Hello, everyone. Thank you for joining us, and welcome to Cable One's First Quarter 2026 Earnings Call. I will now hand the conference over to Jordan Morkert, Vice President of Investor Relations. Please go ahead.

Good afternoon, and welcome to Cable One's First Quarter 2026 Earnings Call. We're glad to have you join us as we review our results. Before we proceed, I'd 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 revenue, customer growth, connects, churn rates and ARPU, the future competitive structure of our markets, the anticipated benefits of our mobile service offering, new product rollouts, future customer retention trends, anticipated cost savings and other benefits to be derived from our billing system migration and our other investments in growth enablement platforms, our plans to expand our multi-gig capabilities in more markets, future cash flow and capital expenditures, potential uses for our cash flow, the upcoming MBI transaction, including the purchase price, MBI's future debt levels, integration timing, anticipated cost and tax efficiencies, combined leverage ratios and closing date, the anticipated timing for closing of the merger of Point Broadband with Clearwave Fiber and expected benefits from that transaction, future tax savings 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 in today's earnings release and in our SEC filings, including our 2025 annual report on Form 10-K and our forthcoming first quarter 2026 quarterly report on Form 10-Q. 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 CEO, Jim Holanda; and CFO, Todd Koetje. With that, I'll turn the call over to Jim.

Thanks, Jordan, and good afternoon, everyone. We really appreciate you joining us today. I've now been in the role for a little over 70 days, which has given me the opportunity to spend meaningful time with our teams, get closer to our markets and develop a clear view of where we are performing well and where we need to improve. At a high level, I'd say the work underway across the business is moving in the right direction, but those efforts are not yet showing up consistently in the results. Today, I want to spend my time on three things: what we're seeing in the business, what I've learned since stepping into the role and our focus and priorities going forward. Starting with the quarter, we're not yet seeing the full benefit of the changes we are making in the business. Results reflect the broader economic backdrop and continued pressure in our more competitive markets, particularly in customer retention. While we have already begun to make changes in these areas, it remains early and those efforts are not yet meaningfully reflected in our results. At the same time, first quarter connects improved year-over-year, which we view as an early indication that elements of our strategy are beginning to gain traction. In addition, we are roughly two months into our MSO-wide mobile launch. And while it is too early to draw conclusions around retention or lifetime value, initial customer response has been encouraging. We continue to believe mobile can become an important component of the broader relationship over time. Even with these challenges, the business is generating substantial free cash flow, reinforcing both the durability of the model and our ability to continue to execute on our debt reduction, strengthen the balance sheet and create long-term shareholder value. In the first quarter, we generated approximately $115 million of free cash flow and $500 million over the past four quarters, providing meaningful flexibility to allocate capital in a disciplined manner. Turning to residential services. I want to spend a bit more time on what we're seeing in the business. In the first quarter, we reported 12,600 net residential broadband customer losses on a sequential basis. While this reflects continued pressure in certain areas of the business, there are several underlying dynamics that help frame how we are thinking about the trajectory going forward. Over the course of my career, I've seen firsthand what has and has not worked in operating environments like this, and those lessons are shaping how we are approaching the business today. First, churn was elevated in the quarter, but remained primarily concentrated within our more competitive markets, which allows us to concentrate our retention efforts where they can have the greatest impact. At the same time, new connects improved year-over-year, driven in part by value-conscious customer segments. These customers represent an important part of our segmentation strategy and remain focused on adding them in an accretive way. We also saw year-over-year improvement across certain go-to-market channels, including e-commerce and direct sales, reinforcing our focus on meeting customers where they prefer to engage and expanding on our connect opportunities. From a retention standpoint, we are implementing targeted initiatives to better identify and engage at-risk customers. These include speed upgrades, more gradual stepped promotional roll-offs, AI-driven tools and a new CRM platform expected to go live later this year. We are also deepening multiproduct customer relationships through offerings such as mobile, Whole-Home WiFi, enhanced online security and comprehensive technical support for the connected home, all while continuing to invest in the network to further strengthen the consistent, reliable experience our customers expect. While still early, these are the types of operational actions we believe can improve retention trends over time. Looking at ARPU, results in the quarter reflected downward pressure from go-to-market initiatives and targeted retention offers, partially offset by continued selling to higher speed tiers and the broader multiproduct offerings just mentioned. While we may see some variability from quarter-to-quarter, we continue to expect ARPU trends to remain broadly stable for the year. Taken together, while retention remains the primary challenge, we believe the underlying trends in connects and multiproduct offerings provide a constructive foundation as we work to improve customer outcomes and drive more consistent performance. Turning to business services. Overall performance showed improvements through the back half of the quarter. Under Edwin Butler's leadership since early January of this year, the business services organization has moved quickly from assessment into execution. Targeted investments in sales enablement, go-to-market discipline and a new sales training program drove improved results across our fiber, carrier and enterprise channels. While still early, these trends are encouraging and reinforce our confidence in the actions underway. Todd will address some discrete items in the quarter in more detail. Clearly, competitive intensity persists. However, we believe our network capacity, reliability and local operating presence position us well, and we continue to invest for improved performance. Today, approximately 53% of our markets are multi-gig capable, and we expect to expand that capability to most markets by year-end, reinforcing our ability to meet growing customer demand across the footprint. Against that backdrop, over the past several weeks, it has become clear that our biggest opportunity is improving the consistency of execution across the footprint. Many of the underlying dynamics are consistent with patterns I've seen in prior operating environments. As a leadership team, we've aligned around a focused set of priorities where disciplined execution can drive the most meaningful improvement. These priorities center on strengthening retention and conversion, simplifying our product set and ensuring greater consistency in how we go to market across the footprint. We've already begun to take action in each of these areas with the objectives of improving the customer experience, the price-value equation and therefore the customer trends and the financial performance over time. The work we're doing today will still take some time to show up in our results, and we would not expect it to fully translate into the numbers within a single quarter. Our focus right now is on improving overall execution of the array of operating strategies at our disposal and continuing to strengthen the balance sheet. Stepping back, I remain confident in our long-term opportunity. The durability of our cash flow allows us to continue prioritizing debt reduction while maintaining the flexibility to invest in the business and support long-term shareholder value creation. That confidence is grounded in the strength and the capacity of our network as well as the clear opportunity we see to improve execution within our existing footprint. And with that, I'll turn it over to Todd, who will provide a recap of our financial performance.

