On August 1, 2024, Cable One Inc (CABO, Financial) released its 8-K filing detailing its financial performance for the second quarter of 2024. The telecommunications company, which provides broadband, voice, and video services to residential and business customers, reported a decline in both revenue and net income compared to the same period last year.
Company Overview
Cable One Inc is a telecommunications company that derives revenue from broadband, voice, and video services. The majority of its revenue comes from data and video services, which are subscription-based and billed monthly. The company also offers Sparklight TV, an IPTV video service, and generates advertising revenue from selling airtime on its video channels. Voice services are provided over Internet protocols, and the company owns a telecommunications infrastructure.
Performance and Challenges
For the quarter ended June 30, 2024, Cable One Inc reported revenues of $394.5 million, a 7.0% decrease from $424.0 million in the same quarter of 2023. The company also saw a decline in net income, which fell to $47.6 million from $55.2 million, representing a 13.8% decrease. These declines were attributed to lower revenues and the discontinuation of the Affordable Connectivity Program (ACP), which impacted residential data primary service units (PSUs).
Julie Laulis, Cable One President and CEO, commented, "We believe our strategic initiatives intended to drive penetration deeper across all market segments are setting the stage for sustainable long-term growth. Despite challenges such as the discontinuation of the Affordable Connectivity Program ('ACP') and typical seasonal headwinds, the underlying fundamentals of both residential and business data additions and retention levels maintained positive momentum during the second quarter, with both connects and disconnects improving year-over-year for the second consecutive quarter."
Financial Achievements
Despite the challenges, Cable One Inc achieved several financial milestones. The company reported an Adjusted EBITDA of $212.4 million, down from $231.3 million in the same quarter last year. The Adjusted EBITDA margin was 53.8%, slightly lower than the 54.5% reported in Q2 2023. Net cash provided by operating activities was $155.5 million, compared to $169.6 million in the prior year quarter. Capital expenditures totaled $71.6 million, down from $81.5 million in Q2 2023.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Revenues | $394.5 million | $424.0 million | -7.0% |
| Net Income | $47.6 million | $55.2 million | -13.8% |
| Adjusted EBITDA | $212.4 million | $231.3 million | -8.2% |
| Net Cash from Operating Activities | $155.5 million | $169.6 million | -8.3% |
| Capital Expenditures | $71.6 million | $81.5 million | -12.2% |
Analysis
The decline in revenue and net income highlights the challenges Cable One Inc faces in the current market environment. The discontinuation of the ACP significantly impacted residential data PSUs, leading to a sequential decrease of approximately 4,200 units. However, the company managed to increase business data PSUs by 500 units sequentially, indicating some resilience in its business segment.
Adjusted EBITDA and net cash from operating activities also saw declines, reflecting the overall reduction in revenue. The company's efforts to manage costs were evident in the reduction of capital expenditures, which decreased by 12.2% year-over-year.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Cable One Inc for further details.
