Cable One's Q4 Revenue Slide Highlights Unabated Competitive and Leverage Pressures

What happened

Cable One reported fourth quarter and full year 2025 results, with revenue declining 6.1% year-over-year to $363.7 million, continuing the mid-single-digit drops seen in prior quarters. This reflects persistent subscriber losses from fiber and fixed-wireless overbuilds, as noted in the DeepValue report, undermining the broadband-first strategy. While the net loss improved to $7.6 million from $105.2 million, this likely stems from cost-cutting and non-recurring items rather than operational turnaround, given ongoing unit erosion. The company's net leverage remains high at around 4.8x, with critical refinancing for $920 million in March 2026 convertible notes and MBI obligations adding balance-sheet strain. Thus, the results confirm that competitive headwinds and financial risks continue to overshadow marginal financial improvements.

Implication

The persistent revenue drop signals that pricing discipline cannot fully offset subscriber churn, threatening EBITDA stability and deleveraging goals essential for equity value. Elevated leverage at 4.8x net debt/EBITDA, coupled with looming March 2026 convertible refinancing, leaves minimal error margin and risks higher interest costs or distressed financing. Although the net loss narrowed, this improvement is superficial without evidence of broadband net add stabilization, keeping the probability-weighted outcome skewed toward the bear case. Until Cable One demonstrates sustained progress in reducing subscriber losses and leverage toward mid-3x, the equity acts as a distressed option with inadequate margin of safety. Therefore, the WAIT rating remains justified, with investors awaiting clearer inflection points in operational metrics and debt management over the next 12-18 months.

Thesis delta

The Q4 results reinforce the existing WAIT thesis, as revenue declines and high leverage persist without meaningful shifts in competitive dynamics or refinancing progress. No material change is warranted; the call remains dependent on visible improvements in broadband net losses and deleveraging ahead of the 2026 maturity wall.