Thanks, Jim. Starting with the top line. Total revenues for the first quarter of 2026 were $353 million versus $380.6 million in the first quarter of 2025, with the year-over-year decrease driven primarily by lower residential video and residential data revenues. Residential video accounted for approximately $10 million of the decrease. Residential data revenues decreased $11.6 million or 5.1% year-over-year due primarily to a 6.1% decline in subscribers. Business data revenues decreased $1 million or 1.8% year-over-year. Operating expenses of $93.9 million for the first quarter of 2026 decreased 6% compared to the first quarter of last year, due primarily to a reduction in programming costs associated with our video business. OpEx was 26.6% and 26.2% of revenues in Q1 of 2026 and Q1 of 2025, respectively. Selling, general and administrative expenses totaled $87.2 million or 24.7% of revenues in the first quarter of 2026 compared to $95.4 million or 25.1% in the first quarter last year. The decrease in SG&A was driven by lower labor costs and a reduction in billing system conversion costs. Adjusted EBITDA for Q1 of 2026 was $183.3 million or 51.9% of revenues compared to $202.7 million or 53.3% of revenues in Q1 of 2025. Capital expenditures were $68.4 million in the first quarter, a decrease of 3.8% year-over-year. During the quarter, we invested $5.1 million of CapEx for new market expansion projects. We continue to track towards 2025 levels for full year CapEx. Adjusted EBITDA less capital expenditures totaled $114.9 million for Q1 of 2026 compared to $131.6 million in Q1 of last year. In March, our $575 million convertible notes matured and were repaid in full with a $575 million revolver draw. Throughout the quarter, we paid down a total of $90.6 million of debt, of which $86.1 million was voluntary. We opportunistically paid down our senior notes by $33.7 million and term loans by $27.4 million at very attractive discounts, along with a $25 million repayment under our revolver at quarter end. Such payments demonstrate our continued commitment to debt reduction. As of March 31, we had $165.6 million of cash and equivalents on hand, and our total debt balance was approximately $3.1 billion, consisting of approximately $1.7 billion of term loans, $550 million of revolver draws, $548 million of unsecured notes, $345 million of convertible notes and $3 million of finance lease liabilities. We also had $700 million of undrawn capacity under our $1.25 billion revolving credit facility at quarter end, providing us additional committed capital. Our net leverage ratio on a last quarter annualized basis was 4x. As Jim mentioned, we are focused on strengthening our balance sheet. While we have the committed capital in place and sufficient excess operating liquidity to affect the MBI acquisition at closing in Q4 2026, as we have stated before, we will remain proactive in our balance sheet management initiatives and continue to evaluate the markets with a focus on optimizing our longer-term capital solutions. Turning to our investment partnerships. We posted updated information about our unconsolidated investments on our Investor Relations website. For the fourth quarter of 2025, these businesses generated approximately $542 million of LQA revenue and $262 million of LQA adjusted EBITDA, representing year-over-year growth of roughly 17% and 36%, respectively. These businesses also grew broadband customers by approximately 22,900 or 7.9% and added over 80,000 new fiber passings during the year. This summary excludes the financial results of MBI as we provide additional detail within our quarterly filings. Additionally, CTI Towers, Ziply and Metronet are no longer reflected in this table following the monetization of those investments, each of which generated attractive returns. We believe these outcomes, including both the operating performance of these businesses and the monetization of certain investments reflect the strength of these assets and the value created over time. And finally, I'll touch on a couple of items related to a recent transaction, along with an update on a pending one. In mid-March, we completed the sale of certain fiber-to-the-tower contract rights for $42 million in cash. We recognized a $26.6 million gain on the sale. Such contracts generated $9 million of business data revenues in 2025 and $2.1 million in Q1, and the sale reduced first quarter business data revenue by approximately $300,000. Results were also modestly impacted by lower revenue from EchoStar as they continue to decommission portions of their 5G network build-out, representing approximately $50,000 in the quarter and roughly $200,000 on an annualized basis, which we believe represents substantially all of our remaining exposure to this activity. Meanwhile, the merger of our Point Broadband and Clearwave Fiber strategic investments remains on track to close during Q2, subject to customary closing conditions. And we continue to work proactively on our pending acquisition of MBI. The Cable One and MBI teams are preparing for an efficient integration of MBI's operations when the transaction closes, which is expected at the beginning of Q4. Before we open it up for questions, I'd reiterate that while the current environment remains competitive, the business continues to generate strong cash flow, and we remain focused on disciplined execution and capital allocation. We are continuing to prioritize debt repayment while investing thoughtfully in the business, and we believe the changes underway position us to deliver improved performance over time. With that, we are ready to take your questions.

