Shenandoah Telecommunications Co: Form 10-Q for the period ended Jun 30, 2025
Filed with the SEC on Jul 31, 2025 and accepted by EDGAR at Jul 31, 2025, 16:08 ET.
Management's discussion and analysis
As filed, 28,111 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
The following management’s discussion and analysis includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “will,” “should,” “could” or “plan” and similar expressions as they relate to Shenandoah Telecommunications Company or its management are intended to identify these forward-looking statements. All statements regarding Shenandoah Telecommunications Company’s expected future financial position, operating results and cash flows, business strategy, financing plans, forecasted trends relating to the markets in which Shenandoah Telecommunications Company operates and similar matters are forward-looking statements. We cannot assure you that the Company’s expectations expressed or implied in these forward-looking statements will turn out to be correct. The Company’s actual results could be materially different from its expectations because of various factors, including, but not limited to, those discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2024 (“2024 Form 10-K”). The forward-looking statements included in this Form 10-Q are made only as of the date of the statement. We undertake 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.
The following management’s discussion and analysis should be read in conjunction with the Company’s 2024 Form 10-K, including the consolidated financial statements and related notes included therein.
Overview
Shenandoah Telecommunications Company (“Shentel”, “we”, “our”, “us”, or the “Company”) is a provider of a comprehensive range of broadband communication services in eight contiguous states in the eastern United States.
Recent Developments
Asset Purchase Agreement
The Company executed an Asset Purchase Agreement in April 2025 to acquire fiber-to-the-home (“FTTH”) assets and operations of a fiber business based in Virginia for $5 million, including passings over 1,500 homes and businesses with approximately 700 customers in Virginia. The Company completed the acquisition on July 9, 2025.
Amendment No. 4 to Credit Agreement
On April 16, 2025, Shentel entered into Amendment No. 4 to Credit Agreement (the “Fourth Amendment”) to the Company’s existing Credit Agreement, dated as of July 1, 2021, with various financial institutions party thereto (the “Lenders”) and CoBank, ACB, as administrative agent for the Lenders (as previously amended by Amendment No. 1 to Credit Agreement, dated as of May 17, 2023, the Consent and Amendment No. 2 to Credit Agreement, dated October 24, 2023, and the Amendment No. 3 to Credit Agreement, Incremental Term Loan Funding Agreement, Joinder and Assignment and Assumption, dated as of April 1, 2024, the “Credit Agreement”).
The Credit Agreement consists of: (i) a $150 million available revolving credit facility due July 1, 2026 (the “Revolver”), (ii) a $150 million delayed draw amortizing term loan due July 1, 2026 (“Term Loan A-1”), (iii) a $150 million delayed draw amortizing term loan due July 1, 2028, and (iv) a $225 million delayed draw amortizing term loan due July 1, 2028. Pursuant to the Fourth Amendment, the maturity date of the Revolver and Term Loan A-1 were extended to July 1, 2027. Additionally, the Fourth Amendment increased the maximum Total Net Leverage Ratio (as defined in the Credit Agreement) permitted as of the last day of any fiscal quarter to 4.75:1.00.
H.R.1 - 119th Congress (2025-2026)
On July 4, 2025, H.R.1 was signed into law and includes numerous changes to existing tax law, including provisions providing current deductibility of certain property additions and limitations on interest deductions based on a tax EBITDA framework. These provisions are generally effective beginning in 2025, and we currently anticipate they will partially defer our income tax payments in future years and will not have a material impact on our effective tax rate. Management continues to review the H.R.1 tax provisions to assess impacts to our consolidated financial statements.
