Shenandoah (SHEN) Q4 2025 Earnings Call Transcript

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DATE

Thursday, February 26, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Edward McKay
• Senior Vice President and Chief Financial Officer — James Volk

TAKEAWAYS

• Total Revenue -- $91.6 million, representing 7.2% growth, driven by Glo Fiber expansion and Commercial Fiber revenue.
• Glo Fiber Expansion Market Revenue -- Increased $6.5 million, or 39%, as data subscribers increased 37% and data ARPU grew 2%.
• Commercial Fiber Revenue -- Rose $2 million, or 10.8%, explained primarily by a negative deferred revenue adjustment in the prior-year quarter.
• Incumbent Broadband Revenue -- Decreased $1.7 million due to a 14.8% decline in video RGUs and a 2.4% drop in data ARPU from competitive pricing.
• Adjusted EBITDA -- Reached $33.5 million, an increase of 31.3%, driven by $6.2 million in revenue growth and $1.8 million in lower expenses from synergies, higher capitalized labor, and lower bad debt.
• Adjusted EBITDA Margin -- Expanded by 670 basis points to 36.5%, attributed to seasonality, higher capitalized labor from a strong quarter of fiber construction, lower compensation expenses, and nonrecurring bad debt adjustments.
• Glo Fiber Passings -- Closed the year at nearly 427,000, up by 81,000 annually; 26,000 added in the final quarter.
• Glo Fiber Data RGUs -- Surpassed 88,000, reflecting 35% growth; total Glo Fiber RGUs exceeded 103,000, or 33% higher.
• Glo Fiber Penetration -- Penetration was 20.6%, flat sequentially, but increased 1.8 percentage points year over year; earliest cohorts (2019-2020) exceed 37% penetration rate.
• Government-Subsidized Passings -- Doubled to 22,000, with aggregate penetration reaching 31% and select cohorts achieving 61% within six quarters.
• Broadband Data Churn — Glo Fiber -- Averaged 1.01% for the quarter and 1.07% for the year, supported by a Net Promoter Score of 61.
• Broadband Data ARPU — Glo Fiber Markets -- Exceeded $77 in the quarter, a 2.3% increase; management expects a temporary 1% ARPU decline next few quarters as 5-year price guarantee plans roll out.
• Incumbent Data Customers -- Ended at about 112,000, increasing by over 600 year over year.
• Incumbent RGUs -- Concluded at more than 158,000, a 3% year-over-year drop due to video subscriber losses.
• Incumbent Broadband Passings -- Reached 252,000, growing by 13,000 through government-subsidized builds; 21% now fiber-to-the-home enabled.
• Broadband Data Churn — Incumbent Markets -- Registered at 1.47% for the quarter, unchanged year over year.
• Broadband Data ARPU — Incumbent Markets -- Reported at $82, a 2.4% annual decline, impacted by competitive market pricing for new customers.
• Commercial Fiber Incremental Monthly Bookings -- Surpassed $155,000 in the quarter; second half 2025 bookings increased nearly 9% over the second half of 2024.
• Commercial Fiber Installed Monthly Revenue -- Added $191,000 in new revenue, a slight decrease as the company addressed backlog.
• Workforce Reduction -- Workforce cut by 10% announced on February 23, with staggered exits through year-end 2026; $3.1 million restructuring cost expected and $12.3 million annual savings anticipated from 2027.
• 2026 Revenue Guidance -- Forecast at $370 million to $377 million, equivalent to 4.4% growth at the midpoint.
• 2026 Adjusted EBITDA Guidance -- Projected between $131 million and $136 million, or 12.1% growth at the midpoint.
• 2026 CapEx Guidance -- Net of grant reimbursements, projected between $220 million and $250 million, representing a 21% midpoint decline.
• 2025 Capital Expenditures -- Totaled $359 million, less $63 million in grant reimbursements, producing $296 million net CapEx; 84% of target Glo Fiber and 94% of target incumbent passings completed.
• Capital Intensity -- Dropped from 91% to 83%, with 2026 guidance of 59%-67%; residential and commercial businesses are trending toward longer-term targets of 25% and 30%, respectively.
• ABS Financing -- In December, debt refinanced through $567 million investment-grade ABS notes maturing 2030 at a 5.69% rate, with a $175 million VFN facility at SOFR plus 175 bps and a $175 million RCF at SOFR plus 250-300 bps.
• Outstanding Debt -- $642 million at year-end, average interest rate 5.75%, a reduction of 172 bps versus prior credit agreement.
• Cash Interest Savings -- Expected to be $11 million annually due to lower rates under the ABS structure.
• Liquidity -- $235 million in available liquidity, comprised of $27 million in cash and equivalents, $21 million restricted cash, $44 million under the VFN, $93 million under the RCF, and $50 million available in government grants.
• Capital Allocation Strategy -- 2026 focus on fiber build completion, Glo Fiber and Commercial Fiber growth, and achieving positive free cash flow in 2027.
• Projected Positive Free Cash Flow -- Management reaffirmed 2027 target, supported by EBITDA growth, declining capital intensity, and refinancing benefits.
• Market Selection Discipline -- The company is foregoing certain Ohio markets due to aerial make-ready costs and inability to meet a 15% investment hurdle rate.
• Customer Adoption of High-Speed Plans -- Over 75% of new residential subscribers chose 1 gig or higher; 20% selected 2 gig, and 5% chose 5 gig plans following full-quarter rollout of 5-year price guarantee.

