Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cable One Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session.

[Operator Instructions] I would now like to turn the conference over to Jordan Morkert, Vice President, Investor Relations..

Good afternoon, and welcome to Cable One's second quarter 2024 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, including statements regarding future customer growth changes in ARPU, our recently announced organizational changes, the impact of the ending of the affordable connectivity program, capital expenditures, financial performance, capital allocation, dividend policy, leverage ratios and financing plans.

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, in today's earnings release and in our SEC filings, including our annual report on Form 10-K.

Cable One is under no obligation and expressly 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. Reconciliations of non-GAAP financial measures discussed on this call to the most directly comparable GAAP measures can be found in our earnings release or on our website at ir.cableone.net. Joining me on today's call is our President and CEO, Julie Laulis; and Todd Koetje our CFO.

With that, let me turn the call over to Julie..

Thank you, Jordan, and good afternoon, everyone. We appreciate you joining us for today's call. In the second quarter, we executed on our phased plan for long-term growth by taking steps to drive penetration deeper across all market segments and strengthening our competitive position.

CABO is a durable enterprise, and our adaptability has been key to our success.

As part of our focus on growth, we have continued to upgrade our internal platforms to best-in-class standards, implemented organizational changes that enhance our competitiveness by empowering greater decision-making at the local level and continue to refine our go-to-market approach to meet evolving market conditions.

Despite challenges such as the discontinuation of the Affordable Connectivity Program and seasonal fluctuations typical of the second quarter, we maintained steady progress with both connect and disconnect, improving on a year-over-year basis for the second consecutive quarter.

We remain focused on leveraging our strong presence in rural America to capture opportunities and deliver value to our stakeholders. And we believe our second quarter results reflect execution against our strategic plan and set the stage for sustained long-term growth.

Before handing the call over to Todd for a detailed review of our financial performance, I'd like to address three key topics. First, I'll discuss broadband growth across our business.

I'll touch on favorable trends we are seeing due to our new initiatives, including the unique challenges and dynamics of the current marketplace and provide insight into our expectations for the future.

Second, I'll explain how proactive and capital-efficient investments in our network over the past years enable us to provide a superior customer experience and position us for the next generation of speeds and service offerings necessary to deliver for our customers' expanding needs.

Finally, I will outline the recent organizational changes we made to fuel our strategy for the future. These reconfigure the relationship between our local teams and corporate office, empowering decision-making at the local level by associates closest to our customers.

We believe this approach will enhance our agility and better support our growth initiatives. First, residential broadband. In the second quarter, we faced the challenges presented by the ending of the affordable connectivity program.

Through proactive and thoughtful communication, assessing our customers' financial and usage needs and aligning them with suitable plans, we successfully managed a net decrease of about 4,000 customers of the approximately 48,000 customers receiving an ACP subsidy during the quarter.

Please note, this figure does not take into account any estimate of the impact that the end of the ACP program had on our gross connections for the quarter. We also anticipate some additional churn from ACP in the third quarter.

Excluding the impact of those 4,000 lost ACP customers, our residential broadband customer base would have declined by only 200 customers on a sequential quarterly basis, a significant improvement compared to the seasonally impacted declines we experienced in the second quarter of 2023.

Despite the loss of ACP subsidies, we experienced both improved connects and disconnects in Q2 on a year-over-year basis for the second consecutive quarter. As I've discussed in prior quarters, our relatively low broadband penetration leaves us well positioned to drive incremental growth over time.

By segmenting our marketplace, we can access new market segments and increase penetration in existing ones. Furthermore, our ongoing digital transformation initiatives and significant excess network capacity enable us to deliver our services more efficiently with the marginal cost of each incremental customer lower than ever.

In addition to the positive momentum and customer trends, our ARPU decline slowed sequentially as anticipated, as our customers began to roll off of select promotions, and we continue to refine our competitive responses.

We also experienced strong demand for our premium speed tiers with 45% of new customers opting for big or higher speeds, up from 39% in the same quarter a year ago. This trend resulted in increased overall [sell-in] ARPU this past quarter and set a favorable trajectory heading into the third quarter.

In July, we implemented a new program in which we increased rates for nearly half of our HFC customers by $5 with an option to offset this increase to a $5 credit for customers who sign up for auto pay using a debit card or bank account and paperless billing.