Results of Operations
Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024
The Company’s consolidated results from operations are summarized as follows:
($ in thousands)
| External revenue | Three Months Ended June 30, 2025 | % of Revenue | 2024 | % of Revenue | Change $% | |
|---|---|---|---|---|---|---|
| Residential & SMB - Incumbent Broadband Markets | $42,837 | 48.4% | $44,243 | 51.6% | $(1,406) | (3.2)% |
| Residential & SMB - Glo Fiber Expansion Markets | 19,796 | 22.4% | 14,093 | 16.4% | 5,703 | 40.5% |
| Commercial Fiber | 19,483 | 22.0% | 20,723 | 24.2% | (1,240) | (6.0)% |
| RLEC & Other | 6,452 | 7.3% | 6,740 | 7.9% | (288) | (4.3)% |
| Total revenue | 88,568 | 100.0% | 85,799 | 100.0% | 2,769 | 3.2% |
| Operating expenses | ||||||
| Cost of services | 32,624 | 36.8% | 34,541 | 40.3% | (1,917) | (5.5)% |
| Selling, general and administrative | 29,743 | 33.6% | 30,239 | 35.2% | (496) | (1.6)% |
| Restructuring, integration and acquisition | 206 | 0.2% | 11,325 | 13.2% | (11,119) | (98.2)% |
| Depreciation and amortization | 35,103 | 39.6% | 25,579 | 29.8% | 9,524 | 37.2% |
| Total operating expenses | 97,676 | 110.3% | 101,684 | 118.5% | (4,008) | (3.9)% |
| Operating loss | (9,108) | (10.3)% | (15,885) | (18.5)% | 6,777 | (42.7)% |
| Other (expense) income: | ||||||
| Interest expense | (6,003) | (6.8)% | (3,996) | (4.7)% | (2,007) | 50.2% |
| Other income, net | 3,015 | 3.4% | 1,908 | 2.2% | 1,107 | 58.0% |
| Loss from continuing operations before income taxes | (12,096) | (13.7)% | (17,973) | (20.9)% | 5,877 | (32.7)% |
| Income tax benefit | (3,048) | (3.4)% | (5,200) | (6.1)% | 2,152 | (41.4)% |
| Loss from continuing operations | (9,048) | (10.2)% | (12,773) | (14.9)% | 3,725 | (29.2)% |
| Loss from discontinued operations, net of tax | — | —% | (99) | (0.1)% | 99 | (100.0)% |
| Net (loss) income | (9,048) | (10.2)% | (12,872) | (15.0)% | 3,824 | (29.7)% |
| Dividends on redeemable noncontrolling interest | 1,497 | 1.7% | — | —% | 1,497 | —% |
| Net loss attributable to common shareholders | $(10,545) | (11.9)% | $(12,872) | (15.0)% | $2,327 | (18.1)% |
Shentel updated the presentation of certain Residential & SMB - Incumbent Broadband Market, Commercial Fiber and RLEC & Other revenues for the prior year to conform with changes in how management currently views these lines of business.
Residential & SMB - Incumbent Broadband Markets revenue
Revenue from residential and small and medium business (“SMB”) customers in Incumbent Broadband Markets are primarily earned through the Company’s provision of data, video and voice services over primarily hybrid fiber coaxial (“HFC”) cable and to a lesser extent FTTH networks in incumbent markets.
Residential & SMB - Incumbent Broadband Markets revenue decreased by $1.4 million, or 3.2%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024 primarily due to lower video revenue driven by a 14.5% decline in video revenue generating units (“RGUs”).
Residential & SMB - Glo Fiber Expansion Markets revenue
Revenue from residential and SMB customers in Glo Fiber Expansion Markets are primarily earned through the Company’s provision of data, video and voice services over FTTH networks in new greenfield expansion markets.
Residential & SMB - Glo Fiber Expansion Markets revenue increased by $5.7 million, or 40.5%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024 primarily due to a 43.1% year-over-year growth in data RGUs driven by the Company’s increase in data penetration rate and increase in passings.
Commercial Fiber revenue
Revenue from Commercial Fiber customers is primarily earned through the Company’s provision of high-speed Ethernet, wavelength, dark fiber leasing and managed services over fiber optic networks.