Your first question comes from the line of Sebastiano Petti with JPMorgan.

And real quick, I guess just trying to think about the connects being up year-over-year. I think, Jim, you talked about contribution from the value-conscious segment. Maybe help us think about how much of that— I mean, maybe a little bit of a difficult question to answer, but how much of that is from just improved offer strategy or maybe improvements or expansion of your distribution channels? And then relatedly, as you, I think, talked about defending the base last quarter, help us think about maybe how much ARPU or was there perhaps some dilution in the quarter relative to win-back retention efforts that I think, yes, other— some of your peers are also kind of enacting to try to defend the base?

Sebastiano, thank you for the questions. Appreciate it. This is Jim Holanda, everyone. Yes, connects are twofold, both to your points. The expansion of the direct sales channel and the improvement in the e-commerce channel results certainly contributed to that, along with our targeted segmented offers across how we've chosen to segment the base and being more aggressive, including price locks in the hypercompetitive markets that we find ourselves in, roughly 15% of the footprint. So I think all of that helped contribute to the improvement. There's still meaningful room for improvement in executing across all of those channels and strategies. And yes, on the ARPU side, along with more aggressive go-to-market offers in competitive areas, being more aggressive on the retention side where we feel competitive pressures has been a focus. Again, we're still early. We saw a little bit of those results impacting the ARPU numbers in Q1.

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

As you're looking to save customers and so forth and that kind of activity, what kind of pressure do you expect on ARPU in your back book? And then can you give us some color on how MBI is tracking from subscribers and a financial perspective? And I assume there's—that might impact the price. Do you expect that to be any materially different from what you've kind of signaled is going to be the cost when you close?

I'll let Todd go ahead and answer the MBI question real quick.

Frank, on MBI, their first quarter, which we put in the Form 10-Q, net adds were south of 2,000. So they lost 2,000, but that's a meaningful improvement from the run rate at which they were last year. There are some timing-related adjustments in the first quarter for MBI. But I think if I understood your question correctly, there are no adjustments in the purchase consideration. That is a locked-in and disclosed number at $480 as we talked about last quarter. And so that's currently the plan. We did adjust the anticipated debt that we will assume or be looking to refinance in conjunction with it into a new range of $895 million to $925 million. So it's slightly higher than what we had as a range before, just due to the impacts of their performance last year and slightly lower free cash flow between now and closing.

