Second Quarter 2026
Filed Jul 29, 2026Shenandoah Telecommunications Company Reports Second Quarter 2026 Results
Revenue and Adjusted EBITDA grew year over year, led by Glo Fiber Expansion Markets and Commercial Fiber, while the Company remained loss-making, incumbent broadband revenue declined, and interest expense increased.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Service revenue and otherGAAP | $ 93,462 (in thousands) | – | 5.5% |
| Cost of services, exclusive of depreciation and amortizationGAAP | 32,703 (in thousands) | – | 0.2% |
| Selling, general and administrativeGAAP | 31,022 (in thousands) | – | 4.3% |
| Restructuring, integration and acquisitionGAAP | 134 (in thousands) | – | (35.0%) |
| Depreciation and amortizationGAAP | 30,619 (in thousands) | – | (12.8%) |
| Total operating expensesGAAP | 94,478 (in thousands) | – | – |
| Operating lossGAAP | $ (1,016 ) (in thousands) | – | – |
| Interest expenseGAAP | $ (9,696 ) (in thousands) | – | – |
| Other income, netGAAP | 472 (in thousands) | – | – |
| Loss before income taxesGAAP | $ (10,240 ) (in thousands) | – | – |
| Income tax benefitGAAP | $ (2,541 ) (in thousands) | – | – |
| Net lossGAAP | $7.7 million | – | – |
| Dividends on redeemable noncontrolling interestGAAP | 1,605 (in thousands) | – | – |
| Net loss attributable to common shareholdersGAAP | $ (9,304 ) (in thousands) | – | – |
| Adjusted EBITDAnon-GAAP | $32.0 million | – | 12.9% |
| Six months ended June 30, 2026: Service revenue and otherGAAP | 185,615 (in thousands) | – | – |
| Six months ended June 30, 2026: Cost of services, exclusive of depreciation and amortizationGAAP | 64,527 (in thousands) | – | – |
| Six months ended June 30, 2026: Selling, general and administrativeGAAP | 64,409 (in thousands) | – | – |
| Six months ended June 30, 2026: Restructuring, integration and acquisitionGAAP | 2,574 (in thousands) | – | – |
| Six months ended June 30, 2026: Depreciation and amortizationGAAP | 65,590 (in thousands) | – | – |
| Six months ended June 30, 2026: Total operating expensesGAAP | 197,100 (in thousands) | – | – |
| Six months ended June 30, 2026: Operating lossGAAP | $ (11,485 ) (in thousands) | – | – |
| Six months ended June 30, 2026: Interest expenseGAAP | $ (19,131 ) (in thousands) | – | – |
| Six months ended June 30, 2026: Other income, netGAAP | 517 (in thousands) | – | – |
| Six months ended June 30, 2026: Loss before income taxesGAAP | $ (30,099 ) (in thousands) | – | – |
| Six months ended June 30, 2026: Income tax benefitGAAP | $ (6,649 ) (in thousands) | – | – |
| Six months ended June 30, 2026: Net lossGAAP | $ (23,450 ) (in thousands) | – | – |
| Six months ended June 30, 2026: Dividends on redeemable noncontrolling interestGAAP | 3,182 (in thousands) | – | – |
| Six months ended June 30, 2026: Net loss attributable to common shareholdersGAAP | $ (26,632 ) (in thousands) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Residential & SMB - Incumbent Broadband MarketsLower video and data revenue. Video revenue declined due to a 14.1% decrease in video RGUs as customers switched to streaming video services, while data revenue declined due to a 2.6% decline in data ARPU. | $ 40,282 (in thousands) | – | (6.0%) |
| Residential & SMB - Glo Fiber Expansion MarketsData RGUs increased 32.1%, driven by increased penetration rates and increased passings. | $26.3 million | – | 32.8% |
| Commercial FiberGrowth reflected recurring revenue in enterprise and carrier verticals, a non-cash sales-type lease of customer equipment, and a negative non-cash deferred revenue adjustment for a national wireless carrier customer in the second quarter of 2025. | $ 21,386 (in thousands) | – | 9.8% |
| RLEC & OtherPrimarily due to the decrease in DSL RGUs and, to a lesser extent, a decrease in government support revenue. | $ 5,505 (in thousands) | – | (14.7%) |
Year Ending December 31, 2026 outlook
- Revenue$370 - $377
- NoteAdjusted EBITDA: $131 - $136
- NoteCapital Expenditures, net of government grant reimbursements: $220 - $250
- Note2026 financial guidance does not reflect any assumptions regarding the potential impacts of ongoing global geopolitical conflicts or the evolving tariff environment.
What drove it
- Glo Fiber Expansion Markets revenue increased $6.5 million, or 32.8%, and data RGUs increased 32.1%.
- The Company added its 100,000th Glo Fiber customer and achieved a record 6,200 Glo Fiber net additions.
- Residential & SMB - Glo Fiber Expansion Markets and Commercial Fiber together represented 51% of total revenue and delivered 21% year-over-year growth during the quarter.
- Cost of services increased primarily due to increased fleet maintenance and fuel expenses.
- Selling, general and administrative expense increased primarily due to higher operating and property taxes, higher advertising to support RGU growth, and higher software maintenance expenses.
- Depreciation and amortization decreased primarily because the prior year included a $4.2 million write-off related to inventory assets that were no longer planned to be used.
Concerns
- Residential & SMB - Incumbent Broadband Markets revenue decreased $2.6 million, or 6.0%, due to lower video and data revenue.
