Management's Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships, Related Transactions and Director Independence
Principal Accounting Fees and Services
PART IV
Exhibits and Financial Statement Schedules
Form 10-K Summary
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PART I
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS:
This annual report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other things, our plans, strategies and prospects, both business and financial including, without limitation, the forward-looking statements set forth in Part I. Item 1, under the heading “Business” and in Part II. Item 7, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this annual report. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions, including, without limitation, the factors described in Part I. Item 1A, under “Risk Factors” and in Part II. Item 7, under the heading, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this annual report. Many of the forward-looking statements contained in this annual report may be identified by the use of forward‑looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” “intend,” “estimated,” “aim,” “on track,” “target,” “opportunity,” “tentative,” “positioning,” “designed,” “create,” “predict,” “project,” “initiatives,” “seek,” “would,” “could,” “continue,” “ongoing,” “upside,” “increases” and “potential,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this annual report are set forth in this annual report and in other reports or documents that we file from time to time with the U.S. Securities and Exchange Commission (“SEC”), and include, but are not limited to:
• our ability to sustain and grow revenues and cash flow from operations by offering broadband internet, video, voice, fiber optic network services and other services to residential and commercial customers, to adequately meet the customer demands in our service areas and to maintain and grow our customer base, particularly in the face of increasingly aggressive competition;
• the impact of competition from other market participants, including but not limited to fiber to the home (“FTTH”) providers, incumbent telephone companies, direct broadcast satellite operators, wireless broadband providers, incumbent cable providers, commercial fiber providers, video provided over the internet by (i) market participants with streaming video services, (ii) traditional multichannel video distributors, and (iii) content providers that offer direct to consumer;
• the availability of cash on hand and access to capital to fund the growth of capital expenditures needed to execute our business plan;
• our ability to comply with all covenants in our various credit facilities, any violation of which, if not cured in a timely manner, could trigger an event of default;
• our ability to maintain high quality network service and any events that disrupt our networks, information systems or properties and impair our operating activities or our reputation;
• the ability to retain and hire key personnel;
• general business conditions, inflation, economic uncertainty or downturn, unemployment levels and the level of activity in the housing sector.
All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We are under no duty or obligation to update any of the forward-looking statements after the date of this annual report.
Unless we indicate otherwise, references in this report to “we,” “us,” “our,” “Shentel” and “the Company” means Shenandoah Telecommunications Company and its subsidiaries.
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ITEM 1. BUSINESS
Our Company
Shenandoah Telecommunications Company and its subsidiaries (“Shentel”, “we”, “our”, “us”, or the “Company”), provide broadband services through its high speed, state-of-the-art fiber-optic and cable networks to customers in eight contiguous states in the eastern United States. The Company’s services include: broadband internet, video and voice; high-speed Ethernet, dark fiber leasing; and managed network services. The Company owns an extensive regional network with approximately 19,000 route miles of fiber. For more information, please visit www.shentel.com.
Description of Business
Shentel provides broadband data, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania, Kentucky, Delaware, Ohio and Indiana, via fiber optic and hybrid fiber coaxial (“HFC”) cable networks. We also lease dark fiber and provide Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. Shentel’s Broadband business also provides voice and digital subscriber line (“DSL”) services as a Rural Local Exchange Carrier (“RLEC”) to customers in Shenandoah County and portions of adjacent counties in Virginia, and in Ross County and portions of adjacent counties in Ohio. The Company served approximately 262,000 Revenue Generating Units (“RGUs”) at December 31, 2025.
New Entities formed to support securitized financing
During 2025, Shentel formed Shentel Guarantor LLC, Shentel Issuer LLC (“Shentel Issuer”), Shentel Asset Entity I LLC and Shentel Asset Entity II LLC (collectively, the “ABS Entities"”, each a bankruptcy-remote subsidiary of the Company. The ABS Entities were formed as part of a securitization transaction, pursuant to which certain of the Company’s fiber network assets and related customer contracts, primarily in Virginia, Ohio, Pennsylvania, Indiana, Maryland and West Virginia, were contributed to Shentel Asset Entity I LLC and Shentel Asset Entity II LLC (collectively, the “ABS Asset Entities”). The cash flow from these contributed assets are used to service the obligations under Shentel's “ABS Notes”, as defined in the following paragraph.
On December 5, 2025 (the “Closing”), Shentel Issuer, in relation to the securitization transaction referenced above, closed its inaugural offering of $567.4 million aggregate principal amount of secured fiber network revenue term notes, consisting of $489.1 million 5.64% Series 2025-1, Class A-2 term notes (“Class A-2 Notes”) and $78.3 million 6.03% Series 2025-1, Class B term notes (“Class B Notes”), each with an anticipated repayment date in December 2030.
As part of the securitization financing transaction, Shentel Issuer also entered into a revolving $175.0 million variable funding note facility (the “VFN”) due December 2029 with a group of financial institutions. VFN advances will be subject to certain pro-forma leverage and debt service coverage ratios as defined in the agreements governing the VFN (the “ABS Indenture”).