Our research indicates that encouraging auto pay enrollment can boost retention rates, providing an opportunity to further reduce our already low churn rates. Additionally, we anticipate this program will result in decreased billing and transaction processing costs.

While our approach with this program remains conservative relative to industry standards, it reflects our ongoing commitment to improving operational efficiency.

Driven by the aforementioned factors, including promotional roll-offs, refinements to our competitive responses, increased selling rates and our auto pay program, we currently expect ARPU to stabilize in the second half of the year. One of the challenges we have faced is steadily increasing wired competition.

We have successfully navigated this hurdle in the past by leveraging our deep local knowledge and delivering products and services that make our customers' lives easier. By actively listening to and acting on customer feedback, we effectively meet our customers' needs and stay ahead of our competitors.

In many of our markets, factors such as high construction costs influenced by lower population density, challenging topography and limited access to labor pools contribute to the difficulty of entering many of our communities. These factors, along with the current cost of capital, make these areas less attractive to [overbuilders].

For those contemplating entry into our markets, the ARPU and penetration rates required to yield viable returns in these higher-cost locations makes aggressive pricing strategies difficult to sustain.

We believe these market dynamics, coupled with our multifaceted responses that extend beyond pricing alone, have already prompted potential newcomers to reconsider their plans to enter some of our markets.

Another key opportunity for long-term growth is business broadband, which saw a 1.6% increase in year-over-year revenues from the same quarter last year despite the economic and market headwinds affecting the small business sector. We also see strong demand in carrier, wholesale and enterprise customer segments.

These markets are still emerging, but consistently growing for Cable One. A recent notable success in our Carrier Services segment is a long-term contract for a several hundred site opportunity with a total contract value exceeding $30 million.

This achievement is a testament to our strong network, trusted brand and the exceptional support provided by our carrier sales team. I would now like to discuss why our network is also a significant growth enabler for us.

We recognize that consumer demand for data consumption, reliability and performance is continually rising and our ongoing investments ensure we will exceed these expectations. We are well positioned to support multi-gig speeds in nearly all markets as we transition our remaining video customers to our IPTV platform.

Our balanced investment strategy includes a road map to achieve 5 and 10 gig speeds, including upgrade options such as DOCSIS 3.1 enhanced and DOCSIS 4.0 over the next several years. Our whole home WiFi product remains integral to enhancing in-home performance and elevating the overall customer experience.

Recognizing WiFi's pivotal role in shaping customer perceptions of their internet service, we are continually investing in the state-of-the-art product to enhance our offerings in the market.

We are actively focused on the development of new products, services and partnerships aimed at elevating the customer experience and ensuring seamless connectivity. We operate our network at substantial capacity and low utilization levels that we believe significantly exceed those of our wireless competitors.

Our HSD customer base, including those with video service, consumes approximately 700 gigabytes monthly per home on average, this data usage level far surpassing that of mobile fixed wireless networks.

We anticipate this trend will accelerate with the increasing shift of sports content to streaming platforms and the introduction of new products that leverage our extensive capabilities. Moreover, our peak hour utilization remains below 20%, underscoring our commitment to ensuring our network is never a barrier to growth.

Lastly, we have recently implemented significant organizational changes as part of our strategy to foster sustainable long-term growth and adapt to evolving customer needs in today's competitive landscape.

Central to these changes is our unwavering dedication to community-based, reliable service, bolstered by equipping our local system associates with the essential tools and resources to meet these challenges.

In our drive to enhance operational excellence, we have restructured the dynamics between our local and corporate teams, harnessing their respective strength to better serve our customers.

This involves expanding and realigning our regions around growth centers, driving decisions to the local level where teams can act with speed and agility in the best interest of customers and associates in their communities.

Providing those leaders with the resources necessary to deliver exceptional service and achieve region-specific performance targets and unifying and streamlining our distributed customer care resources under common leadership, who will maintain our local presence and drive our neighborly approach.

Since the reorganization was announced, we've actively engaged with our associates in the field to discuss the changes and gather their feedback. The enthusiasm has been palpable, reflecting their excitement about being empowered to drive growth in their markets.

These organizational changes, coupled with growth initiatives and ongoing network investments exemplify our commitment to rigorously evaluating every facet of our company to ensure we are continuing to make informed and its strategic decisions that deliver superior long-term value and service to our customers.