And then on the ARPU pressure piece, Frank, yes, clearly, bringing in customers at lower promotional rates and seeing continued elevated churn in the back book continues to put pressure on ARPU. My read from our last earnings call is that defending the base is appropriate. We do have targeted retention offers in our more competitive markets at lower rates, but we're also focused on adding value for higher-ARPU existing customers. Whether that's TechAssist, eero, security products, mobile, or continuing to give people more speed at no incremental cost in terms of network capabilities, those are all tactics we're focused on deploying as quickly as possible.

How much of your back book do you think you're going to need to adjust and kind of lower the pricing when it's all said and done?

All said and done is a wide question. If you mean by the end of this year, or over a multiyear period, that's different. Over time, I think overall a $2 to $5 range is realistic and doable given the value adds we have at our disposal for our existing customer base.

Frank, I'll jump in just real quick, too. Keep in mind, historically CABO was very one size fits all. It wasn't deeply discounted promos with a high step-up that would result in a wide variation of front book and back book as you're referring to it. So while you mentioned the back book is really high, which we don't disclose, it's not a major delta compared to what we're seeing from new selling.

Your next question comes from the line of Greg Williams with TD Cowen.

First one is just on satellite broadband. We're hearing a couple of big announcements in the last few weeks. I'm just curious how you view the satellite competition, particularly in your rural areas. And second question, Todd, you mentioned a little bit about refis and you just paid down the converts. I'm curious about next steps on the balance sheet and when you'd be looking to the debt markets and eventually turn that out.

I'll take the satellite and then turn it over to Todd. We're an avid user of OpenSignal and have accurate data on the competitive landscape across our footprint. While satellite shows up in low circumstances and quantities, it is increasing. We keep our eye on it closely. We're not going to let what happened with FWA happen on the satellite front. I have experience with Dish and DIRECTV from earlier in my career. Satellite providers can be formidable competitors that could scale over time, but we have not seen consistency across their offers, installation costs, or monthly pricing territory to territory. We expect they may figure out a consistent go-to-market strategy and technological approach over time if they choose to allocate resources there. We'll continue to monitor closely. At the same time, we're fighting off one, two, or three FWA carriers and wireline competitors and, in about 15% of the footprint, fiber overbuilders. We feel we have a good playbook to defend our base and grow connects simultaneously.

Greg, on the balance sheet side, as Jim alluded to, and as I commented in my prepared remarks, meaningful repayments have continued as we attack the numerator. That was over $400 million in 2025, and $90 million here this last quarter. Most of those were voluntary and repurchases at attractive discounts on both our term loans and our unsecured notes. That's intentional with respect to how we think about the balance of the capital structure. We want diversity of duration because we are actively evaluating longer-term capital solutions and optimizing the balance sheet to ensure we have the flexibility to reinvest in the business, while also continuing to repay debt at attractive levels. We are focused on having both secured capital that is more attractively prepayable and more foundational unsecured capital. As it relates to timing, we've been consistent for the last few quarters—we have contingency plans, but they're not primary. We actively evaluate the markets and ensure we have the right disclosures in place. We started putting more disclosures on MBI as that acquisition will be affected in early Q4 of this year. We're aware of the refinancing needs over the next two to three years and are actively planning how to address that.

Your next question comes from the line of Brandon Nispel with KeyBanc.

A couple, if I could. It seems like a pretty consistent theme we're seeing across the space is that there's an inverse correlation between ARPUs and subscriber growth. So I'm curious how you guys are expecting to get better performance on the subscriber side while keeping ARPU flat this year. And then if I remember right, historically, your guys' footprint tends to perform best seasonally in the first quarter and in the third quarter, and if we're looking at trends getting worse in the first quarter here, how should we be thinking about sort of second quarter from a net add standpoint?

I'll start. I'm new, so I can't speak to historical Q1s with perfect continuity. Patterns changed through the pandemic and in this competitive environment. In third quarter 2025, we saw a spike associated with work in the back office and billing system consolidation across the family brands that made up Cable One, which put pressure on results. We're not going to have those pressures this year. That becomes an opportunity. The go-to-market strategies we've discussed on recent calls are the things that can help change historical trends. Regarding ARPU versus subscriber growth, Cable One has some advantages: roughly 40% of our footprint is in areas where we're still the only gig provider. While we expect intensity to grow over time, we have visibility as ILECs start to fiberize or third-party overbuilders come in. We think we've built a good playbook to defend against that. I don't think, compared to others, that we lack flexibility. We have opportunities to get customers to higher speeds and to offer a host of value-added services to help with retention pressures.

Got it. Todd, if I could just follow up with one for you. I don't think you provided it or an update here, but with the higher debt that you guys are planning to take on with MBI, the trends there and then the EBITDA trends that you guys are seeing, is there an updated thought on your closing leverage target once you do close MBI?

