Shenandoah Telecommunications Company Reports Third Quarter 2024 Results
Shenandoah Telecommunications (SHEN) reported Q3 2024 results with revenue growing 30% to $87.6 million, primarily driven by the Horizon acquisition contributing $16.9 million. Glo Fiber added approximately 6,000 subscribers, reaching over 59,000 total subscribers, with passings growing by 22,000 to 320,000. The company reported a net loss of $5.3 million, mainly due to higher depreciation and interest expenses. Adjusted EBITDA increased 31.3% to $26.6 million, with margins improving from 27% to 30% sequentially. The Horizon integration is ahead of schedule with expected annual synergy savings of $11 million.
Shenandoah Telecommunications (SHEN) ha riportato i risultati del terzo trimestre del 2024, con un aumento dei ricavi del 30% a 87,6 milioni di dollari, principalmente grazie all'acquisizione di Horizon che ha contribuito con 16,9 milioni di dollari. Glo Fiber ha aggiunto circa 6.000 nuovi abbonati, raggiungendo un totale di oltre 59.000 abbonati, con passaggi aumentati di 22.000 a 320.000. L'azienda ha riportato una perdita netta di 5,3 milioni di dollari, principalmente a causa di maggiori spese per ammortamenti e interessi. L'EBITDA rettificato è aumentato del 31,3% a 26,6 milioni di dollari, con margini che sono migliorati dal 27% al 30% in sequenza. L'integrazione di Horizon è in anticipo rispetto al programma con risparmi annuali sinergici previsti di 11 milioni di dollari.
Shenandoah Telecommunications (SHEN) reportó los resultados del tercer trimestre de 2024, con un crecimiento del 30% en los ingresos, alcanzando 87,6 millones de dólares, impulsados principalmente por la adquisición de Horizon, que contribuyó con 16,9 millones de dólares. Glo Fiber añadió aproximadamente 6.000 suscriptores, alcanzando un total de más de 59.000 suscriptores, con un aumento de 22.000 en las pasadas, llegando a 320.000. La compañía reportó una pérdida neta de 5,3 millones de dólares, principalmente debido a un aumento en los gastos de depreciación e intereses. El EBITDA ajustado aumentó un 31,3% a 26,6 millones de dólares, con márgenes que mejoraron del 27% al 30% secuencialmente. La integración de Horizon va por delante del cronograma con ahorros sinérgicos anuales esperados de 11 millones de dólares.
셴안도아 텔레커뮤니케이션즈 (SHEN)는 2024년 3분기 실적을 보고했으며, 수익은 30% 증가하여 8,760만 달러에 이르렀습니다. 이는 주로 호라이즌 인수에 의해 1,690만 달러가 기여한 결과입니다. 글로 파이버는 약 6,000명의 가입자를 추가하여 총 59,000명 이상의 가입자에 도달했으며, 통과자 수는 22,000명이 증가하여 320,000명에 이르렀습니다. 회사는 530만 달러의 순손실을 보고했으며, 이는 주로 높은 감가상각비와 이자 비용 때문입니다. 조정된 EBITDA는 31.3% 증가하여 2,660만 달러에 이르렀고, 마진은 27%에서 30%로 개선되었습니다. 호라이즌 통합은 일정보다 앞서 진행되고 있으며 연간 시너지 절감액은 1,100만 달러가 예상됩니다.
Shenandoah Telecommunications (SHEN) a publié les résultats du troisième trimestre 2024, avec un chiffre d'affaires en hausse de 30% à 87,6 millions de dollars, principalement soutenu par l'acquisition de Horizon, qui a contribué à hauteur de 16,9 millions de dollars. Glo Fiber a ajouté environ 6.000 abonnés, atteignant un total de plus de 59.000 abonnés, avec un nombre de foyers desservis en augmentation de 22.000 pour atteindre 320.000. L'entreprise a enregistré une perte nette de 5,3 millions de dollars, principalement en raison d'une augmentation des dépenses d'amortissement et d'intérêts. L'EBITDA ajusté a augmenté de 31,3% pour atteindre 26,6 millions de dollars, avec des marges améliorées de 27% à 30% séquentiellement. L'intégration de Horizon est en avance sur le calendrier, avec des économies de synergies annuelles attendues de 11 millions de dollars.
