Shenandoah (SHEN) told investors at the Bank of America 2026 Media, Communications & Entertainment Conference that its Glo Fiber buildout is shifting from aggressive expansion toward cash-flow generation, with the company expecting to reach free cash flow positivity in 2027.
Ed McKay, an executive at Shenandoah, said the firm has invested more than $600 million in its fiber-to-the-premises network since Glo Fiber launched in 2019. Revenue over the last twelve months through Q2 2026 totaled $367 million, growing roughly 5%, while EBITDA came in at $116.15 million and gross profit margins approached 65%.
Average revenue per user for Glo Fiber ranges between $76 and $77, with commercial customers generating approximately double the residential ARPU. About 80% of Glo Fiber subscribers have selected 1-gigabit or faster speeds, including 19% on 2-gigabit service and 5% on 5-gigabit service. The company has not raised prices on Glo Fiber since launch.
Current average penetration in Glo Fiber markets stands at about 21%, with a midterm target of 37% — typically reached five to seven years after launch. Older markets from the 2019 and 2020 cohorts are already above 40% penetration in some cases. McKay noted that higher-income markets are targeted for the low-40% range, while lower-income markets aim for the low-30% range.
Construction activity is expected to decline materially following substantial completion of Glo Fiber builds and government grant-funded projects by the end of 2024, when passings were projected to exceed 510,000. Capital intensity is projected to normalize to 25%–30% overall in 2027, with Glo Fiber at roughly 25%, commercial fiber at about 30%, and the incumbent business at approximately 25%. EBITDA margins are expected to expand by 300 to 400 basis points annually.
The commercial fiber network currently serves about 6,000 of 90,000 near-net locations, representing roughly 6.7% penetration. Drop costs for new residential connections range from $750 to $850 all-in, including labor and equipment, while commercial connection costs average about $5,000 per location — or $1,000 if the customer is already on the Glo Fiber network. Cable remains the only wired rival in approximately 98% of Glo Fiber's markets, and 87% to 88% of passings have no fiber competitor.
McKay said Starlink has had minimal competitive impact, noting that only rural markets have seen any effect and that virtually no impact has been observed in fiber-to-the-home markets. The most noticeable churn occurred in Q1 2024, when Starlink offered free equipment and deep promotional discounts.
For data center connectivity, McKay indicated that revenue generation from hyperscaler agreements is expected to begin in early 2028, though there is typically a 12- to 18-month lag from service order to revenue and EBITDA recognition due to fiber build timelines and ongoing data center construction.
Shenandoah's stock traded around $11.79 at the time of the conference, with an analyst consensus buy rating and price targets of $26 to $29. The EPS forecast for 2026 is negative $0.74. The company announced approximately a 10% reduction in force earlier in the year.
