Cable One Q1 Earnings: EPS Beats Estimates, but Revenue Slump Weighs on Shares
Cable One (NYSE:CABO) reported its first-quarter 2026 results after the bell on Thursday, delivering a bottom-line beat that was overshadowed by a revenue miss. The company’s stock is trading down roughly 3.8% in after-market trading as investors digest a 7.3% year-over-year drop in sales driven by continued subscriber losses in its residential data and video segments.
Earnings vs. Estimates
The headline numbers presented a mixed picture when compared to Wall Street expectations.
- Earnings Per Share (Non-GAAP): Reported at $6.12, exceeding the analyst consensus estimate of $5.70 by roughly 7.4%.
- Revenue: Came in at $352.96 million, falling short of the consensus estimate of $366.78 million. This represents a $13.8 million miss.
The revenue miss is the primary factor driving the negative after-market reaction, as it underscores the ongoing competitive and secular challenges the cable operator faces.
Key Operating Metrics
The decline in profitability metrics was also a focal point, even as net income saw a sharp increase due to one-time items.
- Revenues: Total revenues dropped 7.3% year-over-year to $353.0 million.
- Residential data revenue fell 5.1% to $213.6 million, driven by a decline in subscribers.
- Residential video revenue plunged 19.8% to $40.8 million, primarily due to subscriber losses.
- Business data revenue decreased 1.8% to $56.3 million.
- Net Income: Soared to $35.8 million from $2.6 million in the prior year quarter. This was largely due to a $26.6 million gain on the sale of fiber-to-the-tower contract rights and lower equity investment losses.
- Adjusted EBITDA: Fell 9.6% to $183.3 million, with the Adjusted EBITDA margin compressing to 51.9% from 53.3% in Q1 2025.
- Cash Flow: Adjusted EBITDA less capital expenditures—a key liquidity measure—declined 12.7% to $114.9 million.
- Balance Sheet: The company paid down $90.6 million in debt during the quarter, including repurchases of senior notes and term loan prepayments. The net debt leverage ratio remains a key area for management focus.
Management Commentary
In his first earnings call as CEO, Jim Holanda attempted to strike a forward-looking tone. “What’s become clear to me early on is that Cable One has all the right building blocks in place, including a resilient business model, a high-capacity network, strong local market positions and the ability to generate meaningful cash flow,” Holanda said. He emphasized a shift in operational focus: “Our focus now is on sharpening execution across the business, particularly in how we go to market, retain customers and simplify our product offering.”
Outlook vs. Analyst Estimates
The press release did not provide specific quantitative guidance for the second quarter or the full fiscal year 2026.
For context, Wall Street is currently modeling the following:
- Q2 2026 Sales: $363.85 million
- Full Year 2026 Sales: $1.493 billion
Given the Q1 revenue miss and the lack of formal guidance, the market is left to assess whether the current operational trends—specifically the 2.8% sequential decline in residential data revenue—will persist or stabilize.
Market Reaction
The 3.8% after-market decline suggests that the revenue shortfall is the dominant takeaway for traders. While the EPS beat provides a cushion, the market is pricing in concern over the company’s ability to stabilize its top line amid intense competition from fiber and fixed wireless providers. The stock’s performance in the coming weeks will likely hinge on management’s ability to demonstrate progress on subscriber retention and revenue stabilization.
Dig Deeper into the Data
For a comprehensive look at Cable One’s historical earnings performance, future projections, and analyst estimates, visit the dedicated earnings and forecast pages.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult with a qualified financial professional before making any investment decisions.