Shenandoah Telecommunications (SHEN) berichtete über die Ergebnisse des dritten Quartals 2024, mit einem Umsatzwachstum von 30% auf 87,6 Millionen Dollar, das hauptsächlich durch die Übernahme von Horizon, die 16,9 Millionen Dollar beisteuerte, hervorgerufen wurde. Glo Fiber fügte ungefähr 6.000 neue Abonnenten hinzu und erreichte mehr als 59.000 Gesamtabonnenten, mit einer Zunahme von 22.000 Passagen auf insgesamt 320.000. Das Unternehmen berichtete von einem Nettoverlust von 5,3 Millionen Dollar, hauptsächlich aufgrund höherer Abschreibungen und Zinsaufwendungen. Das bereinigte EBITDA stieg um 31,3% auf 26,6 Millionen Dollar, wobei die Margen von 27% auf 30% sequenziell verbesserten. Die Integration von Horizon liegt im Zeitplan und es werden jährliche Synergien von 11 Millionen Dollar erwartet.
- Revenue increased 30% to $87.6 million
- Glo Fiber revenue grew 62% to $15.1 million
- Added 6,000 new Glo Fiber subscribers
- Adjusted EBITDA increased 31.3% to $26.6 million
- EBITDA margins improved from 27% to 30%
- Expected annual synergy savings increased to $11 million
- Net loss increased to $5.3 million from $0.2 million year-over-year
- Commercial Fiber revenue decreased due to T-Mobile circuit disconnects
- Incumbent Broadband Markets revenue declined 3%
- Higher interest expense from increased borrowings
- Selling, general and administrative expenses increased 22%
Insights
Q3 results highlight significant growth dynamics, with overall revenue increasing
However, profitability remains challenged with a net loss of
The fiber network expansion strategy shows strong execution with approximately 22,000 new passings added in Glo Fiber markets, reaching 320,000 total passings. The
The integration of Horizon's infrastructure is progressing faster than planned, with four of six back-office systems already converted. This accelerated integration timeline combined with higher-than-expected synergy targets suggests operational efficiency improvements ahead of schedule.
EDINBURG, Va., Nov. 07, 2024 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (“Shentel” or the “Company”) (Nasdaq: SHEN) announced third quarter 2024 financial and operating results.
Third Quarter 2024 Highlights
- Glo Fiber Expansion Markets1 experienced growth in a number of key metrics:
- Added approximately 6,000 subscribers in the third quarter of 2024, ending the quarter with over 59,000 subscribers.
- Passings grew approximately 22,000 to a total of approximately 320,000.
- Revenue grew
$5.8 million or62% to$15.1 million compared to the same period in 2023. Excluding Horizon markets, revenue grew56% over the same period in 2023.
- Integration of Horizon ahead of schedule and on track to exceed synergy targets.
“We had a record quarter for Glo Fiber net additions and revenue driving top line revenue growth.” said President and CEO, Christopher E. French. “We made great progress with the integration of our Horizon acquisition, converting four of the six Horizon back-office systems to-date with clear line of sight to finish the integration in early 2025. We now expect to realize
Shentel’s third-quarter earnings conference call will be webcast at 8:00 a.m. ET on Thursday, November 7, 2024. The webcast and related materials will be available on Shentel’s Investor Relations website at https://investor.shentel.com/.
Third Quarter 2024 Results
- Revenue in the third quarter of 2024 grew
$20.2 million , or30.0% , to$87.6 million , primarily driven by$16.9 million of revenue resulting from the acquisition of Horizon. Excluding Horizon, revenues grew$3.3 million or4.9% primarily driven by Glo Fiber Expansion Markets Residential & SMB revenue growth of$5.3 million partially offset by declines in commercial fiber and Incumbent Broadband Markets2 Residential & SMB revenue. Glo Fiber Expansion Markets revenue growth was driven by a54% increase in broadband data subscribers and an7% increase in broadband data Average Revenue per User (“ARPU”). Commercial Fiber revenue decreased, as expected, due to the previously disclosed decline in T-Mobile revenue from prior period backhaul circuit disconnects as part of decommissioning the former Sprint network. Incumbent Broadband Markets revenue declined3% due to lower video and other revenue.
