Cable One, Inc.

If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I'd now like to turn the call over to Jordan Moorquart, Vice President of Investor Relations. You may begin.

Good afternoon and welcome to Cable One's fourth quarter and year-end 2024 earnings call. We're glad to have you join us today. Before we proceed, I would 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 broadband revenue and customer growth, future cash flow, future ARPU, future levels of competition, growth in business data services, including carrier, wholesale, and enterprise market segments, the future capabilities of our network, anticipated benefits from AI, the timing and anticipated benefits of our unified billing system migration, capital expenditures, the purchase price payable if the MBI call or put option is exercised and MBI's anticipated indebtedness, our ability and sources of capital to fund the MBI call or put price, anticipated tax synergies, and our future financial performance, capital allocation policy, leverage ratios, and financing plans. You can find factors that could cause Cable 1'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 annual report on Form 10-K. Cable 1 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.cable1.net. Joining me on today's call is our president and CEO, Julie Lawless, and Todd Cucci, our CFO. With that, let me turn the call over to Julie.

Thank you, Jordan, and good afternoon, everyone. We appreciate you joining us for today's call. 2024 bore the first fruits of a phase plan that lays the groundwork for long-term balanced broadband growth. We kept residential subscribers relatively flat when excluding customer losses from the expiration of the affordable connectivity program and stabilized residential ARPU during the back half of the year as we indicated would happen. Continued rising demand across our carrier, enterprise, and wholesale segments also led to business broadband revenue growth. Our resulting free cash flow grew consistent with our prior statements And we also took significant steps to increase our financial flexibility in order to meet future obligations, especially those related to the potential purchase of the remainder of MBI. And we did all this in an environment of increasing competition. We also substantially completed rebranding the companies we've acquired in recent years, converted many of our customers to a unified billing system, and continue to implement several best in class technology platforms to accelerate our digital transformation and improve operational efficiency. Additionally, we reshaped our leadership team by adding new talent to our core of experienced proven leaders. Building on what I said during our last earnings call, we are confident that the hard work done in 2024 is setting a foundation that will help us grow broadband revenue and cash flow over the long term. Before Todd reviews our financial performance and the recent steps we've taken to strengthen our long-term financial outlook, I'd like to provide deeper insight into our approach to broadband growth, emphasize the strength of our network, and tell you about strategic initiatives we have undertaken. I want to reiterate that we are executing a phased plan for long-term growth and express my confidence that our steadfast, intentional approach will help us to continue to successfully navigate the competitive landscape while delivering a differentiated value proposition to our customers and shareholders. Turning to residential broadband growth, in the latter half of 2024, We concentrated on strengthening our customer acquisition engine by investing in the right people, platforms and processes. As we move into 2025, broadband revenue growth remains our top priority. Our approach will be market and segment specific, driving unit growth and ARPU expansion where appropriate, based on a variety of factors. As mentioned, Our fourth quarter ARPU remained stable on a sequential basis. Notably, gig sell-in rose 10% sequentially in the last quarter. ARPU benefited from this higher sell-in, as well as an increase in the sales of our Intelligent Wi-Fi product, our Secure Plus product, which provides customers enhanced cybersecurity protection, promotional roll-offs, and the loss of lower ARPU ACP customers as well as the continued successful implementation of our AutoPay Plus program. As it relates to units, we remain focused on growing and retaining our premium customers through a variety of personalized products and programs that will continue to provide best-in-class reliability along with great customer experience. For our value-conscious customers, our pay-as-you-go product continues to grow nicely. This product provides greater value than cell phone internet as it is easy to set up, has unlimited data even during busy times, and guaranteed speeds. Last quarter, over 30% of our pay-as-you-go customers signed up for speeds of 500 megs or greater, showing the need for such guaranteed speeds. I would like to take a minute to talk specifically about cell phone internet. We've reached the point where cell phone internet is available throughout almost all of our footprint. But this does not worry us. Our focus is on ensuring those weighing cell phone internet as an option choose a more reliable wireline option. Ours. Our customers have told us what they find most important when looking for internet. Unlimited access to data without the threat of being throttled a variety of guaranteed speeds to meet their needs and better reliability. Our product offers these key advantages, and we plan to target this customer segment in a way that expands our reach without cannibalizing our existing base. We are confident that we can and will win these customers. Business broadband also continues to be an important driver of our long-term growth strategy. with revenue up 2.6% year over year. Looking ahead to 2025, we are confident about the long-term growth of business data services. We expect to see strong, continued growth in our carrier, enterprise, and wholesale segments, with continued focus on maximizing revenue growth in our SMB market as well. Turning to competitive dynamics. We continue to believe that new competition from third-party overbuilders is moderating in our markets. While it is true that incumbent LECs continue to overbuild themselves with new fiber deployments in some of our markets, we've competed effectively against them for a long time and believe we will be able to do so going forward. We also believe that incumbent fiber builds reduce the chance of a new third party entering a given market, maintaining a two-party market where the long-term economics are favorable to us. We will continue to conduct and capitalize on learnings from trials in various markets so that we can compete effectively on our terms across our entire footprint. Turning