Cable One reported an 11.4% year over year uptick in second quarter revenue to $268.4 million, driven by its surging residential data and business services operations.
Residential high-speed internet revenue increased by 18.3% to $122.4 million, even with the user base only growing by 1.2% to 592,234 customers. Julie Laulis, CEO of the Phoenix, Ariz.-based operator, attributed the revenue growth to customers responding to price cuts on higher-speed tiers.
For example, with 200 Mbps tier priced at $65 a month (around 32 cents per Mbps), a number of Cable One customers saw the value in jumping from the 100 Mbps tier, which is priced at $55 (55 cents per meg).
“Customers are making a call on value,” Laulis told investment analysts during Thursday’s earnings call. “When we reduce the prices on faster tiers, ARPU goes cup because the selling goes up.”
Revenue from business services, meanwhile, increased by 18.4% to $38.4 million, with the customer base increasing by 8.3% year over year. With the mid-sized cable company offering products like the 2 Gbps Piranha Fiber, Laulis declared Cable One a “disrupter” in the business services market.
Cable One actually saw a 3.1% revenue increase in residential video to $87.4 million, with its video base shrinking by 11.4% year over year to 323,514.
Speaking to Cable One’s value as an acquisition target, MoffettNathanson analyst Craig Moffett noted that the company has “already lost so many of its video subscribers that, for those worried about video cord-cutting, it has been de-risked
“And the fact that they don’t make any money on video de-risks them still further,” he added.
The company reported a 57.2% jump in net income to $43.8 million.
Notably, Cable One’s financials are skewed a bit by the still-digesting 2017 New Wave acquisition. Only two months of New Wave data are included in the comparable 2017 second quarter.
The skew isn’t massive—with New Wave factored out, for example, net income increased by 57.1% to $40.5 million.
Thursday’s earnings call marked the last public appearance for retiring Cable One CEO Kevin Coyle. Former WOW chief executive Stephen Cochran will officially take over for Coyle on Aug. 13.
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