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RISKS

• Management cited a 14.8% decline in video RGUs and a 2.4% drop in data ARPU in incumbent broadband as customers migrated to streaming and as competitive pricing increased, resulting in a $1.7 million revenue decrease in that segment.
• Rising aerial make-ready costs in expansion markets led the company to abandon investments in specific Ohio markets. This may limit growth potential and reduce targeted passings for 2026.
• Adjusted EBITDA margins are expected to "decline slightly in the first half of 2026 before expanding again in the second half," according to James Volk.
• Management stated that as 5-year price guarantee plans roll out, "we expect data ARPU to decline by approximately 1% over the next few quarters before stabilizing."

SUMMARY

Glo Fiber expansion market revenue grew 39% year over year in the fourth quarter, contributing to a shift in revenue mix as fiber-based business lines surpassed incumbent broadband revenue. Management confirmed 2026 guidance for continued mid-single-digit revenue growth and double-digit adjusted EBITDA growth while signaling a notable decline in capital intensity as major construction phases end. The company finalized a substantial debt refinancing through asset-backed securitization, lowering cash interest costs and extending maturities to 2030 to improve financial flexibility. Strategic focus remains on fiber expansion completion, disciplined market selection, and achieving positive free cash flow inflection in 2027.

• Management noted, "all of the planned Glo Fiber markets have been launched and our primary focus in 2026 is adding passings in our Virginia, Pennsylvania, Maryland and Ohio markets."
• The recent 10% workforce reduction is expected to produce roughly $12.3 million in annualized savings starting in 2027, split between operating expense and capitalized labor.
• Commercial and residential fiber returns differ materially; business customer ARPU is over 40% higher than residential, but ramp to target penetration is slower and terminal penetration is structurally lower due to contractual and competitive factors.
• Customer satisfaction measured by Net Promoter Score was reported as 61, substantially exceeding cable industry norms, and supporting lower observed churn rates.

INDUSTRY GLOSSARY

• ABS (Asset-Backed Securitization): Financing structure involving secured notes supported by revenue-generating assets, used here to refinance a portion of SHEN's debt at lower rates.
• VFN (Variable Funding Note): Revolving credit tranche within the ABS structure, allowing borrowing flexibility tied to performance of underlying fiber assets.
• RCF (Revolving Credit Facility): Traditional corporate credit facility enabling flexible draw and repayment terms, collateralized by SHEN's incumbent business segment.
• RLEC (Rural Local Exchange Carrier): Incumbent rural telecommunications service provider, referenced in SHEN's discussion of revenue changes by segment.
• RGU (Revenue Generating Unit): Distinct purchasable customer service such as broadband data, voice, or video subscription.

Full Conference Call Transcript

Ed McKay, President and Chief Executive Officer; and Jim Volk, Senior Vice President and Chief Financial Officer. After the prepared remarks, we will conduct a question-and-answer session. I refer you to Slide 2 of the presentation, which contains our safe harbor disclaimer and remind you that this conference may include forward-looking statements subject to certain risks and uncertainties that may cause our actual results to differ materially from these forward-looking statements. Additionally, we have provided a detailed discussion of various risk factors in our SEC filings, which you are encouraged to review. You are cautioned not to place undue reliance on these forward-looking statements.

Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements. With that, I will now turn the call over to Ed. Go ahead, Ed.

