Thank you for standing by. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cable One First Quarter 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Thank you. I will now turn the call over to Jordan Morkert, Vice President, of Investor Relations. Please go ahead.

Good afternoon, and welcome to Cable One's first quarter 2025 earnings call. We're glad to have you join us as we review our results. Before we proceed, I would like to remind you that today's discussion contains forward-looking statements relating to future events that involve risks and uncertainties including statements regarding future broadband revenue, customer growth, connects and churn rates, new product rollouts, customer yields from new build activities, including related costs, future cash flow, future ARPU, future levels of competition, capital expenditures, the anticipated impact of our change in dividend policy, our ability and sources of capital to fund the retirement of our zero percent convertible notes in 2026, the anticipated after-tax proceeds from the expected monetization of certain investments and our future financial performance, capital allocation policy, leverage ratios, and financing plans. You can find factors that could cause Cable One's actual results to differ materially from the forward-looking statements discussed during today's call and today's earnings release and in our SEC filings, including our annual report on Form 10-K. Cable One is under no obligation and expressly disclaims any obligation, except as required by law, to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, today's remarks will include a discussion of certain financial measures that are not presented in conformity with U.S. generally accepted accounting principles or GAAP. When we refer to free cash flow during today's call, we mean adjusted EBITDA less capital expenditures as defined in our earnings release. Reconciliations of non-GAAP financial measures discussed on this call to the most directly comparable GAAP measures can be found in our earnings release or on our website at ir.cableone.net. Joining me on today's call is our President and CEO, Julia Laulis; and Todd Koetje, our CFO. With that, let me turn the call over to Julie.