Commercial Fiber revenue decreased by $1.2 million, or 6.0%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024 primarily due to $0.8 million in non-cash deferred revenue adjustments and $0.9 million in early termination fees earned in the prior year. Excluding these variances, Commercial Fiber revenue grew 2.7% over the prior period 2024.
RLEC & Other revenue
Shentel’s RLEC & Other revenue is primarily earned through the Company’s provision of voice and digital subscriber line (“DSL”) telephone services over copper networks primarily in Shenandoah County, Virginia and Ross County, Ohio. Shentel also earns governmental support revenue through the federal Universal Service Fund.
RLEC & Other revenue decreased by $0.3 million, or 4.3%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024 primarily due to a 20.5% decline in DSL RGUs and 38% decline in switched access revenue, partially offset by an increase in governmental support revenue.
Cost of services
Cost of services primarily consist of costs to acquire and deliver video programming, internal labor to maintain our network and service our customers, maintenance and third party network line expenses.
Cost of services decreased by $1.9 million, or 5.5%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024 due to decreases in network payroll, line and programming costs.
Selling, general and administrative
Selling, general and administrative expenses consist of employee compensation, advertising, software maintenance, stock-based compensation, and operating taxes.
Selling, general and administrative expense decreased by $0.5 million, or 1.6%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024 due to decreases in professional fees and software maintenance costs, partially offset by an increase in property taxes.
Restructuring, integration and acquisition
Restructuring, integration and acquisition expense decreased by $11.1 million, or 98.2%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024. Restructuring, integration and acquisition expense in 2024 related primarily to costs incurred to effect the Company’s acquisition (the “Horizon Transaction”) of Horizon Acquisition Parent LLC (“Horizon”) and integration costs during the post-acquisition period.
Depreciation and amortization
Depreciation and amortization increased by $9.5 million, or 37.2%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024 due to the Company’s expansion of its Glo Fiber network and a $4.2 million write-off of plant under construction inventory assets no longer expected to be used.
Interest expense
Interest expense increased by $2.0 million, or 50.2%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024 due to an increase in the Company’s outstanding debt.
Other income, net
Other income, net increased by $1.1 million, or 58.0%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024 due to a favorable settlement of the Horizon acquisition related escrow claim.
Income tax benefit
Income tax benefit decreased by $2.2 million, or 41.4%, in the three months ended June 30, 2025 compared with the three months ended June 30, 2024 due to lower pre-tax loss in the current period.
Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024
The Company’s consolidated results from operations are summarized as follows:
($ in thousands)
| External revenue | Six Months Ended June 30, 2025 | % of Revenue | 2024 | % of Revenue | Change $% | |
|---|---|---|---|---|---|---|
| Residential & SMB - Incumbent Broadband Markets | $86,196 | 48.8% | $88,047 | 56.8% | $(1,851) | (2.1)% |
| Residential & SMB - Glo Fiber Expansion Markets | 38,240 | 21.7% | 26,211 | 16.9% | 12,029 | 45.9% |
| Commercial Fiber | 39,095 | 22.2% | 30,706 | 19.8% | 8,389 | 27.3% |
| RLEC & Other | 12,935 | 7.3% | 10,083 | 6.5% | 2,852 | 28.3% |
| Total revenue | 176,466 | 100.0% | 155,047 | 100.0% | 21,419 | 13.8% |
| Operating expenses | ||||||
| Cost of services | 65,654 | 37.2% | 60,526 | 39.0% | 5,128 | 8.5% |
| Selling, general and administrative | 60,735 | 34.4% | 58,217 | 37.5% | 2,518 | 4.3% |
| Restructuring, integration and acquisition | 716 | 0.4% | 11,943 | 7.7% | (11,227) | (94.0)% |
| Depreciation and amortization | 64,561 | 36.6% | 43,022 | 27.7% | 21,539 | 50.1% |
| Total operating expenses | 191,666 | 108.6% | 173,708 | 112.0% | 17,958 | 10.3% |
| Operating loss | (15,200) | (8.6)% | (18,661) | (12.0)% | 3,461 | (18.5)% |
