Wed, Apr 30, 12:02 PM (23 days ago)
**Shenandoah Telecommunications Company (SHEN) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** $87.9 million, up 26.9% YoY, driven by growth in Glo Fiber and Commercial Fiber segments. - **Operating Loss:** $6.1 million, wider than $2.8 million in Q1 2024 due to increased operating expenses. - **Net Loss:** $10.6 million, compared to a net income of $214.7 million in Q1 2024, which included a significant gain from discontinued operations. - **Cash Flow:** Positive operating cash flow of $20.5 million, but negative free cash flow due to high capital expenditures ($83.2 million). **Profit Margins:** - **Operating Margin:** -6.9%, down from -4.0% in Q1 2024. - **Net Margin:** -12.1%, compared to 310.0% in Q1 2024. **Earnings Changes:** - **EPS:** -$0.19, down from $4.25 in Q1 2024. **Quarterly Performance Discussion:** - **Revenue Growth:** Driven by Glo Fiber expansion and Horizon acquisition. - **Expense Increases:** Higher costs associated with Horizon integration and Glo Fiber expansion. - **Cash Flow:** Positive operating cash flow, but high capital expenditures led to negative free cash flow. **Trends and Uncertainties:** - **Growth Opportunities:** Continued expansion of Glo Fiber and potential acquisitions. - **Risks:** High capital expenditures, integration challenges, and market competition. **Future Operations Impact:** - **Capital Expenditures:** Expected to exceed operating cash flow through 2026. - **Debt Management:** Extended maturity dates for Revolver and Term Loan A-1, increased leverage ratio. - **Government Grants:** $104.1 million available, subject to milestone completion. **Liquidity and Capital Resources:** - **Cash and Cash Equivalents:** $87.5 million. - **Revolver Availability:** $143.0 million. - **Total Liquidity:** Approximately $334.6 million. **Market Risk:** - **Interest Rate Risk:** $515.8 million in variable rate debt, hedged with interest rate swaps. - **Credit Risk:** Dependent on maintaining compliance with credit agreement covenants. **Legal and Regulatory:** - **Legal Proceedings:** No material adverse effects expected from ongoing legal matters. - **Risk Factors:** No updates to risk factors from the most recent Form 10-K. **Conclusion:** Shenandoah Telecommunications Company is focusing on growth through Glo Fiber expansion and strategic acquisitions. However, the company faces challenges related to high capital expenditures, integration costs, and market competition. The company's liquidity position is strong, but it will need to manage its debt and capital expenditures carefully to support its growth strategy.