Shenandoah Telecommunications Company

What they do

Shentel provides broadband internet, video, and voice services to residential and commercial customers in Virginia, West Virginia, Maryland, Pennsylvania, Kentucky, Delaware, Ohio, and Indiana. It operates through fiber optic and hybrid fiber coaxial (HFC) networks, and also leases dark fiber and provides Ethernet and Wavelength services. The company served approximately 262,000 revenue generating units (RGUs) as of December 31, 2025. Its Broadband business also provides DSL and voice services as a Rural Local Exchange Carrier (RLEC) in parts of Virginia and Ohio.

Revenue drivers

• Residential & SMB - Glo Fiber Expansion Markets — This segment contributed 28.1% of Q2 2026 revenue. Revenue grew 32.8% year-over-year to $26.3 million, driven by a 32.1% increase in data RGUs from higher penetration and passings.
• Residential & SMB - Incumbent Broadband Markets — This segment contributed 43.1% of Q2 2026 revenue. Revenue declined 6.0% year-over-year due to lower video and data revenue; video RGUs fell 14.1% as customers shifted to streaming, and data ARPU declined 2.6%.
• Commercial Fiber — This segment contributed 22.9% of Q2 2026 revenue. Revenue increased 9.8% year-over-year, driven by recurring enterprise and carrier revenue, a non-cash sales-type lease of customer equipment, and a negative deferred revenue adjustment in the prior year.
• RLEC & Other — This segment contributed 5.9% of Q2 2026 revenue. Revenue decreased 14.7% year-over-year primarily due to lower DSL RGUs and lower government support revenue.

Recent performance

For Q2 2026, total revenue increased 5.5% year-over-year to $93.5 million. Net loss improved to $7.7 million from a $9.0 million loss in Q2 2025. Adjusted EBITDA grew 12.9% to $32.0 million. Glo Fiber added 6,200 net RGUs, reaching its 100,000th customer. The company's fiber businesses (Glo Fiber Expansion Markets + Commercial Fiber) represented 51% of total revenue and grew 21% year-over-year.

Strategy

Shentel is focused on expanding its Glo Fiber FTTH footprint in greenfield markets and increasing penetration. In 2025, it completed a securitization, issuing $567.4 million of ABS notes and entering a $175 million revolving credit facility to refinance existing debt. In April 2025, it agreed to acquire FTTH assets in Virginia for $5 million, completed in July 2025. Management highlights the shift toward fiber as a key strategic priority, with fiber businesses now over half of total revenue.

Risks

• Competition from wireline and wireless providers — Approximately 30% of incumbent broadband passings face a wireline competitor, and fixed wireless and 5G services also compete for subscribers.
• Declining video and DSL revenue — Video RGUs fell 14.1% year-over-year as customers cut the cord, and DSL RGUs continue to decline, pressuring Incumbent Broadband and RLEC revenue.
• High capital expenditure requirements — Glo Fiber expansion requires significant capex; six-month 2026 capex was $146.2 million, though down from $169.4 million a year earlier.
• Securitization and facility covenants — The ABS Notes and VFN have pro-forma leverage and debt service coverage ratio tests, and certain VFN commitments ($105.1 million) are not available to draw as of June 30, 2026.

Outlook

Management expects continued growth in Glo Fiber as it increases passings and penetration, with fiber businesses now representing over half of revenue. Capital expenditures are expected to moderate, partly due to lower spending on government grant projects. The company will continue to pursue fiber acquisitions, such as the Virginia FTTH deal, and manage its new securitization structure.