Q1 2022 Cable One Inc Earnings Call
Good day, and thank you for standing by welcome to the cable one first quarter 2022 earnings call.
At this time all participants are in a listen only mode.
After the speaker's presentation, there will be question and answer session. If you would like to ask a question. During the session you will need to press star one on your telephone keypad. Please.
Please be advised that today's conference is also being recorded and if you require any further assistance you May press star zero without further Ado I would like to welcome your first speaker for today Ms.
Mr. Steven Cochran CFO .
CFO you may begin.
Thank you Carl.
Good afternoon, and welcome to cable one's first quarter 2022 earnings call. We're glad to have you join us as we review our results.
Before we proceed I'd like to remind you that today's discussion contains forward looking statements relating to future events that involve risks and uncertainties. You can find factors that could cause cable one's actual results to differ materially from the forward looking statements discussed during today's call and today's earnings release and in our recent SEC filings cable one is under no obligation and.
<unk> disclaims any obligation except as required by law to update or alter its forward looking statements, whether as a result of new information future events or otherwise.
Additionally, today's remarks will include a discussion of certain financial measures that are not presented in conformity with U S generally accepted accounting principles or GAAP.
Affiliations of non-GAAP financial measures discussed on this call to the most to the most directly comparable GAAP measures can be found in our earnings release or on our website at IR Cableone net joining.
Joining me on today's call is our president and CEO , Julie Lawlis with that let me turn the call over to Julie Thank.
Thank you Steven and good afternoon, everyone. We appreciate you joining us for today's call.
Given our exceptional track record of strong financial results and solid customer class.
Hope you have comes from years of cable one.
The tool that delivers quarter end quarter out building upon our history of long term consistent performance.
This quarter once again provide a result that exemplify our focus on the execution of our strategic initiatives.
Compared to the first quarter of 2021 total revenues increased 25% adjusted EBITDA increased 25, 6% and adjusted EBITDA margin was 53, 1%.
While we are disappointed that our industry leading results are not reflected in our current stock price, we will continue to execute on our strategy and great. So far.
Sustained HFC customer and ARPA growth effective management of our costs and focused capital allocation, we are well positioned to deliver on our long term goals.
And as a reminder, this is the first quarter in which we have ski consolidated clearway fiber from our results.
Looking first at our residential high speed Internet.
We added 163000 customers on a year over year basis for 24%.
On a sequential quarterly basis, when excluding the impacts of the customers contributed to clearway fiber we grew by 11000 customers.
As we have said for the past year. It is logical to expect customer for us to return to a more normalized pre pandemic seasonality.
During the first quarter, we moved further towards the positive growth patterns. We saw in 2019, which were in line with our expectation.
Demand for our premium high speed data products increased 10, new high with 45% of our new customers selecting speeds at or above 300, megs and sell into gigabit service, reaching 16% for the first time.
The new sale combined with upgrades by our existing customers and the offering of unlimited data resulted in year over year HFC ARPA growth of three 5% for the first quarter of 2022.
As we discussed on our last call we began migrating customers at the end of last quarter from our 100 Meg to tier two.
200, Meg speed tier doubling their speed for an initial increase of $5 per month, we expect to fully realize the associated <unk> lift from this migration in the second quarter.
Turning to our network reliability is at the forefront of our long term strategy and critical to ensuring a premium customer experience.
Part of this we continue to make cost efficient capital investment as part of our efforts to ensure that the network is never a barrier to growth.
Usage has grown at 28% CAGR for the past five years, reaching an average of approximately 560 gigs per customer per month in the first quarter of this year.
Our downstream and upstream utilization during peak hours never exceeded 21%.
Moving to commercial business services revenues were $76 $5 million, increasing 26, 27% year over year.
When excluding hard Gray cable America, and the operations contributed to clearway fiber business services growth was seven 3% year over year.
We continue to see growth not only from new customers, but also from existing customer demand for higher tiered product offering.
This is services benefit from a marketing promotion encouraging customers to increase their internet fees, which contributed to the increase in year over year Q1, or two of seven 7%.
Our business services team has also been deeply engaged in integrating our recently acquired brands and unlocking value.
Most recently, we redeployed hard great talent and support our hosted voice services across our larger footprint. This is just one way in which we are leveraging the expertise of our newest associates.
With an estimated total addressable market of $1 $2 billion.