Edward McKay: Thanks, Lucas, and good morning, everyone. Thank you for joining us today. This past year marked another important step forward for Shentel as we continue to execute on our fiber-first strategy. Strong year-over-year growth in both Glo Fiber and Commercial Fiber drove a notable shift in our revenue mix with our fiber-based lines of business surpassing our incumbent broadband revenue in the fourth quarter. Throughout 2025, we remain disciplined and focused on our 4 strategic pillars that continue to guide our operational and financial priorities, building on our long history of success, completing our fiber network expansion, accelerating growth and positioning the business to inflect to positive free cash flow in 2027.

I'm pleased with the way our team delivered on each of these priorities, strengthening our position and keeping our strategy firmly on track. Starting on Slide 4, we share some of our full year highlights. At year-end 2025, we passed approximately 427,000 homes and businesses in our Glo Fiber expansion markets, an annual increase of 81,000 passings. Our government subsidized passings in incumbent broadband markets more than doubled year-over-year to 22,000 and penetration in these areas has already reached 31%. We are well on our way to substantially completing construction for these capital-intensive expansion projects by the end of 2026.

Glo Fiber data RGUs grew 35% in 2025 to 88,000, and we maintained data ARPU by driving customers to higher speed tiers. Lastly, we successfully refinanced our debt with our inaugural ABS financing in December that will save us approximately 170 basis points in cash interest expense and extend our maturities to 2030. We finished 2025 with strong momentum, driving customer growth, expanding our high-value fiber business and strengthening our balance sheet. This performance gives us confidence in our trajectory as we move into 2026. Turning to Slide 5. We show our integrated broadband network that spans more than 19,000 fiber route miles across 8 states with over 679,000 total broadband passings.

Our markets have compelling competitive dynamics that differentiate us from our peers in the broadband industry. 88% of our Glo Fiber passings are duopoly markets with only one fixed broadband competitor. And in our incumbent markets, 70% of our passings have no fixed broadband competitor. As we enter the home stretch of our Glo Fiber expansion, we remain focused on return on investment. Due to rising aerial make-ready costs in some areas, we have recently decided to pass on investments in certain Ohio markets where the cost to pass increased, reducing our ability to earn a return on investments above our hurdle rate of 15%.

As you can see on the map, all of the planned Glo Fiber markets have been launched and our primary focus in 2026 is adding passings in our Virginia, Pennsylvania, Maryland and Ohio markets. Despite the reduction in targeted passings, we remain confident in our plans to achieve positive free cash flow in 2027. On Slide 6, our sales and marketing team continues to drive growth in our Glo Fiber expansion markets. In the fourth quarter, we added 5,300 new customers and more than 6,000 total data, video and voice revenue-generating units. For full year 2025, we added approximately 23,000 new customers and 26,000 total RGUs.

As a result, total Glo Fiber revenue-generating units surpassed 103,000 by year-end, up 33% compared to the prior year. Moving to Slide 7. The fourth quarter marked our strongest construction period of the year with more than 26,000 Glo Fiber passings completed, bringing total passings to just under 427,000. While the significant increase in new passings kept penetration flat quarter-over-quarter at 20.6%, penetration improved 1.8 percentage points year-over-year. Penetration trends across our Glo Fiber cohorts are shown on Slide 8 and reflect blended penetration rates for both residential and small and medium business passings. Business passings account for about 8% of our total passings, and they typically exhibit a slower penetration ramp than residential passings.

However, business customers generate data ARPU that is more than 40% higher than residential customers. Due to the slower business ramp, cohorts with a higher concentration of business passings can show lower penetration. This dynamic is evident in the Q4 2023, Q1 and Q4 2024, and Q1 2025 cohorts, which have a significantly higher mix of business passings than other cohorts. Excluding the differences in residential and business mix, penetration growth in our Glo Fiber expansion markets has followed a consistent and predictable pattern with steady increases as cohorts mature. Our earliest cohorts launched in 2019 and 2020 now have an average data penetration rate of more than 37%.

On Slide 9, we highlight our most recent Net Promoter Score customer satisfaction survey, where we received an outstanding score of 61. This result compares very favorably with cable competitors that often have single-digit scores. Our continued focus on customer service is a key driver of our low churn with average monthly churn of 1.01% in the fourth quarter and 1.07% for full year 2025. Broadband data average revenue per user increased to more than $77 in the fourth quarter, representing a 2.3% year-over-year increase. Midway through the third quarter, we introduced new promotional rate plans offering higher speeds for the 5-year price guarantee.