| Other (expense) income: | ||||||
| Interest expense | (10,895) | (6.2)% | (8,072) | (5.2)% | (2,823) | 35.0% |
| Other income, net | 3,748 | 2.1% | 3,644 | 2.4% | 104 | 2.9% |
| Loss from continuing operations before income taxes | (22,347) | (12.7)% | (23,089) | (14.9)% | 742 | (3.2)% |
| Income tax benefit | (4,167) | (2.4)% | (6,226) | (4.0)% | 2,059 | (33.1)% |
| Loss from continuing operations | (18,180) | (10.3)% | (16,863) | (10.9)% | (1,317) | 7.8% |
| Income from discontinued operations, net of tax | — | —% | 218,687 | 141.0% | (218,687) | NMF |
| Net (loss) income | (18,180) | (10.3)% | 201,824 | 130.2% | (220,004) | NMF |
| Dividends on redeemable noncontrolling interest | 2,969 | 1.7% | — | —% | 2,969 | NMF |
| Net loss attributable to common shareholders | $(21,149) | (12.0)% | $201,824 | 130.2% | $(222,973) | NMF |
Shentel updated the presentation of certain Residential & SMB - Incumbent Broadband Markets, Commercial Fiber and RLEC & Other revenues in the prior year to conform with changes in how management currently views these lines of business.
Additionally, Shentel acquired Horizon on April 1, 2024 and consequently, results for the six months ended June 30, 2024 included three months of Horizon revenue, whereas the comparable six months ended June 30, 2025 included six months of Horizon revenue. Information below includes the results of the acquired Horizon markets during the first three months of 2025 and explanations of the remaining change.
Residential & SMB - Incumbent Broadband Markets revenue
Residential & SMB - Incumbent Broadband Markets revenue decreased by $1.9 million, or 2.1%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024. Shentel recognized $1.7 million of revenues earned in the acquired Horizon markets during the first three months of 2025. The remaining decrease of $3.6 million was primarily due to lower video revenue driven by a 14.5% decline in video RGUs.
Residential & SMB - Glo Fiber Expansion Markets revenue
Residential & SMB - Glo Fiber Expansion Markets revenue increased by $12.0 million, or 45.9%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024. Shentel recognized $0.7 million of revenues earned in the acquired Horizon markets during the first three months of 2025. The remaining increase of $11.3 million was primarily due to a
43.1% year-over-year growth in data RGUs driven by the Company’s increase in data penetration rate and increase in passings.
Commercial Fiber revenue
Commercial Fiber revenue increased by $8.4 million, or 27.3%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024. Shentel recognized $9.9 million of revenues earned in the acquired Horizon markets during the first three months of 2025. The remaining decrease of $1.5 million was primarily due to less early termination fees and non-cash deferred revenue adjustments.
RLEC & Other revenue
RLEC & Other revenue increased by $2.9 million, or 28.3%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024. Shentel recognized $2.9 million of revenues earned in the acquired Horizon markets during the first three months of 2025.
Cost of services
Cost of services increased by $5.1 million, or 8.5%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024. Shentel incurred $7.6 million of cost of services in the acquired Horizon markets during the first three months of 2025. The remaining decrease of $2.5 million was due to decreases in network payroll, line, and programming costs.
Selling, general and administrative
Selling, general and administrative expense increased by $2.5 million, or 4.3%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024. Shentel incurred $3.2 million of selling, general and administrative costs in the acquired Horizon markets during the first three months of 2025. The remaining decrease of $0.7 million due to decreases in professional fees and bad debt expenses, partially offset by increases in property taxes and marketing and selling payroll.
Restructuring, integration and acquisition
Restructuring, integration and acquisition expense decreased by $11.2 million, or 94.0%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024. Restructuring, integration and acquisition expense in 2024 related primarily to costs incurred to effect the Horizon Transaction and integration of costs during the post-acquisition period.