Thank you, Jordan, and good afternoon, everyone. We appreciate you joining us for today's call. Today, I want to unpack the factors that underline my belief that we will achieve long-term subscriber growth and grow residential broadband revenue in 2025 and beyond. As I noted during our year-end call in February, we are executing on a multiyear plan to achieve sustained profitable growth in a rapidly changing and more competitive environment. While our first quarter customer results were not what we wanted, a closer look at how the quarter unfolded, along with multiple green shoots of growth now emerging, presents a more promising path forward. As I'll detail further, we believe much of the noise of Q1 is behind us. With the right people, platforms, and processes in place, we're building a more effective and scalable customer acquisition engine, one that we believe will drive meaningful growth over the long term. We work very hard to listen to our investors. And right now, every discussion focuses on long-term broadband customer growth. So I want to spend most of my time today discussing that topic. Let me start by addressing our first quarter residential broadband customer numbers. The key driver of our customer decline in the first quarter was lower-than-expected connects. Driving growth through new connects has been the focus of our plans, and I'll speak more about the early progress we are seeing in a moment. Our results were further impacted by unusual churn events which are now behind us, with churn already reverting to historically low levels. With our plans to steadily improve connect underway, we remain confident in our ability to deliver residential broadband growth over time. One of the key drivers of sustainable growth is the strength of our customer retention. After excluding the unusual events of this quarter, our churn levels remained historically low, and we're taking deliberate action to keep them there. Guided by our promise to keep our customers connected to what matters most, we are proactively enhancing our retention efforts. A great example of this is our homegrown AI-driven churn propensity model which rapidly identifies the customers most at risk of leaving. Once identified, we take targeted action to engage and retain them. The combination of this high-touch plus high-tech approach reflects our broader commitment to providing an effortless yet personalized customer experience with neighborly service that sets us apart. Importantly, we believe we are positioned for stronger performance through the remainder of the year, supported by a return to a more normalized churn profile, our plans to drive higher connects, and continued efforts to compete effectively throughout the MSO. I'd like to highlight several encouraging green shoots that we believe contribute to our future growth, particularly through increased connects. To start, I'll share an update on the products we've introduced for value-conscious customers, which we believe will play an important role in our broad growth strategy. First, there's our paid product, which we piloted specifically for the value -by-choice customer. We have rebranded this product as FlexConnect as it effectively competes with cell phone Internet by providing faster speeds, along with a more reliable connection and unlimited data, all at a great value with ultimate ease of use. Since launching the pilot, we've seen growth in both customer count and ARPU within the cohort, as the ability to choose their speed, unlike cell phone Internet, has led many to upgrade to higher tiers that better fit their needs. We will begin to market FlexConnect aggressively across the MSO and expect that it will be an effective tactic to increase connects. Second, we are now piloting Internet Lift, a product designed to serve the value -by-need customer. This offering is available to individuals who meet specific eligibility criteria, and we're taking a targeted local approach to reach them. Internet Lift represents an incremental broadband revenue opportunity for us. Early pilot results show that Lift is bringing additional customers to us with minimal risk of cannibalizing our existing base. We plan to accelerate our marketing efforts for Lift across targeted portions of the MSO with broader rollout beginning in the weeks ahead. In addition to new products, we're leaning into strategic infrastructure innovations that support long-term growth. One example is how we're reengineering our approach to selecting and executing new builds to acquire customers more efficiently. Moreover, we're beginning to see early signs that this is working. Stronger early penetration means we now expect the same number of passings to yield more customers within the first two quarters of release. At the end of the day, our ability to grow our customer base comes down to two things: how effectively we retain existing customers, and we're doing that exceedingly well as reflected in our continued low churn rate and how compelling our value proposition is for new customers. While no single product or initiative stands alone as the driver of growth, together, they create a powerful ecosystem of choice, including flexibility, reliability, and neighborly service for our customers. This not only improves our customers' lives, but it also supports our plan for long-term broadband revenue growth. Of course, none of this happens without the right people, and we have the team and the organizational structure in place to make it happen. I'm incredibly proud of the talent, experience, and momentum within our new customer acquisition and retention teams. Their energy, combined with strong collaboration across other functional areas, gives us confidence that we are going to see positive results. Turning to ARPU. We saw a slight dip this quarter driven by a variety of small factors, including promotional offers, which have proven track records of strong retention, increased adoption of pays and the associated discount and credit issued to certain customers impacted by third-party fiber cuts. That said, ARPU remains stable, and the trends that we see support growth in the coming quarters. These include higher sell-in of our gig and Multi-Gig products, momentum from new product offerings, and the number of discounts scheduled to roll off. Taken together, these factors position us well to improve ARPU through the balance of the year. Related to the potential growth of ARPU, I also want to highlight the continued growth of our SecurePlus product, which has seen a 15% increase in customer adoption since the start of 2025. SecurePlus delivers a suite of security-focused features, including remote access to the home network and household-wide password management. SecurePlus is available a la carte for $8 a month or as part of our ultimate WiFi bundle, which we introduced last November at $24.99 per month. The bundle is resonating well with customers, with 17% of new customers choosing it this quarter, a strong signal that our approach is aligned with the needs of today's connected homes. When you combine these trends with our roadmap and ongoing executable plan, I remain confident in our ability to grow residential broadband revenue in 2025. Finally, before turning the call over to Todd for a review of our financial performance, I want to touch briefly on our decision to revise our capital allocation strategy, specifically the suspension of our dividend. We remain committed to a balanced approach to capital allocation, and after careful consideration, we have decided to suspend our quarterly cash dividend in order to accelerate our debt reduction strategy and invest in organic growth initiatives. As Todd will cover in his remarks, we believe this change will bolster our financial strength and enhance our ability to proactively access the capital markets on favorable terms. With confidence in our strategy, the strength of our team, and the plans we're putting into action, we are well positioned to execute on our goals through the remainder of the year. We remain focused on our long-term objectives of residential broadband customer and revenue growth while maintaining the financial discipline necessary to sustain strong free cash flow generation. And now Todd will provide a recap of our first quarter financial performance.