- Video RGUs declined 14.1% as customers switched to streaming video services.
- Data ARPU declined 2.6%, driven in part by the rate card in markets facing a fixed broadband competitor and the recently implemented rate card in lower demographic markets experiencing softer demand.
- Interest expense was $ (9,696 ) (in thousands), compared with $ (6,003 ) (in thousands) in the second quarter of 2025.
- The Company expects to incur approximately $3.1 million in restructuring costs to achieve expected workforce-reduction savings.
- Guidance does not reflect assumptions regarding ongoing global geopolitical conflicts or the evolving tariff environment.
What to watch
- Execution toward substantially completing the Glo Fiber construction phase by the end of 2026.
- The largest impact from the approximately 10% reduction in force is expected in the fourth quarter of 2026.
- The Company expects approximately $12.3 million in annual savings beginning in 2027, with approximately half affecting operating expenses and approximately half affecting capitalized labor included in capital expenditures.
- Trends in Glo Fiber penetration rates, passings, data RGUs, and net additions.
- Whether incumbent-market video RGU and data ARPU declines continue.
- Progress toward the reiterated 2026 guidance ranges for total revenue, Adjusted EBITDA, and capital expenditures net of government grant reimbursements.
Balance sheet and cash flow
- Capital expenditures were $146.2 million for the six months ended June 30, 2026, compared with $169.4 million for the six months ended June 30, 2025.
- The Company received $20.6 million in government grant cash receipts during the six months ended June 30, 2026, compared with $17.3 million during the six months ended June 30, 2025.
- Total available liquidity was $158.9 million as of June 30, 2026.
- Unrestricted cash and cash equivalents totaled $23.9 million as of June 30, 2026.
- Restricted cash as required by the ABS Indenture totaled $30.9 million as of June 30, 2026.
- Availability under Shentel Broadband’s Revolving Credit Facility was $74.8 million as of June 30, 2026.
- Availability under Shentel Issuer’s Variable Funding Note was $1.9 million as of June 30, 2026.
- Aggregate remaining reimbursements available under government grants were $27.4 million as of June 30, 2026, subject to fulfilling underlying agreement terms.
- VFN commitments not available to draw were $105.1 million as of June 30, 2026.
- The Company incurred $2.2 million in severance expense during the six months ended June 30, 2026, and made $0.4M of severance payments during the period.
Analysis
Shentel reported second-quarter service revenue and other of $93.5 million, up 5.5% year over year, with Adjusted EBITDA of $32.0 million, up 12.9%. Growth was concentrated in the fiber businesses. Residential & SMB - Glo Fiber Expansion Markets revenue rose 32.8% to $26.3 million, while Commercial Fiber revenue increased 9.8%. Management said Glo Fiber reached its 100,000th customer and posted a record 6,200 net additions.
The incumbent business remained a material offset. Residential & SMB - Incumbent Broadband Markets revenue declined 6.0%, driven by lower video and data revenue. Video RGUs fell 14.1% as customers moved to streaming services, and data ARPU declined 2.6%. RLEC & Other revenue also fell 14.7%, primarily reflecting lower DSL RGUs and lower government support revenue. These declines show that growth remains dependent on expansion-market fiber adoption and Commercial Fiber activity.
Reported profitability improved at the operating level but remained negative. Operating loss was $ (1,016 ) (in thousands), compared with $ (9,108 ) (in thousands) a year earlier, aided by lower depreciation and amortization, which declined 12.8% following a prior-year $4.2 million inventory write-off. Net loss was $7.7 million, compared with $9.0 million in the second quarter of 2025. Interest expense increased to $ (9,696 ) (in thousands) from $ (6,003 ) (in thousands), remaining a significant drag on the result.
Capital intensity is declining as construction progresses. Capital expenditures were $146.2 million in the six months ended June 30, 2026, down from $169.4 million in the prior-year period, primarily because of lower spending on government grant construction projects in Incumbent Broadband Markets. The Company reported $158.9 million of total available liquidity, including $23.9 million of unrestricted cash and cash equivalents. Management expects the Glo Fiber construction phase to be substantially complete by the end of 2026.
The Company reiterated its 2026 guidance for total revenue of $370 - $377, Adjusted EBITDA of $131 - $136, and capital expenditures, net of government grant reimbursements, of $220 - $250. The planned approximately 10% reduction in force is expected to generate approximately $12.3 million in annual savings beginning in 2027, but the Company expects approximately $3.1 million of restructuring costs to achieve those savings. Near-term attention is on sustaining Glo Fiber growth, containing incumbent-market erosion, and delivering the planned transition from construction spending to lower capital intensity.
Management, verbatim
The second quarter marked several exciting milestones for Shentel. We added our 100,000th Glo Fiber customer and achieved a record 6,200 Glo Fiber net additions.
Ed McKay, President and CEO
Our fiber businesses continue to build strong momentum, now representing 51% of our total revenue and delivering 21% year-over-year growth during the quarter.
Ed McKay, President and CEO
Not in the filing
stated, not guessed- GAAP and non-GAAP diluted EPS
- Gross profit and gross margin
- Operating cash flow
- Free cash flow
- Total debt balance
- Share repurchases
- Common-share dividends
- Prior-quarter comparisons for reported quarterly metrics
- Prior-year amount for second-quarter Adjusted EBITDA
- Prior-year amount for six months ended June 30, 2026 net loss attributable to common shareholders
- Reconciliation of Adjusted EBITDA to the most comparable GAAP measure
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.