- Cost of services for the three months ended September 30, 2024, increased approximately
$8.1 million , or31.0% , compared with the three months ended September 30, 2023, primarily driven by$8.6 million of cost of services from Horizon partially offset by$0.4 million decline in the legacy Shentel markets due primarily to lower programming costs as customers continue to migrate to video service alternatives.
- Selling, general and administrative expense for the three months ended September 30, 2024, increased
$5.1 million , or22.0% , compared with the three months ended September 30, 2023, primarily driven by$3.7 million of selling, general and administrative costs from Horizon and higher advertising and sales headcount to support the Glo Fiber expansion.
- Integration and acquisition expense for the three months ended September 30, 2024 increased
$0.5 million compared with the three months ended September 30, 2023, primarily driven by non-recurring acquisition-related costs related to the Horizon acquisition and integration.
- Depreciation and amortization for the three months ended September 30, 2024, increased
$11.6 million , or71.7% , compared with the three months ended September 30, 2023, primarily driven by$8.3 million of depreciation and amortization expense resulting from Horizon. The remaining increase in depreciation and amortization expense is attributable to the Company’s expansion of its Glo Fiber network.
- Net loss from continuing operations was
$5.3 million in the third quarter of 2024 compared with net loss from continuing operations of$0.2 million in the third quarter of 2023. The increase in the net loss was due primarily to higher depreciation and amortization from Horizon and Glo Fiber network expansion and higher interest expense from higher borrowings.
- Adjusted EBITDA for the three months ended September 30, 2024 increased to
$26.6 million , representing a$6.3 million , or31.3% , increase compared with the three months ended September 30, 2023. The former Horizon markets contributed$4.7 million . Excluding the former Horizon markets, Adjusted EBITDA grew$1.7 million , or8.3% , driven by the previously disclosed revenue growth partially offset by higher sales and marketing expenses to support new Glo Fiber markets. Adjusted EBITDA margins grew sequentially from27% in the second quarter to30% in the third quarter.
- Total homes passed grew 23,800 to approximately 554,000 including 320,000 Glo Fiber Expansion Market passings and 234,000 Incumbent Broadband Markets passings. Glo Fiber Expansion Markets broadband data subscriber net additions was approximately 6,000. Incumbent Broadband Markets data subscriber net additions were flat in the third quarter 2024.
______________________________________________________
1 Glo Fiber Expansion Markets consists of FTTH passings in greenfield expansion markets in the Shentel and former Horizon markets.
2 Incumbent Broadband Markets consists of Shentel Incumbent Cable Markets and Horizon Incumbent Telephone Markets with Fiber-To-The-Home (“FTTH”) passings.
Other Information
- Capital expenditures were
$226.5 million for the nine months ended September 30, 2024 compared with$189.3 million in the comparable 2023 period. The$37.1 million increase in capital expenditures was primarily driven by$20.8 million of capital expenditures in the former Horizon markets and expansion of the networks in Glo Fiber Expansion Markets and government-subsidized markets.
- As of September 30, 2024, our cash and cash equivalents totaled
$43.1 million .
Earnings Call Webcast
Date: Thursday, November 7, 2024
Time: 8:00 a.m. ET
Listen via Internet: https://investor.shentel.com/
For Analysts, please register to dial-in at this link.
A replay of the call will be available for a limited time on the Investor Relations page of the Company’s website.
About Shenandoah Telecommunications
Shenandoah Telecommunications Company (Shentel) provides broadband services through its high speed, state-of-the-art fiber optic and cable networks to residential and commercial customers in eight contiguous states in the eastern United States. The Company’s services include: broadband internet, video, voice, high-speed Ethernet, dark fiber leasing, and managed network services. The Company owns an extensive regional network with over 16,300 route miles of fiber. For more information, please visit www.shentel.com.
This release contains forward-looking statements about Shentel regarding, among other things, its business strategy, its prospects and its financial position. These statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “expects,” “intends,” “may,” “will,” “plans,” “should,” “could,” or “anticipates” or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties. The forward-looking statements are based upon management’s beliefs, assumptions and current expectations and may include comments as to Shentel’s beliefs and expectations as to future events and trends affecting its business that are necessarily subject to uncertainties, many of which are outside Shentel’s control. Although management believes that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at which such performance or results will be achieved, and actual results may differ materially from those contained in or implied by the forward-looking statements as a result of various factors. A discussion of other factors that may cause actual results to differ from management’s projections, forecasts, estimates and expectations is available in Shentel’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Reports on Form 10-Q. Those factors may include, among others, the expected savings and synergies from the Horizon Transaction may not be realized or may take longer or cost more than expected to realize, changes in overall economic conditions including rising inflation, regulatory requirements, changes in technologies, changes in competition, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, and other conditions. The forward-looking statements included are made only as of the date of the statement. Shentel undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events, except as required by law.
