Shenandoah Telecommunications Company Reports Fourth Quarter and Full Year 2023 Results

February 21, 2024 at 7:00 AM EST

EDINBURG, Va., Feb. 21, 2024 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (“Shentel”) (Nasdaq: SHEN) announced fourth quarter and full year 2023 financial and operating results.

2023 Highlights

  • Glo Fiber data customers grew 71.7% year-over-year to approximately 42,000.
  • Glo Fiber passings grew by approximately 86,400, or 58.6%, to approximately 234,000.
  • Glo Fiber revenue grew 91.9% to $35.1 million.
  • Consolidated revenue grew 7.5% to $287.4 million.
  • Consolidated net income in 2023 was $8.0 million, compared with consolidated net loss of $8.4 million in 2022.
  • Consolidated Adjusted EBITDA1 grew 19.3% to $90.6 million in 2023, compared with $76.0 million in 2022.
  • Announced in October 2023 agreement to acquire 100% of the equity interests in Horizon Acquisition Parent LLC.

“Glo Fiber continues to be the major catalyst for our strong growth and is now our largest line of business in terms of passings. Since our first full year of Glo Fiber operations in 2020, our consolidated revenue and Adjusted EBITDA compounded annual growth rates (“CAGR”) have been industry-leading among publicly-traded broadband companies at 9.2% and 17.8%, respectively,” said President and CEO, Christopher E. French. “We believe we have the potential to more than double our Glo Fiber data customer penetration rate over the next five years, creating an excellent opportunity to continue to drive strong consolidated CAGR results.”

Shentel’s fourth-quarter earnings conference call will be webcast at 8:30 a.m. ET on Wednesday, February 21, 2024. The webcast and related materials will be available on Shentel’s Investor Relations website at https://investor.shentel.com/. For Analysts, please register to dial-in at this link.

Full Year 2023 Results

Broadband

  • Total Broadband Data Revenue Generating Units (“RGUs”) grew 17,459, or 13.0%, in 2023 to 151,389. Glo Fiber Markets Data RGUs grew 17,424, or 71.7%, year-over-year to 41,710, driven by network expansion of 86,393 passings and churn of 1.0%. Cable Markets Data RGUs grew 35 to 109,679. Penetration for Glo Fiber Markets and Cable Markets were 17.8% and 50.8%, respectively, as of December 31, 2023.
  • Broadband revenue grew $20.2 million, or 8.1%, to $269.3 million. Residential & SMB revenue in Glo Fiber Markets increased approximately $16.8 million, or 91.9%, during 2023, primarily driven by 71.7% year-over-year growth in data RGUs and a 4.0% increase in data Average Revenue per Unit (“ARPU”). Residential & SMB revenue in Cable Markets, excluding discontinued Beam operations, increased approximately $2.5 million, or 1.4%, during 2023, primarily driven by 1.8% year-over-year growth in data ARPU. Commercial Fiber revenue increased approximately $3.3 million, or 8.5%, during 2023, primarily driven by $3.0 million in T-Mobile non-recurring early termination fees and $0.3 million in recurring revenue driven by year-over-year growth in connections. T-Mobile disconnected 338 backhaul circuits during 2023 as part of their previously announced rationalization of the former Sprint network. The Company expects approximately $1 million of additional annual revenue churn as part of the network rationalization. Rural Local Exchange Carrier (“RLEC”) & Other revenue decreased approximately $1.1 million, or 6.7%, compared with 2022, primarily driven by a decline in residential DSL subscribers.
  • Broadband operating expenses decreased approximately $0.2 million, or 0.1%, to $228.1 million in 2023, compared with 2022. The primarily drivers were lower impairment charges and depreciation charges resulting from the discontinuation of Beam fixed wireless in 2022 as well as lower payroll costs due to higher capitalized labor. These lower expenses were partially offset by higher line costs due to the expansion of the network into new markets, and higher advertising costs associated with the Company’s expansion of Glo Fiber.
  • Broadband operating income in 2023 was $41.1 million, an increase of 98.6% compared with $20.7 million in 2022.
  • Broadband Adjusted EBITDA2 in 2023 was $105.8 million, an increase of 17.6% compared with $90.0 million in 2022.