Depreciation and amortization
Depreciation and amortization increased by $21.5 million, or 50.1%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024. Shentel incurred $9.2 million of depreciation and amortization related to the tangible and intangible assets acquired in the Horizon Transaction during the first three months of 2025. The remaining increase of $12.3 million was due to the Company’s expansion of its Glo Fiber network and a $4.2 million write-off of plant under construction inventory assets no longer expected to be used.
Interest expense
Interest expense increased by $2.8 million, or 35.0%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024 due to an increase in the Company’s outstanding debt.
Other income, net
Other income, net increased by $0.1 million, or 2.9%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024 due to a favorable settlement of the Horizon acquisition related escrow claim, partially offset by higher interest income earned in the prior year.
Income tax benefit
Income tax benefit decreased by $2.1 million, or 33.1%, in the six months ended June 30, 2025 compared with the six months ended June 30, 2024 due to lower pre-tax loss in the current period and higher excess tax benefits derived from vesting of restricted stock.
Additional Information
Shentel provides broadband internet, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania, Kentucky, Delaware, Ohio and Indiana, via fiber optic and hybrid fiber coaxial cable networks. We also lease dark fiber and provide Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. Shentel’s Broadband business also provides voice and DSL telephone services as a Rural Local Exchange Carrier (“RLEC”) to customers in Shenandoah County and portions of adjacent counties in Virginia, and in Ross County and portions of adjacent counties in Ohio. These integrated networks are connected by over 17,700 route miles of fiber.
The following table indicates selected operating statistics. Shentel updated the presentation of certain revenues and voice RGUs in the prior year to conform with changes in how management views these lines of business. This reclassification resulted in updated Average Revenue per User (“ARPU”) and voice RGUs for the prior period.
| Homes and businesses passed (1) | Three Months Ended June 30, 2025 | 2024 |
|---|---|---|
| Incumbent Broadband Markets | 244,007 | 232,531 |
| Glo Fiber Expansion Markets | 378,916 | 297,545 |
| Total homes and businesses passed | 622,923 | 530,076 |
| Residential & SMB RGUs: | ||
| Incumbent Broadband Markets | 111,730 | 111,256 |
| Glo Fiber Expansion Markets | 76,276 | 53,285 |
| Broadband Data | 188,006 | 164,541 |
| Video | 37,626 | 42,079 |
| Voice | 26,129 | 24,848 |
| Total Residential & SMB RGUs (excludes RLEC) | 251,761 | 231,468 |
| Residential & SMB Penetration (2) | ||
| Incumbent Broadband Markets | 45.8% | 47.8% |
| Glo Fiber Expansion Markets | 20.1% | 17.9% |
| Broadband Data | 30.2% | 31.0% |
| Video | 6.0% | 7.9% |
| Voice | 4.4% | 4.9% |
| Residential & SMB ARPU (3) | ||
| Incumbent Broadband Markets | $83.05 | $83.49 |
| Glo Fiber Expansion Markets | $76.72 | $77.56 |
| Broadband Data | $80.56 | $81.64 |
| Video | $125.15 | $116.96 |
| Voice | $32.68 | $35.21 |
| Fiber route miles | 17,740 | 16,029 |
| Total fiber miles (4) | 1,936,922 | 1,798,211 |
(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 users by the number of passings or available homes, as appropriate.
(3) ARPU calculation = (Residential & SMB Revenue) / average RGUs / 3 months.
(4) 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.
Financial Condition, Liquidity and Capital Resources
Sources and Uses of Cash: The Company’s principal sources of liquidity are our cash and cash equivalents, cash generated from operations, government grants and borrowings under our credit agreement, which contains a $150 million revolving credit facility (the “Revolver”) and $525 million in delayed draw amortizing term loans (the “Term Loans” and collectively with the Revolver, the “Credit Agreement”).
