Cable ONE, Inc ((CABO)) has held its Q4 earnings call. Read on for the main highlights of the call.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
Cable One’s latest earnings call painted a cautiously constructive picture as management balanced deteriorating financial metrics with signs of operational progress. Revenue, EBITDA and free cash flow fell year over year and subscriber losses continued, yet executives emphasized improving trends in connects and churn, strong in‑home product adoption, and a solid balance sheet to weather intense competition.
Improving subscriber momentum but still in decline
Subscriber trends showed early signs of stabilization even as the base shrank. Residential data customers fell by about 10,700 in Q4 and were down 5.8% for 2025, but disconnects improved sharply versus Q3 and gross connects strengthened through the first three quarters, with Q4 connects up meaningfully year over year.
Eero upsell boosts satisfaction and retention
Cable One leaned on its eero partnership to deepen relationships with existing broadband customers. More than one‑third of residential broadband subscribers now use advanced in‑home capabilities, with adoption growing over 30% year over year and sell‑in surpassing 80% in the quarter, a mix that management links to higher satisfaction and lower churn.
Ample network headroom amid rising data usage
Customer data consumption continued to climb, reaching roughly 835 GB per month in Q4 with more than 30% of subscribers exceeding 1 TB. Despite this heavy usage, peak downstream and upstream utilization stayed at or below 20%, underscoring significant available capacity to support higher speeds, new products and future traffic growth.
Mobile pilot sets stage for convergence strategy
The company is testing mobile as a strategic add‑on to its broadband offering with a pilot live in six markets and a small customer base. Having validated billing, provisioning and customer care systems, Cable One plans a broader footprint launch in late Q1 2026 to improve retention and lifetime customer value through a more converged product set.
Business services gaining traction
Business, wholesale and carrier segments delivered improving momentum, with average monthly installs in the last three months of 2025 running ahead of the prior year. Management also launched a broker and agent channel and added a seasoned SVP of Business Services to accelerate product launches and expand wallet share in this higher‑margin segment.
Debt reduction and strong liquidity position
Management underscored conservative balance sheet actions, paying down $403.4 million of debt in 2025, including $72.4 million repurchased at discounts, and fully repaying a $313 million revolver draw. The year ended with $152.8 million in cash and an undrawn $1.25 billion revolver, with roughly 85% of debt fixed or synthetically fixed, limiting rate risk.
Solid free cash flow and disciplined CapEx
Despite earnings pressure, Cable One generated $516.5 million of free cash flow in 2025, defined as adjusted EBITDA less CapEx, supported by full‑year CapEx of $285.3 million that was slightly lower year over year. Q4 free cash flow reached $119.9 million, and management plans to keep 2026 capital spending broadly in line with 2025 while preserving free‑cash‑flow strength.
Strategic M&A reshapes the footprint
The company moved to consolidate its position in key markets by exercising a put option to acquire the remaining 55% of MBI, which generated $308.9 million of 2025 revenue from about 206,000 customers and roughly 674,000 passings. The estimated $480 million purchase is expected to unlock integration efficiencies and tax benefits while Cable One also maintains upside via equity in the Point Broadband and Clearwave Fiber platform.
Revenue under pressure from legacy video and data
Top‑line trends remained negative as total Q4 2025 revenue fell 6.1% year over year to $363.7 million and full‑year revenue declined to about $1.50 billion from $1.58 billion. The company cited a $35 million drag from residential video and a $24.2 million, or 2.6%, decline in residential data revenue for 2025, only partially offset by a modest 0.6% ARPU increase.
Residential data softness weighs on growth
Residential broadband, historically Cable One’s growth engine, came under sustained pressure. Residential data subscribers declined 5.8% for the year and roughly 10,700 in Q4 alone, and the revenue drop signaled that small pricing gains could not fully offset volume losses, highlighting the sensitivity of the model to subscriber churn.
EBITDA contraction and margin squeeze
Profitability weakened as Q4 adjusted EBITDA declined 8.1% year over year to $193.9 million and margin compressed by 120 basis points to 53.3%. For 2025, adjusted EBITDA slipped to $801.7 million from $854.0 million and margin eased to 53.4% from 54.1%, reflecting lower revenues and higher operating expenses.
Free cash flow down versus prior year
While still robust in absolute terms, free cash flow trended lower as competitive and cost pressures mounted. Adjusted EBITDA less CapEx fell to $516.5 million in 2025 from $567.6 million in 2024, a decline of about $51.1 million, underscoring how even modest revenue and margin compression can translate into meaningful cash flow erosion.
Intensifying competition from fixed wireless and fiber
Management highlighted a tough competitive backdrop, noting that fixed wireless is now essentially ubiquitous across the footprint, with multiple providers and heavy overlap from T‑Mobile. Nearly 60% of homes passed now face gig‑capable wired rivals, and just over half of that segment is fiber‑to‑the‑home, pressuring subscriber acquisition, retention and pricing.
Higher SG&A as the company invests for scale
Operating expenses climbed as Cable One invested in growth‑enablement platforms and modernization initiatives. SG&A rose to $381.1 million, or 25.4% of revenue, from $366.0 million, or 23.2%, the prior year, temporarily weighing on margins but framed by management as foundational spending intended to drive future efficiency and better commercial execution.
Uncertain subscriber outlook clouds near term
Despite quarter‑to‑quarter improvement, total net subscribers remained in decline at year‑end, reflecting the still‑challenging demand and competitive environment. Management stopped short of providing explicit 2026 subscriber guidance, underlining both the near‑term uncertainty around customer trends and the execution risk embedded in its turnaround efforts.
Leverage to tick higher post‑MBI acquisition
The planned MBI acquisition will nudge leverage higher, with MBI’s estimated $845–$895 million of net debt and roughly $480 million purchase price pushing pro forma combined leverage slightly above 4x. That compares with Cable One’s current net leverage of about 3.9x on a last‑quarter annualized basis, modestly increasing balance sheet risk in the short run.
Guidance highlights steady CapEx and strategic execution
Looking ahead, Cable One expects 2026 CapEx to remain broadly consistent with 2025 levels while benefiting from anticipated cash tax savings through 2027. Management aims to close the MBI deal around October 1, roll out mobile company‑wide in late Q1, complete multi‑gig DOCSIS upgrades this year across most of the plant and maintain strong free‑cash‑flow generation despite a more levered profile.
Cable One’s earnings call underscored a business in transition, balancing revenue and subscriber declines against operational improvements and strategic investments. For investors, the story hinges on whether network capacity, product convergence, business services growth and the MBI acquisition can offset fierce competition and margin pressure to stabilize cash flows and reignite sustainable growth.