Cable One, Inc. (CABO) — Agentic Tribune

ITEM 1 BUSINESS

Overview

Cable One, Inc. (“Cable One,” “us,” “our,” “we” or the “Company”) is a leading broadband communications provider delivering exceptional service and enabling our customers to thrive and stay connected to what matters most. Through Sparklight®, the brand our customers know and trust, we are transforming the future of connectivity with a commitment to innovation, reliability and customer experience. We serve our customers with technologically advanced fiber-based infrastructure that provides for delivery of a full suite of data, video and voice products.

We believe our robust infrastructure and cutting-edge technology keep our customers connected and help drive progress in education, business and everyday life. We believe the services we provide are critical to the development of new businesses and drive economic growth in the non-metropolitan, secondary and tertiary markets that we serve in 24 Western, Midwestern and Southern states. As of December 31, 2025, approximately 75% of our customers were located in seven states: Arizona, Idaho, Mississippi, Missouri, Oklahoma, South Carolina and Texas. We provided services to approximately 1.0 million residential and business customers out of approximately 2.9 million passings as of December 31, 2025. Of these customers, approximately 999,000 subscribed to data services, 88,000 subscribed to video services and 94,000 subscribed to voice services as of December 31, 2025.

The following map shows the locations of our consolidated markets as of December 31, 2025:

We generate substantially all of our revenues through three primary product lines. Ranked by share of our total revenues during 2025, they are residential data (60.1%), business data (15.3%) and residential video (12.5%). The profit margins, growth rates and/or capital intensity of these three primary product lines vary significantly due to competition, product maturity and relative costs.

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In 2025, our adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) margins for residential data and business data were approximately three and four times greater, respectively, than for residential video. We define Adjusted EBITDA margin for a product line as Adjusted EBITDA attributable to that product line divided by revenue attributable to that product line (see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Use of Adjusted EBITDA” for the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income (loss), which is the most directly comparable measure under generally accepted accounting principles in the United States (“GAAP”)). This margin disparity is largely the result of significant programming costs and retransmission fees incurred to deliver residential video services, which in each of the last three years represented between 59% and 63% of total residential video revenues. Neither of our other primary product lines has direct costs representing as substantial a portion of revenues as programming costs and retransmission fees represent for residential video, and indirect costs are generally allocated on a per primary service unit (“PSU”) basis.

We focus on growing our higher margin businesses, namely residential data and business data services. Our strategy acknowledges the industry-wide trends of declining profitability of video services and declining revenues from residential voice services. The declining profitability of video services is due primarily to increasing programming costs and retransmission fees and competition from other streaming content providers, and the declining revenues from residential voice services are due primarily to the increasing use of wireless voice services instead of residential voice services. Separately, we have also historically focused on retaining customers who are likely to produce higher relative value over the life of their service relationships with us, are less attracted by discounting, require less support and churn less, while more recently supplementing our growth by targeting a broader scope of incremental customers, including those who are more value-conscious. This strategy has focused on increasing Adjusted EBITDA, driving higher margins and delivering attractive levels of Adjusted EBITDA less capital expenditures over the long term. The following chart shows the breakdown of our revenues in 2025 as compared to 2015, the year we became an independent public company following the completion of our spin-off from Graham Holdings Company ("GHC"):

(1)For 2025, 15% of total revenues related to business data services.

Excluding the effects of acquisitions and divestitures, the trends described above have impacted, and are expected to further impact, our three primary product lines in the following ways:

•Residential data. We focus on growing residential data customers and revenues and expect this product line to grow over the long term, supplemented by growth in related services, such as intelligent Wi-Fi, technology support and network security solutions. In recent periods, we have experienced subscriber losses as a result of increased competition in our markets but believe the upgrades made in our broadband capacity, our ability to offer higher access speeds than many of our competitors, the reliability and flexibility of our data service offerings, our Wi-Fi offerings and continuously growing data usage by consumers and their demand for higher speeds will enable us to continue to earn a consistent average monthly revenue per unit ("ARPU") from our existing customers over the long term and potentially capture additional market share. Our broadband plant generally consists of a fiber-to-the-premises ("fiber") or hybrid fiber-coaxial ("HFC") network with ample unused capacity, and we offer our data customers internet products at some of the fastest speeds available in our markets. During the fourth quarter of 2025, our average residential data customer used approximately 835 Gigabytes of data per month, with more than 30% of our customers using over 1 Terabyte of data per month, while peak bandwidth utilization remained at or below 20%. We believe that the capacity and reliability of our networks is equal to or exceeds that of our competitors in most of our markets and best positions us to meet the continuously increasing consumption demands of customers.