CONTACTS:
Shenandoah Telecommunications Company
Jim Volk
Senior Vice President and Chief Financial Officer
540-984-5168
Jim.Volk@emp.shentel.com
| SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES | |||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (in thousands, except per share amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Service revenue and other | $ | 87,599 | $ | 67,409 | $ | 242,646 | $ | 201,218 | |||||||
| Operating expenses: | |||||||||||||||
| Cost of services exclusive of depreciation and amortization | 34,415 | 26,268 | 94,941 | 76,451 | |||||||||||
| Selling, general and administrative | 28,006 | 22,952 | 86,223 | 74,021 | |||||||||||
| Integration and acquisition | 1,673 | 1,146 | 13,616 | 1,578 | |||||||||||
| Impairment expense | — | 1,532 | — | 2,552 | |||||||||||
| Depreciation and amortization | 27,681 | 16,121 | 70,703 | 47,037 | |||||||||||
| Total operating expenses | 91,775 | 68,019 | 265,483 | 201,639 | |||||||||||
| Operating loss | (4,176 | ) | (610 | ) | (22,837 | ) | (421 | ) | |||||||
| Other (expense) income: | |||||||||||||||
| Interest expense | (3,668 | ) | (1,198 | ) | (11,740 | ) | (2,495 | ) | |||||||
| Other income, net | 998 | 2,024 | 4,642 | 4,615 | |||||||||||
| (Loss) income from continuing operations before income taxes | (6,846 | ) | 216 | (29,935 | ) | 1,699 | |||||||||
| Income tax (benefit) expense | (1,542 | ) | 399 | (7,768 | ) | 2,540 | |||||||||
| Loss from continuing operations | (5,304 | ) | (183 | ) | (22,167 | ) | (841 | ) | |||||||
| Discontinued operations: | |||||||||||||||
| Income from discontinued operations, net of tax | 41 | 1,776 | 1,923 | 6,290 | |||||||||||
| Gain on the sale of discontinued operations, net of tax | — | — | 216,805 | — | |||||||||||
| Total income from discontinued operations, net of tax | 41 | 1,776 | 218,728 | 6,290 | |||||||||||
| Net (loss) income | (5,263 | ) | 1,593 | 196,561 | 5,449 | ||||||||||
| Net income attributable to redeemable noncontrolling interest | 1,638 | — | 1,638 | — | |||||||||||
| Net (loss) income attributable to common shareholders | $ | (6,901 | ) | $ | 1,593 | $ | 194,923 | $ | 5,449 | ||||||
| Net (loss) income per share attributable to common shareholders, basic and diluted: | |||||||||||||||
| Loss from continuing operations | $ | (0.13 | ) | $ | — | $ | (0.45 | ) | $ | (0.02 | ) | ||||
| Income from discontinued operations, net of tax | — | 0.03 | 4.10 | 0.13 | |||||||||||
| Net (loss) income per share | $ | (0.13 | ) | $ | 0.03 | $ | 3.65 | $ | 0.11 | ||||||
| Weighted average shares outstanding, basic and diluted | 54,781 | 50,379 | 53,370 | 50,346 | |||||||||||
| SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES | |||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (in thousands) | September 30, 2024 | December 31, 2023 | |||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 43,099 | $ | 139,255 | |||
| Accounts receivable, net of allowance for credit losses of | 32,526 | 19,782 | |||||
| Income taxes receivable | 4,700 | 4,691 | |||||
| Prepaid expenses and other | 17,189 | 11,782 | |||||
| Current assets held for sale | — | 561 | |||||
| Total current assets | 97,514 | 176,071 | |||||
| Investments | 15,369 | 13,198 | |||||
| Property, plant and equipment, net | 1,385,355 | 850,337 | |||||
| Goodwill and intangible assets, net | 162,822 | 81,123 | |||||
| Operating lease right-of-use assets | 20,738 | 13,024 | |||||
| Deferred charges and other assets | 13,011 | 11,561 | |||||
| Non-current assets held for sale | — | 68,915 | |||||
| Total assets | $ | 1,694,809 | $ | 1,214,229 | |||
| LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Current maturities of long-term debt, net of unamortized loan fees | $ | 8,628 | $ | 7,095 | |||
| Accounts payable | 65,952 | 53,546 | |||||
| Advanced billings and customer deposits | 15,212 | 12,394 | |||||
| Accrued compensation | 16,030 | 11,749 | |||||
| Current operating lease liabilities | 3,317 | 2,222 | |||||
| Accrued liabilities and other | 13,994 | 7,747 | |||||
| Current liabilities held for sale | — | 3,602 | |||||
| Total current liabilities | 123,133 | 98,355 | |||||
| Long-term debt, less current maturities, net of unamortized loan fees | 335,931 | 292,804 | |||||
| Other long-term liabilities: | |||||||