With these plans available for a full quarter, more than 75% of our new residential subscribers selected speeds of 1 gig or higher, including 20% choosing 2-gig service and 5% choosing 5-gig service. The increase in ARPU was driven by our shift away from a first month free promotion in prior periods, along with strong adoption of the 5-year price guarantee plans in the fourth quarter. As these plans continue to roll through our base, we expect data ARPU to decline by approximately 1% over the next few quarters before stabilizing. Turning to Slide 10. We show our operating performance for the incumbent broadband markets.

At the end of 2025, we served about 112,000 broadband data customers, reflecting a year-over-year increase of over 600. Data, voice and video RGUs totaled more than 158,000 at the end of the year, down 3% year-over-year, primarily due to video customers moving to online streaming services. Total broadband passings in our incumbent markets grew to 252,000 at year-end, up about 13,000 compared to the prior year. This increase was driven by the construction of government-subsidized passings in previously unserved areas. We've substantially completed construction and fulfilled our grant obligations in Virginia, and we expect to complete the remaining 1,300 government-subsidized incumbent grant passings in West Virginia in 2026.

As a result of our government grant fiber construction, approximately 21% of our incumbent broadband passings are now equipped with fiber-to-the-home technology. As shown on Slide 7, these new subsidized passings represent a strong growth catalyst for our incumbent markets with data penetration exceeding 45% within 6 quarters of a neighborhood launch. Our earliest cohort from the first quarter of 2023 has reached 61% penetration, and we've already achieved an aggregate penetration of 31% across more than 22,000 subsidized passings. Moving to Slide 12. Monthly broadband data churn improved sequentially and remained steady year-over-year at 1.47% for the fourth quarter.

Our rate card strategy offering greater value with higher speeds at the same price continues to be effective at mitigating churn. As expected, broadband data ARPU declined 2.4% from a year ago to $82, driven by the addition of new customers with more aggressive pricing in competitive markets. Our Commercial Fiber business is highlighted on Slide 13. In the fourth quarter, incremental monthly bookings exceeded 155,000, in line with the prior year period. After record bookings in the first half of 2025, second half bookings increased almost 9% compared to the second half of 2024.

We're seeing strong performance across a broad and diverse customer base, including wireless carriers, mid-market and enterprise customers, wholesale partners, educational institutions and state and local governments. Our service delivery team installed $191,000 in new monthly revenue in the fourth quarter, down modestly as we continue to work through the backlog and move bookings to revenue more quickly. Average monthly compression and disconnect churn remained very low at 0.6% in the fourth quarter, driven by exceptional support from our network operations center and sales team. Before I turn the call over to Jim, I want to briefly address the recently announced reduction in force.

On February 23, we announced a workforce reduction of approximately 10% of our employees to better align our staffing levels with the planned completion of the construction phase of Glo Fiber. Impacted employees will have a staggered departure dates through the end of 2026 with the largest impact in the fourth quarter. All affected employees are eligible for severance pay and benefits as well as career transition services. We expect to incur approximately $3.1 million in restructuring costs and anticipate annual savings of roughly $12.3 million starting in 2027, split evenly between operating expenses and capitalized labor.

While our major Glo Fiber market expansion is nearing completion by year-end, we remain firmly focused on driving continued growth in Glo Fiber and Commercial Fiber and delivering the high level of service our customers expect and deserve. I'll now turn the call over to Jim to walk you through our 2025 financial results and our outlook for 2026.

James Volk: Thank you, Ed, and good morning, everyone. I'll start on Slide 15 with the financial results for the fourth quarter 2025. Revenues grew 7.2% to $91.6 million, driven by another quarter of strong Glo Fiber expansion market revenue growth of $6.5 million or 39%, driven by a 37% increase in data subscribers and a 2% increase in data ARPU. Commercial Fiber revenue grew $2 million or 10.8% year-over-year, driven primarily by a negative deferred revenue adjustment in the fourth quarter of 2024.

Incumbent broadband markets revenue declined $1.7 million, primarily due to lower video and data revenues from a 14.8% decline in video RGUs as customers switched to streaming video services and a 2.4% decline in data ARPU due to a more aggressive rate card in competitive markets. Broadband data subscribers did grow 0.6% year-over-year. RLEC revenue declined $500,000, primarily due to lower DSL revenue from a 24.4% decline in DSL RGUs, partially due to customers migrating to our broadband data service in the recently constructed passings supported by government grants.