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•Business data. We focus on growing business data customers and revenues over the long term by concentrating our efforts on increasing sales to business customers and attracting enterprise and wholesale business customers. We expect to experience growth in business data revenues over the long term as we sell-in additional products and services to existing customers and also focus on adding new customers. Margins for products sold to business customers have remained attractive, which we expect will continue.

•Residential video. Residential video service is an increasingly fragmented business, with programming costs and retransmission fees continuing to escalate in the face of a proliferation of streaming content alternatives. We intend to continue our strategy of focusing on the higher-margin businesses of residential data and business data services while de-emphasizing our video business. As a result of our video strategy, we expect that residential video customers and revenues will continue to decline. We offer Sparklight TV, an internet protocol-based (“IPTV”) video service that allows customers with our Sparklight TV app to stream our video channels from the cloud. This IPTV video service optimizes our available bandwidth, maximizing network capacity to increase data speeds and capacity across our network.

During the fourth quarter of 2025, we launched a pilot mobile service offering with a mobile virtual network enabler in several of our markets. Through this focused initiative, we are exploring whether a mobile offering can complement our wired broadband product by delivering added convenience and greater flexibility while strengthening our long-term customer relationships with the ultimate goals of enhancing customer lifetime value, improving retention and supporting packaging opportunities to reinforce our core broadband business.

We serve our customers through a plant and network with capacity generally measuring 750 megahertz or higher and have DOCSIS 3.1 capabilities throughout our systems. Our broadband plant generally consists of a fiber or HFC network with ample unused capacity, and all of our passings have access to Gigabit download speeds, which we believe meaningfully distinguishes our offerings from certain competitors in our markets.

We continue to experience increased competition, particularly from telephone companies; fiber, municipal and cooperative overbuilders; fixed wireless data ("FWA" or "cell phone internet") providers; and over-the-top (“OTT”) video providers. Because of the levels of competition we face, we believe it is important to make investments in our infrastructure. In addition, a key objective of our capital allocation process is to invest in initiatives designed to drive revenue and Adjusted EBITDA expansion. Approximately 71% of our total capital expenditures since 2017 focused on infrastructure improvements intended to grow these measures. We continue to invest capital to, among other things, increase fiber density and coverage, expand our footprint, increase plant and data capacity, enhance network reliability and improve the customer experience. We have rolled out multi-Gigabit download data service to 53% of our markets and currently offer Gigabit download data service to all of our passings. We are currently deploying DOCSIS 4.0 capabilities, which, together with Sparklight TV, further increases our network capacity and enables future growth in our residential data and business data product lines. As a result of multi-year investments in our plant and network, we increased broadband capacity and reliability, which has enabled and will continue to enable us to offer even higher download speeds and to support the continually increasing data usage by customers. We believe these investments will reinforce our competitive strength in this area.

We expect to continue to devote financial resources to infrastructure improvements in existing and acquired markets as well as to expand high-speed data service in areas adjacent to our existing network. We believe these investments are necessary to continually meet our customers’ needs and remain competitive. The capital enhancements associated with acquisitions include rebuilding low-capacity markets; reclaiming bandwidth from traditional QAM-based video services; implementing multi-Gigabit download speeds; deploying DOCSIS 4.0 capabilities; consolidating back-office functions such as billing, accounting and service provisioning; migrating products to Cable One platforms; and expanding our high-capacity fiber network.

Our primary financial goals are to grow residential data and business data customers and revenues, to increase profit margins and to deliver strong Adjusted EBITDA and Adjusted EBITDA less capital expenditures over the long term. To achieve these goals, we intend to continue our disciplined cost management approach, remain focused on customers with expected higher relative value and supplement our growth by targeting a broader scope of incremental customers, including those who are more value-conscious. We combat competitive threats in our markets through targeted pricing and product offerings and further planned investments in broadband plant upgrades, including the continued deployment of DOCSIS 4.0 capabilities and new data service offerings for residential and business customers. We also evaluate opportunistic broadband-related acquisition and strategic investment opportunities in rural markets in addition to the pursuit of organic growth through market expansion projects. Given our strategic focus on our higher margin residential data and business data product lines, we assess our level of capital expenditures relative to Adjusted EBITDA, unlike others in our industry who may compare their capital expenditures to revenues due to their much larger residential video customer bases.

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Our business is subject to extensive governmental regulation, which substantially impacts our operational and administrative expenses. Thus, we could be significantly impacted by changes to the existing regulatory framework, whether triggered by legislative, administrative or judicial rulings. The Federal Communications Commission (the "FCC") has opened inquiries looking at several initiatives that could lead to increased regulation of our data, voice and video services (see the section entitled “Regulation and Legislation”). Some states, including Arizona and Missouri (where we have subscribers), have proposed administrative actions and/or legislation in the past, which if adopted could lead to increased regulation of our provision of data services. Several states, including Minnesota, Oregon and Washington (where we also have subscribers), have adopted legislation that requires entities providing broadband internet access service in the state to comply with net neutrality requirements or that prohibits state and local government agencies from contracting with internet service providers that engage in certain network management activities based on paid prioritization, content blocking or other discrimination. We cannot predict whether or when any future changes to the regulatory framework will occur at the federal or state level or whether or to what extent those changes may affect our operations or impose additional costs on our business.

