Cable One’s third quarter was marked by subscriber losses and operational challenges that contributed to a negative market reaction. Management attributed the downturn to a mix of higher customer churn, intensified competition, the winding down of promotional offers, and disruptions from a major billing system migration. CEO Julie Laulis described the quarter as “disappointing,” citing that the combination of macroeconomic factors and internal changes led to an unusual spike in customer attrition. Management highlighted that while connect trends showed some improvement, the overall impact from these pressures dominated the period.
Is now the time to buy CABO? Find out in our full research report (it’s free for active Edge members).
Cable One (CABO) Q3 CY2025 Highlights:
- Revenue: $376 million vs analyst estimates of $378.9 million (4.5% year-on-year decline, 0.8% miss)
- Adjusted EPS: $18.89 vs analyst estimates of $9.25 (significant beat)
- Adjusted EBITDA: $201.9 million vs analyst estimates of $203 million (53.7% margin, 0.6% miss)
- Operating Margin: 25.2%, down from 28% in the same quarter last year
- Residential Data Subscribers: 1.01 million, down 49,400 year on year
- Market Capitalization: $643.4 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 Q3 Earnings Call
- Craig Moffett (MoffettNathanson): Asked about long-term leverage targets and whether more aggressive strategies are being considered to address broadband ARPU and net subscriber losses. CFO Todd Koetje emphasized ongoing debt reduction, while CEO Julie Laulis noted platform migrations are behind them and highlighted connect improvements in recent months.
- Gregory Williams (TD Cowen): Questioned the relative impact of competition, promo roll-offs, and billing migration on churn, and inquired about future pricing adjustments. Laulis responded that no single factor dominated, with all contributing equally, and stated there are no planned high-speed data price hikes but alternative revenue initiatives are under review.
- Sebastiano Petti (JPMorgan): Sought clarity on low-end subscriber pressure and the progress of Lift and Flex products. Laulis confirmed increased low-end competition from cell phone internet and described Lift as showing promising retention, with Flex rollout expanding in Q4.
- Steven Cahall (Wells Fargo): Asked about the potential impact of increased move activity on connect trends and the outlook for SG&A expenses. Laulis said move activity remains low and stressed the importance of winning each new customer opportunity, while Koetje expects SG&A to normalize as migration-related costs subside.
- Brandon Nispel (KeyBanc Capital Markets): Requested updates on fiber overlap and the expansion of fixed wireless competitors like AT&T Air. Koetje reported fiber overlap remains stable, and Laulis expressed optimism that the Flex product and mobile launch could help counter fixed wireless threats.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) whether Cable One’s retention programs and segmentation strategies translate into sustained improvements in customer churn, (2) the adoption rates and impact of new products like mobile and Tech Assist on subscriber trends and ARPU, and (3) the company’s ability to manage competitive pressures from fiber and fixed wireless providers while maintaining profitability. Execution in these areas will be key markers of Cable One’s progress.
Cable One currently trades at $117, down from $133.82 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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