And now, Todd will provide a recap of our second quarter financial performance and further discuss our outlook for the future..

one, investing in our network to ensure we are able to offer premium Internet service in the markets we serve; two, pursuing organic growth investments with attractive economic returns, highlighted by the 34,000 new passings we built so far this year; three, exploring inorganic investments to consolidate complementary rural broadband assets or partner with proven operating leaders for strategic growth opportunities; and four, returning capital to shareholders through regular dividends, disciplined debt reduction and opportunistic share repurchases.

During the quarter, we invested an additional $20 million in Nextlink Internet, extending our strong partnership with its leading rural broadband provider.

Our investment comes alongside an incremental investment from the Company's founder and CEO and we'll continue to support Nextlink's compelling profitable growth trajectory and expanded fiber footprint to the Central and South Central U.S.

We continue to see strong long-term value creation opportunities via our existing investments in these rural broadband franchises, alongside the proven owner-operators and trusted third-party financial partners.

In Q2, we distributed $17.1 million in dividends to shareholders and repaid $54.6 million of debt, including a $50 million volunteer revolving credit facility paydown.

Our capitalization and balance sheet management philosophy is rooted in a conservative mindset and one that is committed to disciplined debt repayment and demonstrate an ability to deleverage, specifically subsequent to material strategic events.

Since early 2023, we have repaid over $327 million of debt, including $300 million of the initial $488 million drawn under our revolving credit facility.

As of the end of the second quarter, we had approximately $202 million of cash and cash equivalents on hand and our debt balance was approximately $3.6 billion, consisting of approximately $1.8 billion in term loans, $920 million in convertible notes, $650 million in unsecured notes, $238 million of revolver borrowings and $5 million of finance lease liabilities.

We also had $762 million available for additional borrowings under our $1 billion committed revolving credit facility as of the end of the second quarter.

Our weighted average cost of debt for Q2 of 2024 was 4.2% with over 75% of our borrowing is either fixed issuance or synthetically fixed at underlying base rates that are approximately half of the prevailing floating rates.

Our net leverage ratio on a last quarter annualized basis was just below 4x, while our secured net leverage ratio was approximately 2x. Turning to MBI. Our call options to acquire the remaining 55% of the Company that we do not already own, expired unexercised on June 30.

If the put options held by the other MBI owners is exercised during the open window in Q3 of 2025, we would expect the transaction to close around late 2025 or early 2026, subject to customary closing conditions and regulatory approvals.

We believe that if the put option is exercised, our existing cash balances, anticipated available capacity under our revolver at the time of the transaction and our operating cash flows would be sufficient to fund the purchase price without raising additional incremental capital.

However, as previously mentioned, we will continue to opportunistically assess capital market conditions with a focus on ensuring we maintain meaningful excess liquidity, a long-term maturity profile and access to diversified sources of capital.

Before we hand it off for questions, I'd like to emphasize that we are executing effectively on our phased plan for long-term growth.

Our robust network and dedicated associates are central to this effort as we remain fully focused on leveraging our unique resources to deliver a seamless connectivity experience to a growing number of customers across our footprint. We are making progress, and we are just getting started. Our commitment to all stakeholders is steadfast.

We are always working for you. With that, we are now ready for questions..

[Operator Instructions]. Our first question will come from the line of Greg Williams with TD Cowen..

You guys had some helpful color on calling the trough of ARPU. Wondering if you can do the same for EBITDA? You had a lot of investments in billing automation platforms, but then of course you had a 5% price hike, and you mentioned the 4% organizational headcount reduction.

And so, are we at trough EBITDA on dollar and margin levels from here at [$3 million] to $12 million? Just any color [indiscernible] would be helpful. And then second question is just on maybe a little more color on ACP.

You said 4,000 subscribers left, but there's 4,800 that were taking the ACP subsidies because I thought you had 10,000 ACP subscribers. I'm just trying to reconcile that. So, does that mean there's only 800 paying less in the third quarter? If you could give some help on the third quarter clary that would be great..

Good question on EBITDA and ARPU trough comment that you reiterated, and then I'll let Julie hit on some of the ACP stuff.

As it relates to that ARPU stabilization, we've talked about this as it's specific to some of the initiatives that we started late last year, both with some of the tactical responses as well as some of the more value-conscious sell-in rates or sell-in rates for more value-conscious customers is better said.

And we do feel like some of the initiatives that we took, had the outcomes that we expected. And then now many of the initiatives that we're putting in place now, like we referred to on the call, we'll provide that stabilization factor.