Corporate History

In 1986, The Washington Post Company (the prior name of our former corporate parent, GHC) acquired cable television systems throughout multiple Western, Midwestern and Southern states. We completed a number of acquisitions and dispositions of cable systems through 2015, both through cash sales and system trades. In the process, we substantially reshaped our original geographic footprint and resized our typical system, including exiting a number of metropolitan markets and acquiring cable systems in non-metropolitan markets that fit our business model. On July 1, 2015, we became an independent public company traded under the ticker symbol “CABO” on the New York Stock Exchange after completion of our spin-off from GHC.

In addition to our organic growth, we have also completed a number of acquisitions since our spin-off. In 2017, we acquired RBI Holding LLC (“NewWave”). In 2019, we acquired Delta Communications, L.L.C. (“Clearwave”) and Fidelity Communications Co. (“Fidelity”). In 2020, we acquired Valu-Net LLC (“Valu-Net”) and contributed the assets of our Anniston, Alabama system (the “Anniston System”) to Hargray Acquisition Holdings, LLC ("Hargray") in exchange for an approximately 15% equity interest in Hargray. We subsequently acquired the remaining approximately 85% equity interest in Hargray in 2021 (the "Hargray Acquisition"). We also acquired certain assets and assumed certain liabilities from Cable America Missouri, LLC (“CableAmerica”) in 2021 and completed a small acquisition in 2024. On January 3, 2026, we entered into a purchase agreement to acquire the remaining equity interests in MBI that we do not already own following the exercise of the Put Option (as defined elsewhere in this Annual Report on Form 10-K). The acquisition is subject to customary closing conditions, and we currently anticipate that the acquisition will be completed on October 1, 2026 (refer to the section entitled “Financial Condition: Liquidity and Capital Resources – Liquidity” for further details).

In 2025, we completed the rebranding of our acquired operations under the unified brand of Sparklight, which we have been operating under since 2020. The Sparklight brand better conveys who we are and what we stand for – a company committed to providing our communities with connectivity that enriches their world - and solidified our shift in focus from video to data offerings. As part of the rebranding, we streamlined our residential internet service plans and pricing and strengthened our commitment to the communities we serve through educational programs, corporate giving and donations of time and resources.

In recent years, we have made investments in several broadband-centric providers serving non-urban markets that follow various strategies similar to our own. Such strategic investments were intended to capitalize on opportunities that may not have existed under a full ownership model, in order to allow us to participate more aggressively in the fiber expansion business and potentially provide future monetization, acquisition or investment opportunities, while allowing our management team to focus on our core business and without burdening our cash flow:

•In 2020, we invested in CTI Towers, Inc. (“CTI”), AMG Technology Investment Group, LLC (“Nextlink”), Wisper ISP, LLC (“Wisper”) and MBI and contributed the assets of the Anniston System to Hargray in exchange for an approximately 15% equity interest.

•In 2021, we invested in Point Broadband Holdings, LLC (“Point”), Tristar Acquisition I Corp (“Tristar”) and Nextlink.

•In 2022, we contributed certain fiber operations to a newly formed entity, Clearwave Fiber LLC ("Clearwave Fiber") (the "Clearwave Fiber Contribution") in exchange for an approximately 58% equity interest in Clearwave Fiber and invested in Point, MetroNet Systems, LLC ("MetroNet"), Visionary Communications, Inc. ("Visionary") and Northwest Fiber Holdco, LLC ("Ziply").

•In 2023, we made additional investments in Visionary and Ziply. We also redeemed our equity investments in Wisper and Tristar.

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-04-30 (period ending 2026-03-31).

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and accompanying notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025 and the related “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” both of which are contained in our 2025 Form 10-K. Our results of operations and financial condition discussed herein may not be indicative of our future results and trends.

Throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” all totals, percentages and year-over-year changes are calculated using exact numbers. Minor differences may exist due to rounding.

Overview

We are a leading broadband communications provider delivering exceptional service and enabling our customers to thrive and stay connected to what matters most. Through Sparklight, the brand our customers know and trust, we are transforming the future of connectivity with a commitment to innovation, reliability and customer experience. We serve our customers with technologically advanced fiber-based infrastructure that provides for delivery of a full suite of data, video and voice products.

