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SHENANDOAH TELECOMMUNICATIONS CO/VA/ (SHEN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue grew 26.9% YoY to $87.9M, driven by Horizon and 52% growth in Glo Fiber Expansion Markets; Adjusted EBITDA rose 43% YoY to $27.6M with margin expanding to 31% .
  • Against S&P Global consensus, SHEN posted a modest miss: revenue $87.9M vs $89.3M*, EPS -$0.19 vs -$0.14*, and EBITDA $23.9M vs $25.0M*; Adjusted EBITDA was $27.6M (company-reported) as mix and higher D&A weighed on GAAP metrics .
  • Management reiterated 2025 net capex of $250–$280M (after $60–$70M subsidies), expects ABS refinancing in 2H25 (targeting ~100 bps interest savings), and guided to capital intensity falling to ~20–25% in 2027 with FCF turning positive in 2027 .
  • Strategic catalysts: accelerating Glo Fiber subs (+5,400 net adds) and passings (+16,600), rising synergy capture ($8.5M incremental in 2025), and potential lower debt costs via ABS; CFO characterized EBITDA margin trajectory as “300–400 bps per year” improvement from here .

Values with asterisks (*) are from S&P Global consensus.

What Went Well and What Went Wrong

What Went Well

  • Strong fiber growth: “We added 5,400 new subscribers and 16,600 new passings and increased revenues by 52%” in Glo Fiber Expansion Markets; mature cohorts generated “free cash flow margins of over 40%” in Q1 even after connect/maintenance capex .
  • Margin momentum: Adjusted EBITDA +43% YoY to $27.6M (31% margin) on high incremental Glo Fiber margins and higher synergy savings; legacy markets Adjusted EBITDA margin rose from 28% to 31% .
  • Commercial fiber demand: record sales bookings “just under $200,000” MRR with backlog expected to be installed mostly in 2025, early indicator of accelerating revenue growth .

What Went Wrong

  • GAAP losses widened: net loss from continuing operations increased to -$9.1M vs -$4.1M YoY, primarily from higher D&A tied to Horizon and Glo Fiber expansion .
  • Incumbent headwinds: Incumbent Broadband Markets revenue fell 5% YoY on cord-cutting (-14.1% video RGUs) and lower other data revenue; penetration in incumbents decreased due to acquired passings and new subsidized builds .
  • Consensus misses: modest revenue, EPS, and EBITDA under-shoot vs S&P Global consensus amid higher depreciation and early-stage integration/build spend; EBITDA (S&P basis) missed despite company-reported Adjusted EBITDA strength .

Financial Results

Headline vs Estimates (Q1 2025)

MetricActualConsensus*Surprise
Revenue ($M)87.9 89.3*-1.6%
GAAP Diluted EPS (Continuing Ops)-0.19 -0.14*-$0.05
EBITDA ($M, S&P basis)23.9 [GetEstimates]25.0*-4.6%
Adjusted EBITDA ($M, company)27.6 ——

Values with asterisks (*) are from S&P Global consensus. Surprises computed from cited actuals and S&P Global estimates.

Sequential Trend (Q3 2024 → Q4 2024 → Q1 2025)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($M)87.6 85.4 87.9
GAAP Diluted EPS (Continuing Ops)-0.13 -0.11 -0.19
Adjusted EBITDA ($M)26.6 25.5 27.6
Adjusted EBITDA Margin (%)30% 30% 31%

YoY (Q1 2024 → Q1 2025)

MetricQ1 2024Q1 2025
Revenue ($M)69.2 87.9
GAAP Diluted EPS (Continuing Ops)-0.08 -0.19
Adjusted EBITDA ($M)19.3 27.6
Adjusted EBITDA Margin (%)28% 31%

Segment Revenue (Q1 2025 vs Q4 2024 vs Q1 2024)

