NASDAQ:SHEN Shenandoah Telecommunications Q1 2025 Earnings Report $11.98 +0.49 (+4.26%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$11.97 -0.01 (-0.08%) As of 05/2/2025 04:40 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Shenandoah Telecommunications EPS ResultsActual EPS-$0.19Consensus EPS -$0.14Beat/MissMissed by -$0.05One Year Ago EPS-$0.07Shenandoah Telecommunications Revenue ResultsActual Revenue$87.90 millionExpected Revenue$89.31 millionBeat/MissMissed by -$1.41 millionYoY Revenue GrowthN/AShenandoah Telecommunications Announcement DetailsQuarterQ1 2025Date4/30/2025TimeBefore Market OpensConference Call DateWednesday, April 30, 2025Conference Call Time8:30AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Shenandoah Telecommunications Q1 2025 Earnings Call TranscriptProvided by QuartrApril 30, 2025 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Good morning, everyone. Welcome to the Shenandoah Telecommunications First Quarter twenty twenty five Earnings Conference Call. Today's conference is being recorded. At this time, I will turn the conference over to Mr. Kirk Andrews, Director of Financial Planning and Analysis for Shantel. Speaker 100:00:18Good morning, and thank you for joining us. The purpose of today's call is to review Shentel's results for first quarter twenty twenty five. Our results were announced in a press release distributed this morning, and the presentation we'll be reviewing is included on the investor page at our shentel.com website. Please note that an audio replay of this call will be made available later today. The details are set forth in the press release announcing this call. Speaker 100:00:44With us on the call today are Chris French, President and Chief Executive Officer Ed McKay, Executive Vice President and Chief Operating Officer and Jim Volk, Senior Vice President of Finance and CFO. After our prepared remarks, we will conduct a question and answer session. As always, let me refer you to slide two of the presentation, which contains our safe harbor disclaimer and remind you that this conference call may include forward looking statements subject to certain risks and uncertainties. These may cause our actual results to differ materially from the statements. Therefore, we have provided detailed discussion of various risk factors in our SEC filings, which you are encouraged to review. Speaker 100:01:24You are cautioned not to place undue reliance on these forward looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward looking statements. And with that, I'll now turn the call over to Chris. Go ahead, Chris. Speaker 200:01:40Thanks, Kirk. We appreciate everyone joining us this morning, and I hope everyone is well. We are pleased with our results for the first quarter of twenty twenty five with growth or subscriber improvements across all lines of business. Highlights for the quarter are listed on Slide four. First, we had another solid quarter of rapid growth in our Glo Fiber expansion markets. Speaker 200:02:05We added 5,400 new subscribers and 16,600 new passings and increased revenues by 52% over the same period in 2024. As we enter the last twenty months of the investment phase of our expansion, we're very excited about the growth prospects these greenfield markets will contribute to shareholder value. While we have reported on our track record of ramping up the number of passings, customers, and revenue for the past few years, we're also very excited about the potential free cash flow generation. As an example, our mature market cohorts from fourth quarter twenty nineteen through third quarter twenty twenty three represent 51,000 customers with an average penetration rate of 25%. These mature cohorts generated free cash flow margins of over 40% during the first quarter twenty twenty five after considering the cost to connect new customers and maintenance CapEx. Speaker 200:03:12We expect these free cash flow margins to expand as we approach our average terminal penetration rate of 37%. We believe this is an underappreciated value of our business and will be a catalyst for share price appreciation. We also saw improvement in our incumbent broadband business as we return to positive data RGU growth, driven by 31 basis point reduction in churn to 1.36% and ramping subscriber penetration in our newly constructed passings in unserved areas. Our customers are reacting favorably to the enhanced rate plans and value propositions we introduced in the past year. Despite the elevated capital expenditures and constructing fiber to unserved homes with various government grant subsidy programs, We expect to generate free cash flow in this mature line of business in 2025. Speaker 200:04:11Lastly, our commercial sales team had a record quarter for sales bookings of just under $200,000 in monthly recurring revenues. While we still have work to do in accelerating service delivery and improving the quality of service for our carrier customers in our Ohio markets, sales bookings are an early indicator of future revenue growth accelerating. With that, I'll now turn the call over to Jim to review the details of our financial results. Speaker 300:04:42Thank you, Chris, and good morning, everyone. Before I review our financial results, please note that we changed the reporting of promotional discounts and certain revenues across our products and lines of business to better conform with industry practice. These changes are revenue neutral, but do impact certain lines of business revenue disclosures and non GAAP metrics like average revenue per unit or ARPU. We have updated the presentation of prior year revenues, ARPU, and RGUs to conform with reporting changes for comparability purposes. Please see slides twenty one and twenty two in the appendix to the earnings call deck for the last two pages of the earnings release that we posted