Shenandoah Telecommunications’ Earnings Call: Positive Growth Amid Challenges

Shenandoah Telecommunications ((SHEN)) has held its Q4 earnings call. Read on for the main highlights of the call.

In the recent earnings call for Shenandoah Telecommunications, the sentiment was generally positive, with notable achievements in system integration and growth expansion, particularly through Glo Fiber, contributing to strong revenue gains. Despite challenges like T-Mobile revenue churn and declines in incumbent broadband markets, the positive aspects slightly outweighed the negative impacts.

Successful Horizon Integration and Increased Synergy Savings

Shenandoah Telecommunications completed the integration of six back-office systems a remarkable three months ahead of schedule, achieving this feat in just nine months. This efficient integration led to an increase in annual run rate synergy savings, climbing from $9.6 million to $13.8 million, showcasing the company’s operational effectiveness and strategic planning.

Glo Fiber Expansion and Customer Growth

The company marked its fourth consecutive year of enhanced construction pace and customer net additions in the Glo Fiber segment. With approximately 97,000 new passings released to sales, customer net additions exceeded 21,000, underscoring the robust demand and strategic expansion of their fiber network.

Revenue and Growth Metrics

Shenandoah Telecommunications reported a significant 22% increase in revenue, reaching $328.1 million in 2024. The Glo Fiber segment alone saw a 61% revenue increase, driven by a 50.9% rise in subscribers and a 7.3% increase in Average Revenue Per User (ARPU), highlighting the segment’s substantial contribution to the company’s overall growth.

Increased Fiber Network Passings

The year 2024 saw the addition of over 103,000 new fiber passings and more than 1,400 new route miles of fiber, bringing the total fiber passings to 585,000, with 61% served via fiber. This expansion reflects the company’s commitment to enhancing its infrastructure and service capabilities.

T-Mobile Revenue Churn

The commercial revenue faced a decline of $5.8 million, largely due to an anticipated $7.1 million churn in T-Mobile revenue as part of the Sprint network decommissioning. This churn highlights the ongoing challenges in adapting to changes in the telecommunications landscape.

Incumbent Broadband Markets Decline

Revenue from incumbent broadband markets declined by $5 million, driven by a 16.9% drop in video RGUs due to cord-cutting trends and a 1.6% decline in data RGUs, reflecting broader industry challenges.

Horizon Revenue Adjustment

A fourth-quarter adjustment to Horizon’s commercial revenues resulted in a negative $2.6 million impact, affecting deferred revenue. This adjustment points to the complexities involved in recent acquisitions and market integrations.

Forward-Looking Guidance

Looking ahead, Shenandoah Telecommunications outlined a positive trajectory, with expectations for continued growth driven by the Glo Fiber business. The company projects increased customer net additions and revenue growth over the next six to seven years, with penetration levels anticipated to rise significantly. Strategic capital expenditures are planned to further expand the fiber network, aiming for reduced capital intensity post-2026.

In conclusion, Shenandoah Telecommunications’ earnings call reflected a generally positive sentiment, with significant achievements in system integration and growth through Glo Fiber. While challenges like T-Mobile revenue churn and declines in broadband markets pose concerns, the company’s forward-looking strategies and robust growth metrics suggest a promising future.