- Revenue: $183.3 million, down 2% year-over-year.
- Operating Income: $24.3 million, up from $2.4 million in Q2 2023.
- Net Income: $9 million, $0.5 per share, compared to $0.8 million, loss of $0.03 per share in prior year.
- Adjusted EBITDA: $48.7 million, up 6% year-over-year.
- International Telecom Revenue: $95.4 million, up 4% year-over-year.
- International Telecom Adjusted EBITDA: $33.3 million, up 14% year-over-year.
- US Telecom Revenue: $87.9 million, down 7% year-over-year.
- US Telecom Adjusted EBITDA: $21.9 million, down 4% year-over-year.
- High-Speed Broadband Homes Passed: 403,000, up 22% year-over-year.
- High-Speed Data Subscribers: 141,000, up 9% year-over-year.
- International High-Speed Data Homes Passed: 257,000, up 2% year-over-year.
- International High-Speed Data Subscribers: up 9% year-over-year.
- International Business Solutions Revenue: up over 10% year-over-year.
- International Business Mobility Revenue: up 40% year-over-year.
- International Fixed Business Revenue: up nearly 9% year-over-year.
- Prepaid and Postpaid Mobile Data Plans Subscribers: up 9% year-over-year.
- US High-Speed Broadband Homes Passed: 146,000, up 85% year-over-year.
- Net Debt to Adjusted EBITDA Ratio: 2.45 times.
- Net Cash Provided by Operating Activities: $53.5 million for the first half of 2024.
- Capital Expenditures: $61.8 million for the first six months of 2024.
- Dividends and Share Buybacks: $3.7 million in dividends and $9.9 million in share buybacks during Q2.
- Full-Year Revenue Guidance: $730 million to $750 million.
- Full-Year Adjusted EBITDA Guidance: $190 million to $200 million.
- Full-Year Capital Expenditures Guidance: $100 million to $110 million net of reimbursed amounts.
- Year-End Net Debt Ratio Guidance: 2.25 to 2.5.
Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Adjusted EBITDA grew by 6% year-over-year, driven by strong performance in the International Telecom segment.
- International Telecom segment saw a 4% increase in revenue and a $4.2 million growth in adjusted EBITDA.
- High-speed data broadband customers increased by 22% year-over-year, with high-speed data subscribers up by 9%.
- Completed the sale of a non-core international real estate asset, resulting in a $15.9 million gain.
- Continued focus on cost management led to lower SG&A expenses and improved operating efficiency.
Negative Points
- Overall revenue declined by 2% due to the expiration of the Emergency Connectivity Fund program.
- US Telecom revenue saw a year-over-year decline, impacting overall performance.
- Churn in legacy low-speed broadband networks as new high-speed networks are deployed.
- Net cash provided by operating activities decreased due to higher interest expenses from increased debt levels.
- Temporary headwinds from the expiration of government programs like the Affordable Connectivity Program.
Q & A Highlights
Q: The $16 million asset sale, what type of real estate was that? Are there other non-core assets you could monetize?
A: It was an undeveloped piece of land. We routinely look at our asset portfolio to maximize shareholder value. This process had been in place for multiple quarters.
Q: Did the asset sale inform the $10 million stock buyback? What's left on the authorized program?
A: The processes were not connected. The real estate sale had been ongoing for several quarters. The share buyback program was instituted independently. There's another $15 million left on the authorized program.
Q: How much construction revenue is there left to go this year?
A: We still have some programs to finish, but we expect it not to be at the same scale. We see around $5 million in construction revenue.
Q: Any updated thoughts on possibly joint venturing given private multiples are above public multiples?
A: Our Board routinely considers strategic opportunities. We see those type of moves as confirming our strategy. We're confident in our strategy to generate continued shareholder value.
Q: On the international side, is the high-speed data customer gain due to stronger economies?
A: It's a mix. We operate in markets with strong economic tailwinds, like Guyana. But it's also due to our investments and strategy to be First-to-Fiber, meeting market needs with great broadband service.
Q: Was the entire revenue decline in the US related to the ECF program?
A: The majority was driven by the discontinuation of the ECF program, which was around $27-$28 million on an annualized basis.
Q: Is there more cost savings you could take advantage of?
A: The incremental impact of our cost-saving efforts is reflected in the margin improvement for the second half of the year.
Q: How many more quarters do you foresee churn from decommissioning older networks being a headwind?
A: We expect to see this headwind for another couple of quarters. The churn is primarily on legacy technologies like DSL and fixed wireless broadband.
Q: Are there any forward-looking metrics that give confidence in the growth potential of the broadband business in the US?
A: We don't share funnel specifics, but we are encouraged by leveraging the assets we've built. Government-funded reimbursable programs are starting to make significant contributions to our capital profile.
Q: Internationally, will growth come more from ARPU expansion or subscriber growth?
A: It will be a mix of both. We are pleased with the data adoption trends and have made investments to support these trends for a significant period.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