Yes, Brandon, the range is pretty modest relative to the overall debt stack, so it doesn't move that much. But with the trends from 2025 for both Cable One and MBI on a customer basis and how those translate into the effective denominator of that leverage ratio and EBITDA, it will be higher than what we previously stated, which was around 4x, but still very manageable in our opinion. It will depend on where we close and how quickly we can reduce that relative to ongoing initiatives to focus on debt repayment and stabilize and change the trajectory of the EBITDA base.

Your next question comes from the line of Sam McHugh with BNP Paribas.

Two questions, if I can. One on the gross add connect side. Do you have a sense of how many of your gross adds are coming from DSL? And then as DSL kind of just disappears in the next few years, what's the plan to make up that gap? And then secondly, on the tower divestment, Todd, you've given us the revenue number. I wonder if you could give us an EBITDA number of how much that might take out of EBITDA for this year.

On the connect side and how many are coming from DSL, with only 40% of the footprint left where the ILECs are unupgraded, you'll over-index slightly in terms of that connect performance. If that is 40% of the potential and 50% of the connects, that's a consistent rule with the OpenSignal data that supports our view. That is an opportunity we can exploit further. Given the larger announced acquisitions by ILECs and the integration work they have to do, we have a window to potentially take advantage of this in a bigger way going forward.

Sam, as we've talked about in the past, where the LEC has not upgraded to fiber and especially where that LEC has a fixed wireless access product for home broadband, they've been aggressive at trying to keep customers as they decommission high-cost copper. That has accelerated the decline of the DSL population. As it relates to the fiber-to-the-tower contract sale in the first quarter, it was $42 million of gross proceeds. Because of tax efficiencies, net proceeds were pretty comparable and we used those proceeds to accelerate debt reduction. We disclosed the related revenues; that's a high single-digit revenue impact and margins that are slightly higher than what you see from the enterprise side of the equation. That should get you to a directionally accurate cash flow number as that rolls through on a GAAP basis this year.

Your final question comes from the line of Julie Zhu with MoffettNathanson.

Team, last quarter you had mentioned approaching an equilibrium on fixed wireless competition. I was wondering if you could comment on any updated thoughts there. I know that we saw Verizon's fixed wireless net adds sharply slow, but T-Mobile stopped reporting yet and given they're your largest overlap, would love any insight into year-to-date activity and view into the future. And then if I can squeeze a follow-up in about the satellite LEO competitors. Jim, I think you had mentioned that it's sort of a haphazard go-to-market for them. How does that affect how you and the team think about competing in more rural areas? And do you have an updated point of view in terms of the structural market share of satellite connectivity and fixed wireless across your footprint?

Those are good questions. Roughly 80% of our footprint now has one or more FWA competitor, according to OpenSignal. We're already competing fiercely to retain customers and to pursue the low end where those product sets are more appealing. Even if satellite providers find a consistent go-to-market strategy, if you're competing against two or three FWAs and one or two other wireline competitors in a market, we're focused on the things we can control: the value and customer experience differentiators we bring, and the local presence and support our teams provide to communities. We'll continue to take advantage of those opportunities and monitor how things develop. According to our data, we haven't seen a lot of incremental expansion out of Verizon's FWA product recently, but we do continue to see T-Mobile and AT&T deployments. I would call their deployment slow and steady, not large instantaneous expansions based on the information we've seen so far.

Julie, on structural market share, this is an estimate and a view of the future equilibrium. When you think about wired broadband, we believe longer term that wired broadband will represent a larger share—more towards 80%—because of capacity needs, speed needs and utilization that continue to increase across residential and business customers. The other roughly 20% would be wireless-only, whether that's mobile, fixed wireless access, or satellite, representing an adoption segment that remains meaningful but smaller in the long run.

Got you. I appreciate the fulsome answers. Maybe a quick follow-up. Is it fair to characterize the rate of change for T-Mobile and AT&T fixed wireless as slowing when you say slow and steady?

No. Consistent.

That's all we have time for today. I will now turn the call back to Jim for closing remarks.

Thank you, Alexandra. Before we wrap up, I just want to thank all of our associates across the country for welcoming me into the Cable One family and for their continued focus on our customers and each other. Over my first roughly 70 days, I've had the opportunity to meet many of our associates, customers and investors, and I look forward to continuing to engage with our key stakeholders in the quarters ahead. Thank you, everyone, on the call today for your time and your continued interest in Cable One.

This concludes today's call. Thank you for attending. You may now disconnect.