We believe our robust infrastructure and cutting-edge technology keep our customers connected and help drive progress in education, business and everyday life. We believe the services we provide are critical to the development of new businesses and drive economic growth in the non-metropolitan, secondary and tertiary markets that we serve in 24 Western, Midwestern and Southern states. As of March 31, 2026, approximately 76% of our customers were located in seven states: Arizona, Idaho, Mississippi, Missouri, Oklahoma, South Carolina and Texas. We provided services to approximately 1.0 million residential and business customers out of approximately 2.8 million passings as of March 31, 2026. Of these customers, approximately 986,000 subscribed to data services, 82,000 subscribed to video services and 91,000 subscribed to voice services.

We generate substantially all of our revenues through three primary product lines. Ranked by share of our total revenues through the first three months of 2026, they are residential data (60.5%), business data (15.9%) and residential video (11.6%). The profit margins, growth rates and/or capital intensity of these three primary product lines vary significantly due to competition, product maturity and relative costs.

We focus on growing our higher margin businesses, namely residential data and business data services. Our strategy acknowledges the industry-wide trends of declining profitability of video services and declining revenues from residential voice services. The declining profitability of residential video services is due primarily to increasing programming costs and retransmission fees and competition from other streaming content providers, and the declining revenues from residential voice services are due primarily to the increasing use of wireless voice services instead of residential voice services. Separately, we have also historically focused on retaining customers who are likely to produce higher relative value over the life of their service relationships with us, are less attracted by discounting, require less support and churn less, while more recently supplementing our growth by targeting a broader scope of incremental customers, including those who are more value-conscious. This strategy has focused on increasing adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), driving higher margins and delivering attractive levels of Adjusted EBITDA less capital expenditures over the long-term.

Excluding the effects of acquisitions and divestitures, the trends described above have impacted, and are expected to further impact, our three primary product lines in the following ways:

•Residential data. We focus on growing residential data customers and revenues and expect this product line to grow over the long-term, supplemented by growth in related services, such as intelligent Wi-Fi, technology support and network security solutions. In recent periods, we have experienced subscriber losses as a result of increased competition in our markets but believe the upgrades made in our broadband capacity, our ability to offer higher access speeds than many of our competitors, the reliability and flexibility of our data service offerings, our Wi-Fi offerings and continuously growing data usage by consumers and their demand for higher speeds will enable us to continue to earn a consistent average monthly revenue per unit (“ARPU”) from our existing customers over the long-term and potentially capture additional market share. Our broadband plant generally consists of a fiber-to-the-premises (“fiber”) or hybrid fiber-coaxial (“HFC”) network with ample unused capacity, and we offer our data customers internet products at some of the fastest speeds available in our markets. We believe that the capacity and reliability of our networks is equal to or exceeds that of our competitors in most of our markets and best positions us to meet the continuously increasing consumption demands of customers.

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•Business data. We focus on growing business data customers and revenues over the long term by concentrating our efforts on increasing sales to business customers and attracting enterprise and wholesale business customers. We expect to experience growth in business data revenues over the long-term as we sell-in additional products and services to existing customers and also focus on adding new customers. Margins for products sold to business customers have remained attractive, which we expect will continue.

We recently launched a mobile service offering with a mobile virtual network enabler to complement our wired broadband product by delivering added convenience and greater flexibility while strengthening our long-term customer relationships with the ultimate goals of enhancing customer lifetime value, improving retention and supporting packaging opportunities to reinforce our core broadband business.

We continue to experience increased competition, particularly from telephone companies; fiber, municipal and cooperative overbuilders; fixed wireless data providers; and over-the-top video providers. Because of the levels of competition we face, we believe it is important to make investments in our infrastructure. In addition, a key objective of our capital allocation process is to invest in initiatives designed to drive revenue and Adjusted EBITDA expansion. We continue to invest capital to, among other things, increase fiber density and coverage, expand our footprint, increase plant and data capacity, enhance network reliability and improve the customer experience. We have rolled out multi-Gigabit download data service to over half of our markets and currently offer Gigabit download data service to all of our passings. We are currently deploying DOCSIS 4.0 capabilities, which, together with Sparklight TV, further increases our network capacity and enables future growth in our residential data and business data product lines. As a result of multi-year investments in our plant and network, we increased broadband capacity and reliability, which has enabled and will continue to enable us to offer even higher download speeds and to support the continually increasing data usage by customers. We believe these investments will reinforce our competitive strength in this area.

Our primary financial goals are to grow residential data and business data customers and revenues, to increase profit margins and to deliver strong Adjusted EBITDA and Adjusted EBITDA less capital expenditures over the long-term. To achieve these goals, we intend to continue our disciplined cost management approach, remain focused on customers with expected higher relative value and supplement our growth by targeting a broader scope of incremental customers, including those who are more value-conscious. We combat competitive threats in our markets through targeted pricing and product offerings and further planned investments in broadband plant upgrades, including the continued deployment of DOCSIS 4.0 capabilities and new data service offerings for residential and business customers. Given our strategic focus on our higher margin residential data and business data product lines, we assess our level of capital expenditures relative to Adjusted EBITDA, unlike others in our industry who may compare their capital expenditures to revenues due to their much larger residential video customer bases.

