Cable One, Inc. (CABO): BCG Matrix [Dec-2025 Updated]

You're looking at Cable One, Inc. (CABO)'s portfolio right now, and honestly, the BCG Matrix maps their current transition perfectly from legacy cable to a pure-play broadband provider. They're actively managing the decline of Residential Video Services, which dropped 16.2% year-over-year in Q3 2025, while the core Residential HSD business acts as a massive Cash Cow, generating $130.1 million in free cash flow despite subscriber pressure. The future bets, like fiber and new mobile pilots, are the Stars and Question Marks, demanding capital while the old video segment becomes a Dog management exercise. Let's break down where CABO is putting its chips for the next phase of growth.

Background of Cable One, Inc. (CABO)

You're looking at Cable One, Inc. (CABO), which you probably know better by its consumer brand, Sparklight. Honestly, this company has been making a clear pivot for a while now, positioning itself as a broadband communications provider rather than a traditional cable TV company. As of late 2025, Cable One serves more than one million residential and business customers across 24 states.

Let's look at the numbers from the third quarter of 2025, which gives us a solid, recent snapshot. Total revenues for that quarter came in at $376 million. The company is still managing the final stages of its video product lifecycle, which is driving significant declines there; residential video revenues dropped by $8.7 million year-over-year.

The core of the business remains residential data, though even that segment saw a slight contraction in Q3 2025, with revenues of $227.6 million, a 1.2% year-over-year decrease, largely due to subscriber declines, even as ARPU (average revenue per unit) saw some increases. To be fair, the business data segment, which includes fiber, showed some resilience, growing 0.4% year-over-year in the third quarter.

Operationally, the company is focused on cash generation amid these transitions. For the third quarter of 2025, Adjusted EBITDA was $201.9 million, which translated to a margin of 53.7% of revenues. Cash flow from operations was strong at $156.5 million, leading to free cash flow of $130.1 million for the quarter. Management has been aggressively using this cash to manage the balance sheet, paying down an aggregate of $197.9 million of debt during that third quarter alone.

The market is definitely weighing the challenges of customer erosion against the high-margin nature of the remaining data business. As of September 30, 2025, the company had 910,400 residential data subscribers, continuing a trend of subscriber losses seen across the broader cable industry. At the end of October 2025, the stock price was sitting at $148.55, giving Cable One a market capitalization of $836M.

Cable One, Inc. (CABO) - BCG Matrix: Stars

You're looking at the business units within Cable One, Inc. (CABO) that are leading the charge in growing markets, even if their current market share growth isn't explosive yet. In the BCG framework, these are the Stars-the segments demanding investment to maintain their leadership position in high-growth areas.

The Business Data Services segment, which houses the fiber and carrier portions of the business, is positioned here. For the third quarter of 2025, this segment posted revenues of $57.5 million, representing a year-over-year increase of 0.4%. This modest top-line growth is significant because the underlying fiber and carrier components are noted as experiencing durable growth, benefiting from strong sales momentum and higher connection volumes, making it the highest-growth sub-segment in the current portfolio. Still, the overall segment growth is tempered by softness in the Small and Medium Business (SMB) segment.

The residential data business shows a classic Star dynamic: high value per customer offsetting volume loss. For Q3 2025, the Average Revenue Per Unit (ARPU) for high-ARPU residential data customers saw a healthy increase of 3.2%. This pricing power helped partially offset a subscriber decline of 5.1% year-over-year in that same residential data category. The resulting residential data revenue was $227.6 million, a year-over-year decrease of 1.2%.

Here's a quick look at how the key data segments performed in Q3 2025:

To keep these leaders growing, Cable One, Inc. is making necessary capital allocations. Management pointed to increased Selling, General, and Administrative (SG&A) expenses, which rose to 26.8% of revenues in Q3 2025 (up from 22.5% in Q3 2024), driven in part by investments in growth enablement platforms. These platforms are intended to generate future operating expense and SG&A savings through greater automation. Capital expenditures for the quarter totaled $71.8 million, a decrease of 6.8% year-over-year, and the full-year CapEx expectation has been lowered to the high $200 million range from a previous estimate near $300 million.

The investment thesis for Stars centers on maintaining market share until the market matures. For Cable One, Inc., this means:

• Continue funding the fiber and carrier segments for durable growth.
• Support the ARPU strategy in residential data services.
• Ensure the growth enablement platforms are implemented effectively.
• Maintain disciplined capital allocation, as evidenced by the lower full-year CapEx guidance.

If the fiber and carrier segments sustain their current momentum until the broader market growth slows, they are positioned to transition into Cash Cows for Cable One, Inc. Finance: review the Q4 capital allocation plan against the revised high $200 million CapEx target by next Wednesday.

Cable One, Inc. (CABO) - BCG Matrix: Cash Cows

You're looking at the engine room of Cable One, Inc. (CABO) portfolio, the segment that keeps the lights on and funds the rest of the strategy. Cash Cows thrive in mature markets where they hold a high market share, and for Cable One, that's definitely the Residential High-Speed Data (HSD) business.

This unit is the primary revenue driver, generating $227.6 million in revenue for the third quarter of 2025. To put that in perspective against the total top line of $376.0 million for the quarter, you see just how central this service is to the company's financial stability.

The profitability here is what makes it a true Cash Cow. The Adjusted EBITDA margin hit 53.7% in Q3 2025, which is a strong indicator of high profit margins relative to the market it serves. This high margin on $201.9 million in Adjusted EBITDA shows the business consumes less to maintain its position than it spits out.