Thanks, Julie. Beginning with the top line. For the first quarter of 2025, our total revenues reached $380.6 million compared to $404.3 million in the first quarter of 2024. Residential data revenues decreased $10.7 million or 4.5% year-over-year. During the first quarter, residential data subscribers and ARPU both decreased by 1.1%. However, as Julie noted, we continue to have confidence in our execution strategy to deliver residential broadband revenue growth in 2025. The remaining decrease in total revenue was primarily attributable to a decrease in residential video revenues of $9.6 million or 15.8% year-over-year, driven by losses in video subscribers as we continue to navigate the final phases of our video product lifecycle. On the business services side, for the first quarter of 2025, business data revenues grew by 1.2% compared to Q1 of 2024. As we mentioned earlier this year, our carrier and enterprise fiber businesses remained strong, delivering consistent results with an average contract term of about five years. Carrier sales recently reached their highest monthly levels since 2022, and we secured several new multimillion-dollar long-term contracts that not only add recurring revenue but also expand our network reach into new commercial areas, setting the stage for future growth. Operating expenses were now $99.9 million or 26.2% of revenues in the first quarter of 2025 compared to $106.5 million or 26.3% of revenues in the prior year quarter, with the decrease driven largely by a reduction in programming and labor costs. Selling, general and administrative expenses were $95.4 million for the first quarter of 2025 compared to $90.4 million in the prior year quarter. SG&A as a percentage of revenue was 25.1% for Q1 of 2025 compared to 22.4% for Q1 of 2024, with the increase driven largely by non-cash stock-based compensation, billing system implementation costs and insurance-related costs, partially offset by a reduction in payroll costs and improved bad debt expense. Net income was $2.6 million for the first quarter of 2025 compared to $37.4 million in the first quarter of 2024, driven by lower income from operations and an increased noncash equity method accounting loss in Q1 of 2025. Adjusted EBITDA was $203 million in Q1 of 2025, representing a 53.3% margin compared to $217 million, a 53.7% margin in Q1 of 2024. Capital expenditures of $71.1 million in Q1 were $5.2 million or 8% higher than in Q1 of last year. During the quarter, we invested $7.1 million of CapEx for new market expansion projects and $3.9 million for integration activities. We expect the impact of any tariffs to be manageable and we are well positioned to carry out our previously outlined plan for total CapEx in the low 300s for the full year. Adjusted EBITDA less capital expenditures was $131.6 million in the first quarter of 2025 or 65% as a percentage of adjusted EBITDA. We will continuously assess the optimal allocation of the significant cash flow generated by our business, maintaining a commitment to long-term growth initiatives in a highly disciplined, conservative balance sheet management strategy. As Julie said, after careful and extensive consideration, we have decided to suspend our quarterly cash dividend on our common shares. This represents approximately $67 million annually and over $200 million of discretionary free cash flow over the next three years that we will be able to allocate towards accelerated debt repayment, refinancing support, and ongoing investment in organic growth initiatives. While our near-term priorities will be centered around fortifying our balance sheet and investing in long-term growth, we will also remain balanced with our return of capital to shareholders and will opportunistically evaluate future share repurchases under our remaining $143 million authorization, subject to achieving lower leverage levels. We repaid nearly $45 million of debt in the quarter, including $40 million of early debt repayment, along with an additional $10 million subsequent to the quarter close. Since Q2 of 2023 through today, excluding borrowing associated with our recently renegotiated MBI partnership agreement, our total debt repayment has exceeded $450 million. As of March 31, we had approximately $149 million of cash and cash equivalents on hand and our debt balance was approximately $3.6 billion, consisting of approximately $1.7 billion in term loans, $90 million in convertible notes, $650 million in unsecured notes, $273 million of revolver borrowings, and $3 million of finance lease liabilities. We also had $977 million available for additional borrowings under our $1.25 billion committed revolving credit facility as of March 31. Our weighted average cost of debt for the first quarter of 2025 was 3.9%, and our net leverage ratio on a last quarter annualized basis was just north of 4 times. As we continue our accelerated debt repayment and invest in EBITDA growth initiatives, we remain confident this ratio will decline, expecting that our leverage will remain below 4 times pro forma for the potential MBI consolidation in late 2026. A large majority of our borrowings are either fixed tenors or have been synthetically fixed at underlying base rates that are approximately half of the prevailing floating rates. The nearest final maturity for any of our debt instruments of $575 million of zero percent convertible notes does not occur until 2026. Given the available capacity under our revolving credit agreement and our free cash flow generation, we would be well prepared to retire those instruments without accessing the capital markets for additional incremental capital. However, as we previously stated, we remain ready and opportunistic in evaluating attractive windows in the capital markets. Turning to our investment partnerships. We posted updated information about our unconsolidated investments on our Investor Relations website. For the fourth quarter of 2024, the annualized adjusted EBITDA of select companies was approximately $682 million, up 10% from the prior year. These companies also grew broadband subscribers by 11% and added over 240,000 new fiber passings during the year. That momentum carried into the first quarter with residential and business data customers increasing by approximately 16,000 or 1.8% sequentially. These figures exclude Metronet, where our ownership stake is smaller. The pending monetization of our Ziply and Metronet investment in the coming months, along with our monetization of CTI towers in the first quarter, are expected to generate well over $100 million of combined after-tax proceeds, with each investment providing a solid return. We believe these outcomes, both the strong operating execution and the successful monetization of our investments, reflect the strength of the businesses we partnered with and the opportunities we continue to see ahead. Before we open it up for questions, I want to reiterate our confidence in the strategy we're executing to drive long-term sustainable broadband revenue growth and durable cash flow growth. As we allow the appropriate amount of time for our new and ongoing investments in people, operational platforms, and go-to-market playbooks to come together, we believe we have the foundational elements in place to return to delivering the differentiated results that have defined Cable One's reputation throughout our history.