You saw that EBITDA margins were very consistent sequentially in the quarter, slightly up but basically by 10 basis points.

And when you start to think about ARPU stabilizing and you have a stable to growing base of units, and that's your highest margin product outside of some of the cost things that we're going to continue to invest in, as you said, in these long-term platforms, you can allude to where we also feel like profitability can expand from here..

And jumping in on ACP. So, 4,000 ACP customers lost in the second quarter out of the 48,000 total ACP customers. So, at this point in time, through the second quarter, 91% of the ACP customers are being retained.

But hey, we're in unprecedented times, right? We have essentially been through all of our billing cycles given that we did not give a partial subsidy in May. But we understand that customers will be adjusting to ongoing billing amounts and that future non-pay churn is possible.

I also will call out that we have a small segment of ACP customers who have a loyalty credit that will roll off in the third quarter, which could be a catalyst for churn. But as usual, we're communicating with these customers, and we're talking to them about options that meet their needs. So that is more color on ACP..

Our next question will come from the line of Sebastiano Petti with JPMorgan..

Just a quick clarification and follow-up on the ARPU stabilization.

Should we be thinking about that as you exit the year, so 3Q into 4Q sequentially ARPU begins to stabilize? Or what should we be thinking about it on a year-on-year decline basis? And then additionally, in regards to the price increase, any color perhaps around the percentage of your base currently on auto pay and how we should think about the price increase impacting back half trends and trying to perhaps size the impact or benefit there?.

It's -- I don't really think of it as a price increase because clearly, customers can completely negate it. I think we specified that half of our current HSD customers received this.

The folks that didn't would either be currently enrolled in such a program or potentially a promo customer or different family of brands that have yet to be integrated into our billing database..

And Sebastiano, when you think about that, while we're going to be tracking that very closely, it's $5 if somebody does not elect to that auto pay, so you can assume a population will not. But it's been approximately half that we make up in expenses if they do relative to fees and other charges. And we've seen data.

I think others have spoken to this in the past. And we've seen data that on auto pay, you even improve on the retention side of the equation. So, if you're half of that number in just absolute costs and you're improving retention, we feel that you win on either side of that equation.

As it relates to the ARPU question, if that a sequential assumption, if you will, relative to where we are in the high 70s right now and with the initiatives that we put in place that we've been talking about some of the sell-in ARPU lift, some of the discount roll-offs, some of the competitive dynamics with tactical strategies that we'll continue to evaluate but the vast majority of them that were employed in late '23 and early '24, the stabilization comment is related to sequential ARPU..

And then if I could ask a quick follow-up.

On the broadband subscribers, I think maybe last quarter or perhaps fourth quarter, I think you had talked about the year-on-year improvement in net adds continuing to accelerate as you -- you're blocking and tackling or your go-to-market strategy was tweaked a little bit towards initiatives that would accelerate subscriber growth.

Is the expectation at this point that you can -- that can continue, that the pace of change or the pace of improvements in underlying broadband subscriber growth can continue while ARPU stabilize?.

Yes, I think when you look at the second quarter as an example, despite the headwinds from the expiration of ACP, we still had a quarter that was dramatically better than last year same period. And our connects have been improving on a year-over-year basis. This is the third quarter that, that happened and our churn is also at all-time lows.

So, I think we are learning, we are calibrating, we are leveraging. We are taking those learnings and putting them to use. So, our focus is absolutely as we've talked about in the past, on a phased growth plan and the first phase of that is really driving growth, unit growth specifically and [Technical Difficulty] a part of that, obviously..

Our next question will come from the line of Frank Louthan with Raymond James..

And just to back on the ARPU question, should we think of Q2 as the low and it bottoming from there? Or will it be more -- maybe drift down a little bit and then maybe grow in the back half of '25, something like that? And then when you say you're targeting certain customers, how much longer can you do that? And when you talk about these customers, are these some of the bigger customers, national players or more some of the smaller regional ankle biters?.

I would say, again, on the ARPU side, it's a stabilization factor sequentially, in [indiscernible], sense on that relative to up or down is not the guidance we're going to give, but I think with some of the initiatives that we have in place, the stability and growing customer base that we have [indiscernible] ACP, we feel very confident in that, not only just through the balance of the year, but even as we're into the next quarter.