We also evaluate opportunistic broadband-related acquisition and strategic investment opportunities in rural markets in addition to the pursuit of organic growth through market expansion projects. In recent years, we have made investments in several broadband-centric providers serving non-urban markets that follow various strategies similar to our own. Such strategic investments were intended to capitalize on opportunities that may not have existed under a full ownership model, in order to allow us to participate more aggressively in the fiber expansion business and potentially provide future monetization, acquisition or investment opportunities, while allowing our management team to focus on our core business and without burdening our cash flow.

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Results of Operations

Key Performance Measures Summary

The following table summarizes certain key measures of our results of operations (dollars in thousands):

	Three Months Ended March 31,
	2026		2025		$ Change		% Change
Revenues	$	352,957	$	380,601	$	(27,644)	(7.3)	%
Total costs and expenses	$	266,351	$	284,926	$	(18,575)	(6.5)	%
Income from operations	$	86,606	$	95,675	$	(9,069)	(9.5)	%
Net income	$	35,774	$	2,607	$	33,167	NM
Cash flows from operating activities	$	118,220	$	116,332	$	1,888	1.6	%
Cash flows from investing activities	$	(23,905)	$	(56,556)	$	32,651	(57.7)	%
Cash flows from financing activities	$	(81,483)	$	(64,319)	$	(17,164)	26.7	%
Adjusted EBITDA(1)	$	183,348	$	202,712	$	(19,364)	(9.6)	%
Capital expenditures	$	68,424	$	71,130	$	(2,706)	(3.8)	%

NM = Not meaningful

(1)Adjusted EBITDA is a non-GAAP measure. Refer to "Use of Adjusted EBITDA" below for a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure.

Primary Service Units ("PSUs") and Customer Counts

Selected subscriber data for the periods presented was as follows (in thousands, except percentages):

	As of March 31,		Annual Net Gain (Loss)
	2026	2025	Change	% Change
Residential data PSUs	887.1	945.0	(57.9)	(6.1)	%
Residential video PSUs	78.0	101.3	(23.2)	(22.9)	%
Residential voice PSUs	53.6	64.6	(11.0)	(17.0)	%
Total residential PSUs	1,018.8	1,110.8	(92.1)	(8.3)	%
Business data PSUs	98.5	99.8	(1.3)	(1.3)	%
Business video PSUs	4.4	6.4	(1.9)	(30.2)	%
Business voice PSUs	37.4	38.0	(0.6)	(1.6)
Total business services PSUs	140.3	144.1	(3.9)	(2.7)	%
Total data PSUs	985.6	1,044.8	(59.2)	(5.7)	%
Total video PSUs	82.5	107.6	(25.1)	(23.4)	%
Total voice PSUs	91.0	102.6	(11.6)	(11.3)	%
Total PSUs	1,159.0	1,255.0	(95.9)	(7.6)	%
Residential customer relationships	907.0	970.1	(63.1)	(6.5)	%
Business customer relationships	106.5	105.0	1.5	1.4	%
Total customer relationships	1,013.5	1,075.1	(61.6)	(5.7)	%
Passings(1)	2,847.0	2,849.0	(2.0)	(0.1)	%

(1)Passings as of March 31, 2026 reflect certain refinements to the service provider's counting methodology.

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Use of Nonfinancial Metrics and ARPU

We use various nonfinancial metrics to measure, manage and monitor our operating performance on an ongoing basis. Such metrics include passings, PSUs and customer relationships.

Passings represent the estimated number of serviceable and marketable homes and businesses passed by our active plant based on available information. We use an external reporting service for determining reported passings. The service provider generates updated counts biannually, during the first and third quarters of each year. Therefore, our reported passings for the second and fourth quarters of the year remain unchanged from the preceding sequential quarter.

A PSU represents a single subscription to a particular service offering. Residential bulk multi-dwelling PSUs are generally classified as residential and are counted at the individual unit level. Business voice customers who have multiple voice lines are counted as a single PSU.

A customer relationship represents a single customer who subscribes to one or more PSUs.

We believe passings, PSUs and customer relationship counts are useful to investors in evaluating our operating performance. Similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measures of passings, PSUs and customer relationships may not be directly comparable to similarly titled measures reported by other companies.