Segment ($M)Q1 2024Q4 2024Q1 2025
Residential & SMB – Incumbent Broadband Markets43.8 43.9 43.4
Residential & SMB – Glo Fiber Expansion Markets12.1 16.6 18.4
Commercial Fiber9.9 17.5 19.6
RLEC & Other3.4 7.4 6.5
Total Service Revenue and Other69.2 85.4 87.9

KPIs and Operating Metrics

KPIQ3 2024Q4 2024Q1 2025
Total Homes & Businesses Passed553,877 585,340 603,649
Glo Fiber Expansion Passings319,511 346,299 362,861
Glo Fiber Data Subscribers (~)“over 59,000” 65,140 ~71,000
Glo Fiber Penetration (Data)18.5% 18.8% 19.4%
Incumbent Broadband Penetration (Data)47.5% 46.6% 46.5%
Glo Fiber Monthly Data Churn1.17% 1.04% (full-year avg) 0.9% (Q1)
Incumbent Monthly Data Churn1.67% 1.49% (Q4) 1.36% (Q1)
Broadband Data ARPU ($)83.65 (Q3) 83.67 (FY) / 83.52 (Q4 ARPU table) 81.09
Glo Fiber SMB/Res ARPU ($)81.70 (Q3) 80.42 (Q4) 77.42

Note: ARPU mix and reporting were reclassed; prior-period presentation updated for comparability .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Capex (after subsidies)FY 2025$250–$280M (Q4 call) $250–$280M; subsidies $60–$70M (Q1 call) Maintained/clarified
Glo Fiber Passings TargetYE 2025 / YE 2026“>100k adds per year; substantially complete by 2026” ~440k by YE25; ~550k by YE26 Refined (more specific)
Capital Intensity (LT)From 202720–25% (company-level view) 20–25%; initially higher due to drops, then normalizing Maintained/expanded
Free Cash Flow Inflection2027“FCF positive in ’27” (implied) FCF positive in 2027; meaningful growth in 2028+ Maintained
ABS Refinancing2025 timing/costPlan to refinance 2026 maturities in 2025 Expect ABS in 2H25; ~100 bps interest savings; extended maturities by 1 year Updated (timing and savings)
Synergy Savings2025Raised to $13.8M run-rate by early Q2’25; $8.5M incremental in 2025 Expect $8.5M incremental synergies realized in 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3/Q4 2024)Current Period (Q1 2025)Trend
ABS/RefinancingRefi 2026 maturities in 2025 ABS in 2H25, ~100 bps savings; only IG tranches; revolver for incumbents; maturities extended by 1 year Positive (cost of debt)
Capital Intensity & FCFPeak capex 2024; long-term 20–25% intensity; FCF inflect 2027 Capex net $250–$280M 2025; intensity declines to 20–25% in 2027; FCF positive in 2027 Improving line-of-sight
Glo Fiber Growth & PenetrationRecord adds, ~59k subs; cohorts >25% at 3 yrs; 49% 1G+ take-rate +5,400 subs; 19.4% penetration; mature cohorts 40%+ FCF margin; 49% 1G+ take-rate Strong, compounding
CompetitionLimited new Verizon fiber; overlap ~28% (incumbent) Brightspeed overlap ~5% of passings; selective build to avoid Fios; cable promos at low tiers Manageable
T-Mobile Backhaul ChurnHeadwind in 2024; now largely behind Behind us; flow-through done Headwind abating
Tariffs/Supply ChainN/AMinimal impact; 20% of capex is materials; CPE tariffs could be offset with rental fees Controlled risk
Grants/BEADARPA grants robust; BEAD modest $104.1M remaining reimbursements; $6.9M received in Q1 Funding tailwind

Management Commentary

  • “We added 5,400 new subscribers and 16,600 new passings and increased revenues by 52% over the same period in 2024.” — Christopher E. French, CEO .
  • “Mature market cohorts…generated free cash flow margins of over 40% during the first quarter of 2025… We expect these…to expand as we approach…37% [terminal penetration].” — CEO .
  • “Adjusted EBITDA margins [to]…grow 300 to 400 basis points a year as we continue to add customers on the Glo Fiber side.” — CFO .
  • “ABS is going to save us about 100 basis points in interest expense… We expect to likely access the ABS market in the second half of the year.” — CFO .
  • “We expect to complete the construction to get to the 550,000 passings through the end of ’26… capital intensity should drop to about 20% to 25% of our revenues [in 2027]… We expect to be free cash flow positive in ’27.” — CFO .