| Deferred income taxes | 181,613 | 85,664 | |||||
| Benefit plan obligations | 5,091 | 3,943 | |||||
| Non-current operating lease liabilities | 11,657 | 7,185 | |||||
| Other liabilities | 31,008 | 16,912 | |||||
| Non-current liabilities held for sale | — | 56,696 | |||||
| Total other long-term liabilities | 229,369 | 170,400 | |||||
| Commitments and contingencies (Note 15) | |||||||
| Temporary equity: | |||||||
| Redeemable noncontrolling interest | 81,018 | — | |||||
| Shareholders’ equity: | |||||||
| Common stock, no par value, authorized 96,000; 54,573 and 50,272 issued and outstanding at June 30, 2024 and December 31, 2023, respectively | — | — | |||||
| Additional paid in capital | 145,363 | 66,933 | |||||
| Retained earnings | 778,992 | 584,069 | |||||
| Accumulated other comprehensive income, net of taxes | 1,003 | 1,668 | |||||
| Total shareholders’ equity | 925,358 | 652,670 | |||||
| Total liabilities, temporary equity and shareholders’ equity | $ | 1,694,809 | $ | 1,214,229 | |||
| SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES | |||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (in thousands) | Nine Months Ended September 30, | ||||||
| 2024 | 2023 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 196,561 | $ | 5,449 | |||
| Income from discontinued operations, net of tax | 218,728 | 6,290 | |||||
| Loss from continuing operations | (22,167 | ) | (841 | ) | |||
| Adjustments to reconcile net income to net cash provided by operating activities, net of effects of business acquisition | |||||||
| Depreciation and amortization | 70,703 | 47,037 | |||||
| Stock-based compensation expense, net of amount capitalized | 7,620 | 8,364 | |||||
| Impairment expense | — | 2,552 | |||||
| Deferred income taxes | (7,768 | ) | 3,211 | ||||
| Provision for credit losses | 1,748 | 1,837 | |||||
| Gain on sale of FCC spectrum licenses | — | (1,328 | ) | ||||
| Other, net | 903 | 5 | |||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | (630 | ) | 1,257 | ||||
| Current income taxes | 1,154 | 25,108 | |||||
| Operating lease assets and liabilities, net | (123 | ) | (156 | ) | |||
| Other assets | (3,045 | ) | 2,914 | ||||
| Accounts payable | (583 | ) | (3,458 | ) | |||
| Other deferrals and accruals | 564 | (4,220 | ) | ||||
| Net cash provided by operating activities - continuing operations | 48,376 | 82,282 | |||||
| Net cash (used in) provided by operating activities - discontinued operations | (6,405 | ) | 9,407 | ||||
| Net cash provided by operating activities | 41,971 | 91,689 | |||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (226,452 | ) | (189,343 | ) | |||
| Government grants received | 11,094 | 448 | |||||
| Cash disbursed for acquisition, net of cash acquired | (347,411 | ) | — | ||||
| Proceeds from the sale of FCC spectrum licenses | — | 17,300 | |||||
| Proceeds from sale of assets and other | 1,846 | 566 | |||||
| Net cash used in investing activities - continuing operations | (560,923 | ) | (171,029 | ) | |||
| Net cash provided by (used in) investing activities - discontinued operations | 305,827 | (1,459 | ) | ||||
| Net cash used in investing activities | (255,096 | ) | (172,488 | ) | |||
| Cash flows from financing activities: | |||||||
| Principal payments on long-term debt | (4,843 | ) | — | ||||
| Proceeds from credit facility borrowings | 50,000 | 75,000 | |||||
| Payments for debt amendment costs | (4,570 | ) | (300 | ) | |||
| Proceeds from the issuance of redeemable noncontrolling interest, net of financing fees paid | 79,380 | — | |||||
| Taxes paid for equity award issuances | (1,671 | ) | (1,317 | ) | |||
| Payments for financing arrangements and other | (1,327 | ) | (679 | ) | |||
| Net cash provided by financing activities - continuing operations | 116,969 | 72,704 | |||||
| Net decrease in cash and cash equivalents | (96,156 | ) | (8,095 | ) | |||
| Cash and cash equivalents, beginning of period | 139,255 | 44,061 | |||||
| Cash and cash equivalents, end of period | $ | 43,099 | $ | 35,966 | |||
| Supplemental Disclosures of Cash Flow Information | |||||||
| Interest paid, net of amounts capitalized | $ | (8,935 | ) | $ | (1,633 | ) | |
| Income tax (paid) refunds received, net | $ | (6,657 | ) | $ | 25,481 | ||
