Shenandoah Telecommunications Co

Welcome to the Shenandoah Communications fourth quarter 2022 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Kirk Andrews, Director of Financial Planning and Analysis for Shentel.

Good morning, and thank you for joining us. The purpose of today's call is to review Shentel's results for fourth quarter and full year 2022. Our results were announced in a press release distributed this morning and the presentation we'll be reviewing is included on the investor page at our website, www.chentel.com. Please note that an audio replay of this call will be made available later today. The details are set forth in the press release announcing this call. With us on the call today are Chris French, President and Chief Executive Officer, Ed McKay, Executive Vice President and Chief Operating Officer, and Jim Volk, Senior Vice President of Finance and CSO. After our prepared remarks, we will conduct a question and answer session. As always, let me refer you to slide two of the presentation, which contains our safe harbor disclaimer, and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. These may cause our actual results to differ materially from the statements. Therefore, we have provided a detailed discussion of various risk factors in our SEC filings, which you are encouraged to review. Your caution is not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements. With that, I will now turn the call over to Chris. Go ahead, Chris.

Thanks, Kirk. We appreciate everyone joining us this morning and hope everyone's staying healthy and safe. 2022 was another successful year for Chantel. We had solid growth across our incumbent cable, commercial fiber and tower businesses and had remarkable growth with our Glowfiber expansion. As noted on slide four, we accelerated both our construction and sales of Glowfiber in each of the past two years. Our annual construction pace increased 64% from approximately 27,000 new passings in 2020 to over 72,000 new passings in 2022. We have built a sizable construction backlog underwriting new markets, securing franchise agreements, and doing the field engineering and permitting work, which should enable us to construct 100,000 new passings in 2023. Our sales team has more than kept pace with our construction team, with Glowfiber net data additions growing 79% from 4,000 in 2020 to almost 13,000 in 2022. We expect data net additions to accelerate again in 2023. As reflected on slide five, we highlight the outstanding progress we've made over the past four years since we began investing in Glowfiber. We have successfully transitioned from the proof of concept stage to the rapid growth stage as all key metrics have met or exceeded our business plans. We ended 2022 with over 147,000 passings in 17 markets. All of our Glow Fiber passings are in greenfield markets, bringing us new customers and incremental revenue. We have now secured franchise agreements for 445,000 passings, rapidly approaching our 450,000 target, and preparing as well for accelerating construction. Our cost to pass of $1,170 is consistent with our underwriting assumptions. The metric I'm most proud of is our outstanding customer satisfaction scores. Our most recent Net Promoter Score was 65%, more than 10 times the average score for internet service providers. We believe our local customer service is a competitive advantage, as our employees are neighbors with our customers, knowledgeable about the local markets, and involved in the communities that they serve. We believe this local connection and care is a major driver of the NPS score and our data churn results of less than 1.1% since launch. We ended 2022 with 24,000 Glowfiber customers or about 16% of year-end passings. As we stated in the past, we expect our average market to reach 38% terminal penetration more than double our current level. Coupled with the growth expected as we complete construction of all franchise passings, we believe we are well positioned for significant revenue growth over the next five years. We've also been pleased by the strong demand for our Glow symmetrical gigabit service. As of December 31st, 44% of our Glow fiber customer base has purchased our one gigabit or higher bandwidth speed. driving up ARPU to over $73 since we launched service. We recently introduced a 2.4 gigabit service to meet the customer demand for higher bandwidth services. With that, I'll now turn the call over to Jim to review the details of our financial results.