to our Investor Relations website this morning for 2024 revenue and metrics details under the prior and current reporting. Speaker 300:05:35I'll now start on slide six for our financial results for the first quarter twenty twenty five. Revenues grew 27% to $87,900,000 The former Horizon markets contributed $15,200,000 of revenue. Excluding Horizon, revenues grew $3,500,000 or 5% over the first quarter twenty twenty four. Legacy Glo Fiber markets revenue grew $5,600,000 or 47%, driven by an increase in subscribers. The legacy Glo Fiber revenue growth was partially offset by a decline in incumbent broadband markets revenue of $2,200,000 primarily due to 14% decline in video RGUs due to customers switching to streaming video services and lower installation and equipment revenues. Speaker 300:06:26Adjusted EBITDA grew 43% to $27,600,000 The former Horizon markets contributed $4,400,000 of adjusted EBITDA. Excluding Horizon, adjusted EBITDA grew $4,000,000 or 21% from the same period a year ago. Adjusted EBITDA margins increased from 28% in the first quarter twenty twenty four to 31% in the first quarter twenty twenty five, driven by the high incremental margins of adding Globe Fiber subscribers and an additional 2,800,000.0 of Horizon synergy savings being realized. We expect to realize a total of 8,500,000.0 of incremental synergies in 2025 as previously guided. I'd now like to update you on our liquidity and debt positions on slide seven. Speaker 300:07:18Liquidity was $335,000,000 as of March 31, including 88,000,000 in cash, 143,000,000 in available revolver capacity, and 104,000,000 in remaining reimbursements available under government grants. As of March 31, we had $516,000,000 of outstanding debt. Earlier this month, we executed an amendment to our credit facility to extend the July 2026 maturities of our revolver and one of our term loans by one year, in addition to increasing the net leverage covenant by a half a turn to 4.7 times. With the amendment, the first major maturity is now July 2027. As I noted during our earnings call, our last earnings call, we are planning to refinance our credit facilities. Speaker 300:08:11At this time, our preferred path to refinance is to access the asset backed securitization or ABS market for our fiber business and enter into a new credit facility for our incumbent broadband business. We believe this hybrid capital structure could provide us a lower cost of debt. The amendment to our credit facility provides us additional time to restructure our lines of business reporting and back office systems to support this hybrid capital structure, while lowering the risk that the current term loans will be reclassified as a current liability. More to come on refinancing details in future quarters. And now I'll turn the call over to Ed. Speaker 400:08:53Thank you, Jim, and good morning, everyone. Our integrated broadband network shown on slide nine now passes more than 600,000 homes and businesses with Globe Fiber accounting for over 60% of our total passes. Our construction teams added almost 400 route miles of fiber in the quarter to expand Globe Fiber, pass additional homes in government subsidized areas of incumbent broadband markets and extend service to commercial customers. Our extensive regional fiber network now spans more than 17,200 route miles across eight states. Slide 10 provides additional details on our broadband passings and plans to substantially complete the construction phase of our GLO fiber expansion project and government grant projects by the end of twenty twenty six. Speaker 400:09:41We started 2025 with 346,000 GLO fiber passings and we added approximately 17,000 passings in the first quarter to bring our total to 363,000. By the end of twenty twenty five, we plan to reach a total of 440,000 homes and we are targeting approximately 550,000 total Glo Fiber passings by the end of twenty twenty six as we focus on construction in areas meeting our return criteria. Our incumbent broadband markets, we started the year with 239,000 passings and added approximately 2,000 additional passings in the first quarter, primarily as part of government grant projects to extend fiber to unserved areas. We plan to reach a total of approximately 254,000 incumbent broadband passings as we complete government grant projects in the remainder of 2025 and 2026. With Glo Fiber and incumbent broadband markets combined, we plan to pass more than 800,000 homes and businesses with broadband service by the end of twenty twenty six. Speaker 400:10:47As we continue to increase our number of Glo Fiber passings, customer net additions have accelerated as shown on Slide 11. In the first quarter, we added 5,400 new customers and approximately 6,100 total data, video and voice revenue generating units. Year over year, we grew our customer base by 51% and ended the first quarter with approximately 71,000 GloFiber subscribers. Our total Glo Fiber revenue generating units reached 84,000 at the end of the quarter, up approximately 48% year over year. Broadband data penetration in our Glo Fiber expansion markets climbed to 19.4% at the end of the first quarter, up 18% from 18% a year earlier. Speaker 400:11:35And monthly broadband data churn for the first quarter remained very low at 0.9%. Our broadband data average revenue per user increased slightly to more than $77 in the first quarter as over 49% of our residential subscribers adopted speed tiers of one gig or higher, including approximately 7% that took speeds of two gig or higher. On slide 12, we've updated our data penetration rates as markets mature, and we are very pleased with our progress toward our average terminal penetration target of 37%. As Chris noted earlier, passings released to sales from fourth quarter twenty nineteen to third quarter twenty twenty three ended the first quarter with an