As part of the same ABS Indenture and fiber network assets and related customer contracts that govern and secure the ABS Notes, Shentel Issuer entered into a $25 million delay draw Liquidity Funding Note facility (the “LFN”, together with the Class A-2 Notes, Class B notes, and the VFN, the “ABS Notes”) with Bank of America.
Concurrently, Shentel Broadband Operations LLC (“Shentel Broadband”), a wholly-owned indirect subsidiary of the Company, entered into a new $175.0 million Revolving Credit Facility (the “RCF”) due December 2030 with a group of financial institutions. The RCF is secured by the cash flows and substantially all of the assets and equity interests of the Company’s subsidiaries excluding the ABS Entities.
Shentel and its non ABS Entities have no recourse of the loans of the ABS Entities. Likewise, the ABS Entities have no recourse of the loans of Shentel Broadband.
Shentel used the proceeds from the issuance of the ABS Notes and the RCF to repay the outstanding principal on the Company’s existing debt. Refer to Note 10, Debt to the Company’s 2025 consolidated financial statements for more information.
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Competition
As the incumbent broadband provider passing approximately 252,000 homes and businesses, we compete against incumbent local telephone companies that provide digital subscriber line (“DSL”) internet and voice services over hybrid fiber and copper-based networks as well as broadband overbuilder providers that offer data, voice, and video services over hybrid coaxial cable or fiber optic networks. Approximately 30% of our incumbent broadband passings compete with a wireline broadband competitor. In addition, we compete with fixed wireless broadband services and indirectly with wireless substitution as the bandwidth speeds from wireless providers have increased with 5th generation network technology upgrades.
Our Glo Fiber Fiber-To-The-Home (“FTTH”) service passes approximately 427,000 homes and businesses and competes against the incumbent cable companies’ broadband, video and voice services utilizing hybrid fiber-coaxial cable networks and the incumbent local telephone companies. Approximately 88% of the Glo Fiber passings compete with incumbent telephone company’s DSL internet and voice services via hybrid fiber and copper-based networks and approximately 12% of the Glo Fiber passings compete with the incumbent telephone company’s FTTH networks.
Competition is also intense and growing in the market for video services. Cable television systems are operated under non-exclusive franchises granted by local authorities, which may result in more than one operator providing video services in a particular market. Incumbent cable television companies, which have historically provided video service, also face competition from direct broadcast satellite providers such as Dish and DirecTV and online video services, such as Netflix, YouTube TV, Hulu, Disney and Amazon. Our ability to compete effectively with our competitors in video will depend, in part, on price, content cost and variety, service quality, access to content and the convenience of our service offerings.
A recent trend towards convergence of wireless and fiber broadband service offerings has started consolidation in the FTTH segment. If this trend continues, mergers, acquisitions and strategic alliances with large wireless carriers could also increase the level of competition we face.
Regulation
Shentel’s operations are subject to regulation by the Federal Communications Commission ("FCC"), state utility commissions, and other federal, state, and local governmental agencies across the Company’s footprint. The laws governing these agencies, and the regulations and policies that they administer, are subject to constant review and revision, and some of these changes could have material impacts on our revenues and expenses.
Regulation of Broadband Internet and Cable Video Services
We provide broadband internet, video, voice and fiber services to residential and business customers in franchise areas covering portions of Virginia, West Virginia, Maryland, Pennsylvania, Kentucky, Delaware, Ohio and Indiana.
The provision of cable service generally is subject to regulation by the FCC, and cable operators typically also must comply with the terms of the franchise agreement between the cable operator and the state or local franchising authority. Some states, including Virginia and West Virginia, have enacted regulations and franchise provisions that also can affect certain aspects of a cable provider’s operations. Our business may be significantly impacted by changes to the existing regulatory framework, whether caused by legislation or administrative or judicial actions.
The FCC originally classified broadband internet access services, such as those we offer, as an information service, which by law exempts the service from traditional common carrier communications laws and regulations. In 2015, the FCC determined that broadband internet access services, such as those we offer, were a form of telecommunications service under the Communications Act of 1934, as amended (the “Communications Act”), and, on that basis, imposed rules (commonly referred to as “Net Neutrality” rules) banning service providers from blocking access to lawful content, restricting data rates for downloading lawful content, prohibiting the attachment of non-harmful devices, giving special transmission priority to affiliates and offering third parties the ability to pay for priority routing. The Net Neutrality rules also imposed a transparency requirement, i.e., an obligation to disclose all material terms and conditions of our service to consumers. The legality of Net Neutrality rules have been disputed since the FCC’s 2015 determination, and in 2025, the U.S. Supreme Court ruled that the FCC does not have the authority to impose Net Neutrality rules. Consequently, broadband internet access services are currently classified as an information service.
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As the internet has matured, it has become the subject of increasing regulatory interest. Congress and Federal regulators have adopted a wide range of measures that either directly or indirectly impacted internet use and the adoption of new internet regulations or policies could adversely affect our business.