Adjusted EBITDA grew $8 million or 31.3% to $33.5 million, driven by $6.2 million in revenue growth and $1.8 million in lower expenses from a combination of Horizon synergy savings, higher capitalized labor from a strong quarter of fiber construction and lower bad debt. Adjusted EBITDA margins increased 670 basis points to 36.5% in the fourth quarter due to a combination of recurring synergy savings seasonality due to a strong quarter of fiber construction, favorably impacting higher capitalized labor and lower network compensation expenses and nonrecurring bad debt expense adjustments. We expect adjusted EBITDA margin to decline slightly in the first half of 2026 before expanding again in the second half of 2026.

On Slide 16, we share our last 5-year financial results. Revenues and adjusted EBITDA grew at a compounded annual growth rate of 10% and 16%, respectively. We believe these growth rates are industry-leading among publicly traded broadband companies. Please note that we acquired $19 million of annual run rate EBITDA when we acquired Horizon in 2024. This was fully offset by $12 million of lower EBITDA when we sold our tower business in the same year and $7 million in lower EBITDA from backhaul revenue churn due to the onetime network rationalization event following T-Mobile's acquisition of Sprint.

While we are proud of our team's performance over the past 5 years, we are even more excited about our growth prospects over the next 5 years when we expect low double-digit EBITDA growth rates, combined with significantly lower capital intensity starting in 2027. Turning to Slide 17 for our annual guidance for 2026. We expect 2026 revenues of $370 million to $377 million or 4.4% growth based upon the midpoint. We are guiding to adjusted EBITDA of $131 million to $136 million or 12.1% growth based upon the midpoint. We expect 2026 CapEx net of grant reimbursements to be $220 million to $250 million or a 21% decline at the midpoint. Moving to Slide 18.

We invested $359 million in capital expenditures in 2025 and collected $63 million in government grants for net CapEx of $296 million. We have completed construction of 84% of Target Glo Fiber passings and 94% of target incumbent government grant passings in unserved areas. In summary, capital intensity is trending down as we get closer to the end of the expansion phase. Capital intensity declined from 91% in '24 to 83% in '25 and to a range of 59% to 67% in '26 based upon our guidance. For 2027, we are currently trending to the high end of the long-term target capital intensity range we provided a year ago.

We expect our residential businesses to be in the 25% range and our commercial business in the 30% range initially before declining further over time as our businesses scale. I'd now like to update you on our refinanced credit facilities and liquidity on Slide 19. As previously announced in December, we successfully refinanced our $675 million term loan and revolving credit facility with a hybrid capital structure featuring asset-backed securitization or ABS notes supported by most of our fiber business and a revolving credit facility backed primarily by our incumbent business.

The ABS notes include $567 million of privately placed investment-grade notes to institutional investors due December 2030 with a weighted average interest rate of 5.69% and $175 million variable funding note facility or VFN, with a group of financial institutions. The VFN has a maturity date of December 2029 and bears interest at SOFR plus 175 basis points. The VFN is a revolving facility within the ABS special purpose entities that is also investment-grade rated and securitized by the same fiber assets and customer contracts. It is also governed by the same ABS indenture as the ABS notes. We did not borrow from the VFN as of December 31, 2025.

Concurrently, we established a new $175 million revolving credit facility, or RCF, with a group of financial investors maturing December 2030. The RCF bears interest at SOFR plus 250 to 300 basis points, depending upon net leverage as defined in the RCF agreement. We borrowed $75 million from the RCF as of December 31, 2025. Please note that these are 2 discrete credit facilities separated legally by special purpose entities established for ABS. Shentel and the non-ABS entities have no recourse to the loans of the ABS entities. Likewise, the ABS entities have no recourse to the loans of the RCF. As of December 31, we had $642 million in outstanding debt with a weighted average interest rate of 5.75%.

This compares favorably to September 30 weighted average interest rate of our prior credit facility of 7.47%, saving us 172 basis points in cash interest, driven by the investment-grade rated ABS notes. Based on our current debt levels, this will save us $11 million annually in cash interest. Total available liquidity was approximately $235 million as of December 31, consisting of $27 million of cash and cash equivalents, $21 million in restricted cash as required by the ABS indenture, $44 million available under the VFN, $93 million under the RCF and $50 million available under government grants. In addition, the company has over $130 million of VFN commitments that are not available to draw as of December 31.