to our network, I'd like to share more detail around why we believe it will be a long-term differentiator for Cable 1. We've traditionally talked about our network in terms of reliability and capacity. While both remain critical, they are now baseline expectations. Customers expect reliability, and they assume we will have the capacity to meet their needs. To differentiate ourselves in today's competitive landscape, we have been moving beyond these basics and focusing on how customers experience our network, remembering always that when we're serving our customers, we're also serving our neighbors. This means shifting from purely technical metrics to understanding how our services enhance our customers' lives and our continued emphasis on improving in-home experience is central to this strategy. As one example, accelerated deployment of our intelligent Wi-Fi, powered by Eero, delivers an exceptional customer experience. We see an increase in retention from customers with this service because of the superior internet service they receive. Additionally, Our customer-facing app offers valuable features like parental controls, enhanced security, and self-service troubleshooting, empowering users to manage their in-home network seamlessly. Beyond these visible benefits, our intelligent network tools allow us to collect real-time customer performance data, enabling us to not only measure when the network is performing well, but also predict and proactively address potential issues before they impact the customer. This is a significant shift in how we deliver service, moving from reactive to proactive support and is a key element of improving the overall customer experience and network resiliency. These tools help us to reduce churn, lower expenses, and create a competitive advantage as we attract and retain customers. Given how technology and customer expectations are evolving, questions like, how will you compete with fiber, miss the point. Not only is our network powered by fiber, but we already provide more speed and capacity than most customers require today. However, we fully understand that data demands will likely have step function growth over time, so our future investments will focus on two areas to meet their needs. expanding capacity to stay ahead of the demand curve, and enhancing the intelligence of our network. By integrating advanced data-driven insights and predictive capabilities, we're building a network that's not just reliable but adaptive, anticipating customer needs and leading to long-term growth in a highly capital-efficient way. Whether through our investments in multi-gig capabilities, intelligent Wi-Fi, or cybersecurity solutions, the reality is our network isn't just infrastructure. It's a catalyst for innovation, customer satisfaction, and business growth. Turning to our recent strategic initiatives, we have now migrated the acquired Fidelity, ValueNet, and Cable America operations onto our unified billing system, which will streamline operations for associates and improve the customer experience. This will help us accelerate the use of tailored customer acquisition platforms and product launches for these portions of our customer base throughout 2025 and beyond. We expect to complete the migration of all other customers this year, which, as we have noted previously, will yield us several million dollars in annual savings going forward. We also substantially completed the rebranding of our Fidelity, Hargrave, ValueNet and Cable America operations. Fourth quarter brand measurement surveys in our legacy markets show that our Sparklight brand achieves 100% needed awareness and over 85% of Sparklight customers have a very positive perception of the brand, the strongest brand perception we have recorded. It is exciting to see Sparklight uniforms, trucks, and advertisements throughout our footprint. Moreover, Consolidating all customers under a unified Sparklight brand supports growth by creating cost efficiencies and leveraging the strength of our well-established brand across our footprint. During 2025, we're excited to start our first fiber instant-on multiple dwelling unit trial, which will enable customers to activate new HSC service with multi-gig symmetrical speeds in minutes. We look forward to carrying out this trial and believe we will be able to expand it throughout our MDU footprint. Our data shows that customers on an intelligent Wi-Fi network experience higher satisfaction in turn at a much lower rate. Thus, we have focused on increasing adoption of our intelligent Wi-Fi solution, powered by Eero, throughout our customer base. We also saw the number of customers subscribing to SecurePlus Our product offering advanced cybersecurity features across the home increased by 25% in Q4 compared to Q3. As we discussed last quarter, Secure Plus costs $8 per month, and we believe this, in addition to our intelligent Wi-Fi deployment efforts, will enhance the customer experience and provide an additional tailwind for ARPU going forward. Transitioning to technological improvements, we're pleased to share that we are continuing to integrate AI into our business, enhancing customer experience, increasing operational efficiency, and helping us reduce churn. Simply put, AI is making a difference in the way we do work every day. We launched an AI model in the fourth quarter, which allows us to review 100% of call center contacts in minutes. providing real-time feedback on customer sentiment that assists our agents in delivering superior customer service. We also launched a project management tool with automation and AI built into the platform that has allowed us to streamline projects and complete them faster by identifying and reducing redundancies and roadblocks. Finally, we developed an internal AI tool which created a term propensity model for residential customers, allowing us to improve the accuracy of finding customers most likely to turn and lower costs by eliminating a third party model we were previously utilizing. This tool also contains a customer lifetime value model, which has already helped us reduce customer losses in competitive markets. Before turning it over to Todd, let me conclude by telling you that I am excited for our associates, customers, and shareholders in 2025. It reminds me of a sports team in the middle of a rebuild where success might seem sudden to outsiders, but those inside the locker room know it's the result of countless hours spent building culture, refining skills, and sticking to the plan. In the same way, The groundwork we've laid behind the scenes will start to show through in the form of smart, balanced, and sustainable growth. We'll keep pushing forward until we reach that goal. Todd will now provide a recap of our fourth quarter and full-year financial performance and further discuss our outlook for the future.