average data penetration rate of approximately 25%. Our most mature cohorts launched four or more years ago continue to show strong growth with a weighted average growth rate of more than one percentage point in the first quarter. Speaker 400:12:35Moving on to slide 13, we show our operating results for our incumbent broadband markets. In the first quarter, we added more than 500 broadband data subscribers with customer additions in our government subsidized markets more than offsetting losses in competitive areas. We ended the first quarter with approximately 112,000 broadband data customers, up 2.7% year over year due to the acquisition of approximately 3,000 broadband data customers from Horizon. Data voice and video RGUs totaled approximately 163,000 at the end of the first quarter and remained fairly consistent year over year with RGUs acquired from Horizon partially offsetting losses in Shentel incumbent cable markets due to video customers moving to online streaming options. Monthly broadband data churn continued to improve in the first quarter, down more than 30 basis points year over year to 1.36%. Speaker 400:13:37Our rate cards providing higher speeds and more value for the same price continue to be effective in mitigating churn while preserving broadband data ARPU of more than $83 Overall broadband data penetration decreased to 46.5% at the end of the first quarter, down year over year due to the addition of acquired passings in the Horizon ILEC territory and recently constructed government subsidized passings. We see significant opportunities to drive penetration growth in both of these areas over the next several years. Slide 14 highlights our commercial fiber business and our record quarter for sales with new contracts for $196,000 in incremental monthly revenue. In the first quarter, our service delivery team installed approximately $221,000 in new monthly revenue, and our remaining installation backlog is 549,000 in monthly revenue. We expect to install the vast majority of this backlog in 2025. Speaker 400:14:40Average monthly compression and disconnect churn was up slightly year over year to 1.3% due to an expected re rate of certain T Mobile circuits in the first quarter. This contract was executed in 2021 and included a January 2025 step down in price that remains in effect until early two thousand thirty one. Capital spending in the first quarter and guidance for the full year are shown on slide 15. We invested $76,000,000 in the first quarter, net of $7,000,000 in government subsidies. For the full year, we expect capital investments to be in the $250,000,000 to $280,000,000 range, net of 60,000,000 to $70,000,000 in government subsidies. Speaker 400:15:26The timing of government subsidies are factors in our elevated spending in both commercial fiber and incumbent cable markets, and we expect spending to normalize as we receive additional reimbursements in the second half of the year. To date, we have not been impacted by price increases due to tariffs, and we don't expect to see a significant impact on our future construction costs. Materials and equipment only account for about 20% of our overall capital investments in 2025. The vast majority of fiber and associated construction materials we use are manufactured in The United States, and we have about eight months' worth of construction materials in our warehouses. We could have future tariff exposure with electronic equipment, particularly customer premise equipment like Wi Fi routers, cable modems, and video set top boxes. Speaker 400:16:17Most of this equipment is manufactured overseas, but we currently have more than six months' worth of equipment either in our warehouses or already in The US with firm pricing commitments. If this equipment is impacted by tariffs and price increases, we would likely increase monthly equipment rental fees to offset the cost increase. Overall, we think we're well positioned to execute on our capital plan this year and substantially complete the construction phase of our low fiber builds and government grant projects by the end of twenty twenty six. Thank you very much. And operator, we're now ready for questions. Operator00:16:54Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by while I compile the Q and A roster. Operator00:17:14Our first question comes from Frank Louthan from Raymond James and Associates. Please go ahead. Speaker 500:17:21Great. Thank you. Just want to talk about the potential for for some AVS securities. What rates do you think you can get? And and do you think you can get it done a deal done this year? Speaker 500:17:31And then what is sort of the optimal capital structure for you guys using that capital source and other sources? How do you think about that longer term? And then I've got a follow-up. Speaker 300:17:43Sure. Good morning, Frank. Yeah, we think ABS is going to save us about 100 basis points in interest expense. We're planning to only use the investment grade tranches of the ABS. We're not trying to maximize leverage here. Speaker 300:18:00We're really just trying to minimize the cost of the debt. We will also put in a revolver credit facility for incumbent broadband business. And as I think long term, most likely that facility will likely be used in the short term, but in the long term likely all of the debt will end up on the fiber side of the capital structure. Speaker 500:18:27All right. Great. And then can you walk us through sort of the tail end plan here of Glo Fiber? When will that elevated CapEx investment Is that year end 2026? Speaker 500:18:40And is that the point where we can expect CapEx to really fall off? And then once you're done with the current expansion there, what is an ongoing level of capital intensity we should expect going forward? Speaker 300:18:57Yeah, Frank, we expect to complete the construction