And then on the customer side, from a competitive perspective, as we've mentioned in the past, the tactical strategies were very specific to certain competitors that, in most cases -- not in most cases, in all cases we knew where capital access was, cost of capital, go-to-market strategies, and we were able to employ specific strategies against those.

So, I won't put them into a specific defined category that you use, but you can probably take away from that the types of specific competitors that we were focused on there..

I was going to say to give an example where when we go up against small [overbuilders] with these targeted offers, we have seen wins in that there may have been press releases about other markets that they were going into that have been quietly taken down. And so that is the result that we are seeing from those targeted efforts..

Our next question will come from the line of Steven Cahall with Wells Fargo..

This is Dan on for Steve. Unfortunately, going to beat a dead horse here, but back on broadband ARPU.

The stabilization commentary is helpful but looking back historically, growing ARPU in the mid-single-digit range, so would you expect to return to these levels of broadband ARPU growth over time? Or should we expect a more persistent level of promotion and toward our pricing actions moving forward?.

I don't -- well, we're not going to give specific guidance, but I think the idea of growing in mid-single-digit range over the long term is something that we'd be looking forward to. But we are in a phased growth plan at this point in time, so that starts with stabilization. So again, as part of the long-term plan, sure. Right now, stabilization..

And I'll just add on that. I'll just add on that, Dan. It's Todd, you continue to see more and more discipline in the market across all operators. I mean there's still a select view that you scratch your head at from time to time.

But as it relates to pricing discipline, return on invested capital for these highly complex, extremely costly to build, especially in these rural markets, costly to operate networks.

And we believe, as Julie alluded to in her remarks, that, that will continue to be a discipline that's required as it relates to long-term returns for invested capital, whether that be public capital or private capital..

[indiscernible] demand for connectivity, both speed and data and you realize that there are lots of opportunities for monetization in the future..

And maybe just as a quick follow-up.

Could you update us with where your fiber overlap sits today?.

Yes. We currently are sitting at 42% of our markets overbuilt with fiber..

Our next question will come from the line of Kohulan Paramaguru with BNP Paribas..

First question is on ACP. Can you just try and quantify for us how much of the impact this quarter was from churn and how much was from gross adds declining in the market? And secondly, we noticed you have added a new risk factor related to MBI in the filing.

I know you've been reluctant in the past but please, can you try and give us a little bit more color around the potential size of the outlay here or multiples for this business, given it's so material for shareholders?.

I'll start on the ACP question. We noted in our comments that the 4,000 lost during the second quarter of the 48,000 total ACP customers was on the disconnect side, we did not quantify the connect side.

But given that we stopped selling ACP in the first quarter, and our connects are still up -- and actually, about 1/3 of our connects in the second quarter came from what I would call our value segment, which I would assume is very similar to ACP customers, and the majority of those folks took 300 [indiscernible] services or higher.

So, we did not quantify the connect side, but rather the disconnect side..

And then on the MBI side, I will reiterate a few things I've said over the last couple of quarters as it relates to any events. Well, one, an event that we expect to occur if nothing else changes according to the agreement we have in late '25 or really 26.

We did outline in our prepared remarks that the call option has expired as of this quarter unexercised. That put option is in Q3 of 2025. We've been actively planning for that. Our commentary has been very centered around our confidence and the ability to affect that transaction without even the need to go to the capital markets.

Yet we will remain very opportunistic in looking at capital markets. We have a very diversified access strategy and a very proactive long-term strategy to ensure we have excess liquidity, long-term maturities, cost-efficient capital and we're actively evaluating those.

But that's something that we feel very comfortable can be executed within our historical operating leverage of 2.5 to 4.5x. Is it going to be towards the higher end of that range, acknowledging that, but well within that higher end, if that's helpful..

Our next question will come from the line of Craig Moffett with MoffettNathanson..

First, I know I've asked this question in the past, but I thought just given how much convergence is on everyone's lips, I'm wondering if you are thinking at all about how you might add wireless to your consumer offering and whether there's anything to discuss on that front? And then second, do you think that your competitors who are building fiber in your footprints are making money? Todd, I think I know you well enough to know you probably have a pretty good guess about what they're spending in cost per home [pass].

Is it your sense that they are still overbuilding at a positive return on capital?.

I'll start with the latter, and then I'll let Julie speak to some of the convergence, Craig. Thanks for the question. And yes, we have spoken a lot about that. I would say, I think it's important to note that while Julie alluded, we have 42% overlap from fiber and that's both with incumbent fiber as well as new entry, overbuild fiber.