<unk> portfolio designed to meet the evolving needs of businesses of all sizes and our commitment to delivering white glove service. Our business team is laser focused on continuing to build and defense the strong competitive position in our markets.
We are very excited for the robust growth opportunities for business services.
Looking at our unconsolidated investments in total residential and business data customers grew by approximately 12500 or three 2% on a sequential basis from Q4 of last year the.
The continued growth of our strategic operating partners highlights the value that they bring to cable one including the opportunity to share best practices, which enables us to better serve our customers.
Keep in mind that clear white fiber net ads are now included in this figure.
As a reminder, our investor day presentation, which provides more detail on our portfolio of unconsolidated investments is available on our IR website.
Transitioning to integrations teams across the company are making excellent progress, bringing our recently acquired brands together working diligently to execute on our integration road map.
We continue to learn and adopt best practices and solutions from our acquired brands, whether it's the company wide incentive program, we implemented from new wave. The innovative video chat solution from fidelity that proved essential to connecting and servicing customers. During the pandemic. The very recent adoption of her grade.
HR platform or the incredible talent that has joined our company across all of our acquisitions. We have many examples of the tangible and intangible value. These companies bring to table one.
Our integration efforts have also benefited from the formation of clearway fiber as.
As mentioned previously with the spin off of Clearway and fiber we are seeing the evidence of cost savings associated with the hard great integration with more to come.
Clearway fiber is focused on accelerating fiber to the premises investment opportunities cable one is expected to benefit from reduced capital intensity, and therefore improved free cash flow.
During the first quarter, we saw the first signs of this with cable one's capital spending as a percent of adjusted EBITDA declining from 48, 8% during the fourth quarter of 2021 to 43, 9% in Q1 2022, even with a large upfront modem sun.
Before I hand, the call over to Stephen I'd like to touch on two other items.
I'm pleased to share that later this month, we will be awarding $125000 in grants to nonprofit organizations in our markets through the company's charitable giving fund which is now in its second year.
The fund, which annually award $250000 in grants across our footprint concentrates of course in the areas of education and digital literacy hunger relief and community development.
We are humbled and honored to partner with these organizations to support the communities we serve.
Next I want to take a moment to recognize Steven.
As many of you may be aware, Stephen recently announced his intention to step away from his role as CFO of cable one.
While he will remain with US until January 2023, serving in an advisory role and working closely with our next CFO Todd Coochie. This will be Stevens final earnings call.
Over the past four years Stephen's financial discipline business acumen, and strategic expertise has enabled cable one to achieve industry, leading growth and enhanced our opportunities for continued success in the future.
Taking over as CFO effective July 1st will be tied to Qi, our current SVP of business development and finance.
I joined the company in September of last year. After spending 21 years in investment banking. Most recently is the former managing director and group head of the technology media and telecommunications capital markets team at tree Securities.
His extensive financial experience and background in the telecom industry as well as his deep understanding of our business will be invaluable as we continue to execute on our long term strategy of delivering exceptional growth and strong operating yourself.
Todd's core values.
Oriented approach to work and alignment with our strategy has made him a great fit within our organization. So we are exceptionally pleased to welcome him to his new role with cable one.
On the behalf of the board of directors and all cable one associates I would like to thank Steven for his exceptional contribution to the company and congratulate Todd who you will hear from on our next quarter's earnings call.
4.2% residential ageist, Degrowth was 8.7% and business services growth was 7.3% a year over year.
As a reminder, we expect to fully realize the <unk> lift from our annual video rate adjustment and he just you migrations with the second quarter financial results.
Resident until you just eat P. S use grew by approximately 5000 since the beginning of the year for my 11000, when accounting for the Psus that were contributed to clear away fiber.
Operating expenses were $119.4 million or 28% of revenue in the first quarter of 2022 compared to $101.5 million or 29.7% of revenue in the prior year quarter 170 basis point improvement driven largely by a 5.4 million dollar decrease in programming costs.
Selling general and administrative expenses were $87.8 million for the first quarter of 2022 compared to $69 million and the prior year quarter. These expenses were 20.6 per cent of revenues in the first quarter of 2022 compared to 22% of revenues in the prior year quarter.
Net income in the first quarter was $171.5 million, which included a 22.1 million dollar non-cash gain on the clear way fiber transaction and and 84.6 million dollar non-cash gain on the fair value adjustment associated with the call input options to acquire the remaining equity interest in Meg of broadband investments.