The available capacity of the VFN will increase based upon fiber revenue growth from the ABS entities, multiplied by a net operating income margin as defined in the ABS indenture and a 6.25 multiple. We are very pleased with our new credit facilities and the financial flexibility they will provide us in future years. In summary, as noted on Slide 20, we have 3 catalysts converging that we expect will lead us to generating and growing positive free cash flow in 2027 and beyond.

Low double-digit adjusted EBITDA growth rates driven by our fiber businesses, declining capital intensity as we exit the construction phase of our business plan in 2027 and declining cost of capital after refinancing our debt in December 2025 with primarily investment-grade ABS notes. This is a very exciting time for Shentel and our shareholders. Thank you, operator. We are now ready for questions.

Operator: [Operator Instructions] Your first question comes from the line of Hamed Khorsand with BWS Financial.

Hamed Khorsand: About the markets that you've decided not to enter in Ohio, how much CapEx are you looking to save? And is it all being -- was it all planned for '26? So it already brings down the CapEx that you're projecting for '26?

James Volk: Yes. Hamed, the CapEx per passing in this last year is roughly going to be around $1,400 per passing. Now some of that money has been previously spent in prior years, and we're now really focusing primarily on just placing the fiber. So it's mainly construction labor at this stage, which will probably be about 75% of the $1,400 or, call it, $1,000 per passing. The markets that we decided to pass on wasn't an issue of timing as much as it was an issue of return on investment. As Ed mentioned in his scripted comments, the cost of aerial make-ready has gone up significantly, like 2 and 3x in some markets.

And it just made it uneconomical for us to build these markets and get a return on investment as we've expected of roughly 15%.

Hamed Khorsand: Okay. And from a competitive standpoint, you introduced this 5-year guarantee, I think, last quarter. Have you seen any step down as far as competitive pressures go? Or is it still the same?

Edward McKay: Hamed, recently, one of our large cable competitors actually increased their prices on their 5-year guarantee. But that just happened recently here in the first quarter. Other than that, we haven't seen significant changes since we launched the 5-year price guarantee.

Hamed Khorsand: Okay. And then you had said, if I heard you right, that it takes a bit longer on the business than on the residential. How fast -- I don't think I heard you say how fast it takes for residential to sign up.

Edward McKay: Sorry, say again, for a residential customer to sign up?

Hamed Khorsand: Yes, to sign up for service. I know you were talking about how there's a delayed factor when it comes to business customers.

Edward McKay: Yes. So with the business customers, in many cases, they're under contract. We have to wait for that contract to roll off. And in some markets, there are actually multiple providers going after business customers. So we expect terminal penetration on business customers to be lower than residential. But then residential customers that ramp to our target 37% plus penetration rate, we're tracking 5 to 7 years after we launch a market.

Operator: Your next question comes from the line of Vikash Harlalka with New Street Research.

Vikash Harlalka: I just have a couple of questions. Why did you feel the need to offer a 5-year price guarantee plans? Was it because competition was going in that direction? And then how does that impact ARPU growth? And I'll ask my second after you answer this one.

Edward McKay: Yes. So it was in response to competition. One of our large cable competitors launched a 5-year price guarantee. We did initially see some impact on gross adds when they launched it, didn't see any impact on churn. But once we launched our own 5-year price guarantee, that impact on gross adds, we felt was mitigated. And as I mentioned on the -- in my script, we do expect short-term impact on ARPU as this 5-year price guarantees roll through about 1% over the next few quarters, but we expect it to stabilize after that in our Glo Fiber markets.

Vikash Harlalka: Got it. And then I have one strategic question. We recently met with many small private fiber operators. There seems to be a lot of appetite for M&A. Could you just remind us how you're thinking about M&A? And if you're looking to buy fiber assets out there, what characteristics are you looking for in any potential targets?

Edward McKay: Well, I'd say we've certainly seen consolidation start. We believe consolidation will continue. At this point in time, we're focused on successfully completing our build plan, accelerating customer growth and then reaching that positive free cash flow inflection point in 2027. So that's really our main focus right now. As we look ahead further into the future, from an M&A standpoint, we'd be most interested in a pure-play fiber provider, less interested in a cable provider and not interested at all in a copper provider.

Operator: We have no further questions at this time. I will now turn the call back over to Jim Volk for closing remarks.

James Volk: Well, thanks, everyone, for joining our call this morning. As I mentioned earlier, this is a very exciting time for Shentel, and we look forward to updating you on our progress in future quarters. Thank you. Have a good day.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

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