to get to the 550,000 passings through the end of twenty six. So beginning in 2027, we think the capital intensity should drop to about 20 to 25% of our revenues. And we expect to be free cash flow positive in 'twenty seven and with meaningful amounts of growth in 'twenty eight and beyond as we continue to execute. There will still be plenty of growth left from the Glo Fiber business as we continue to add customers there. Speaker 500:19:34Why would it still be that high? That seems very elevated to me relative to the industry and kind of historic norms. Is that still sort of running drops to houses and things like that for a couple of years? I mean, we think about it long term, you settle in at a decent penetration rate. Why wouldn't capital intensity be in the mid teens? Speaker 400:19:56Yes. Frank, this is Ed. What you mentioned about installing drops to homes, that's a big factor here. As we install more drops and have those drops in place, that capital intensity does come down. Speaker 500:20:09Okay, great. One last question. Just impressive on the EBITDA side. Is this the new normal here for the level of EBITDA we should think about going forward? Or is there anything kind of one time that helped the margin Or any seasonal costs coming up later this year that might walk that margin back a little bit? Speaker 500:20:26How should we think about the ongoing level of EBITDA? Speaker 300:20:31Yes. Frank, is I was using your words the new normal. We do expect revenue and EBITDA to continue to grow as we've talked about in the past and that we expect the margins, the EBITDA margins each year to probably grow 300 to 400 basis points a year as we continue to add customers on the Glo Fiber side. Very high incremental margins when we're adding a Glo Fiber customer. Speaker 500:20:57So 300 to 400 basis points for the whole company kind of EBITDA margin growth each year? Correct. Okay. Great. Thank you very much. Operator00:21:08Thank you. One moment for our next question. Our next question comes from Hamed Khorsand from BWS Financial. Please go ahead. Speaker 600:21:20Hi. Good morning. First off, just wanna talk about, you know, the amount of subscriber growth you're seeing, on the GlobalFiber side. Is it becoming difficult in adding that incremental one subscriber each quarter? Or you're not at that point yet? Speaker 400:21:41Yes, Frank, is excuse me, Hamed, this is Ed. Really, we're not at that point yet. Even our most mature markets that we launched four plus years ago, we saw one percentage point growth in the past quarter. So we're continuing to add customers two, three, four years after we launch a market. Speaker 600:22:05And are you seeing any competitive pressures in any of these markets yet? Speaker 400:22:11We have a small overlap with BrightSpeed, roughly 5% of our passings. We have seen them deploy fiber. Other than that, we haven't seen any significant fiber deployments in our glow fiber markets. Speaker 600:22:31Are you changing your CapEx strategy based upon competition or you just don't think that's a factor? Speaker 400:22:39No. When we're building out into a new area, we consider the competition. For example, if we're in a market and Verizon has already built Fios into a neighborhood, we avoid that neighborhood. So we are targeting passings where we are the only fiber provider and really the only wired broadband competitor is the cable company. Speaker 600:22:59And then I'm just trying to understand the refinancing topic. It sounds like you were going through this integration process with Horizon, but now it sounds like you're going through it on integration standpoint, if that's even a word, process just to get this refinancing done and is that I'm just trying to understand the cost basis here. I know you're trying to save on interest rates, but then isn't there a cost factor as far as this kind of restructuring is concerned? Speaker 300:23:31Ahmed, just internal projects more than anything here. But for us, be able to save 100 basis points on roughly $700,000,000 of funded debt is pretty meaningful to us. So the internal work that we're doing on this is going to take several months. We expect to likely access the ABS market in the second half of the year. But we think it's well worth it to say roughly $7,000,000 of interest expense a year. Speaker 600:24:07Okay. Thank you. Speaker 300:24:09Okay. Thank you. Operator00:24:12Thank you. As a reminder, to ask a question, you need to press 11 on your telephone and wait for your name to be announced. This concludes the question and answer session. I will now turn it back to Jim Bulk for closing remarks. Speaker 300:24:39Thank you, everyone, for joining. We look forward to updating you on our progress in future quarters. Have a great day. Operator00:24:48Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallShenandoah Telecommunications Q1 202500:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Shenandoah Telecommunications Earnings HeadlinesShenandoah Telecommunications Company Reports 26.9% Revenue Growth and 51% Increase in Glo Fiber Subscribers for Q1 2025May 3 at 12:21 AM | nasdaq.comShenandoah Telecommunications Company (NASDAQ:SHEN) Q1 2025 Earnings Call TranscriptMay 1 at 11:27 AM | msn.comGold Alert: The Truth About Fort Knox Is ComingOwning physical gold isn’t the best way to profit. I’ve found a better way to invest in gold—one that’s already performing nearly twice as well as gold this year and looks ready to go much higher. If you wait for the news to hit, you’ll already be too late.May 4, 2025 | Golden Portfolio (Ad)Shenandoah Telecommunications Co (SHEN) Q1 2025 Earnings Call Highlights: Strong Revenue Growth ...May 1 at 2:15 AM | gurufocus.comQ1 2025 Shenandoah Telecommunications Co Earnings CallMay 1 at 1:27 AM | finance.yahoo.comShenandoah Telecom misses Q1 estimates, shares dropApril 30, 2025 | investing.comSee More Shenandoah Telecommunications Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Shenandoah Telecommunications? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Shenandoah Telecommunications and other key companies, straight to your email. Email Address About Shenandoah TelecommunicationsShenandoah Telecommunications (NASDAQ:SHEN) Company, together with its subsidiaries, provides a range of broadband communication services and cell tower colocation space in the Mid-Atlantic portion of the United States. It operates in two segments, Broadband and Tower. The company Broadband segment offers broadband, video, and voice services to residential and commercial customers in Virginia, West Virginia, Maryland, Pennsylvania, and Kentucky through hybrid fiber coaxial cable under the Shentel brand; and fiber optic services under the Glo Fiber brand name. This segment also leases dark fiber and provides Ethernet and wavelength fiber optic services to enterprise and wholesale customers under the Glo Fiber Enterprise and Glo Fiber Wholesale brand names; and provides voice data and DSL telephone services. The Tower segment owns macro cellular towers and leases colocation space to the wireless communications providers. Shenandoah Telecommunications Company was founded in 1902 and is based in Edinburg, Virginia.View Shenandoah Telecommunications ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback PlanMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of Earnings Upcoming Earnings Palantir Technologies (5/5/2025)Vertex Pharmaceuticals (5/5/2025)Realty Income (5/5/2025)Williams Companies (5/5/2025)CRH (5/5/2025)Advanced Micro Devices (5/6/2025)American Electric Power (5/6/2025)Constellation Energy (5/6/2025)Marriott International (5/6/2025)Energy Transfer (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 7 speakers on the call. Operator00:00:00Good morning, everyone. Welcome to the Shenandoah Telecommunications First Quarter twenty twenty five Earnings Conference Call. Today's conference is being recorded. At this time, I will turn the conference over to Mr. Kirk Andrews, Director of Financial Planning and Analysis for Shantel. Speaker 100:00:18Good morning, and thank you for joining us. The purpose of today's call is to review Shentel's results for first quarter twenty twenty five. Our results were announced in a press release distributed this morning, and the presentation we'll be reviewing is included on the investor page at our shentel.com website. Please note that an audio replay of this call will be made available later today. The details are set forth in the press release announcing this call. Speaker 100:00:44With us on the call today are Chris French, President and Chief Executive Officer Ed McKay, Executive Vice President and Chief Operating Officer and Jim Volk, Senior Vice President of Finance and CFO. After our prepared remarks, we will conduct a question and answer session. As always, let me refer you to slide two of the presentation, which contains our safe harbor disclaimer and remind you that this conference call may include forward looking statements subject to certain risks and uncertainties. These may cause our actual results to differ materially from the statements. Therefore, we have provided detailed discussion of various risk factors in our SEC filings, which you are encouraged to review. Speaker 100:01:24You are cautioned not to place undue reliance on these forward looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward looking statements. And with that, I'll now turn the call over to Chris. Go ahead, Chris. Speaker 200:01:40Thanks, Kirk. We appreciate everyone joining us this morning, and I hope everyone is well. We are pleased with our results for the first quarter of twenty twenty five with growth or subscriber improvements across all lines of business. Highlights for the quarter are listed on Slide four. First, we had another solid quarter of rapid growth in our Glo Fiber expansion markets. Speaker 200:02:05We added 5,400 new subscribers and 16,600 new passings and increased revenues by 52% over the same period in 2024. As we enter the last twenty months of the investment phase of our expansion, we're very excited about the growth prospects these greenfield markets will contribute to shareholder value. While we have reported on our track record of ramping up the number of passings, customers, and revenue for the past few years, we're also very excited about the potential free cash flow generation. As an example, our mature market cohorts from fourth quarter twenty nineteen through third quarter twenty twenty three represent 51,000 customers with an average penetration rate of 25%. These mature cohorts generated free cash flow margins of over 40% during the first quarter twenty twenty five after considering the cost to connect new customers and maintenance CapEx. Speaker 200:03:12We expect these free cash flow margins to expand as we approach our average terminal penetration rate of 37%. We believe this is an underappreciated value of our business and will be a catalyst for share price appreciation. We also saw improvement in our incumbent broadband business as we return to positive data RGU growth, driven by 31 basis point reduction in churn to 1.36% and ramping subscriber penetration in our newly constructed passings in unserved areas. Our customers are reacting favorably to the enhanced rate plans and value propositions we introduced in the past year. Despite the elevated capital expenditures and constructing fiber to unserved homes with various government grant subsidy programs, We expect to generate free cash flow in this mature line of business in 2025. Speaker 200:04:11Lastly, our commercial sales team had a record quarter for sales bookings of just under $200,000 in monthly recurring revenues. While we still