Shenandoah Telecommunications (NASDAQ:SHEN) executives used the company’s fourth-quarter 2025 earnings call to emphasize continued execution of a “fiber-first” strategy, highlighting growth in its Glo Fiber expansion markets, improving revenue mix, and a debt refinancing intended to lower interest costs and extend maturities.
President and CEO Ed McKay said fiber-based lines of business surpassed incumbent broadband revenue in the fourth quarter, reflecting what he described as strong year-over-year growth in both Glo Fiber and commercial fiber. Management reiterated four strategic pillars: building on the company’s legacy operations, completing its fiber network expansion, accelerating growth, and positioning the business to “inflect to positive free cash flow in 2027.”
Fiber expansion progress and market economics
Shentel described its footprint as more than 19,000 fiber route miles across eight states and more than 679,000 total broadband passings. McKay said 88% of Glo Fiber passings are in duopoly markets with just one fixed broadband competitor, while 70% of passings in incumbent markets have no fixed broadband competitor.
However, the company also disclosed it has pulled back in certain Ohio markets due to rising aerial make-ready costs. McKay said the company opted to “pass on investments” where the cost to pass increased and returns would fall below its 15% hurdle rate, adding that all planned Glo Fiber markets have been launched and that 2026 priorities include adding passings in Virginia, Pennsylvania, Maryland, and Ohio despite the reduced targets.
Customer growth, penetration, and pricing strategy
Management reported continued customer additions. In the fourth quarter, Glo Fiber added 5,300 new customers and more than 6,000 total data, video, and voice revenue-generating units (RGUs). For full-year 2025, the company added about 23,000 customers and 26,000 RGUs. Glo Fiber data RGUs rose 35% in 2025 to 88,000, and total Glo Fiber RGUs surpassed 103,000 at year-end, up 33% from the prior year.
The company said the fourth quarter was its strongest construction period of the year, with more than 26,000 Glo Fiber passings completed. Penetration was 20.6%, flat sequentially but up 1.8 percentage points year-over-year. McKay noted that business passings represent about 8% of total passings and typically ramp more slowly than residential, though business customers generate data ARPU more than 40% higher than residential customers. He said early cohorts launched in 2019 and 2020 now average more than 37% data penetration.
Shentel highlighted customer satisfaction and churn metrics, citing a Net Promoter Score of 61 and average monthly churn of 1.01% in the fourth quarter and 1.07% for full-year 2025.
On pricing, management said broadband data ARPU in Glo Fiber markets rose to more than $77 in the fourth quarter, up 2.3% year-over-year. The company introduced new promotional rate plans midway through the third quarter offering higher speeds with a five-year price guarantee. With the plans available for a full quarter, management said more than 75% of new residential subscribers selected speeds of 1 gig or higher, including 20% choosing 2 gig service and 5% choosing 5 gig service. The company attributed fourth-quarter ARPU strength to a shift away from a “first month free” promotion and adoption of the five-year plans, while cautioning that it expects Glo Fiber data ARPU to decline about 1% over the next few quarters before stabilizing as the plans roll through the base.
In Q&A, the company said the five-year price guarantee was introduced in response to a large cable competitor that launched a similar offer. Management said it initially saw an impact on gross adds from that competitor’s move, but that launching Shentel’s own guarantee mitigated the effect. It also noted that a large cable competitor recently increased prices on its five-year guarantee in the first quarter of 2026.
Incumbent broadband and commercial fiber performance
In incumbent broadband markets, Shentel said it served about 112,000 broadband data customers at the end of 2025, up more than 600 year-over-year. Total data, voice, and video RGUs were more than 158,000, down 3% year-over-year, which management attributed primarily to video customers switching to streaming services. Total incumbent broadband passings grew to 252,000, up about 13,000, driven by government-subsidized construction in previously unserved areas.