As a reminder, the M. B I options are subject to mark to market accounting on a quarterly basis until these options are exercised or expire any changes in the assumptions used to determine their fair value to increase or decrease the resulting valuation which in turn could cause significant non-operating fluctuations in our financial results from one quarter to the Max.
Net income per share on a fully diluted basis was $26.85 per share inclusive of the non-cash games just mentioned.
Adjusted EBITDA was $226.5 million for the first quarter, an increase of 25.6% from the prior year quarter.
Or just an EBIT margin was $53 one per cent. Please.
Please note that we are not able to provide adjusted EBITDA growth rates that exclude the impact of heart rate and cable America acquisitions, and declare wait five or deconsolidation due to the the challenges in providing the required non-GAAP reconciliation when taking into account corporate allocations that were part of hargraves financial statements and 2021.
Capital expenditures totaled $99.4 million for the first quarter of 2022, which equates to 43.9% of adjusted EBITDA.
During the quarter, we invested $15.7 million of Capex for network expansion and $3.4 million for integration activities.
Approximately $8.5 million in our capital spend is driven by a proactive pull forward and modem spin to ensure we have materials to support our continued growth in 2022.
While capital spin will vary from quarter to quarter overall, nothing has changed in our long-term capital deployment strategy.
Adjusted EBITDA <unk> capital expenditures was $127.1 million for the first quarter and increased 17.1 per cent from the prior year quarter.
And the first quarter of 2022, we distributed $16.7 million in dividends to shareholders and repurchase 47800 chairs, bringing the total capital return to shareholders during the quarter to $86.4 million.
Under the current Board Board authorization, we had approximately $75 million remaining for share repurchases at the end of the first quarter.
They'll continue to be opportunistic with how we allocate our capital.
From a liquidity standpoint, we had approximately $368 million of cash and cash equivalents on hand as of March 31, and we continue to generate significant pretty castillo.
A quarter into our that balance was approximately $3.9 billion consisting of approximately $2.3 billion in term loans.
$920 million in convertible notes $650 million, an unsecured notes and $5 million in finance at least liabilities.
We also had approximately $449 billion available for additional borrowing under a revolver as of March 31st.
Overall are that the last quarter annualized adjusted EBITDA after netting cash on hand against it was at 3.9 times as of March 31st.
Also after quarter ended on April 1st we contributed are Tallahassee assets in exchange for cash and equity interest in Metro net communications totaling $14 million.
Lastly, as mentioned on last quarter's call, we continue to unwind or bulk cable video offerings. While we estimate this initiative reduced video revenue by approximately $1.3 million in the first quarter of 2022 more importantly, it is helping prepare our network for the next generation of high speed data enhancements, reducing the amount of time and then.
Energy spent focusing on an unprofitable product offerings and is expected to continue to help improve our margins.
With that Carl we're now ready for questions.
Thank you Sir as a reminder, if you have questions. Please.
One.
Again that is star one to ask a question.
Our first question comes from the lineup Frank Luton.
Raymond James Please ask you a question.
Great. Thank you I just wanted to start with the J D contribution I see that you know the the.
Subscribe or decline there in about 6000 or so so it's kind of kind of go away can you give us a little bit more color on the nature of those properties that kind of penetration they have in N Y those were selected for for the J D banks.
Sure. So the clearly article or way of fiber that was the basically the entire asset that we bought as part of clear ways net of the the tower business associated with the carriers. We looked at that piece is more of a part of the overall cable one strategy that's more of a nationwide.
Effort to sell fiber to the tower too do the various carriers and then on the hard way fiber piece. It was really hard to get fiber was a concept within harder, but not a legal entity with aren't Margaret it is what they had done to kind of do their own version of network expansion on a fiber basis.
So mostly it was the market that we're inclusive within that I'm in the best and also there. We also pulled out the tower business associated with that too. So it was kind of tan picking the assets that kind of fit that business model and had been part of what they were doing so high capital intensity new markets are relatively low.
Margins and and.
You know accidentally expansion capital versus expansion markets instead of legacy markets would be the way I would describe it it's primarily a.
Business services business today, there was the 6000 ready hsp customers, but that was a much smaller piece of the overall business compared to the business services side certainly launching residents are for them as part of what they are doing it a number of those markets and that will certainly be fairly capital intense.
On their part and one of the reasons, we thought it made sense to deconsolidate from our base business.
