Cable One’s second quarter reflected a mix of internal pricing actions, increased competitive overlap with fiber internet providers, and persistent churn in key customer segments. Management attributed the decline in residential data subscribers to promotional roll-offs, segmented pricing adjustments, and seasonal softness in college markets. CEO Julia Laulis noted, “Elevated disconnects this quarter were driven by customer response to recent segmented pricing changes, churn arising from promotional roll-offs and seasonal churn in our college markets.” The company emphasized progress on sequential improvement in new customer connects, even as subscriber losses continued.
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Cable One (CABO) Q2 CY2025 Highlights:
- Revenue: $381.1 million vs analyst estimates of $379.5 million (3.4% year-on-year decline, in line)
- Adjusted EPS: $7.73 vs analyst expectations of $8.23 (6% miss)
- Adjusted EBITDA: $203.2 million vs analyst estimates of $200 million (53.3% margin, 1.6% beat)
- Operating Margin: -128%, down from 27.9% in the same quarter last year
- Residential Data Subscribers: 1.03 million, down 31,500 year on year
- Market Capitalization: $783.4 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Cable One’s Q2 Earnings Call
- Brandon Lee Nispel (KeyBanc): Asked about the impact of fiber competition and fixed wireless on subscriber losses. CEO Julia Laulis explained that most losses stemmed from a lack of connects, likely due to cellphone internet, and detailed how pricing actions and promo roll-offs also contributed to churn.
- Brandon Lee Nispel (KeyBanc): Followed up on future promo roll-offs and retention tactics. Laulis said promo-related churn would remain elevated through year-end, but noted that the new retention team is already seeing improved retention rates in affected cohorts.
- Samuel McHugh (BNP Paribas): Pressed on whether the company prioritizes ARPU or subscriber growth. Laulis stated that both are important, but acknowledged the need to balance market-specific dynamics. CFO Todd Koetje added that ARPU is expected to remain stable for the rest of the year.
- Samuel McHugh (BNP Paribas): Inquired about the underperformance of FlexConnect and the competitive threat from AT&T’s fixed wireless. Koetje responded that FlexConnect’s launch was delayed by billing and digital platform upgrades, but relaunch efforts are underway to target value-conscious customers.
- Nikhil Phanish Aluru (JPMorgan): Asked if the mobile service pilot was a competitive response. Laulis said improved network economics and platform maturity made the launch viable now, viewing mobile as both a complement to broadband and a means to enhance profitability.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will monitor (1) the adoption and customer impact of the new mobile pilot and Tech Assist offerings, (2) execution and realized cost savings from the unified billing platform, and (3) the trajectory of broadband subscriber losses in the face of persistent fiber and wireless competition. The progress of the CEO succession process and its effect on strategic continuity will also be important to track.
Cable One currently trades at $139.18, up from $127.94 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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