That pace has continued to increase. In spite of that, our discos and our connects as July was outlining on the call, are at really healthy improvement levels. On the disco side, it's actually for Q2, a low for the last six years if you take out the pandemic years, of course.

And we think that, that's actually a great testimonial to how we're performing against even this increased competition. As it relates to the economics, what's been built to date was probably where they're going to get more disciplined economics and where maybe in many cases, you had access to lower cost of capital over the last three years.

We know the cost of capital has changed, we know the access to capital has changed, with the exception of maybe a few of the larger scale players.

And we do expect that when you start to get into cost per home and then the overall labor cost to operate, which I think so many people fail to think about as it relates to how do you operate a highly rural, low-density in an efficient operating cost structure that the areas that have not yet been built will probably be built over a slower pace over time because of the economic dynamics we talked about..

Jumping in on convergence, it's interesting to watch today to see where wireless companies are either building or buying wired providers, I think that is just something interesting to us all.

And I think we continue to [indiscernible] over the utility of a wireless and wired bundle, either to the customer or to the companies that are providing them for the long term.

That being said, the MVNO possibility is something that we look at and model and remodel multiple times a year to check and see, it needs to be economically viable and compelling to both us and our customers over the long term to jump into that.

And we think that there are -- that is just one of the products and capabilities and partnerships that will serve customers and be monetized by companies like ours over the long term. If we do decide to jump into the wireless world, I think we have options available to us that get us off to a relatively quick start. So, time will tell, Craig..

Our next question will come from the line of Brandon Nispel with KeyBanc Capital Markets..

I was hoping you could help us understand your expectations for broadband to [drive] growth in the second half of the year? Maybe some comments in terms of July, Julie, are you guys positive in July? And then just bigger picture, when will we start to see penetration go up? Obviously, that's the goal of this program in terms of changing strategy.

So, hoping you could help there..

Yes. Well, I would point us all back to our focus on growth on a phased long-term growth plan on increasing penetration across all customer segments. That is what we are focused on. And remind you that, again, despite the headwinds that we experienced with ACP expiring, we are making steady progress on that.

I don't think you're hearing about connect being up over year-over-year over three quarters where customer growth like you were hearing from us because of our focus and the fact that these initiatives are gaining momentum, disconnects being down as well.

But I'm not going to give specific guidance about what sub-growth will look like in the second half. Only that is what we are focused on and as Todd said at the end of his comments, we're always working for you.

That is our branding tagline, and I think that the reorganization that we've recently accomplished is part of making sure that, that focus comes to life in a very bespoke way in each one of our markets..

And Brandon, I'll just jump in, Brandon, if you're okay. As it relates to what is, I think, a really compelling incremental opportunity for us. You've seen our passings increase. We talked about it in the prepared remarks of about 35,000 year-to-date. On an LTM basis, that's over 75,000 homes. A meaningful amount of those are in our existing markets.

And these are in our existing markets where we see really strong -- well, really strong, maybe be a little bit of a stronger turn, but stronger than what we've seen in the last couple of years, developments from stimulus economic growth, new builds, new housing permits.

Texas, Northern Arizona, South Carolina, Idaho, these are some areas yet still very rural markets that are seeing some really strong growth areas, and we can capitalize on those. And these are [capitalizing] in markets we've been in for years with a very strong brand with highly upgraded networks. And so that's the best return on invested capital.

We can allocate towards and then when we can capitalize from a growth perspective. But as we all know, when you build those, you're not just a connection a day away, right? So that lags a little bit.

But as Julie said, with our reorg and the changes that we've made there, we're really powering that growth through that local approach and those local leaders..

And if I could just follow up, just so that we are all perfectly clear, you guys said stabilization in ARPU in the second half.

That implies that there could still be sequential declines in ARPU or it could be sequentially positive in 3Q, 4Q?.

Don't think [indiscernible] comment..

I think the initiatives we put in place gives us confidence in that stabilization factor and sequentially, that should be seen in Q3..

I will now turn the call back to Julie Laulis for closing remarks..

So, before we conclude, I want to extend my gratitude to our associates. Their energy, dedication and ability to navigate this ever-changing environment has never been more evident. I'm incredibly proud of and thankful for each and every one of them. Thanks, and we look forward to speaking to you again next quarter..

And this will conclude today's call. Thank you all for joining. You may now disconnect..