We use ARPU to evaluate and monitor the amount of revenue generated by each type of service subscribed to by customers and the contribution to total revenues as well as to analyze and compare growth patterns. Residential ARPU values represent the applicable residential service revenues (excluding installation and activation fees) divided by the corresponding average of the number of PSUs at the beginning and end of each period, divided by the number of months in the period, except that for any PSUs added or subtracted as a result of an acquisition or divestiture occurring during the period, the associated ARPU values represent the applicable residential service revenues (excluding installation and activation fees) divided by the pro-rated average number of PSUs during such period. Business services ARPU values represent business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period, divided by the number of months in the period, except that for any business customer relationships added or subtracted as a result of an acquisition or divestiture occurring during the period, the associated ARPU values represent business services revenues divided by the pro-rated average number of business customer relationships during such period.

We believe ARPU is useful to investors in evaluating our operating performance. ARPU and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measure of ARPU may not be directly comparable to similarly titled measures reported by other companies.

Comparison of Three Months Ended March 31, 2026 to Three Months Ended March 31, 2025

Revenues

Revenues by service offering for the three months ended March 31, 2026 and 2025, together with the percentages of total revenues that each item represented for the periods presented, were as follows (dollars in thousands):

	Three Months Ended March 31,
	2026				2025				2026 vs. 2025
	Revenues		% of Total		Revenues		% of Total		$ Change		% Change
Residential data	$	213,571	60.5	%	$	225,121	59.1	%	$	(11,550)	(5.1)	%
Residential video	40,769		11.6	%	50,805		13.3	%	(10,036)		(19.8)	%
Residential voice	6,509		1.8	%	7,044		1.9	%	(535)		(7.6)	%
Business data	56,288		15.9	%	57,293		15.1	%	(1,005)		(1.8)	%
Business other	14,238		4.0	%	16,883		4.4	%	(2,645)		(15.7)	%
Other	21,582		6.1	%	23,455		6.2	%	(1,873)		(8.0)	%
Total revenues	$	352,957	100.0	%	$	380,601	100.0	%	$	(27,644)	(7.3)	%

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ARPU for the indicated service offerings for the three months ended March 31, 2026 and 2025 were as follows:

	Three Months Ended March 31,				2026 vs. 2025
	2026		2025		$ Change		% Change
Residential data	$	79.51	$	78.84	$	0.67	0.8	%
Residential video	$	167.98	$	162.30	$	5.68	3.5	%
Residential voice	$	39.60	$	35.58	$	4.02	11.3	%
Business services(1)	$	219.62	$	234.48	$	(14.86)	(6.3)	%

(1)In March 2026, we sold certain fiber-to-the-tower contract rights for cash proceeds of $42.0 million. Such contracts generated $9.0 million of business data revenues during 2025.

Residential data service revenues decreased $11.6 million, or 5.1%, due primarily to a decrease in residential data subscribers, partially offset by a 0.8% increase in ARPU.

Residential video service revenues decreased $10.0 million, or 19.8%, due primarily to a decrease in residential video subscribers, partially offset by rate adjustments enacted during 2025.

Residential voice service revenues decreased $0.5 million, or 7.6%, due primarily to a decrease in residential voice subscribers.

Business data revenues decreased $1.0 million, or 1.8%.

Business other revenues decreased $2.6 million, or 15.7%, due primarily to a decrease in business video subscribers.

Other revenues decreased $1.9 million, or 8.0%, due primarily to a decrease in regulatory and advertising revenues.

Costs and Expenses

Operating expenses (excluding depreciation and amortization) were $93.9 million for the three months ended March 31, 2026 and decreased $6.0 million, or 6.0%, compared to the three months ended March 31, 2025. The decrease in operating expenses was primarily attributable to decreases of $6.9 million in programming and franchise costs as a result of video customer losses and $2.9 million in health insurance costs, partially offset by increases of $1.8 million in software costs and $1.0 million in maintenance costs. Operating expenses as a percentage of revenues were 26.6% and 26.2% for the three months ended March 31, 2026 and 2025, respectively.

Selling, general and administrative expenses were $87.2 million for the three months ended March 31, 2026 and decreased $8.2 million, or 8.6%, compared to the three months ended March 31, 2025. The decrease in selling, general and administrative expenses was primarily attributable to decreases of $3.8 million in labor and other compensation-related costs, $3.7 million in billing system conversion costs and $3.0 million in health insurance costs, partially offset by a $1.3 million increase in software costs. Selling, general and administrative expenses as a percentage of revenues were 24.7% and 25.1% for the three months ended March 31, 2026 and 2025, respectively.

Depreciation and amortization expense was $82.5 million for the three months ended March 31, 2026 and decreased $3.0 million, or 3.5%, compared to the three months ended March 31, 2025. Depreciation and amortization expense as a percentage of revenues was 23.4% and 22.5% for the three months ended March 31, 2026 and 2025, respectively.