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin
The Company defines Adjusted EBITDA as net (loss) income from continuing operations calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization, impairment expense, other income (expense), net, interest income, interest expense, income tax expense (benefit), stock compensation expense, transaction costs related to acquisition and disposition events (including professional advisory fees, integration costs, and related compensatory matters), restructuring expense, tax on equity award vesting and exercise events, and other non-comparable items. A reconciliation of net (loss) income from continuing operations, which is the most directly comparable GAAP financial measure, to Adjusted EBITDA is provided below herein.
Adjusted EBITDA margin is the Company’s calculation of Adjusted EBITDA, divided by revenue calculated in accordance with GAAP.
The Company uses Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of performance to evaluate operating effectiveness and assess its ability to increase revenues while controlling expense growth and the scalability of the Company’s business growth strategy. Adjusted EBITDA is also a significant performance measure used by the Company in its incentive compensation programs. The Company believes that the exclusion of the expense and income items eliminated in calculating Adjusted EBITDA and Adjusted EBITDA margin provides management and investors a useful measure for period-to-period comparisons of the Company’s core operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to the Company’s ongoing operations. Accordingly, the Company believes that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating the Company’s operating results. However, use of Adjusted EBITDA and Adjusted EBITDA margin as analytical tools has limitations, and investors and others should not consider them in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies may calculate Adjusted EBITDA and Adjusted EBITDA margin or similarly titled measures differently, which may reduce their usefulness as comparative measures.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Loss from continuing operations | $ | (5,304 | ) | $ | (183 | ) | $ | (22,167 | ) | $ | (841 | ) | |||
| Depreciation and amortization | 27,681 | 16,121 | 70,703 | 47,037 | |||||||||||
| Impairment expense | — | 1,532 | — | 2,552 | |||||||||||
| Other expense (income), net | 2,670 | (826 | ) | 7,098 | (2,120 | ) | |||||||||
| Income tax (benefit) expense | (1,542 | ) | 399 | (7,768 | ) | 2,540 | |||||||||
| Stock-based compensation | 1,384 | 2,044 | 7,620 | 8,364 | |||||||||||
| Integration and acquisition | 1,673 | 1,146 | 13,616 | 1,578 | |||||||||||
| Adjusted EBITDA | $ | 26,562 | $ | 20,233 | $ | 69,102 | $ | 59,110 | |||||||
| Adjusted EBITDA margin | 30 | % | 30 | % | 28 | % | 29 | % | |||||||
Supplemental Information
Operating Statistics
| Three Months Ended September 30, | |||||||
| 2024 | 2023 | ||||||
| Homes and businesses passed (1) | 553,877 | 415,971 | |||||
| Incumbent Broadband Markets (4) | 234,366 | 213,317 | |||||
| Glo Fiber Expansion Markets (5) | 319,511 | 202,654 | |||||
| Residential & Small and Medium Business ("SMB") Revenue Generating Units ("RGUs"): | |||||||
| Broadband Data | 170,586 | 146,797 | |||||
| Incumbent Broadband Markets (4) | 111,320 | 109,404 | |||||
| Glo Fiber Expansion Markets (5) | 59,266 | 37,393 | |||||
| Video | 41,192 | 44,050 | |||||
| Voice | 44,389 | 40,699 | |||||
| Total Residential & SMB RGUs (excludes RLEC) | 256,167 | 231,546 | |||||
| Residential & SMB Penetration (2) | |||||||
| Broadband Data | 30.8 | % | 35.3 | % | |||
| Incumbent Broadband Markets (4) | 47.5 | % | 51.3 | % | |||
| Glo Fiber Expansion Markets (5) | 18.5 | % | 18.5 | % | |||
| Video | 7.4 | % | 10.6 | % | |||
| Voice | 8.3 | % | 10.2 | % | |||
| Fiber route miles | 16,357 | 9,387 | |||||
| Total fiber miles (3) | 1,825,122 | 813,273 | |||||
______________________________________________________
(1) Homes and businesses are considered passed (“passings”) if we can connect them to our network without further extending the distribution system. Passings is an estimate based upon the best available information. Passings will vary among video, broadband data and voice services.