Tower

  • Total macro towers and tenants were 219 and 453, respectively, as of December 31, 2023 compared with 222 and 446, respectively, as of December 31, 2022.
  • Revenue decreased approximately $0.3 million, or 1.5%, in 2023 to $18.6 million compared with 2022. This decrease was primarily driven by lower intercompany lease revenue from ceasing Beam service in 2022.
  • Operating expenses decreased approximately $0.3 million, or 2.8%, in 2023 compared with 2022, primarily driven by lower depreciation as a result of fewer depreciable tower assets in 2023 compared to 2022.
  • Tower operating income in 2023 was $9.5 million, approximately flat compared with $9.5 million in 2022.
  • Tower Adjusted EBITDA3 in 2023 was $11.6 million, a decrease of 2.8%compared with $11.9 million in 2022.

1 Non-GAAP measure. See the disclosure captioned “Non-GAAP Financial Measures” below in this press release for more details and a reconciliation to the most comparable GAAP measure.
2 Non-GAAP measure. See the disclosure captioned “Non-GAAP Financial Measures” below in this press release for more details and a reconciliation to the most comparable GAAP measure.
3 Non-GAAP measure. See the disclosure captioned “Non-GAAP Financial Measures” below in this press release for more details and a reconciliation to the most comparable GAAP measure.

Consolidated Fourth Quarter 2023 Results

  • Consolidated revenue in the fourth quarter of 2023 grew 3.6% to $72.5 million compared with the fourth quarter of 2022 primarily due to growth of 3.7% in the Broadband segment.
  • Consolidated net income in the fourth quarter of 2023 was $2.6 million, compared with net loss of $1.8 million in the fourth quarter of 2022.
  • Consolidated Adjusted EBITDA in the fourth quarter of 2023 was $22.9 million, an increase of $1.9 million, or 8.8%, compared with the fourth quarter of 2022 due to growth of 8.9% in the Broadband segment and 9.3% growth in the Tower segment, partially offset by a 9.2% increase in corporate expenses.

Broadband

  • Broadband revenue in the fourth quarter of 2023 grew $2.4 million, or 3.7%, to $67.9 million compared with $65.5 million in the fourth quarter of 2022. Residential & SMB revenue in Glo Fiber Markets increased approximately $4.7 million, or 79.2%, during 2023, primarily driven 71.7% year-over-year growth in data RGUs and 7.1% increase in data ARPU. Residential & SMB revenue in Cable Markets decreased approximately $0.4 million, or 0.8%, during 2023, primarily driven by a 11.2% decrease in video subscribers due to accelerated cord cutting. Commercial Fiber revenue decreased approximately $1.1 million, or 10.4%, primarily driven by timing of T-Mobile early termination fees. T-Mobile disconnected 338 backhaul circuits during 2023 as part of their previously announced rationalization of the former Sprint network. RLEC & Other revenue decreased approximately $0.6 million, or 15.3%, compared with 2022, primarily driven by a decline in residential DSL subscribers.
  • Broadband operating expenses in the fourth quarter of 2023 were $57.1 million compared with $61.9 million in the fourth quarter of 2022. The decrease was primarily due to $4.8 million in lower depreciation due to 2022 accelerated depreciation of Beam network assets associated with the Company’s decision to permanently cease Beam operations, for which no equivalent accelerated depreciation was present in 2023.
  • Broadband operating income in the fourth quarter of 2023 was $10.8 million, an increase of 200% compared with $3.6 million in the fourth quarter of 2022.
  • Broadband Adjusted EBITDA in the fourth quarter of 2023 was $26.8 million, an increase of 8.9% compared with $24.6 million for the fourth quarter of 2022.

Tower

  • Tower revenue for the fourth quarter of 2023 was consistent with revenue for fourth quarter of 2022.
  • Tower operating income in the fourth quarter of 2023 was $2.5 million, an increase of 32.2% compared with $1.9 million for the fourth quarter of 2022, primarily due to lower depreciation and rent expense.
  • Tower Adjusted EBITDA in the fourth quarter of 2023 was $3.0 million, an increase of 9.3% compared with $2.7 million for the fourth quarter of 2022.