In 2021, Congress passed the American Rescue Plan Act and the Infrastructure Investment and Jobs Act to subsidize the deployment of high-speed broadband internet access in unserved areas. We have been awarded approximately $151.1 million in grants to serve approximately 27,100 unserved homes in the states of Virginia, Ohio, Maryland and West Virginia and to upgrade the capacity of the Ohio middle mile network. The grants will be paid to the Company as certain milestones are completed. As of June 30, 2025, the Company had $94.6 million in grants available. The Company expects to fulfill the majority of its obligations under these programs by 2026.
As of June 30, 2025, the Company’s total available liquidity was $266.7 million, consisting of (i) cash and cash equivalents totaling $29.1 million; (ii) $143.0 million of availability under the Company’s revolving credit facility; and (iii) an aggregate of $94.6 million remaining reimbursements available under government grants, which reimbursements are subject to fulfilling the terms of the underlying agreements.
Net cash provided by operating activities from continuing operations was approximately $43.7 million during the six months ended June 30, 2025, representing an increase of $20.5 million compared with the prior year period, primarily driven by increases in revenue and timing of changes in working capital.
Net cash used in investing activities from continuing operations was approximately $151.9 million during the six months ended June 30, 2025, representing a decrease of $337.0 million compared with the prior year period, primarily driven by a $347.1 million decrease in cash disbursed for acquisitions and a $9.6 million increase in cash receipts from government grant programs, partially offset by a $18.5 million increase in capital expenditures driven by expansion of Glo Fiber and government-subsidized markets.
Net cash provided by financing activities from continuing operations was approximately $93.2 million during the six months ended June 30, 2025, representing an increase of $23.3 million compared with the prior year period, primarily driven by an increase of $100.0 million in borrowings under the Term Loans, partially offset by a decrease in proceeds from equity issuances and a $2.3 million increase in principal payments on long-term debt.
Indebtedness: As of June 30, 2025, the Company’s net indebtedness was approximately $511.8 million, including $513.1 million in outstanding Term Loans, net of unamortized loan fees of $1.3 million. The borrowed amounts bear interest at a variable rate determined by one-month term SOFR, plus a margin based on net leverage. The weighted-average interest rate for the Term Loans was 6.97% at June 30, 2025.
Shentel’s Term Loans, which consist of Term Loan A-1, Term Loan A-2 and Term Loan A-3, have outstanding balances of $140.9 million, $147.8 million and $224.4 million, respectively. The Term Loans require quarterly payments based on a percentage of the outstanding balance. On April 16, 2025, Shentel amended the Credit Agreement (the “Fourth Amendment”) to extend the maturity date of the Revolver and Term Loan A-1 to July 1, 2027. Both Term Loan A-2 and Term Loan A-3 mature on July 1, 2028.
Refer to Note 9, Debt, in the Company’s unaudited condensed consolidated financial statements for more information about the Credit Agreement.
The Fourth Amendment of Shentel’s Credit Agreement also amended certain covenant provisions, including increasing the maximum Total Net Leverage Ratio (as defined in the Credit Agreement) permitted as of the last day of any fiscal quarter to 4.75:1.00. As of June 30, 2025, the Company was in compliance with the financial covenants in our Credit Agreement.
We expect our cash on hand, cash flows from continuing operations, and availability of funds from our Credit Agreement as well as government grants will be sufficient to meet our anticipated liquidity needs for business operations for the next twelve months. There can be no assurance that we will continue to generate cash flows at or above current levels.
During the six months ended June 30, 2025, our capital expenditures of $169.4 million exceeded our net cash provided by operating activities of continuing operations by $125.7 million, and we expect our capital expenditures to exceed the cash flows provided from continuing operations through 2026, as we expand our Glo Fiber broadband network.
The actual amount and timing of our future capital requirements may differ materially from our estimates depending on the demand for our products and services, new market developments and expansion opportunities.