Going forward will will focus be more business or residence or residential and what else do you anticipate.
Contributing on an annual basis, either in cash or in other assets.
Yeah. So we would expect so one you know it's it's both certainly want to continue to expand their commercial business, but add rather arad residential as a bigger component of that.
But there's no you know.
There's no expected ongoing commitments there was over $320 million of cash contributed by our partners.
There's no leverage on it today, so between the cash in the leverage capacity, which will grow over time as the business grows you know we wouldn't see putting more cash in that unless there were significant M&A opportunities that you know they choose chose to pursue.
That profile more so.
Had the opportunity to but we certainly have no obligation to and certainly can have impact on whether that would happen or not.
[laughter].
Alright, great. Thank you very much.
Our next question comes from the line of Greg Williams.
Please ask you a question.
Great. Thanks for Steve I just wanted to.
It was a pleasure working with you and best of luck I did want to ask about the 5000 subscribers. You grew undergraduate data side is that apples to apples as I think about the 2000 discover adjustment upper.
<unk> so how many how many subscribers came through the door on residential data and it seems like it would be 3005 thousand maybe I'm missing something there and you can help me that'd be great I know it and second rate. The number that's okay. Let me just answer that one first and then we can go on and thank you for the kind words I appreciate that the <unk>. The net AD was 11000, so if if you.
Back out what was contributed and the the 2000 adjustment was actually put into the starting number two so from a true organic growth standpoint, we added 11000, new customers during the quarter.
Okay got it.
And then I was just asking are.
Are you seeing any encroachments on fixed wireless I know you haven't been in the past, but there was some big numbers by Verizon and T mobile.
Have the and that adds in the corner and every ISP during or any fees and it's been rather dismissive. So you know you guys are more rural and I'm. Just wondering if it's coming from you and if not what do you think it's coming from.
Yeah did you want me to go ahead and put all the hamster.
[laughter] diabolical plan, that's Steven flat.
Should have to answer all the questions but.
First of all let's just review our competitor footprints, we would consider about 29% of our total footprint you, having another provider who can offer a hunter green.
Ringer.
And about a smaller subset.
And 20 per cent are around 20 per cent five or to the home competition.
Fixed wireless certainly something that we have our eye on here actually.
Can associate your customers X wireless so that we can keep an eye on her.
And the experience of.
I'm fine.
That survey.
Our overlap.
The information that I have with T mobile is actually quite small and smaller than other operator human now at this point in time I don't expect to see you then.
There isn't it isn't it that doesn't mean that they won't get their over time.
I also over time their network is going to be needed for normal customers.
So for us it really is.
Sure at this point in time now that isn't to say that we cannot take.
Seriously and that is quite honestly why we have such a focus on local local <unk> vocal operator, we have people, who live and work and I'm trying to give our customers with them where can I neighbors with our customers.
So so I think we're pretty close to the ground on that and it's not a concern right now for us.
Quite honestly my assumption customers are coming from urban areas.
Yeah.
Yeah.
The only thing I would add to that it you know implying did they come from US. Obviously you didn't our numbers are still really consistent with where we were in the first quarter of 2019 and in 2019 pre pandemic that was Ah.
Highest growth rate, we had an AD. After after you know becoming public and so I'm I'm, probably even before then.
So clearly we haven't seen a pullback at all and we're still you know what we would have considered kind of what was the accelerated pre pandemic right levels. So we're not really feeling like they're coming from anywhere in that we're losing anything cause we're still kind of growing at the rates we solved before then.
Got it thank you.
Our next question comes from the lineup.
Huh.
Fargo.
That's your question.
Thank you. So in Q1 would that 11000 I think that's about 1.1% sequential growth do you feel like you might be able to annualize that right or do you have any kind of outlook maybe for the full year in terms of net add growth and I know you had the.
Upgrade to make the base 200 megabits per second for that extra five Bucks did you see any elevation insured on customers, where you put that modest speeding price increase through.
I'll start with the second.
Mmm, it's backwards.
You can see churn excel at.
Historically.
So.
[laughter].
China is typically driven quite honestly from video rate adjustments and given our love video games.
Or less inclined to have that issue.
The other operators.
Quite honestly customer Scott.
And double the data.
For that increase and so so far so good I'm really looking forward to seeing those results swelling to our our appeal in the second quarter.