Interest Expense, Net

Interest expense, net, was $30.3 million for the three months ended March 31, 2026 and decreased $4.2 million, or 12.2%, compared to the three months ended March 31, 2025 due primarily to lower outstanding debt balances and a decrease in interest rates.

Other Income (Expense), Net

Other income, net, was $23.0 million for the three months ended March 31, 2026 and consisted primarily of a $26.6 million gain on sale of fiber-to-the-tower contract rights and $9.8 million of gains on debt extinguishments, partially offset by a $13.8 million non-cash loss on fair value adjustment associated with the MBI option. Other expense, net, was $1.4 million for the three months ended March 31, 2025 and consisted primarily of a $4.7 million non-cash loss on fair value adjustment associated with the MBI Net Option, partially offset by a $3.2 million gain on sale of an equity investment.

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Income Tax Provision

Income tax provision was $19.4 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively, and our effective tax rate was 24.5% and 0.3% for the three months ended March 31, 2026 and 2025, respectively. The increase in income tax provision was due primarily to an increase in pre-tax income and lower equity method investment net losses.

Equity Method Investment Income (Loss), Net

Equity method investment loss, net, was $24.1 million for the three months ended March 31, 2026 and consisted primarily of our $24.1 million and $1.5 million proportionate shares of net losses from our Clearwave Fiber and MBI investments, respectively, partially offset by our $1.5 million proportionate share of net income from our Nextlink investment. Equity method investment loss, net, was $57.0 million for the three months ended March 31, 2025 and consisted of our $54.9 million and $3.5 million proportionate share of net losses from our Clearwave Fiber and MBI investments, respectively, partially offset by our $1.4 million proportionate share of net income from our Nextlink investment. Our proportionate share of Clearwave Fiber's net loss for the three months ended March 31, 2025 included $28.0 million of non-cash impairment charges incurred by Clearwave Fiber.

Net Income

Net income was $35.8 million and $2.6 million for the three months ended March 31, 2026 and 2025, respectively.

Unrealized Gain (Loss) on Cash Flow Hedges and Other, Net of Tax

Unrealized gain on cash flow hedges and other, net of tax, was $4.1 million for the three months ended March 31, 2026 compared to a $15.0 million loss for the three months ended March 31, 2025. The $19.1 million change was due primarily to an increase in forward interest rates during the three months ended March 31, 2026 compared to a decrease in the prior year quarter.

Use of Adjusted EBITDA

We use certain measures that are not defined by GAAP to evaluate various aspects of our business. Adjusted EBITDA is a non-GAAP financial measure and should be considered in addition to, not as superior to, or as a substitute for, net income reported in accordance with GAAP. Adjusted EBITDA is reconciled to net income below, the most directly comparable GAAP financial measure.

Adjusted EBITDA is defined as net income plus net interest expense, income tax provision, depreciation and amortization, equity-based compensation, severance and contract termination costs, acquisition-related costs, net (gain) loss on asset sales and disposals, system conversion costs, net equity method investment (income) loss, executive search and transition costs, MBI integration costs net other (income) expense and any special items, as applicable, provided in the reconciliation tables below. Executive search and transition costs consist of expenses incurred in connection with changes in executive leadership, including make-whole payment, severance and other separation benefits, and costs related to executive search and onboarding. MBI integration costs consist of expenses for planning and implementing system conversion, rebranding, employee-related costs (including severance and retention) and other professional fees incurred in connection with the integration of MBI. These costs are associated with discrete events and are incremental to normal, recurring, operating expenses and as such, are excluded from Adjusted EBITDA. Adjusted EBITDA eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of our business as well as other non-cash or special items and is unaffected by our capital structure or investment activities. This measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and our cash cost of debt financing. These costs are evaluated through other financial measures.

We use Adjusted EBITDA to assess our performance. In addition, Adjusted EBITDA generally correlates to the measure used in the leverage ratio calculations under the Credit Agreement and the Senior Notes Indenture to determine compliance with the covenants contained in the Credit Agreement and the ability to take certain actions under the Senior Notes Indenture. Adjusted EBITDA is also a significant performance measure that we have used in our incentive compensation programs. Adjusted EBITDA does not take into account cash used for mandatory debt service requirements or other non-discretionary expenditures, and thus does not represent residual funds available for discretionary uses.

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We believe that Adjusted EBITDA is useful to investors in evaluating our operating performance. Adjusted EBITDA and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measure of Adjusted EBITDA may not be directly comparable to similarly titled measures reported by other companies.

