Cable One reports broadband subscriber growth, continued focus on rural markets

Feb. 28, 2024
The company added approximately 9,800 residential and business data customers in Q4 2023.

During Cable One’s Q4 2023 earnings report on Feb. 22, CEO and president Julia Laulis reported that the company expanded its broadband base by more than 1,600 customers in the fourth quarter, which she credited to an improvement in year-over-year new connects and sustaining low churn rates.

“We have re-engineered our go-to-market approach,” she said, “to strategically target new customer segments with attractive pricing and product offerings, deploy countermeasures to address competition, and expand our network footprint. We believe these changes through our tactical plan drove our results.”

Targeting value-conscious customers

Laulis also reported that, with nearly a quarter of the company’s residential internet customers now using more than a terabyte of data per month, Cable One will continue to invest in rural infrastructure to remain ahead of the consumption curve. The company is also taking steps to acquire and retain subscribers.

“Our efforts to strategically target value-conscious customers and fiercely compete where necessary,” said Laulis, “resulted in downward pressure on ARPU for our residential data customers during the fourth quarter. We anticipated this and expect that we can continue to effectively manage ARPU going forward as we fine-tune our tactics to achieve balanced growth over time. Although targeting the value segment is expected to pressure ARPU in the near term, we view this as an acceptable trade-off for defending our markets, expanding our customer base, and enhancing long-term value.”

Regarding the ARPU being pressured by low-end offers and its impact on Cable One’s subscriber base, Laulis reported that, while there has been some down-tiering among subscribers, the company has been addressing it by offering more promotional and discounted offers, primarily towards what she calls the ‘value-conscious segment;’ this is in addition to pricing and packaging changes.

In total, residential and business data customers grew by approximately 9,800 or 1.2% on a sequential basis in the fourth quarter.

Financial results

Cable One CFO Todd Koetje reported some key quarterly figures.

“For the fourth quarter of 2023,” said Koetje, “our total revenues were $411.8 million, a 3.2% decrease from the fourth quarter of 2022, driven by a 21.3% decrease in residential video revenues. Residential data revenues, however, increased 2.1% year-over-year, with PSUs growing more than 1,600 during the fourth quarter. Business services revenues declined 0.5% year-over-year, whereas data services revenue within the business services offerings exceeded the comparable residential data revenue growth rates.”

Cable One’s net income for Q4 was $115.3 million, and the adjusted EBITDA was $226.9 million, a decrease of 2.7% compared to 2022.

Capital expenditures for Q4 totaled $115.6 million.

“During the quarter,” said Koetje, “we invested $21.9 million of CapEx for new market expansion and $9.4 million for integration activities. Our fourth quarter capital expenditures were elevated due to the timing of strategic projects with the completion of several large initiatives and the launch of new ones.”

Adjusted EBITDA minus capital expenditures decreased from $126.4 million in the fourth quarter of 2022 to $111.3 million in the fourth quarter of 2023, which Koetje ascribed to the higher capital expenditures incurred in the fourth quarter of 2023.

For the entirety of 2023, Cable One’s total revenues were approximately $1.7 billion, a decrease of $28 million or 1.6% from 2022. Residential data revenues grew by $44.7 million or 4.8% compared to 2022, and business services revenues declined 0.2% year-over-year but grew approximately 1% on an adjusted basis. 

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