Management said it has substantially completed construction and met grant obligations in Virginia and expects to finish the remaining 1,300 government-subsidized passings in West Virginia in 2026. It added that about 21% of incumbent broadband passings are now equipped with fiber-to-the-home technology. Shentel also reported data penetration exceeding 45% within six quarters of a neighborhood launch in these subsidized areas, with the first-quarter 2023 cohort reaching 61% penetration.
For commercial fiber, the company reported incremental monthly bookings exceeding $155,000 in the fourth quarter, in line with the prior-year period. It said that after record bookings in the first half of 2025, second-half bookings increased almost 9% compared with the second half of 2024. Service delivery installed $191,000 in new monthly revenue in the fourth quarter, while average monthly compression and disconnect churn was 0.6%.
Financial results, guidance, and refinancing
Senior Vice President and CFO Jim Volk reported fourth-quarter revenue grew 7.2% to $91.6 million, driven by $6.5 million (39%) growth in Glo Fiber expansion market revenue and a $2 million (10.8%) increase in commercial fiber revenue. Incumbent broadband market revenue declined $1.7 million, driven by lower video and data revenues tied to a 14.8% decline in video RGUs and a 2.4% decline in data ARPU, though broadband data subscribers grew 0.6% year-over-year.
Adjusted EBITDA increased $8 million, or 31.3%, to $33.5 million, which the company attributed to revenue growth and $1.8 million in lower expenses from Horizon synergy savings, higher capitalized labor during a strong construction quarter, and lower bad debt. Adjusted EBITDA margin expanded 670 basis points to 36.5%. Volk said the company expects adjusted EBITDA margin to decline slightly in the first half of 2026 before expanding again in the second half.
For 2026, Shentel guided to:
- Revenue: $370 million to $377 million
- Adjusted EBITDA: $131 million to $136 million
- CapEx net of grant reimbursements: $220 million to $250 million
Volk said the company invested $359 million in capital expenditures in 2025 and collected $63 million in government grants, for net CapEx of $296 million. He said Shentel has completed construction of 84% of target Glo Fiber passings and 94% of target incumbent government grant passings. Capital intensity, he added, declined from 91% in 2024 to 83% in 2025, and is expected to fall to a range of 59% to 67% in 2026 based on guidance.
The company also detailed a December refinancing that replaced its prior term loan and revolver with a hybrid structure including asset-backed securitization (ABS) notes and a separate revolving credit facility. Volk said the ABS portion includes $567 million of privately placed investment-grade notes due December 2030 with a weighted average interest rate of 5.69%, plus a $175 million variable funding note facility maturing December 2029 at SOFR plus 175 basis points. Shentel also established a new $175 million revolving credit facility maturing December 2030, with pricing tied to leverage. As of December 31, 2025, Shentel had $642 million of outstanding debt at a weighted average interest rate of 5.75%, compared with 7.47% under its prior credit facility, which Volk said should save about $11 million annually in cash interest based on current debt levels.
Workforce reduction and M&A posture
McKay addressed a February 23 workforce reduction of about 10% intended to align staffing with the planned completion of Glo Fiber construction. He said departures will be staggered through the end of 2026, with the largest impact in the fourth quarter. The company expects approximately $3.1 million in restructuring costs and anticipates annual savings of about $12.3 million starting in 2027, split evenly between operating expenses and capitalized labor.
In response to a question on potential industry consolidation, management said its near-term focus remains completing the build plan, accelerating customer growth, and reaching positive free cash flow in 2027. Looking further out, executives said Shentel would be most interested in a “pure play” fiber provider, less interested in cable, and not interested in copper assets.
About Shenandoah Telecommunications (NASDAQ:SHEN)
Shenandoah Telecommunications Company operates as a diversified communications provider offering both wireless and wireline services across rural markets in the Mid-Atlantic region. Headquartered in Edinburg, Virginia, the company designs, builds and maintains network infrastructure to deliver mobile connectivity, high-speed broadband access and related telecommunications solutions to residential, business and wholesale customers.
In its wireless segment, the company owns and operates a portfolio of cellular towers and associated spectrum under a long-term partnership with a national carrier.