have work to do in accelerating service delivery and improving the quality of service for our carrier customers in our Ohio markets, sales bookings are an early indicator of future revenue growth accelerating. With that, I'll now turn the call over to Jim to review the details of our financial results. Speaker 300:04:42Thank you, Chris, and good morning, everyone. Before I review our financial results, please note that we changed the reporting of promotional discounts and certain revenues across our products and lines of business to better conform with industry practice. These changes are revenue neutral, but do impact certain lines of business revenue disclosures and non GAAP metrics like average revenue per unit or ARPU. We have updated the presentation of prior year revenues, ARPU, and RGUs to conform with reporting changes for comparability purposes. Please see slides twenty one and twenty two in the appendix to the earnings call deck for the last two pages of the earnings release that we posted to our Investor Relations website this morning for 2024 revenue and metrics details under the prior and current reporting. Speaker 300:05:35I'll now start on slide six for our financial results for the first quarter twenty twenty five. Revenues grew 27% to $87,900,000 The former Horizon markets contributed $15,200,000 of revenue. Excluding Horizon, revenues grew $3,500,000 or 5% over the first quarter twenty twenty four. Legacy Glo Fiber markets revenue grew $5,600,000 or 47%, driven by an increase in subscribers. The legacy Glo Fiber revenue growth was partially offset by a decline in incumbent broadband markets revenue of $2,200,000 primarily due to 14% decline in video RGUs due to customers switching to streaming video services and lower installation and equipment revenues. Speaker 300:06:26Adjusted EBITDA grew 43% to $27,600,000 The former Horizon markets contributed $4,400,000 of adjusted EBITDA. Excluding Horizon, adjusted EBITDA grew $4,000,000 or 21% from the same period a year ago. Adjusted EBITDA margins increased from 28% in the first quarter twenty twenty four to 31% in the first quarter twenty twenty five, driven by the high incremental margins of adding Globe Fiber subscribers and an additional 2,800,000.0 of Horizon synergy savings being realized. We expect to realize a total of 8,500,000.0 of incremental synergies in 2025 as previously guided. I'd now like to update you on our liquidity and debt positions on slide seven. Speaker 300:07:18Liquidity was $335,000,000 as of March 31, including 88,000,000 in cash, 143,000,000 in available revolver capacity, and 104,000,000 in remaining reimbursements available under government grants. As of March 31, we had $516,000,000 of outstanding debt. Earlier this month, we executed an amendment to our credit facility to extend the July 2026 maturities of our revolver and one of our term loans by one year, in addition to increasing the net leverage covenant by a half a turn to 4.7 times. With the amendment, the first major maturity is now July 2027. As I noted during our earnings call, our last earnings call, we are planning to refinance our credit facilities. Speaker 300:08:11At this time, our preferred path to refinance is to access the asset backed securitization or ABS market for our fiber business and enter into a new credit facility for our incumbent broadband business. We believe this hybrid capital structure could provide us a lower cost of debt. The amendment to our credit facility provides us additional time to restructure our lines of business reporting and back office systems to support this hybrid capital structure, while lowering the risk that the current term loans will be reclassified as a current liability. More to come on refinancing details in future quarters. And now I'll turn the call over to Ed. Speaker 400:08:53Thank you, Jim, and good morning, everyone. Our integrated broadband network shown on slide nine now passes more than 600,000 homes and businesses with Globe Fiber accounting for over 60% of our total passes. Our construction teams added almost 400 route miles of fiber in the quarter to expand Globe Fiber, pass additional homes in government subsidized areas of incumbent broadband markets and extend service to commercial customers. Our extensive regional fiber network now spans more than 17,200 route miles across eight states. Slide 10 provides additional details on our broadband passings and plans to substantially complete the construction phase of our GLO fiber expansion project and government grant projects by the end of twenty twenty six. Speaker 400:09:41We started 2025 with 346,000 GLO fiber passings and we added approximately 17,000 passings in the first quarter to bring our total to 363,000. By the end of twenty twenty five, we plan to reach a total of 440,000 homes and we are targeting approximately 550,000 total Glo Fiber passings by the end of twenty twenty six as we focus on construction in areas meeting our return criteria. Our incumbent broadband markets, we started the year with 239,000 passings and added approximately 2,000 additional passings in the first quarter, primarily as part of government grant projects to extend fiber to unserved areas. We plan to reach a total of approximately 254,000 incumbent broadband passings as we complete government grant projects in the remainder of 2025 and 2026. With Glo Fiber and incumbent broadband markets combined, we plan to pass more than 800,000 homes and businesses with broadband service by the end of twenty twenty six. Speaker 400:10:47As we continue to increase our number of Glo Fiber passings, customer net additions have accelerated as shown on Slide 11. In the first quarter, we added 5,400 new customers and approximately 6,100 total data, video and voice revenue generating units. Year over year, we grew our customer base by 51% and ended