Shenandoah Telecommunications Co

Good morning, everyone. Welcome to Shenandoah Telecommunications' second quarter 2026 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Lucas Binder, Vice President of Corporate Finance for Chantel. Please go ahead.

Good morning, and thank you for joining us. The purpose of today's call is to review Chantel's results for the second quarter of 2026. Our results were announced in a press release distributed this morning. In addition, we filed our Form 10-Q with the SEC. The presentation we will be reviewing is included on the investor page on our investor.chentel.com website. 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 Ed McKay, President and Chief Executive Officer, and Jim Volk, Senior Vice President and Chief Financial Officer. After the prepared remarks, we will conduct a question and answer session. I 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 that may cause our actual results to differ materially from these forward-looking statements. We have provided a detailed discussion of various risk factors in our FCC filings, which you are encouraged to review. You are cautioned 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 Ed. Go ahead, Ed.

Thanks, Lucas. Good morning, everyone, and thank you for joining us today. Starting on slide four, I'll share some of our second quarter highlights. The quarter included several important milestones for Shentel and our Glowfiber business. We achieved a record 6,200 Glowfiber net additions during the quarter, demonstrating continued strong demand for our service. We also surpassed 100,000 Glowfiber data customers, representing 31.3% year-over-year growth and underscoring the success of our seven-year investment in fiber to the home. Fiber revenue, which includes both glow fiber and commercial fiber, grew 21.4% year-over-year in the second quarter, reflecting the strong momentum we continue to see across both fiber businesses. For the first time, our fast-growing fiber businesses represented 51% of consolidated revenue in the second quarter, exceeding the combined revenue for incumbent broadband and Arlec businesses. Consolidated revenue for the quarter was $93.5 million, an annual increase of 5.5%, and adjusted EBITDA was $32 million, up 12.9% year over year. This growth reflects the success in our Fiber First strategy we put in place years ago, including our early investment in fiber to the home starting in 2019, the expansion of our commercial fiber business through the Horizon acquisition, and our continued focus on driving sustained residential and commercial growth. Our operating footprint also provides a strategic advantage with close proximity to major data center hubs in Ashburn, Virginia and Columbus, Ohio. I would like to thank our team members for their dedication and execution in achieving these results. As we complete our fiber of the home build and position our business to return to positive free cash flow beginning in 2027, I'm excited about the opportunities ahead to continue building on the momentum. Turning to slide five, we highlight our scaled integrated broadband network that spans more than 19,800 fiber route miles across eight states with approximately 730,000 total broadband passings. As shown on the map, all planned glow fiber markets have now been launched, and we've added nearly 97,000 fiber passings over the past 12 months. We remain on track to substantially complete our Glow Fiber expansion in 2026, reaching 510,000 passings. On slide six, our sales and marketing team continues to drive strong growth across our Glow Fiber expansion markets. During the second quarter, we added over 6,000 new customers, a record for quarterly net additions, and nearly 7,000 total data, video, and voice revenue generating units. Our five-year price guarantee card introduced in the second half of 2025 continues to drive interest and is supported by the expansion of our door-to-door sales channel. Over the past 12 months, we've added approximately 24,000 new data customers and more than 26,000 total RGUs. Total Glowfiber revenue generating units surpassed 117,000 in the second quarter, up 30% compared to the prior year. Moving to slide seven, second quarter construction was strong with more than 26,000 passings added, bringing the total to more than 475,000. Penetration rose to 21.1%, 20 basis point increase over the first quarter and a 93 basis point increase year over year. Penetration trends across our Glowfiber cohorts are shown on slide eight and reflect blended penetration rates for both residential and small and medium business passings. We're expecting data penetration rates of approximately 37% five to seven years after launching a market. Our most mature cohorts launched during the two years ending in the third quarter of 2021 have surpassed the five-year mark and currently average 35% penetration, providing confidence in our ability to reach our objective. In addition to providing the fastest speeds in our markets, we continue to focus on providing outstanding local customer service. As shown on slide 9, our average monthly churn was 1.21% in the second quarter, which continues to be among the best in the industry. As expected, seasonal customer move activity was elevated during the quarter. Almost half of our churn, or approximately 59 basis points, was driven by customers relocating. Included in that figure are 13 basis points associated with customers who transferred their Glowfiber service to a new address. We saw virtually no low-fiber churn to satellite providers during the quarter. Broadband data average revenue per user for the second quarter was down slightly sequentially year over year to just under $77. We continue to have success selling up the rate card and differentiating our offerings through faster speeds than our cable competitors. Customer demand for higher speed products remain strong, with more than 80% of new residential customers in the second quarter selecting speeds of one gig or higher, including nearly 19% choosing two gig service and almost 5% choosing five gig service. Our commercial fiber business is highlighted on slide 10. In the second quarter, incremental monthly sales bookings exceeded 180,000, driven by strong demand across commercial and enterprise customers, including wireless carriers, wholesale customers, and school systems. Our service delivery team had a strong quarter, installing 209,000 in new monthly revenue, and the exceptional customer support from our sales and network operations teams kept average monthly compression and disconnect churn very low at 0.4%. Turning to slide 11, we ended the second quarter with more than 110,000 broadband data customers in our incumbent broadband markets, a modest decline of less than 1% year over year. While total RGUs declined at a faster rate, the decrease was largely attributable to expected video subscriber losses as consumers continued the industry-wide shift towards streaming services. Total broadband passings in our incumbent markets increased slightly quarter over quarter, and we expect to complete approximately 1,100 additional government subsidized fiber passings in the second half of 2026, primarily in West Virginia. As shown on slide 12, our recently constructed subsidized passings represent a strong growth opportunity for our incumbent markets and data penetration has exceeded 40% within 18 months of a neighborhood launch. The average penetration of our 2023 cohorts is over 59%, with the oldest cohort reaching more than 72%. We've already achieved an aggregate penetration of 40% across 23,000 subsidized passes. Moving to slide 13, broadband data monthly churn increased modestly in the second quarter to 1.73%. The increase was driven by a combination of normal seasonal move activity, wired broadband competition across roughly 35% of our passings, and softer demand in rural markets with weaker demographics as inflation continues to pressure household budgets. Customer moves contributed 65 basis points of churn, including 23 basis points associated with customer transfers to another Shentel service address. The impact from satellite competition declined from the first quarter and remained a relatively small contributor to churn. We saw further improvement in June and will continue to monitor competitive activity across all technologies. Broadband data ARPU declined 2.6% year over year to $81. As we previously disclosed, we introduced a more competitive rate card a few years ago in markets where we face wired broadband competition. Those markets drove about a 1% decline in ARPU, consistent with recent quarters. Late in the first quarter, we introduced a new rate card in our rural markets where demographics are weaker and demand was softer. The pricing change reduced ARPU by an additional 1.6%, but it has already improved the satellite-related churn we saw in the first quarter. We expect a new pricing strategy to drive higher growth SADs and further churn improvement over the coming quarters. Overall, we believe these changes will maximize long-term revenue by balancing subscriber growth, retention, and ARPU. I'll now turn the call over to Jim to walk you through our second quarter 2026 financial results.