Other Information

  • As previously announced, on October 24, 2023, Shentel entered into a definitive agreement to acquire 100% of the equity interests in Horizon Acquisition Parent LLC for $385 million. Consideration will consist of $305 million in cash and $80 million of Shentel common stock. Closing is expected to occur in the first half of 2024 after regulatory approvals are received.
  • The Company plans to raise additional growth capital for the FTTH network expansion, government grant projects and general corporate purposes, which may include the sale of some or all of its tower portfolio as well as exploring other strategic alternatives.
  • Capital expenditures were $256.6 million for the year ended December 31, 2023 compared with $189.6 million in 2022. The $66.9 million increase in capital expenditures was primarily due to higher spending in the Broadband segment driven by the expansion of Glo Fiber Markets.
  • As of December 31, 2023, our cash and cash equivalents totaled $139.3 million and the availability under our revolving line of credit was $100.0 million, for total available liquidity of $239.3 million. During 2023, we borrowed a total of $225.0 million under our term loans and had total indebtedness of $300 million as of December 31, 2023.
  • On July 6, 2023, the Company closed on the sale of its 2.5 GHz spectrum for $17.3 million in cash and $3.8 million in assumed liabilities.

Conference Call and Webcast

Date: Wednesday, February 21, 2024
Time: 8:30 a.m. (ET)
Listen via Internet: https://investor.shentel.com/
For Analysts, please register to dial-in at this link.

A live webcast of the call will be available on the “Investor Relations” page of the Company’s website at http://investor.shentel.com/.

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 and networks to customers in the Mid-Atlantic United States. The Company’s services include: broadband internet, video and voice; fiber optic Ethernet, wavelength and leasing; and tower colocation leasing. The Company owns an extensive regional network with approximately 9,900 route miles of fiber and 219 macro cellular towers. 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,” “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. Those factors may include, among others, the ability to obtain the required regulatory approvals and satisfy the closing conditions required for the Horizon Transaction, Shentel’s ability to obtain the financing for the Horizon Transaction, the closing of the Transaction may not occur on time or at all, 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 - Chief Financial Officer
540-984-5168
Jim.Volk@emp.shentel.com


SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in thousands, except per share amounts)
(Figures for the quarters ended December 31, 2023 and 2022 are unaudited)

  Quarter Ended December 31,   Year Ended December 31,
    2023       2022       2023     2022  
Service revenue and other $ 72,510     $ 70,012     $ 287,379   $ 267,371  
Operating expenses:              
Cost of services exclusive of depreciation and amortization   25,707       26,974       106,101     107,546  
Selling, general and administrative   26,929       23,240       103,631     92,392  
Restructuring expense         220           1,251  
Impairment expense         357       2,552     5,241  
Depreciation and amortization   16,834       21,891       65,471     68,899  
Total operating expenses   69,470       72,682       277,755     275,329  
Operating income (loss)   3,040       (2,670 )     9,624     (7,958 )
Other income (expense):              
Other income (expense), net   (733 )     619       1,387     (1,348 )
Income (loss) before income taxes   2,307       (2,051 )     11,011     (9,306 )
Income tax expense (benefit)   (282 )     (228 )     2,973     (927 )
Net income (loss) $ 2,589     $ (1,823 )   $ 8,038   $ (8,379 )
               
Other comprehensive income (loss):              
Unrealized (loss) income on interest rate hedge, net of tax   (1,574 )           1,668      
Comprehensive (loss) income $ 1,015     $ (1,823 )   $ 9,706   $ (8,379 )
               
Net income (loss) per share, basic and diluted:              
Basic net income (loss) per share $ 0.05     $ (0.04 )   $ 0.16   $ (0.17 )
               
Diluted net income (loss) per share $ 0.05     $ (0.04 )   $ 0.16   $ (0.17 )
               
Weighted average shares outstanding, basic   50,422       50,194       50,396     50,155  
Weighted average shares outstanding, diluted   50,971       50,194       50,715     50,155  
 


SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(in thousands) 2023   2022
ASSETS      
Current assets:      
Cash and cash equivalents $ 139,255   $ 44,061
Accounts receivable, net of allowance for credit losses of $886 and $776, respectively   19,782     20,615
Income taxes receivable   4,691     29,755
Prepaid expenses and other   11,782     11,509
Current assets held for sale   561     22,622
Total current assets   176,071     128,562
Investments   13,198     12,971
Property, plant and equipment, net   879,499     687,553
Goodwill and intangible assets, net   81,123     81,515
Operating lease right-of-use assets   50,640     53,859
Deferred charges and other assets   13,698     13,259
Total assets $ 1,214,229   $ 977,719
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities:      
Current maturities of long-term debt, net of unamortized loan fees $ 7,095   $ 648
Accounts payable   53,546     49,173
Advanced billings and customer deposits   13,241     12,425
Accrued compensation   11,749     9,616
Current operating lease liabilities   3,081     2,829
Accrued liabilities and other   9,643     17,906
Current liabilities held for sale       3,824
Total current liabilities   98,355     96,421
Long-term debt, less current maturities, net of unamortized loan fees   292,804     74,306
Other long-term liabilities:      
Deferred income taxes   88,147     84,600
Asset retirement obligations   10,069     9,932
Benefit plan obligations   3,943     3,758
Non-current operating lease liabilities   48,358     50,477
Other liabilities   19,883     20,218
Total other long-term liabilities   170,400     168,985
Commitments and contingencies      
Shareholders’ equity:      
Common stock, no par value, authorized 96,000; 50,272 and 50,110 issued and outstanding at December 31, 2023 and 2022, respectively      
Additional paid in capital   66,933     57,453
Retained earnings   584,069     580,554
Accumulated other comprehensive income, net of taxes   1,668    
Total shareholders’ equity   652,670     638,007
Total liabilities and shareholders’ equity $ 1,214,229   $ 977,719
 


SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)   2023       2022  
Cash flows from operating activities:      
Net income (loss) $ 8,038     $ (8,379 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:      
Depreciation and amortization   64,981       68,175  
Amortization of intangible assets   490       724  
Accretion of asset retirement obligations   621       531  
Provision for credit losses   2,898       1,972  
Stock-based compensation expense, net of amount capitalized   10,033       8,528  
Deferred income taxes   2,973       (1,414 )
Impairment expense   2,552       5,241  
Gain on sale of FCC spectrum licenses   (1,328 )      
Other, net   (504 )     427  
Changes in assets and liabilities:      
Accounts receivable   (189 )     (583 )
Current income taxes   25,064       434  
Operating lease right-of-use assets   3,614       6,322  
Other assets   5,043       (451 )
Accounts payable   (2,869 )     19  
Lease liabilities   (3,098 )     (5,471 )
Other deferrals and accruals   (4,545 )     (1,180 )
Net cash provided by operating activities   113,774       74,895  
       
Cash flows from investing activities:      
Capital expenditures   (256,550 )     (189,609 )
Government grants received   1,904        
Proceeds from the sale of FCC spectrum licenses   17,300        
Refund received for deposit on FCC spectrum leases         3,996  
Proceeds from sale of assets and other   655       1,434  
Net cash used in investing activities   (236,691 )     (184,179 )
       
Cash flows from financing activities:      
Proceeds from credit facility borrowings   225,000       75,000  
Payments for debt issuance costs   (300 )      
Dividends paid, net of dividends reinvested   (4,523 )     (3,991 )
Taxes paid for equity award issuances   (1,387 )     (1,076 )
Payments for financing arrangements and other   (679 )     (932 )
Net cash provided by financing activities   218,111       69,001  
Net increase (decrease) in cash and cash equivalents   95,194       (40,283 )
Cash and cash equivalents, beginning of period   44,061       84,344  
Cash and cash equivalents, end of period $ 139,255     $ 44,061  
 


Non-GAAP Financial Measures
Adjusted EBITDA

The Company defines Adjusted EBITDA as net income (loss) from continuing operations calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization, impairment, 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 income (loss), 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.

Year Ended December 31, 2023                
(in thousands)   Broadband   Tower   Corporate & Eliminations   Consolidated
Net income (loss)   $ 42,308     $ 9,495     $ (43,765 )   $ 8,038  
Depreciation and amortization     61,897       2,103       1,471       65,471  
Impairment expense     2,552                   2,552  
Other income, net     (1,179 )           (208 )     (1,387 )
Income tax expense (benefit)                 2,973       2,973  
Stock-based compensation                 10,033       10,033  
Restructuring charges and transaction related fees     221             2,694       2,915  
Adjusted EBITDA   $ 105,799     $ 11,598     $ (26,802 )   $ 90,595  
                 
Adjusted EBITDA margin     39 %     62 %   N/A     32 %


Year Ended December 31, 2022                
(in thousands)   Broadband   Tower   Corporate & Eliminations   Consolidated
Net income (loss)   $ 20,467     $ 9,512     $ (38,358 )   $ (8,379 )
Depreciation and amortization     63,175       2,416       3,308       68,899  
Impairment expense     5,241                   5,241  
Other expense, net     240             1,108       1,348  
Income tax expense (benefit)                 (927 )     (927 )
Stock-based compensation                 8,528       8,528  
Restructuring charges and transaction related fees     849             402       1,251  
Adjusted EBITDA   $ 89,972     $ 11,928     $ (25,939 )   $ 75,961  
                 