the first quarter with approximately 71,000 GloFiber subscribers. Our total Glo Fiber revenue generating units reached 84,000 at the end of the quarter, up approximately 48% year over year. Broadband data penetration in our Glo Fiber expansion markets climbed to 19.4% at the end of the first quarter, up 18% from 18% a year earlier. Speaker 400:11:35And monthly broadband data churn for the first quarter remained very low at 0.9%. Our broadband data average revenue per user increased slightly to more than $77 in the first quarter as over 49% of our residential subscribers adopted speed tiers of one gig or higher, including approximately 7% that took speeds of two gig or higher. On slide 12, we've updated our data penetration rates as markets mature, and we are very pleased with our progress toward our average terminal penetration target of 37%. As Chris noted earlier, passings released to sales from fourth quarter twenty nineteen to third quarter twenty twenty three ended the first quarter with an average data penetration rate of approximately 25%. Our most mature cohorts launched four or more years ago continue to show strong growth with a weighted average growth rate of more than one percentage point in the first quarter. Speaker 400:12:35Moving on to slide 13, we show our operating results for our incumbent broadband markets. In the first quarter, we added more than 500 broadband data subscribers with customer additions in our government subsidized markets more than offsetting losses in competitive areas. We ended the first quarter with approximately 112,000 broadband data customers, up 2.7% year over year due to the acquisition of approximately 3,000 broadband data customers from Horizon. Data voice and video RGUs totaled approximately 163,000 at the end of the first quarter and remained fairly consistent year over year with RGUs acquired from Horizon partially offsetting losses in Shentel incumbent cable markets due to video customers moving to online streaming options. Monthly broadband data churn continued to improve in the first quarter, down more than 30 basis points year over year to 1.36%. Speaker 400:13:37Our rate cards providing higher speeds and more value for the same price continue to be effective in mitigating churn while preserving broadband data ARPU of more than $83 Overall broadband data penetration decreased to 46.5% at the end of the first quarter, down year over year due to the addition of acquired passings in the Horizon ILEC territory and recently constructed government subsidized passings. We see significant opportunities to drive penetration growth in both of these areas over the next several years. Slide 14 highlights our commercial fiber business and our record quarter for sales with new contracts for $196,000 in incremental monthly revenue. In the first quarter, our service delivery team installed approximately $221,000 in new monthly revenue, and our remaining installation backlog is 549,000 in monthly revenue. We expect to install the vast majority of this backlog in 2025. Speaker 400:14:40Average monthly compression and disconnect churn was up slightly year over year to 1.3% due to an expected re rate of certain T Mobile circuits in the first quarter. This contract was executed in 2021 and included a January 2025 step down in price that remains in effect until early two thousand thirty one. Capital spending in the first quarter and guidance for the full year are shown on slide 15. We invested $76,000,000 in the first quarter, net of $7,000,000 in government subsidies. For the full year, we expect capital investments to be in the $250,000,000 to $280,000,000 range, net of 60,000,000 to $70,000,000 in government subsidies. Speaker 400:15:26The timing of government subsidies are factors in our elevated spending in both commercial fiber and incumbent cable markets, and we expect spending to normalize as we receive additional reimbursements in the second half of the year. To date, we have not been impacted by price increases due to tariffs, and we don't expect to see a significant impact on our future construction costs. Materials and equipment only account for about 20% of our overall capital investments in 2025. The vast majority of fiber and associated construction materials we use are manufactured in The United States, and we have about eight months' worth of construction materials in our warehouses. We could have future tariff exposure with electronic equipment, particularly customer premise equipment like Wi Fi routers, cable modems, and video set top boxes. Speaker 400:16:17Most of this equipment is manufactured overseas, but we currently have more than six months' worth of equipment either in our warehouses or already in The US with firm pricing commitments. If this equipment is impacted by tariffs and price increases, we would likely increase monthly equipment rental fees to offset the cost increase. Overall, we think we're well positioned to execute on our capital plan this year and substantially complete the construction phase of our low fiber builds and government grant projects by the end of twenty twenty six. Thank you very much. And operator, we're now ready for questions. Operator00:16:54Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by while I compile the Q and A roster. Operator00:17:14Our first question comes from Frank Louthan from Raymond James and Associates. Please go ahead. Speaker 500:17:21Great. Thank you. Just want to talk about the potential for for some AVS securities. What rates do you think you can get? And and do you think you can get it done a deal done this year? Speaker 500:17:31And then what is sort of the optimal capital structure for you guys using that capital source and other sources? How do you think about that longer term? And then I've got a follow-up. Speaker 300:17:43Sure. Good morning, Frank. Yeah, we