I would add to that that we did give the notices to people that we're moving into the 200 Meg they did experience the price move up and so what you saw from a growth standpoint reflected that all of these customers knew it and we still get the growth targets that we did and all we got was no revenue out of it so far and so all of that will be coming in the.
<unk> as well the video revenue. So the fact that I mean, I know if people were worried about the churn impact of this move because it's the first time, we've had even something that approximate at a rate increase in a long time, but the subscriber impact.
We're kind of through that piece of it already so I think that's encouraging and I would say, there's a difference between price and value.
Yep.
And on the.
On the second question I think.
We've continued to point to 19 as a whole year. We also believe that you know.
Seasonality is going to return that is our best guess and Zoe if it looks like it did pre pandemic then you have a pretty strong first and third.
You know it worse second and so so forth. That's what has historically been the case, we haven't seen that for the last two years. So you know.
I don't know that any of us can say with confidence that we know these things are happening, but that would be our anticipation because things feel a lot more normal than they did even this time last year or six months ago.
Great and then sorry, if I missed this earlier, but do you have a target for growth in passing this year, maybe booth organic N in total.
Yeah, I I wouldn't say, we we we've ever kind of given that up I mean, I think you can look at historical and get a feel for for what we've done we have some that's coming through the network expansion that we're doing this captured in the network expansion capital that we discussed and we have some that comes from just new home growth and I think we continue to be fortunate.
We're in a lot of markets that are growing and because of that we get that so we don't really give that as a target because it's not something that we completely control. We are certainly opportunistic win passings arise and tried to take advantage of them, but I can't say that we actually target what those are gonna be and we want to take advantage of those.
Great. Thank you.
Your next Brandon.
Keybanc capital markets.
Your line is open.
Okay, great two.
Two questions Julie you're Gonna hate. This question cause it's on video that's deal with more strategy, but so when you. Finally do you guys have programming expense and the percentage of video revenue go in up.
Oh in the mid 60%, it's been going up for the last couple of years, you guys take right regularly but it's not all off set.
From a margin standpoint, and I guess when do you just consider exiting the business.
And when and if you do that does it change your view on whether or not to bundle something else with your broadband service like mobile then questions for Stephen EBITDA margins were up sequentially. Despite this video right mismatch you have a big each S D price increase coming for those hundred Meg moving.
I mean, what factors do we need to keep in mind when modeling EBIT margin for the remainder of the year.
Sure sure Yeah. So on the on the Eve at a question clearly contribution of the clearway fiber assets.
Which were lower margin assets helped impact that we also had a significant portion of the management team at hardware who'd stayed through us to the end of the year. Many of them went over to clear away fiber some of those some of the others left. So there was you know that piece of that impacted as well and so I would say it was a bit of you know part of what the.
The strategy will slip cleared away if I ever was to literally take the capital Tensity lower margin business that has the potential to grow really high and put that in an entity where it has the ability to you know.
Invest heavily and grow quickly, but do it in a low margin environment without the pressure of the public company of you of needing to be higher margin and so so that's what's reflected there I think as we move forward clearly.
The the HSE or Hulu impact well, there's really none of that in the first quarter because of the timing of the way some of the unlimited rolls off for those customers. We really got no R. Boo lift tied to to that particular move in the first quarter. So we'll get it all in the second quarter and on the video side, we used to.
Actually get the equivalent of one sixth of the of the rate increase and while we don't.
Past.
We don't try to maintain margin percentage, we tried to more than maintain margin dollars on a per customer basis, So I'm, making sure that on a fully EBIT basis, not just the program and cost basis that we're passing through all the incremental costs, that's going to come in and do a year. So that we're not stepping backwards on an individual customer basis.
And Giuliani like the strategy.
Okay.
Bundling strategy.
Yeah, <unk> would we consider bundling something else with the Internet.
I think the answer to that is yes, whether it adds value related items, which I feel like we already do it as soon.
Is we're offering unlimited data for has anything about that either or other products that will be coming down the line.
[noise] take advantage of this super robust type that we have directly into consumers mm.
Not sure what will be will watch and see that for sure it's gotta be something that.
Pocketable.
Okay.
Oh.
And that we can call I guess anyway, where we own the customer I think that's what we'd be looking to find out.
Super reliable.
Egypt keep on it.
Got it thank you.
For our next question comes from the line J Lee.
<unk> <unk> <unk>.
Your line is open.
