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SHENANDOAH TELECOMMUNICATIONS CO/VA/ (SHEN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered modest top-line growth and strong margin expansion: revenue up 2.5% to $89.8M, Adjusted EBITDA up 11.8% to $29.7M with margin +300 bps to 33% .
  • Glo Fiber Expansion Markets were the growth engine (+41.1% YoY to $21.3M), offset by declines in Incumbent Broadband, Commercial Fiber (due to deferred revenue accounting and lower early termination fees), and RLEC & Other .
  • Guidance was reiterated for 2025: revenue $352–$357M, Adjusted EBITDA $113–$118M, and CapEx net of grants $260–$290M; management flagged tariff uncertainty and potential U.S. government shutdown timing risk for grant payments .
  • Strategic catalysts: milestone 400k Glo Fiber passings, promotional five‑year price guarantee driving higher gross adds, and planned refinancing (ABS + new credit facility) to lower cost of debt and support positive FCF by 2027 .

What Went Well and What Went Wrong

What Went Well

  • Glo Fiber Expansion Markets revenue grew 41.1% YoY to $21.3M on 41.3% average subscriber growth; passings increased 21k sequentially to over 400k; subscribers ~83k at quarter-end .
  • Adjusted EBITDA rose 11.8% to $29.7M; margin expanded to 33% from 30% YoY, reflecting scaling and Horizon synergies realization .
  • Management highlighted operational execution and technology leverage: “we’re currently using AI to streamline our technical support operations and optimize digital marketing” (Ed McKay) .

What Went Wrong

  • Incumbent Broadband Markets revenue declined $1.6M, driven by a 14.9% decline in video RGUs and a 1.3% decline in data ARPU .
  • Commercial Fiber revenue declined $1.1M due to $0.9M non‑cash deferred revenue adjustment for a carrier customer and $0.5M in prior‑year early termination fees; excluding these, revenue grew 2.3% YoY .
  • Net loss from continuing operations widened to $9.4M from $5.3M YoY, with D&A up $6.8M including a $3.2M write‑off of inventory assets no longer expected to be used .

Financial Results

Consolidated Results (Actuals)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$87.898 $88.568 $89.796
Adjusted EBITDA ($USD Millions)$27.593 $28.388 $29.687
Adjusted EBITDA Margin %31% 32% 33%
EPS ($USD, basic & diluted)$(0.19) $(0.19) $(0.20)

Actual vs S&P Global Consensus

MetricQ1 2025Q2 2025Q3 2025
Revenue Actual ($USD)$87.898 $88.568 $89.796
Revenue Consensus Mean ($USD)$89.307M*$89.939M*$89.299M*
EPS Actual ($USD)$(0.19) $(0.19) $(0.20)
Primary EPS Consensus Mean ($USD)$(0.138)*$(0.193)*$(0.2205)*
Adjusted EBITDA Actual ($USD)$27.593M $28.388M $29.687M
EBITDA Consensus Mean ($USD)$25.040M*$29.163M*$30.292M*

Values retrieved from S&P Global.*

  • Q3: revenue slightly beat consensus; EPS was better than consensus (less negative); Adjusted EBITDA was modestly below consensus .
  • Q2: revenue missed consensus; EPS in line with consensus; Adjusted EBITDA below consensus .
  • Q1: revenue missed consensus; EPS missed; Adjusted EBITDA slightly above consensus .

Segment Revenue Breakdown (Q3 2025 vs Q3 2024)

SegmentQ3 2024 ($USD Thousands)Q3 2025 ($USD Thousands)
Residential & SMB – Incumbent Broadband Markets$43,499 $41,935
Residential & SMB – Glo Fiber Expansion Markets$15,100 $21,305
Commercial Fiber$21,071 $19,957
RLEC & Other$7,929 $6,599
Total Service Revenue and Other$87,599 $89,796

KPIs and Operating Statistics

KPIQ3 2024Q3 2025
Homes & businesses passed – Incumbent234,366 248,002
Homes & businesses passed – Glo Fiber Expansion319,511 400,323
Total passings553,877 648,325
Glo Fiber Expansion RGUs59,266 82,662
Incumbent Broadband RGUs111,320 111,900
Residential & SMB Penetration – Glo Fiber Expansion18.5% 20.6%
Residential & SMB Penetration – Incumbent47.5% 45.1%
Fiber route miles16,357 18,077
Broadband Data ARPU ($)$81.22 $80.03
Video ARPU ($)$116.07 $125.38
Voice ARPU ($)$34.61 $32.62

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
Total Revenue ($USD Millions)FY 2025$352–$357 $352–$357 Maintained
Adjusted EBITDA ($USD Millions)FY 2025$113–$118 $113–$118 Maintained
Capital Expenditures, net of government grant reimbursements ($USD Millions)FY 2025$260–$290 $260–$290 Maintained