Your first question comes from the line of Frank Louthan with Raymond James.

Great. Thank you. So you have fallen into the trap that I've seen other companies I have covered fall into where bankers or someone have talked about eliminating the dividend entirely. So I would be interested to know what led you to that decision? And specifically, are there any kind of going concern issues or debt covenants or some other issue that we're aware of in the business environment that would require you to cut the dividend? And does this have anything to do with the short-term debt jumping out $575 million in the quarter?

Hey, Frank, it's Todd. Appreciate the question. I'll reassure you and our stakeholder audience it has nothing to do with any going concern or debt covenant concerns. The capital allocation strategies that we've been extensively revisiting not just in the quarter, but active discussions and active listening to many of our stakeholders was what drove us to that decision. This allows us, as we said in our prepared remarks, to accelerate our debt repayment. In addition to what we generated leverage free cash flow in excess of $300 million annually in the next couple of years in advance of the potential MBI transaction, another $120 million of that will be allocated towards debt repayment. Therefore, reiterating our view and our comfort that we'll be below 4 times, as we've stated previously.

Was eliminating the dividend part of the way you were confident you were going to get there before? Or is this new? And then as a follow-up, you mentioned getting back to broadband subscriber growth. Can you articulate when you think you'll be able to cross that line?

I'll address the first, and I'll let Julie jump in. But no, I said last quarter, we are confident in that less than 4 times without a decision being effectively made on that dividend suspension. So that would not be a corollary to that. It just further reemphasizes that point.

On broadband growth, whether we're discussing broadband revenue, subscriber growth, or customer growth, we believe we can achieve both. We've been setting this up for some time, starting with a professional and experienced team in a competitive environment, along with platforms that enable us to track our actions more precisely and strategically. While the first quarter began somewhat slowly, this was expected as we were still finalizing our initiatives. Despite that, our main focus has been on Connect, and we have seen improvements month over month, which is encouraging compared to last year's performance. We're committed to bending the curve on this. Although I won't commit to a specific month or week for when you'll see broadband customer growth, I truly believe we will achieve it in 2025. We will definitely see revenue growth or broadband revenue growth in 2025, and I'm happy to discuss why I feel that way.

Hi, thank you for taking the question. Could you unpack what the one-time unusual churn event was in the quarter? Just one quick other follow-up there, but as we look out to the fourth quarter as well, there were some one-off activities or one-off events that were not necessarily supposed to be looked upon as a quote on run rate for the 2025 here. So what underlies your confidence in returning to broadband revenue growth for the year? As you think about the starting point with subscriber decline as well as the ARPU decline in the quarter. Just if you could unpack the confidence there, particularly given the competitive backdrop. Thank you.