	Three Months Ended March 31,
(dollars in thousands)	2026		2025		$ Change		% Change
Net income	$	35,774	$	2,607	$	33,167	NM
Plus: Interest expense, net	30,269		34,463		(4,194)		(12.2)	%
Income tax provision	19,421		203		19,218		NM
Depreciation and amortization	82,494		85,465		(2,971)		(3.5)	%
Equity-based compensation	7,564		11,311		(3,747)		(33.1)	%
Severance and contract termination costs	—		328		(328)		(100.0)	%
Acquisition-related costs	1,645		1,432		213		14.9	%
(Gain) loss on asset sales and disposals, net	2,785		4,196		(1,411)		(33.6)	%
System conversion costs	628		4,305		(3,677)		(85.4)	%
Equity method investment (income) loss, net	24,102		56,990		(32,888)		(57.7)	%
Executive search and transition costs	905		—		905		NM
MBI integration costs	721		—		721		NM
Other (income) expense, net	(22,960)		1,412		(24,372)		NM
Adjusted EBITDA	$	183,348	$	202,712	$	(19,364)	(9.6)	%

NM = Not meaningful.

Financial Condition: Liquidity and Capital Resources

Liquidity

Our primary funding requirements are for our ongoing operations, capital expenditures, the MBI acquisition (discussed below), potential acquisitions and strategic investments, debt repayment (including MBI's term loans due November 2027) and share repurchases. We believe that our existing cash balances, our Senior Credit Facilities and operating cash flows will provide adequate support for these funding requirements over the next 12 months. However, our ability to utilize those funding sources to fund ongoing operations, make capital expenditures, complete the MBI acquisition, make future acquisitions and strategic investments, repay debt and make share repurchases depends on future operating performance and cash flows, which, in turn, are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control.

From November 2020 to June 30, 2024, we held a call option to purchase all but not less than all of the remaining equity interests in MBI, a data, video and voice services provider in which we acquired an approximately 45% equity interest in November 2020, that we did not already own between January 1, 2023 and June 30, 2024. The call option expired unexercised on June 30, 2024. Further, certain investors in MBI held a put option to sell (and to cause all members of MBI other than us to sell) to us all but not less than all of the remaining equity interests in MBI that we did not already own between July 1, 2025 and September 30, 2025.

In December 2024, we amended our agreement with MBI, to, among other things, (i) reinstate the expired call option to acquire the Call Option; (ii) amend the put option to establish the Put Option; (iii) require us to make the Upfront Payment, which was paid on December 20, 2024; and (iv) provide for the other members of MBI to immediately receive, indirectly, the New MBI Debt. The Put Price payable by us upon the closing of the Put Option exercise is calculated under a formula based on a multiple of MBI’s adjusted EBITDA for the twelve-month period ended June 30, 2025, and MBI’s total net indebtedness. The aggregate amount of the Upfront Payment and the impact of the New MBI Debt will reduce the Put Price payable upon the closing of the Put Option exercise and the impact of the New MBI Debt (and the associated interest and fees) will be excluded from the calculation of MBI's total net indebtedness for purposes of determining such purchase price. Further, if the closing of the Put Option exercise occurs prior to October 1, 2026, the Put Price payable will be discounted, from October 1, 2026 to the closing, at a per annum rate of 12%. The Put Option was exercised on January 2, 2026 and the transaction is expected to close on October 1, 2026.

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The following table summarizes select operating and financial metrics for MBI (dollar amounts in thousands):

	As of and Three Months Ended March 31,
	2026		2025		Change		% Change
Total data PSUs	204,151		217,796		(13,645)		(6.3)	%
Residential data revenues	$	41,907	$	45,908	$	(4,001)	(8.7)	%
Total residential revenues	$	54,145	$	59,699	$	(5,554)	(9.3)	%
Total business services revenues	$	18,856	$	18,640	$	216	1.2	%
Total revenues	$

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Next expected filings

~2026-07-31 10-Q expected by 2026-08-06 (in 22 days)
~2026-11-06 10-Q expected by 2026-11-12 (in 120 days)
~2027-02-25 10-K expected by 2027-02-26 (in 231 days)
~2027-04-29 10-Q expected by 2027-05-05 (in 294 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-07-09 8-K Earnings Release; Regulation FD Disclosure
2026-06-24 8-K Other Events
2026-06-23 8-K Other Events; Financial Statements and Exhibits
2026-06-22 8-K Other Events; Financial Statements and Exhibits
2026-05-14 S-8 Employee Benefit Plan Registration
2026-04-30 8-K Earnings Release; Financial Statements and Exhibits
2026-04-30 10-Q Quarterly Report
2026-04-23 8-K/A Officer/Director Change; Financial Statements and Exhibits
2026-04-07 DEF 14A Proxy Statement
2026-04-02 8-K Officer/Director Change
2026-03-16 8-K Material Financial Obligation; Other Events
2026-02-26 10-K Annual Report
2026-02-26 8-K Earnings Release; Financial Statements and Exhibits
2026-01-05 8-K Material Agreement Entered; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
2025-12-31 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits

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