Hi, Thank you.
So it sounds like from the questions. So far you you anticipate pretty normal.
Activity level back then 2019 and I'm curious if you could comment on you know just kind of break it down gross add environment to turn level or even just competitive dynamic has that all returned to you know pretty normal level for Ya and <unk> <unk> <unk>.
Different from the experience with some of your peers. So maybe you could comment on.
Maybe contrast to wipe it differently.
Alright, how you're experiencing right now.
Yeah, sorry about that a lot of that last quarter.
That we seem to be experiencing something different than others and that Ah trout, 21, or can ask where <unk>.
There were several of us even though churn Allen aimed at low levels I would say that generally speaking connect.
Turn or.
Continuing at that pace and churn is lower than it was in pandemic and quite honestly, we know that.
We did benefit from.
News and our market or.
In our market.
Look like a typically <unk> national average, but starting at 2020th route.
If you can call it <unk> or at least there's two years our newest escalated.
National average and.
<unk> are coming back on line, which is which is a matter of getting this frederick around we think we think we're starting to look normal again.
If there's going to be the normal seasonality the normal patterns of things that we love about this business.
So predictable.
We think we're coming back to that.
Got it and just a quick follow up on.
I know AT&T. His name is fiber pricing strategy and any communist given there is some overlap there with your footprints.
And any comment on your view of.
That strategy or versus what you guys are doing.
Yeah. So.
<unk> is covered by AT&T half bye.
Central Bank.
Teeny tiny person frontier.
We are not seeing any phone.
Oh.
Out of a T and T for central and quite honestly.
We have seen frontier Greenville.
They seem to be the biggest mover out of their street and for US They are a as I said.
Peace.
Yeah, and and and on I mean, essentially we certainly have not too much at all AT&T, we haven't I'm clearly, they're being active and I think based on everything you are either activity is much more focused on areas that were originally fiber to the curb that they're taking fiber to the home and you know that makes sense, it's the quickest way to get more fiber homes and.
Because of that.
Those were heavy suburban areas when they did that which means that you know, they're they're not ours will they eventually come to our markets what are the ones that they're not already in cause if you think of our fiber competition. There half of what we have today that affirmative Ivor competitors' standpoint, and that was all part of their you know obligation to build 13 million homes as part of the.
Direct T V deal and so we saw that in the Gulf Coast and some of the Texas properties in southern So we've we've seen that we've been through it we managed to grow through that and so you know we expect to be prepared to be ready to do it again, but we think you know we we.
We constantly talk about is there's competition coming eventually someday maybe not in all of our markets, but certainly in more than there are today, but it's always gonna be slower lower than it is in the rest of the industry and maybe never in parts of our markets and we think that's one of the I I think pieces that people don't completely understand is it's not that we will never see competition.
But we're always going to see it in a less intrusive ways and what the rest of the industry does.
So.
I'm pretty confident in where we're getting our customers.
And so we have competitive intelligence on that.
And during the pandemic typically we got customers from everyone. We got customers from wireless only we got customers from TSS.
Fresh from fiber.
Okay, I'm from all types of technologies and and types of competitors.
And I think that goes to you know having.
Having a reliable service.
That is.
And takes care of the customers needs, we have a deep knowledge of these markets, we aren't new entrants, we know that we are there.
[laughter].
Great. Thank you both and best of luck.
Thank you.
And we have a follow up question from the line of Brandon.
Keybanc capital markets.
After a question.
I I had to come back in and ask about the buyback.
This quarter, you guys spent $70 million, what what's the intention for the remainder of the year or how much are you authorized to buy back your stock. Thanks.
Yeah. So I said in the script that we have $75 million left of the authorization. So you know I think our intentions are always to be opportunistic which is what we've always said about that component of our capital allocation strategy and we talk about a consistent growing dividend uhm investing in a network <unk>.
Testing and growth and being being opportunistic as it relates to the share repurchase side, obviously Julie mentioned in her script portion that you know what we're certainly disappointed with where the stock is from the standpoint of it doesn't make sense to us.
But that also you know it presents an opportunity for us to deploy our cash in something that were huge believers hey, ma'am.
Our last question comes from the line of UT Miller of Goldentree. Your line is open.
[noise], Hey, Steven Julie Thanks for taking my question. So so two quick follow ups for me from some earlier points.
I think a year ago, you guys said that your fiber overlap was 14 per cent I recall, you said today is 20.