(2) Penetration is calculated by dividing the number of users by the number of passings or available homes, as appropriate.
(3) Total fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance. For example, a 10 mile route with 144 fiber strands would equal 1,440 fiber miles.
(4) Incumbent Broadband Markets consists of Shentel Incumbent Cable Markets and Horizon Incumbent Telephone Markets with Fiber-To-The-Home (“FTTH”) passings.
(5) Glo Fiber Expansion Markets consists of FTTH passings in greenfield expansion markets in the Shentel and former Horizon markets.
| Residential & SMB ARPU | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Residential & SMB Revenue: | |||||||||||||||
| Broadband Data | $ | 42,038 | $ | 35,096 | $ | 121,442 | $ | 102,422 | |||||||
| Incumbent Broadband Markets | 28,241 | 26,977 | 84,363 | 81,422 | |||||||||||
| Glo Fiber Expansion Markets | 13,797 | 8,119 | 37,079 | 21,000 | |||||||||||
| Video | 14,520 | 14,077 | 43,827 | 43,133 | |||||||||||
| Voice | 3,275 | 3,062 | 9,580 | 9,146 | |||||||||||
| Discounts, adjustments and other | (508 | ) | 769 | 17 | 2,629 | ||||||||||
| Total Residential & SMB Revenue | $ | 59,325 | $ | 53,004 | $ | 174,866 | $ | 157,330 | |||||||
| Average RGUs: | |||||||||||||||
| Broadband Data | 167,514 | 144,510 | 161,169 | 140,420 | |||||||||||
| Incumbent Broadband Markets | 111,224 | 109,364 | 110,722 | 109,612 | |||||||||||
| Glo Fiber Expansion Markets | 56,290 | 35,146 | 50,447 | 30,808 | |||||||||||
| Video | 41,630 | 44,385 | 41,789 | 45,294 | |||||||||||
| Voice | 44,214 | 40,605 | 42,923 | 40,254 | |||||||||||
| ARPU: (1) | |||||||||||||||
| Broadband Data | $ | 83.65 | $ | 80.95 | $ | 83.72 | $ | 81.02 | |||||||
| Incumbent Broadband Markets | $ | 84.64 | $ | 82.22 | $ | 84.66 | $ | 82.54 | |||||||
| Glo Fiber Expansion Markets | $ | 81.70 | $ | 77.00 | $ | 81.67 | $ | 75.74 | |||||||
| Video | $ | 116.26 | $ | 105.72 | $ | 116.53 | $ | 105.81 | |||||||
| Voice | $ | 24.69 | $ | 25.14 | $ | 24.80 | $ | 25.24 | |||||||
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(1) Average Revenue Per RGU calculation = (Residential & SMB Revenue) / average RGUs / 3 months.
FAQ
What was Shenandoah Telecommunications (SHEN) revenue in Q3 2024?
How many new Glo Fiber subscribers did SHEN add in Q3 2024?
What was SHEN's Adjusted EBITDA in Q3 2024?
What was SHEN's net income/loss in Q3 2024?