Adjusted EBITDA margin     36 %     63 %   N/A     28 %


Quarter Ended December 31, 2023                
(in thousands)   Broadband   Tower   Corporate & Eliminations   Consolidated
Net income (loss)   $ 10,791     $ 2,490     $ (10,692 )   $ 2,589  
Depreciation and amortization     15,995       503       336       16,834  
Impairment expense                        
Other expense, net     20             713       733  
Income tax benefit                 (282 )     (282 )
Stock-based compensation                 1,669       1,669  
Restructuring charges and transaction related fees     16             1,321       1,337  
Adjusted EBITDA   $ 26,822     $ 2,993     $ (6,935 )   $ 22,880  
                 
Adjusted EBITDA margin     39 %     64 %   N/A     32 %


Quarter Ended December 31, 2022                
(in thousands)   Broadband   Tower   Corporate & Eliminations   Consolidated
Net income (loss)   $ 3,546     $ 1,884     $ (7,253 )   $ (1,823 )
Depreciation and amortization     20,451       854       586       21,891  
Impairment expense     357                   357  
Other expense (income), net     63             (682 )     (619 )
Income tax benefit                 (228 )     (228 )
Stock-based compensation                 1,229       1,229  
Restructuring charges and transaction related fees     220                   220  
Adjusted EBITDA   $ 24,637     $ 2,738     $ (6,348 )   $ 21,027  
                 
Adjusted EBITDA margin     38 %     58 %   N/A     30 %
 


Segment Results

Year ended December 31, 2023



(in thousands)
  Broadband   Tower   Corporate & Eliminations   Consolidated
External revenue                
Residential & SMB - Cable Markets1   $ 176,879   $   $     $ 176,879
Residential & SMB - Glo Fiber Markets1     35,103               35,103
Commercial Fiber     42,132               42,132
RLEC & Other     14,791               14,791
Tower lease         18,474           18,474
Service revenue and other     268,905     18,474           287,379
Intercompany revenue and other     348     161     (509 )    
Total revenue     269,253     18,635     (509 )     287,379
Operating expenses                
Cost of services     100,841     5,625     (365 )     106,101
Selling, general and administrative     62,834     1,412     39,385       103,631
Impairment expense     2,552               2,552
Depreciation and amortization     61,897     2,103     1,471       65,471
Total operating expenses     228,124     9,140     40,491       277,755
Operating income (loss)   $ 41,129   $ 9,495   $ (41,000 )   $ 9,624
 

Year ended December 31, 2022

(in thousands)   Broadband   Tower   Corporate & Eliminations   Consolidated
External revenue                
Residential & SMB - Cable Markets1   $ 175,681   $   $     $ 175,681  
Residential & SMB - Glo Fiber Markets1     18,293               18,293  
Commercial Fiber     38,821               38,821  
RLEC & Other     16,035               16,035  
Tower lease         18,541           18,541  
Service revenue and other     248,830     18,541           267,371  
Intercompany revenue and other     185     378     (563 )      
Total revenue     249,015     18,919     (563 )     267,371  
Operating expenses                
Cost of services     102,267     5,712     (433 )     107,546  
Selling, general and administrative     56,776     1,279     34,337       92,392  
Restructuring expense     849         402       1,251  
Impairment expense     5,241               5,241  
Depreciation and amortization     63,175     2,416     3,308       68,899  
Total operating expenses     228,308     9,407     37,614       275,329  
Operating income (loss)   $ 20,707   $ 9,512   $ (38,177 )   $ (7,958 )
 

Quarter ended December 31, 2023



(in thousands)
  Broadband   Tower   Corporate & Eliminations   Consolidated
External revenue                
Residential & SMB - Cable Markets1   $ 44,041   $   $     $ 44,041
Residential & SMB - Glo Fiber Markets1   $ 10,611   $   $     $ 10,611
Commercial Fiber     9,766               9,766
RLEC & Other     3,479               3,479
Tower lease         4,613           4,613
Service revenue and other     67,897     4,613           72,510
Intercompany revenue and other     27     49     (76 )    
Total revenue     67,924     4,662     (76 )     72,510
Operating expenses                
Cost of services     24,394     1,360     (47 )     25,707
Selling, general and administrative     16,724     309     9,896       26,929
Depreciation and amortization     15,995     503     336       16,834
Total operating expenses     57,113     2,172     10,185       69,470
Operating income (loss)   $ 10,811   $ 2,490   $ (10,261 )   $ 3,040
 

