Cable One Q2 commercial revenues grow amid economic pressures

Cable One is finding that business services continue to grow despite broader financial issues weighing on current businesses and the development of new business customers.

While business services revenues grew 0.2% to $76.7 million, total business service Primary Service Units (PSUs) declined 2.2% to 147,100.

Julie Laulis, president and CEO of Cable One, told investors during its second-quarter earnings call that “our business services growth story on the commercial side continues.” “On an adjusted basis, we drove business services revenue growth of 1.6% year-over-year despite inflationary pressures impacting the existing businesses as well as new business creation,” she said. “The business services team is focused on executing on areas within our span of control. And as a result, we are seeing strong demand in carrier, wholesale and enterprise customer segments.”

Balancing legacy declines The growth Cable One experienced in both residential and business broadband was offset by lower revenue in video and voice services.

Data services remain a big seller in Cable One’s residential and business segments. The company reported that residential and business data customers grew by about 20,500 or 4.4%.

Business services revenue grew by 1.6% for the comparable period on an adjusted basis. “Data services within our business services segment meaningfully outpaced this growth given business services, as reported, still include video and voice revenues, which have similar characteristics to that of our residential segment,” said Todd M. Koetje, CFO of Cable One.

Koetje said that while these results include both acquired and organic growth, they do not include the Metronet or Ziply assets where Cable One has “less significant investments.”

“We are pleased with the solid results of these companies, which are successfully providing fast and reliable broadband services to rural America and are run by some of the best business and financial leaders in our industry,” he said.

Targeted fiber expansions

As Cable One looks to meet business and wholesale carrier customer needs, the service provider is strategically extending its fiber network.

Laulis said that as the business team focuses on areas within its span of control, “we are seeing strong demand in carrier, wholesale and enterprise customer segments.”

This strategy has been paying off for Cable One.

It recently completed a $29 million network expansion project in Gila County, Arizona, which will bring service to 10 schools and eight libraries in the area. Initially announced in 2021, the network build extended its fiber network from Show Low to provide high-speed internet to communities across Gila County, including Payson, Heber-Overgaard, and Star Valley.

The project was made possible with funding from three agencies—MHA Foundation, Arizona Commerce Authority (ACA) and the Universal Service Administrative Company (USAC) eRate program. MHA Foundation and ACA provided $2 million and $1 million, while USAC provided an additional $17.5 million to expand its fiber network.

“At more than 200 route miles and nearly 29,000 fiber miles, much of it through solid granite, this is one of the largest single fiber e-rate construction projects executed by Sparklight,” Laulis said. “This project also brings fiber network presence into several underserved communities in Northern Arizona, where we will be able to offer both residential and business services in the future.”

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