How do I think about how much of that is inorganic versus.
Geography, as you guys acquired versus Newbuilds and then you know if that 14, one from 20 in in one for Fortune 20th 12 months of work, we see that going in the next 12 months.
Sure Yeah. So.
I would say there's actually three components you mentioned two of them one of them is clearly.
Buying stuff someone what we bought has had an impact on that I would say the actually the biggest impact. We've had is just our own focus on getting it right. As you saw though the the overall competitive dynamic hasn't moved that much. So we we we've seen a little bit of upgrade activity a little bit of new market entrants, but mostly what we found is.
Where we've gone back and found where people actually have fiber and I would say, we actually err on the side of if there's fiber in the geography, then we count the most vibrant homes, even though because of the nature of the phone upgrades and what they are they aren't necessarily all that so I would say a lot of it as an we've mentioned on previous calls about the competitive mindset.
Digging deeper understanding every market you know I'm just even in the time I've been here if you look at the.
The data we get on the competitive footprint today compared to what it was and it's unbelievably different and way more focused and down to the.
The really small communities and even within the communities down into the neighborhoods and a better understanding on all of that so that's the biggest component honestly of the increase in this last year with some going to the so I'm going to the M&A peace and so I'm going to just some fiber overlap. So I would say the build itself has been a a portion of military rella.
Dudley small portion of the change in the last year.
Okay.
And then.
It has really put a focus.
Mindset for at least the past two to three years and.
And intelligence has just wrapped up.
It's getting better information about what is.
That's upstate, Arizona and building either.
Again.
Overlap with frontier clearly, we're seeing building.
Got it and I think you said that the frontier overlap with small and you're seeing most of the bills from a T and T is that right.
I think we've seen most of our footprint today I mean, if he took the twenties. She talked about over 10 of it is AT&T and that goes historical not what's happening currently and I would say frontier is where we've seen the most activity. There also the smallest from an overlap standpoint of any of the.
<unk>.
Got it and then it's T V talking about M&A for a minute you guys have a lot of time talking about you know the non consult consolidated investments on the balance sheet at the Investor day, a few months ago.
With Mega specifically in that Pokal agreement and where valuations have come in on the space. How are we supposed to think about that investment as it says here today.
Well I think the way I would think about it is it's growing nicely and we only 45% of it. So we're participating in that growth. We have a call that you know we can choose to exercise sometime between the middle of twenty-three in the middle of 24, if we choose not to do that our partners have the opportunity to.
Go sell that asset and you know, we could theoretically participate and we would participate in the upside created through that danger or in 2025. They can you know.
Put it to us at a lower multiple and so you know I think for US we're looking at where we stand today you know, we're we're trading today and what the best use of caches I would tell you that you know we weren't buying shares of actually it would be thinking about solidifying the balance sheet to make sure. We're invest position to do this but when we can buy cable won at the price looking.
Right at we just don't think there's anything better to invest in and so right now that's where we invested the dollars doesn't mean that we won't you.
Figure out a way to do May I guess, some time, which I would argue is probably more likely than twenty-four then then twenty-three but.
But today today.
All we can do to control how we operate how we execute how we grow we can't control the stock price and so if the stock price isn't where it needs to be and we have the opportunity to buy that at a much lower evaluation and potentially where we can do other M&A then that's what we should do.
Great. Thanks.
Sure.
There are no further questions at this time I will now turn to go over two.
C C S O Mr. Steven Coughing for closing remarks.
Thank you Carl.
I want to thank Julie and the entire cable one team for all their support over the past four years I've really enjoyed my time, a cable on and will continue to work with our next CFO to ensure a seamless transition got and I will both be attending the J P. Morgan TMT Conference later in May and the Wells Fargo streaming day in mid June we helped.
See many of you there.
Thank you Steven we are sincerely grateful for all that you've done since joining a cable one family. My tank also go out to our sense, yet you continue to execute it the highest level. So that we can stay true to our purpose of connecting our customers and communities.
And that's.
Scott since our spin off nearly seven years ago.
Focuses on long term results.
That remains true to that cause.
The macroeconomic environment in which we find ourselves I have the utmost confidence that we will continue to grow out of the business.
Excellent longterm results for our investors.
We appreciate everyone joining us for today's call.
Yeah.
This concludes today's conference call. Thank you again.
You may now disconnect.
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