The unique challenges we encountered at the end of the year were mainly related to the conclusion of ACP and some changes in key team members. In the first quarter, several small issues contributed to our churn rate, which, without these factors, would have been extremely low. We experienced some increased churn due to our billing migration efforts, the closure of unprofitable fixed wireless towers, and some severe weather events. However, our churn remains remarkably low even in this competitive environment. We are diligently measuring and analyzing data from our experiments to make informed decisions. Since tracking our customer acquisition cohorts from the first quarter of 2021, we've seen an increase in retention rates, rising by 300 basis points compared to 2021. This reflects the effective strategies we have implemented to address churn. Looking ahead, I reassure my team that we haven’t fully leveraged our potential yet. We are preparing to implement a comprehensive and strategic plan instead of piecemeal tactics. Our team is deeply engaged in understanding what advertising messages resonate with our customers and how to effectively reach them. Our retention remains strong, especially since we know that when customers choose us, they tend to stay. As we prepare to launch new products like FlexConnect, which will compete with mobile internet, we have gathered valuable insights from our trials, indicating potential demand and usage patterns. We are also exploring products like Lift, which targets customers based on specific needs, allowing us to generate additional revenue without negatively impacting our existing customer base. Additionally, a recent acquisition campaign from late 2024 resulted in a notable increase in customer retention, which remained strong even after discounts were removed. We are now equipped to consistently achieve growth in ARPU and customer satisfaction. Our new processes are already showing improved performance metrics, such as higher customer penetration rates at lower costs. We are developing new products that meet customer demands effectively, ensuring we have the elasticity needed for pricing based on perceived value. All these factors contribute to my confidence in our upcoming initiatives.

Thank you.

Hey, guys. Thanks for taking questions. I was hoping maybe you could help us in some of your trials with FlexConnect and Lift. Help us understand what intake ARPU looks like for those products. And then hoping you could provide an update on what percentage of your footprint is now overbuilt with fiber and the percentage of your footprint you think you're competing with fixed wireless in. Thanks.

FlexConnect is quite intriguing as it competes with cell phone Internet and is considered a value option. Customers are opting for a budget-friendly product, but they differ from those using Lift who require it due to their income levels. FlexConnect provides a straightforward onboarding and self-service experience similar to cell phone Internet. It offers various speed options, though I can't specify the exact average revenue per user for this segment as the pricing and speed options we will promote are evolving between our mass rollout and trial based on insights gained. There are two price points: $45 and $75, and I can say some customers are choosing the higher speed tier. We're finding interesting insights about these customers and their satisfaction with the product and data use. Stay tuned for our advertising, which is going to be impactful. Similarly, Lift's trial is concluding, and we are preparing to market it as well. There is a specific target market for Lift, consisting of individuals who must qualify to access this product. We will focus our marketing efforts on this group, which will contribute to additional revenue and help reconnect former ACP customers with Sparklight. As for our fiber infrastructure, approximately half of our footprint is covered.

It's a little over 50%, Brandon, very consistent with what we talked about last quarter. It hasn't moved meaningfully. And then with a broadband offering from a mobile operator, that's in nearly all of our markets as we also said last quarter that hasn't changed meaningfully either and can because it's pretty widely available.

And tracks.

If anything from a spectrum capacity constraint, it will contract over time. But right now, that is the case, and that's, as Julie said, the Connect challenge, which is why we've been piloting and now executing on some of these new initiatives that will go head-to-head.

Thanks for all the color.

Thank you, Rebecca. As we wrap up today's call, I want to thank our associates again for their continuing hard work and dedication to our customers and one another. This has been a challenging time for our company and our industry, but our people continue to believe in our mission to connect people to what matters most. Indeed, high-speed data remains one of the most important products in rural America, where it is a lifeline for people to work, learn, and receive medical care. While today's discussion centered on topics that our shareholders and investors frequently ask about, it's important to remember that it's our associates who provide an invaluable service to our customers. So to each of our associates, please accept my thanks for all that you do. Thanks, everyone, and speak to you again next quarter.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.