Shenandoah Telecommunications Company

Revenue rose 5.5% year over year to $93.5 million in Q2 2026. Adjusted EBITDA increased 12.9% to $32 million, and adjusted EBITDA margin improved 200 basis points to 34.3%. Fiber revenue grew 21.4% year over year and represented 51% of consolidated revenue for the first time. Glo Fiber expansion market revenue increased $6.5 million, or 32.8%, driven by a 31.3% increase in data subscribers; Commercial Fiber revenue grew $1.9 million, or 9.8%. Incumbent broadband markets revenue declined $2.5 million, and RLEC revenue declined $1 million. Management reiterated full-year 2026 guidance for revenue of $370 million to $377 million, adjusted EBITDA of $131 million to $136 million, and CapEx, net of government grant reimbursements, of $220 million to $250 million. They also said they expect second-half 2026 revenue and adjusted EBITDA to benefit from continued high-margin Glo Fiber growth and lower operating expenses from the previously announced reduction in force.

Ed McKay emphasized that the quarter validated Shentel’s Fiber First strategy, citing record subscriber additions, strong demand, and fiber becoming the majority of revenue. He said all planned Glo Fiber markets are now launched, construction is still on track to substantially finish in 2026, and the company is building toward positive free cash flow beginning in 2027. His tone was constructive on the business mix shift and upbeat about future growth opportunities, including data centers and commercial SMB.

Jim Volk focused on the financial leverage of fiber growth, noting revenue of $93.5 million, adjusted EBITDA of $32 million, and incremental adjusted EBITDA margin of 73% in Q2. He said capital expenditures were $146 million in the first half of 2026 and net CapEx was $126 million after $20 million of government grants, with construction 95% complete on subsidized passings and 93% complete on target Glo Fiber passings. On the balance sheet, he cited $728 million of debt, $674 million of net debt, $159 million of total available liquidity, no debt maturities until 2029, and 78% fixed-rate debt; he also said the company expects positive free cash flow in 2027 and beyond as EBITDA grows, capital intensity falls, and debt costs decline after refinancing in December 2025.

Analysts focused on the data center opportunity, competitive pressure from satellite and wired providers, and the path to long-term margins. Management said it has a master service agreement with a major hyperscaler and sees an opportunity because it already has fiber and conduit near data centers, limiting the need for heavy capital spend. On competition, management said satellite churn was only minimal in Glo Fiber and improved in the rural markets after a new rate card, while wired competition remains present across about 35% of incumbent passings; they also said they are adding commercial and SMB resources and expect EBITDA margins to rise 300 to 400 basis points per year toward 40% in a couple of years.