Cable One (CABO) Q2 FY26 earnings call: guidance and Q&A

How is Cable One changing its approach to capitalize on low penetration rates, given this has been a long-standing opportunity?

Jim Holanda highlighted investments in digital and direct sales channels, which now account for 35% of sales, up from less than 10% a year ago. He also noted the launch of Mobile in March FY26 as a competitive response to FWA and a tool for retention, along with ancillary services to increase value.

“The immediate opportunity, 5.5, 6 months ago when I walked through the door was to really balance and invest in additional sales channels, primarily on the digital and e-commerce side along with the direct sales side. And when you look back over a year ago, those two sales channels accounted for less than 10% of sales. In Q2, they accounted for roughly 35% of sales.”

asked by Brandon Nispel · answered by James Holanda

Can you provide an update on ongoing financing transactions, given recent reports?

Todd Koetje stated the company is actively evaluating financing alternatives to strengthen the balance sheet but is not in a position to provide specific updates on financing efforts for CABO or MBI at this time. He affirmed the commitment to explore all opportunities for clarity and stability.

“given the consideration of that active evaluation, we are not in a position to answer any questions related to our financing efforts at CABO or the financing efforts at MBI at this time, but we will continue to explore, evaluate, pursue all potential opportunities because we know we need to provide clarity and additional stability to the balance sheet.”

asked by Brandon Nispel · answered by Todd Koetje

How does the shift to more direct and digital sales channels impact the overall cost to acquire customers, and what is the expected ARPU trajectory given various moving parts?

Jim Holanda expects the overall Customer Acquisition Cost (CAC) to increase slightly but not materially due to the more expensive direct sales channel, offset by efficient digital channels. Todd Koetje explained ARPU benefits from AutoPayPlus and product adoption, but also headwinds from aggressive front-book pricing for new customer acquisition, aiming for balanced customer growth over ARPU expansion.

“I expect the overall [ CAC ] to increase slightly but not materially to where it really impacts margin overall. To the extent that changes as we continue to beef up those and those mixes changes, we'll be happy to update on future calls.”

asked by Gregory Williams · answered by James Holanda

What are the expectations for subscriber trends in the next quarter or two, and how does mobile bundling impact the price vs. volume trade-off?

Todd Koetje noted Q3 is seasonally better and Q3 FY25 was weak due to billing system issues, suggesting potential year-over-year improvement. He reiterated retention as the highest priority and mobile bundling as a way to improve retention and customer lifetime value, even if it means sacrificing some ARPU for subscriber growth.

“The third quarter is a seasonally better quarter and Q2, demonstrated that Q2 is usually the seasonally worst quarter in addition to some of the pricing adjustments that I talked about in addition to just a more intense competitive environment that we continue to operate in. And recall, if you're talking about year-over-year, Q3 of 2025 was definitely not a great quarter for us as we were coming through a lot of the billing system implementation.”

asked by Steven Cahall · answered by Todd Koetje

Does Cable One consider walking away from low penetration areas like Optimum, and how does market share vary between fiber and non-fiber overbuild markets?

Jim Holanda views low penetration markets as opportunities and does not foresee pursuing a strategy of walking away. He acknowledged that penetration varies significantly across markets due to historical performance and prior investments of acquired companies, but expressed optimism in gaining "fair share" long-term through current investments and execution.

“I view low-penetration markets as an opportunity. And so I had not heard that on the Optimum remarks. But certainly, in the 6 months I've been here so far, I have not seen anything that would indicate that, that would be a strategy that we would pursue at this time.”

asked by Samuel McHugh · answered by James Holanda

What percentage of gross adds come from digital channels, what is the target, and what is the current fixed wireless overlap in Cable One's and MBI's markets?

Jim Holanda stated digital sales accounted for roughly 25% of sales in Q2 FY26, with an expectation to reach 35-40% over the next 12-18 months. Todd Koetje confirmed fixed wireless overlap is a little over 80% in Cable One's footprint, similar to a year ago, and slightly less in MBI's territory.

“In terms of the digital sales channel, that is now accounting for roughly 25% of sales in Q2. My expectation is that, that goes up to 35% to 40% over the next 12 to 18 months if we're following kind of where the rest of the industry and some of my prior experiences would indicate in terms of that.”

asked by Frank Louthan · answered by James Holanda