Quarter ended December 31, 2022



(in thousands)
  Broadband   Tower   Corporate & Eliminations   Consolidated
External revenue                
Residential & SMB - Cable Markets1   $ 44,540   $   $     $ 44,540  
Residential & SMB - Glo Fiber Markets1     5,922               5,922  
Commercial Fiber     10,897               10,897  
RLEC & Other     4,083               4,083  
Tower lease         4,570           4,570  
Service revenue and other     65,442     4,570           70,012  
Intercompany revenue and other     61     123     (184 )      
Total revenue     65,503     4,693     (184 )     70,012  
Operating expenses                
Cost of services     25,466     1,658     (150 )     26,974  
Selling, general and administrative     15,400     297     7,543       23,240  
Restructuring expense     220               220  
Impairment expense     357               357  
Depreciation and amortization     20,451     854     586       21,891  
Total operating expenses     61,894     2,809     7,979       72,682  
Operating income (loss)   $ 3,609   $ 1,884   $ (8,163 )   $ (2,670 )

_________________________________________
(1) Shentel has presented Residential & SMB - Cable Markets and Residential & SMB - Glo Fiber Markets separately for 2023. These revenues were previously reported in one line under the description “Residential & SMB”. Shentel has amended the presentation for 2022 for comparability.


Supplemental Information

Broadband Operating Statistics

    December 31,
2023
  December 31,
2022
Broadband homes and businesses passed (1)   449,635     359,529  
Cable Markets   215,763     212,050  
Glo Fiber Markets   233,872     147,479  
         
Residential & Small and Medium Business ("SMB") Revenue Generating Units ("RGUs"):        
Broadband Data   151,389     133,930  
Cable Markets   109,679     109,644  
Glo Fiber Markets   41,710     24,286  
Video   43,152     46,975  
Voice   40,757     39,951  
Total Residential & SMB RGUs (excludes RLEC)   235,298     220,856  
         
Residential & SMB Penetration (2)        
Broadband Data   33.7 %   37.3 %
Cable Markets   50.8 %   51.7 %
Glo Fiber Markets   17.8 %   16.5 %
Video   9.6 %   13.1 %
Voice   9.5 %   11.7 %
         
Fiber route miles   9,875     8,346  
Total fiber miles (3)   861,980     656,033  

_________________________________________
(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 RGUs 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.


Broadband - Residential and SMB ARPU                
    Quarter Ended December 31,   Year Ended December 31,
    2023   2022   2023   2022
Residential and SMB Revenue:                
Broadband Data   $ 36,679   $ 31,916   $ 139,102   $ 120,803
Cable Markets     27,400     26,945     108,822     105,433
Glo Fiber Markets     9,279     4,971     30,280     15,370
Video     13,791     14,558     56,924     60,023
Voice     3,057     3,079     12,203     12,030
Discounts and adjustments     1,125     909     3,753     1,118
Total Revenue   $ 54,652   $ 50,462   $ 211,982   $ 193,974
                 
Average RGUs:                
Broadband Data     149,134     132,123     142,598     125,484
Cable Markets     109,528     109,403     109,591     108,053
Glo Fiber Markets     39,606     22,720     33,007     17,431
Video     43,621     47,571     44,876     48,654
Voice     40,726     39,910     40,372     38,217
                 
ARPU:                
Broadband Data   $ 81.98   $ 80.46   $ 81.27   $ 80.14
Cable Markets   $ 83.39   $ 82.10   $ 82.75   $ 81.31
Glo Fiber Markets   $ 78.10   $ 72.93   $ 76.45   $ 73.48
Video   $ 105.38   $ 102.01   $ 105.71   $ 102.80
Voice   $ 25.02   $ 25.72   $ 25.19   $ 26.23

_________________________________________

(1) Average Revenue Per Data RGU calculation = (Residential & SMB Revenue * 1,000) / average data RGUs / 12 months


Tower Operating Statistics

    December 31,
2023
  December 31,
2022
Macro tower sites   219   222
Tenants   453   446
Average tenants per tower   2.0   1.9

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Source: Shenandoah Telecommunications Co

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