterprise and 21% in carrier sales. The company is working to improve how quickly and consistently those sales become installed, billable revenue.

Cable One is also piloting mobile service for business customers and reported early adoption of its cloud-based business communications product. Its residential mobile offering remains small but is performing in line with expectations, Holanda said.

Spending and balance sheet

Third-quarter capital expenditures rose to $77.9 million from $71.8 million a year earlier. Koetje attributed the increase to stronger new-connection activity and investment in advanced Wi-Fi and security products. Cable One expects full-year capital expenditures in the high $200 million range.

Adjusted EBITDA less capital expenditures was $81.9 million, down from $130.1 million a year earlier. Cable One defines that measure as free cash flow.

The company drew a net $500 million under its revolving credit facility during the quarter. At Sept. 30, it had $674.8 million in cash, $3.55 billion in gross debt and $200 million undrawn under its committed revolver. Its trailing 12-month net leverage ratio was 4.1 times.

Koetje said Cable One is evaluating financing alternatives to maintain long-term flexibility. He said the company continues to consider next steps regarding its MBI investment but had no additional update to announce. Cable One also recognized noncash impairment charges and fair-value adjustments related to franchise agreements, goodwill and MBI.

On costs, Holanda said the company launched an early retirement offering during the quarter and is using artificial intelligence tools and simpler processes across customer service, sales and operations. Selling, general and administrative expenses fell 18.4% year over year, while operating expenses rose 2.8%.

About Cable One (NYSE:CABO)

Cable One, Inc is a broadband communications provider serving residential and business customers in smaller cities and rural communities across the United States. The company operates primarily under the Sparklight brand and provides connectivity services over its cable and fiber networks.

Its consumer offerings include high-speed internet, video entertainment and traditional voice services, along with related products such as Wi-Fi solutions and streaming-oriented television options. For business customers, Cable One provides internet access, data connectivity, communications services and other technology solutions designed for organizations of various sizes.

Cable One traces its history to the cable operations of Graham Holdings Company and became an independent publicly traded company in 2015.