Because this market is mature, you don't see the massive promotional spending you'd expect in a high-growth area. Instead, the focus shifts to efficiency. Investments here are targeted, like the $71.8 million in Capital Expenditures during the quarter, aimed at supporting infrastructure rather than aggressive market share grabs.

The resulting cash generation is significant. We see $130.1 million reported as Adjusted EBITDA less capital expenditures for Q3 2025. This cash is being deployed with discipline, primarily toward the balance sheet. You saw the company pay down an aggregate of $197.9 million of debt during that same third quarter. That's the definition of milking the gains-using the cash cow's output to service corporate debt and maintain financial health.

Here's a quick look at the key financial performance metrics for this segment's results:

The business unit operates with a clear advantage, holding a dominant market share in secondary and tertiary markets where the competitive landscape is historically less intense. This positioning allows Cable One, Inc. (CABO) to maintain pricing power and operational stability, which is exactly what you want from a Cash Cow. You're looking at a business unit that generates the necessary liquidity to fund the riskier Question Marks in the portfolio, or to simply shore up the corporate structure. It's the foundation, honestly.

The characteristics of this segment align perfectly with the Cash Cow profile:

• High market share in a mature segment.
• Generates substantial cash flow over consumption.
• Low growth prospects limit promotional spending needs.
• Cash flow is directed toward debt reduction.
• Reported Adjusted EBITDA margin of 53.7%.

Finance: draft the Q4 2025 cash flow projection, isolating the expected contribution from Residential HSD, by next Tuesday.

Cable One, Inc. (CABO) - BCG Matrix: Dogs

You're looking at the segments of Cable One, Inc. (CABO) that are firmly in the Dog quadrant of the BCG Matrix. These are the businesses operating in low-growth or declining markets with a low relative market share. Honestly, they tie up capital without offering much in return, making divestiture a prime consideration.

The primary example here is the legacy video business. Management has been quite clear that they view video as being in its final phases, which signals a deliberate retreat from this product line. This isn't a surprise when you look at the hard numbers coming out of the third quarter of 2025.

The sharp decline in the video segment is a core driver of the company's overall revenue pressure. Specifically, Residential Video Services saw its revenue decline sharply by 16.2% year-over-year in Q3 2025. This attrition is a major factor in the overall total revenue decline of 4.5% reported for Q3 2025, where total revenues fell to $376.0 million from $393.6 million in Q3 2024. Expensive turn-around plans for this type of legacy product usually don't work; the market is simply moving on.

To give you a clearer picture of these low-growth, low-share businesses, here's a quick look at the recent revenue figures for these legacy services:

The Residential Voice Services segment is another clear Dog. It's a small and declining legacy offering. For instance, in Q1 2025, this segment brought in revenue of only $7.04 million. When you compare that to the total Q1 2025 revenue of $380.60 million, you see how small its contribution is, even as it shrinks. These units are cash traps because they require maintenance but generate minimal incremental cash flow.

The reality of these segments dictates a clear strategic path, which you can see reflected in the company's actions:

• Residential Video revenue fell by $8.7 million year-over-year in Q3 2025.
• Residential Voice revenue in Q1 2025 was just $7.04 million.
• The company is actively navigating the 'final phases' of the video product lifecycle.
• Video subscriber attrition is the core reason for the overall revenue decline.

Honestly, the focus should be on minimizing exposure here. Finance: draft the projected cash flow impact of a full video service wind-down by Friday.

Cable One, Inc. (CABO) - BCG Matrix: Question Marks

You're looking at the new growth areas for Cable One, Inc. (CABO) that require heavy investment to capture market share, or risk becoming Dogs. These are the Question Marks, consuming cash while the market decides their fate.

Mobile Service Pilot represents a major foray into the highly competitive wireless market, mirroring strategies used by cable giants Charter and Comcast, who together count 19.3 million mobile lines. The U.S. mobile sector is dominated by incumbents, with T-Mobile holding a 35% share, Verizon Wireless at 34%, and AT&T at 27% as of December 31, 2024. Cable One is piloting this service through an unspecified third party, aiming to increase customer stickiness by bundling fixed and mobile broadband.

The push for new footprint growth is evident in capital allocation decisions. For the second quarter of 2025, Cable One, Inc. (CABO) invested $8.7 million of Capital Expenditures (CapEx) specifically for new market expansion projects, separate from the $2.2 million spent on integration activities during that same period.

Value-focused product offerings are a direct response to subscriber pressure in the core Residential Data segment. FlexConnect, designed for value-conscious customers, offers two simple speed tiers:

Lift Internet, another offering, targets eligible customers with a low-cost option at $29.95/month, which includes a free modem and free standard installation, with no credit check for families qualifying through federal assistance programs.

The overall Residential Data segment, traditionally a Cash Cow, is showing signs of weakness that place its future in question due to fiber competition. The pressure is visible in subscriber trends:

• Residential data revenues in Q3 2025 were $227.6 million, a year-over-year decrease of 1.2%.
• Residential data subscribers stood at 910,400 as of September 30, 2025.
• In Q2 2025, the company reported losing 13,500 broadband subscribers.
• Residential data subscribers declined by 3.2% year-over-year in Q2 2025.

The CEO acknowledged 'higher than expected churn in residential data customers' during the Q3 2025 call. These new product rollouts are intended to stem this decline and improve Average Revenue Per Unit (ARPU) through higher-tier adoption.

Here's a quick look at the cash consumption and investment for these growth/retention efforts:

• Q2 2025 CapEx for new market expansion: $8.7 million.
• Q2 2025 Adjusted EBITDA less capital expenditures: $134.8 million.
• Q1 2025 Capital expenditures: $71.1 million.

Finance: draft 13-week cash view by Friday.