Shenandoah Telecom’s Earnings Call Highlights Growth

Shenandoah Telecommunications ((SHEN)) has held its Q1 earnings call. Read on for the main highlights of the call.

Shenandoah Telecommunications’ recent earnings call painted a picture of robust growth and positive financial health, driven by significant expansions in Glo Fiber and record commercial sales bookings. The company reported impressive adjusted EBITDA growth, although challenges in the Incumbent Broadband Markets and increased debt levels were noted. Overall, the positive developments significantly outweighed the negatives, reflecting a strong performance in the first quarter of 2025.

Glo Fiber Expansion Success

The Glo Fiber segment was a standout performer, adding 5,400 new subscribers and 16,600 new passings. This expansion led to a remarkable 52% revenue increase compared to the same period in 2024, underscoring the success of Shenandoah Telecommunications’ strategic focus on this area.

Commercial Sales Record

The company achieved a record quarter for commercial sales bookings, generating nearly $200,000 in monthly recurring revenues. This milestone highlights the effectiveness of Shentel’s commercial strategies and its potential for sustained revenue growth in the future.

Adjusted EBITDA Growth

Shenandoah Telecommunications reported a 43% increase in adjusted EBITDA, reaching $27.6 million. The company’s EBITDA margins also improved, rising from 28% to 31% year-over-year, indicating enhanced operational efficiency and profitability.

Liquidity Position

The company’s liquidity remained strong at $335 million, with $88 million in cash and $143 million in revolver capacity. This robust liquidity position provides Shentel with the financial flexibility to pursue growth opportunities and manage its debt effectively.

Glo Fiber Subscriber Growth

Glo Fiber continued to demonstrate impressive subscriber growth, with a 51% year-over-year increase, reaching 71,000 subscribers and 84,000 total revenue-generating units. This growth reflects the increasing demand for high-speed internet services in the markets Shentel serves.

Incumbent Broadband Revenue Decline

Despite the overall positive performance, the Incumbent Broadband Markets faced challenges, with revenues declining by $2.2 million due to a 14% drop in video RGUs. This decline highlights the competitive pressures and changing consumer preferences in the broadband sector.

Increased Debt

Shenandoah Telecommunications reported an outstanding debt of $516 million as of March 31, 2025. While the company maintains a strong liquidity position, managing this debt will be crucial for sustaining long-term financial health.

Commercial Fiber Churn

The average monthly compression and disconnect churn in the commercial fiber segment rose slightly year-over-year to 1.3%. This increase in churn, while modest, indicates the need for continued focus on customer retention strategies.

Forward-Looking Guidance

Looking ahead, Shenandoah Telecommunications provided optimistic guidance, with a 27% increase in revenues to $87.9 million. The company plans to complete its Glo Fiber Expansion and government grant projects by the end of 2026, with expectations of a 300 to 400 basis point annual increase in EBITDA margins. Additionally, Shentel aims to refinance its credit facilities to lower debt costs, further strengthening its financial position.

In conclusion, Shenandoah Telecommunications’ earnings call highlighted a strong performance driven by Glo Fiber expansion and record commercial sales. Despite challenges in the Incumbent Broadband Markets and increased debt, the company’s positive momentum and strategic initiatives position it well for future growth. Investors and stakeholders can remain optimistic about Shentel’s trajectory as it continues to capitalize on market opportunities and enhance its financial metrics.