Our cash flows from operations could be adversely affected by events outside our control, including, without limitation, changes in overall economic conditions including rising inflation, changes in tariffs, 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. Our ability to attract and maintain a sufficient customer base is critical to our ability to maintain positive cash flows from operations. The foregoing events individually or collectively could affect our results.
Critical Accounting Policies
There have been no material changes to the critical accounting policies previously disclosed in Part II, Item 8 of our 2024 Form 10-K for the year ended December 31, 2024.
Market risk
As filed, 1,195 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
We have borrowed a total of $525 million pursuant to the variable rate delayed draw Term Loans available under the Credit Agreement. As of June 30, 2025, Shentel has borrowed the full amount available under our Term Loans A-1, A-2 and A-3.
As of June 30, 2025, the Company had $513.1 million of gross variable rate debt outstanding. The weighted-average interest rate was 6.97% for the Term Loans at June 30, 2025. An increase in market interest rates of 1.00% would add approximately $5.1 million to annual interest expense.
Shentel has pay fixed, receive variable interest rate swaps totaling $150.0 million of notional principal (the “Swaps”). The Swaps contain monthly payment terms that became effective in May 2024 which extend through their maturity dates in June 2026. The Swaps are designated as cash flow hedges, representing 50% of the Company’s Term Loan A-1 and A-2 outstanding debt. The Company uses the Swaps to manage its exposure to interest rate risk for a portion of its long-term variable-rate Term Loans through interest rate swaps. Shentel effectively pays a fixed weighted-average interest rate of 2.90%, prior to interest rate margin provided under our credit facility.
Controls and procedures
As filed, 838 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial and Principal Accounting Officer (the certifying officers) have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2025. Our certifying officers concluded that our disclosure controls and procedures were effective as of June 30, 2025.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Risk factors
As filed, 407 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
We discuss in our Annual Report on Form 10-K various risks that may materially affect our business. We use this section to update this discussion to reflect material developments since our Form 10-K was filed. As of June 30, 2025, the Company has identified one additional risk factor related to potential cost pressures associated with tariffs as presented in the Financial Condition and Liquidity section.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2025-06-30. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2025-04-01 to 2025-06-30 | $88.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months2025-01-01 to 2025-06-30 | $176.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Selling, general and administrative | 3 months2025-04-01 to 2025-06-30 | $29.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months2025-01-01 to 2025-06-30 | $60.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months2025-04-01 to 2025-06-30 | −$9.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months2025-01-01 to 2025-06-30 | −$15.2m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months2025-04-01 to 2025-06-30 | $6.0m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months2025-01-01 to 2025-06-30 | $10.9m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months2025-04-01 to 2025-06-30 | −$3.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months2025-01-01 to 2025-06-30 | −$4.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 6 months2025-01-01 to 2025-06-30 | −$18.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2025-04-01 to 2025-06-30 | −$0.19 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months2025-01-01 to 2025-06-30 | −$0.38 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2025-04-01 to 2025-06-30 | −$0.19 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months2025-01-01 to 2025-06-30 | −$0.38 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2025-04-01 to 2025-06-30 | 55,103,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months2025-01-01 to 2025-06-30 | 55,032,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months2025-01-01 to 2025-06-30 | $41.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months2025-01-01 to 2025-06-30 | $169.4m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | At period end2025-06-30 | $29.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | At period end2025-06-30 | $83.4m | us-gaap:AssetsCurrent |
| Total assets | At period end2025-06-30 | $1.81bn | us-gaap:Assets |
| Current liabilities | At period end2025-06-30 | $114.9m | us-gaap:LiabilitiesCurrent |
| Long-term debt | At period end2025-06-30 | $501.6m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | At period end2025-06-30 | $10.2m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | At period end2025-06-30 | $902.0m | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0000354963-25-000210. Last ingested by Listed: Nov 2, 2026, 20:22 ET. Listed shows no prices and gives no investment advice.