Cable One's Earnings Surge: A Signal of Streaming Supremacy?

Ticker: CABO

Published on: February 27, 2020

Cable One, Inc. (NYSE: CABO) has just released its fourth quarter and full-year results for 2019, and the numbers are, dare I say, electrifying. With total revenues clocking in at $318.8 million for Q4, the company shows a robust 18.1% increase from the previous year. Residential data revenues jumped by 18.9%, while business services surged by 41.6%. If this isn't an earnings surprise, I don't know what is.

Net Income and EBITDA: The Bottom Line Shines Bright

Net income for the quarter reached $53.6 million, reflecting a healthy 27.6% year-over-year increase. Adjusted EBITDA was reported at $158.3 million, climbing 24.0% from Q4 2018. The company's net profit margin was 16.8%, while the Adjusted EBITDA margin stood at 49.7%. For those keeping score at home, that?s a pretty impressive EPS consensus, indicating that Cable One is not just a player, but a contender in the broadband arena.

Cash Flow: The Lifeblood of Growth

Cash flow is often the lifeblood of any growing company, and Cable One's operating cash flow of $156.6 million in Q4, a staggering 56.3% increase year-over-year, suggests that the company is not just growing but thriving. Adjusted EBITDA less capital expenditures came in at $72.3 million, a slight uptick from the $69 million recorded in the same quarter last year. This financial flexibility will likely allow Cable One to pursue further acquisitions and enhance its service offerings.

Subscriber Growth: The Real Indicator of Success

Subscriber metrics are telling a story of their own. Residential data primary service units (PSUs) grew by over 94,000?an impressive 15.7% year-over-year. Meanwhile, business services PSUs grew nearly 24,000, marking a 22.4% increase. This growth in subscribers, coupled with the acquisitions of Clearwave Communications and Fidelity Communications, paints a picture of a company that is not just growing but strategically positioning itself for the future.

Looking Ahead: What This Means for Cable One and Its Peers

So, what does this all mean? For Cable One, these results are a signal that its revenue forecast remains bright, especially as it capitalizes on a growing demand for high-quality broadband services. As more consumers and businesses rely on robust internet connections, Cable One's focus on expanding its service capabilities should resonate well in the market.

For its peers, this performance serves as both a benchmark and a challenge. Companies that have traditionally dominated the broadband space need to take note: Cable One is not just a niche player anymore; it's becoming a formidable competitor. The question now is whether they can keep pace with Cable One's rapid ascent or if they'll find themselves playing catch-up.