think ABS is going to save us about 100 basis points in interest expense. We're planning to only use the investment grade tranches of the ABS. We're not trying to maximize leverage here. Speaker 300:18:00We're really just trying to minimize the cost of the debt. We will also put in a revolver credit facility for incumbent broadband business. And as I think long term, most likely that facility will likely be used in the short term, but in the long term likely all of the debt will end up on the fiber side of the capital structure. Speaker 500:18:27All right. Great. And then can you walk us through sort of the tail end plan here of Glo Fiber? When will that elevated CapEx investment Is that year end 2026? Speaker 500:18:40And is that the point where we can expect CapEx to really fall off? And then once you're done with the current expansion there, what is an ongoing level of capital intensity we should expect going forward? Speaker 300:18:57Yeah, Frank, we expect to complete the construction to get to the 550,000 passings through the end of twenty six. So beginning in 2027, we think the capital intensity should drop to about 20 to 25% of our revenues. And we expect to be free cash flow positive in 'twenty seven and with meaningful amounts of growth in 'twenty eight and beyond as we continue to execute. There will still be plenty of growth left from the Glo Fiber business as we continue to add customers there. Speaker 500:19:34Why would it still be that high? That seems very elevated to me relative to the industry and kind of historic norms. Is that still sort of running drops to houses and things like that for a couple of years? I mean, we think about it long term, you settle in at a decent penetration rate. Why wouldn't capital intensity be in the mid teens? Speaker 400:19:56Yes. Frank, this is Ed. What you mentioned about installing drops to homes, that's a big factor here. As we install more drops and have those drops in place, that capital intensity does come down. Speaker 500:20:09Okay, great. One last question. Just impressive on the EBITDA side. Is this the new normal here for the level of EBITDA we should think about going forward? Or is there anything kind of one time that helped the margin Or any seasonal costs coming up later this year that might walk that margin back a little bit? Speaker 500:20:26How should we think about the ongoing level of EBITDA? Speaker 300:20:31Yes. Frank, is I was using your words the new normal. We do expect revenue and EBITDA to continue to grow as we've talked about in the past and that we expect the margins, the EBITDA margins each year to probably grow 300 to 400 basis points a year as we continue to add customers on the Glo Fiber side. Very high incremental margins when we're adding a Glo Fiber customer. Speaker 500:20:57So 300 to 400 basis points for the whole company kind of EBITDA margin growth each year? Correct. Okay. Great. Thank you very much. Operator00:21:08Thank you. One moment for our next question. Our next question comes from Hamed Khorsand from BWS Financial. Please go ahead. Speaker 600:21:20Hi. Good morning. First off, just wanna talk about, you know, the amount of subscriber growth you're seeing, on the GlobalFiber side. Is it becoming difficult in adding that incremental one subscriber each quarter? Or you're not at that point yet? Speaker 400:21:41Yes, Frank, is excuse me, Hamed, this is Ed. Really, we're not at that point yet. Even our most mature markets that we launched four plus years ago, we saw one percentage point growth in the past quarter. So we're continuing to add customers two, three, four years after we launch a market. Speaker 600:22:05And are you seeing any competitive pressures in any of these markets yet? Speaker 400:22:11We have a small overlap with BrightSpeed, roughly 5% of our passings. We have seen them deploy fiber. Other than that, we haven't seen any significant fiber deployments in our glow fiber markets. Speaker 600:22:31Are you changing your CapEx strategy based upon competition or you just don't think that's a factor? Speaker 400:22:39No. When we're building out into a new area, we consider the competition. For example, if we're in a market and Verizon has already built Fios into a neighborhood, we avoid that neighborhood. So we are targeting passings where we are the only fiber provider and really the only wired broadband competitor is the cable company. Speaker 600:22:59And then I'm just trying to understand the refinancing topic. It sounds like you were going through this integration process with Horizon, but now it sounds like you're going through it on integration standpoint, if that's even a word, process just to get this refinancing done and is that I'm just trying to understand the cost basis here. I know you're trying to save on interest rates, but then isn't there a cost factor as far as this kind of restructuring is concerned? Speaker 300:23:31Ahmed, just internal projects more than anything here. But for us, be able to save 100 basis points on roughly $700,000,000 of funded debt is pretty meaningful to us. So the internal work that we're doing on this is going to take several months. We expect to likely access the ABS market in the second half of the year. But we think it's well worth it to say roughly $7,000,000 of interest expense a year. Speaker 600:24:07Okay. Thank you. Speaker 300:24:09Okay. Thank you. Operator00:24:12Thank you. As a reminder, to ask a question, you need to press 11 on your telephone and wait for your name to be announced. This concludes the question and answer session. I will now turn it back to Jim Bulk for closing remarks. Speaker 300:24:39Thank you, everyone, for joining. We look forward to updating you on our progress in future quarters. Have a great day. Operator00:24:48Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.Read morePowered by