Q&A Highlights

  • ABS financing path: Company intends to issue only IG tranches; estimates ~100 bps interest savings; ABS targeted for 2H25; long-term most debt expected to be on the fiber side .
  • Capex cadence and LT intensity: Build substantially done by YE26; capital intensity ~20–25% in 2027, initially higher due to customer drops; FCF positive in 2027 .
  • EBITDA outlook: CFO called the quarter “the new normal” and expects EBITDA margins to expand 300–400 bps per year as Glo Fiber scales .
  • Competition: Overlap with Brightspeed ~5% of passings; company avoids neighborhoods where Verizon Fios already built; cable promos mostly at low tiers .
  • Growth durability: Even the most mature Glo Fiber markets continue to add customers; targeted promotions used later to increase penetration .

Estimates Context

  • Results vs S&P Global: Revenue $87.9M vs $89.3M* (miss), GAAP EPS -$0.19 vs -$0.14* (miss), EBITDA $23.9M vs $25.0M* (miss). Company-reported Adjusted EBITDA was $27.6M, reflecting add-backs outlined in non-GAAP reconciliations .
  • Implication: Expect modest downward revisions to near-term GAAP EPS/EBITDA where analysts use S&P’s EBITDA construct; however, rising Adjusted EBITDA margins and synergy capture should support medium-term upward revisions to margin/FCF trajectories as fiber cohorts mature .

Values with asterisks (*) are from S&P Global consensus.

Estimate Comparison Table (Q1 2025)

MetricActualConsensus*Surprise
Revenue ($M)87.9 89.3*-1.6%
GAAP Diluted EPS (Continuing Ops)-0.19 -0.14*-$0.05
EBITDA ($M, S&P basis)23.9 [GetEstimates]25.0*-4.6%

Values with asterisks (*) are from S&P Global consensus. Surprises computed from cited actuals and S&P Global estimates.

Key Takeaways for Investors

  • Fiber flywheel intact: Glo Fiber is scaling with improving penetration, low churn, and high incremental margins; management targets 300–400 bps annual EBITDA margin expansion from here .
  • Near-term P&L optics vs long-term value: GAAP EPS/EBITDA can lag during heavy build/integration and higher D&A; company Adjusted EBITDA and unit economics signal durable value creation as cohorts mature .
  • Capex peak and FCF inflection: Net capex remains elevated in 2025 but intensity set to fall to 20–25% by 2027, with FCF positive in 2027—a key re-rating catalyst .
  • Liability management tailwind: ABS transaction in 2H25 could lower interest expense by ~100 bps and extend maturities—supporting equity value via lower WACC .
  • Commercial fiber acceleration: Record bookings and installation backlog provide line-of-sight to revenue growth in 2025, partially offsetting legacy declines .
  • Competitive positioning: Limited overbuilds in Glo Fiber markets, disciplined market selection to avoid Fios neighborhoods, and targeted promos support sustained net adds .
  • Watch estimate drift: Modest misses vs S&P Global set up near-term estimate trims, but synergy execution ($8.5M in 2025) and margin expansion argue for constructive medium-term revisions .

Supporting Documents & Additional Context

  • Q1 2025 8-K and press release with full financials, segment detail, liquidity, and non-GAAP reconciliation .
  • Q1 2025 earnings call transcript (strategy, guidance, ABS plan, margin outlook, competition) .
  • Prior quarters for trend analysis: Q4 2024 and Q3 2024 press releases and calls (integration progress, T-Mobile churn timing, margin trajectory) .

Values with asterisks (*) are from S&P Global consensus.