Notes: Guidance excludes potential impacts from evolving tariffs and U.S. government shutdown timing for federal funding/grant payments .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesNot highlighted in PR Not highlighted in call Using AI to streamline support and optimize digital marketing (CEO) Emerging focus
Competitive pricing dynamicsNot highlighted Big cable introducing five‑year guarantees; monitoring impact Comcast launched five‑year guarantee; Shentel responded with its own, lifting gross adds Intensifying competition; proactive response
Glo Fiber growth trajectoryRevenue $18.4M (+52% YoY); +5,400 subs; passings +16.6k Revenue $19.8M (+40.5% YoY); +5,700 subs; passings +16k Revenue $21.3M (+41.1% YoY); +5,800 customers; passings +21k Consistent acceleration
Government‑subsidized passingsLiquidity and grants detailed; program scale growing 22k target; rapid penetration (~45% after one year) 89% of planned subsidized passings constructed; ~30% aggregate penetration; target penetration high‑60% Execution strong; favorable uptake
Tariffs/macro/gov’t shutdown riskNot specified Guidance excludes tariff impacts Guidance reiteration excludes tariff impacts and shutdown timing Risk framework reiterated
Financing/Capital structureCash/liquidity update with new term loan draws Liquidity $260M; debt $513M; maturity 2027 Planned ABS + new facility refinancing; liquidity ~$230M; debt $535M Refinancing catalyst near term

Management Commentary

  • “We are focused on building on our success... integrating advanced technology and AI to boost operational efficiency... streamline technical support operations and optimize digital marketing” (Ed McKay) .
  • “GloFiber reached a major milestone, passing 400,000 homes and businesses… remain on track to substantially complete our build by the end of 2026” (Ed McKay) .
  • “Returning to positive free cash flow for the full year of 2027… plan to refinance… via asset‑backed securitization and a new credit facility… lower cost of debt and increase financial flexibility” (Ed McKay) .
  • “Adjusted EBITDA margin expansion from 27% in the second quarter of 2024… to 33% in the third quarter of 2025” (Ed McKay) .
  • “In the third quarter, we added 6,400 new customers… 68% of new residential customers choosing speeds of one gig or higher” (Ed McKay) .

Q&A Highlights

  • M&A/Industry consolidation: Management wants flexibility to participate; refinancing aimed at lowering cost of debt and enabling strategic moves (Ed McKay) .
  • Subsidized passings: Target ~22k in incumbent cable markets with ultimate penetration high‑60% (Ed McKay) .
  • Pricing actions: Response to Comcast’s five‑year guarantee; Shentel’s own guarantee with enhanced speeds drove gross adds above pre‑Comcast levels; churn unaffected (Ed McKay) .
  • Guidance timing: Not raised now given cumulative nature of growth; expect stronger lift after several quarters of higher gross adds (Jim Volk) .

Estimates Context

  • Q3 2025: Revenue beat consensus slightly; EPS less negative than expected; Adjusted EBITDA modestly below consensus .
  • Q2 2025: Revenue missed; EPS in line; Adjusted EBITDA below consensus .
  • Q1 2025: Revenue missed; EPS missed; Adjusted EBITDA above consensus .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Margin expansion is durable: Adjusted EBITDA margin reached 33%, supported by Horizon synergies and scale; monitor continued cost savings and mix shift toward fiber .
  • Glo Fiber momentum is intact: sequential passings (+21k) and strong subscriber adds underpin revenue growth; five‑year price guarantee appears effective against cable competition (Comcast) .
  • Commercial Fiber softness is largely timing/accounting (deferred revenue) and lapping early termination fees; underlying growth excluding one‑offs was +2.3% YoY .
  • Liquidity and refinancing plan are near‑term catalysts to lower WACC and support the path to positive FCF in 2027; watch for ABS transaction updates .
  • Guidance held despite promotional plan—expect revenue/EBITDA lift to build over several quarters; estimates may need upward adjustment for revenue/EPS but potentially cautious on EBITDA near term given D&A/inventory write‑offs .
  • Incumbent Broadband headwinds are concentrated in video cord‑cutting; fiber subsidized builds show attractive penetration and should offset ARPU pressure over time .
  • Regulatory/grant timing and tariff uncertainty remain external risks to cash collection and costs; management is explicitly excluding these from guidance .

Appendices

Additional Q3 Press Releases (Operational)

  • Company announced date of Q3 call (Oct 20) .
  • Glo Fiber retail expansion in Winchester, VA (Oct 7) .
  • Broader Glo Fiber launches (Aug 27; Jul 15; Jul 8) supporting expansion narrative .

Balance Sheet and Cash Flow Highlights (Nine Months YTD)

  • Liquidity: $212.6M at 9/30/25 (cash $22.6M; revolver availability $117.9M; grants remaining $72.1M); debt $535.4M .
  • YTD operating cash flow: $74.5M; CapEx $251.5M; grants received $39.9M; financing net $114.1M .