Federal and state governments have launched numerous programs to provide subsidies for the construction of high-speed broadband facilities to homes that do not have access to broadband service (currently defined by the FCC) including federal funding from the American Rescue Plan Act, the Coronavirus Aid, Relief, and Economic Security Act and the FCC’s Rural Digital Opportunities Fund, and state programs such as the Virginia Telecommunications Initiative (“VATI”), Maryland Network Infrastructure Grant Program and West Virginia Broadband Development Fund.
In January 2020, the FCC adopted an order approving the Rural Digital Opportunity Fund to disburse $20.4 billion over the course of 10 years to subsidize the deployment of networks for the provision of high-speed broadband internet access and voice services in unserved areas via a reverse auction, some of which may be directed to competitive providers in some of the states in which we operate. We prevailed as a winning bidder in the auction for certain areas with a grant of $0.9 million to serve approximately 900 unserved homes. The Company began fulfilling its obligation during 2023 and will complete its obligation before 2028.
In March 2021, Congress passed the American Rescue Plan Act to subsidize the deployment of high-speed broadband internet access in unserved areas. We have been awarded approximately $122.8 million in grants to serve approximately 26,900 unserved homes in the states of Virginia, Maryland, West Virginia and Ohio. The grants are paid to the Company as certain milestones are completed. The Company substantially completed its Virginia obligations in 2025 with approximately 20,000 previously unserved homes now with broadband service and expects to complete the majority of its obligations in Maryland, West Virginia and Ohio by the end of 2026.
In November 2021, Congress passed the Infrastructure Investment and Jobs Act (“IIJA”) that will provide an additional $42.5 billion for the Broadband Equity, Access, and Deployment (“BEAD”) Program to fund broadband construction and adoption programs that prioritize the expansion of high-speed broadband to unserved homes across the country. The Company has not been awarded any grants under the BEAD Program. The IIJA also included $1 billion for the Enabling Middle Mile Broadband Infrastructure Program for the construction, improvement or acquisition of middle mile infrastructure. As part of this program, the Company has been awarded approximately $27.5 million in grants to construct and upgrade middle mile networks in Ohio and expect to complete the majority of its obligations by the end of 2027.
Pricing and Packaging . Our video and broadband internet services are not subject to rate regulation in the states that we operate. These services are subject to federal laws requiring itemization of certain charges in notices and invoices to customers, and we must also comply with generally-applicable marketing and advertising requirements. Congress and the FCC from time to time have considered imposing packaging and consumer protection restrictions on cable operators. We cannot predict whether or when any such new marketing restrictions may be imposed on us or what effect they would have on our ability to provide cable service.
Must-Carry/Retransmission Consent. Local broadcast television stations can require a cable operator to carry their signals pursuant to federal “must-carry” requirements. Alternatively, local television stations may require that a cable operator obtain “retransmission consent” for carriage of the station’s signal, which can enable a popular local television station to obtain concessions from the cable operator for the right to carry the station’s signal. Although some local television stations today are carried by cable operators under the must-carry obligation, popular broadcast network affiliated stations, such as ABC, CBS, FOX, CW and NBC, typically are carried pursuant to retransmission consent agreements. The retransmission consent costs charged by broadcast networks affiliate stations have increased dramatically over the past decade. We cannot predict the extent to which such retransmission consent costs may increase in the future or the effect such cost increases may have on our ability to provide cable service.
Copyright Fees. Cable operators pay compulsory copyright fees, in addition to possible retransmission consent fees, to retransmit broadcast programming. Although the cable compulsory copyright license has been in place for more than 45 years, there have been legislative and regulatory proposals to modify or even replace the compulsory license with privately negotiated licenses. We cannot predict whether such proposals will be enacted and how they might affect our business.
Programming Costs. Non-broadcast channels (including satellite-delivered cable programming, such as ESPN, HBO and the Discovery Channel) are not subject to must-carry/retransmission consent regulations or a compulsory copyright license. The Company negotiates directly or through the National Cable Television Cooperative with these cable programmers for the right to carry their programming. The cost of acquiring the right to carry cable programming can increase as programmers demand rate increases and we cannot predict the extent to which any potential costs may impact our business.
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Franchise Matters. Cable and FTTH operators generally must apply for and obtain non-exclusive franchises from local or state franchising authorities before providing video and data services. The terms and conditions of franchises vary among jurisdictions, but franchises generally last for a fixed term and are subject to renewal, require the cable operator to collect a franchise fee of 5% of the cable operator’s gross revenue from video services, and contain certain service quality and customer service obligations. We believe that our ability to obtain franchises or our franchise renewal prospects are generally favorable, but we cannot guarantee the initial franchise award or future renewal of any individual franchise. A significant number of states today have processes in place for obtaining state-wide franchises. In addition, from time to time legislation and regulation are introduced in Congress, the FCC and in various states, including those in which we provide some form of video or data service, that would modify franchising processes, potentially lowering barriers to entry and increasing competition in the marketplace for video services. The states in which we currently operate largely leave franchising responsibility in the hands of local municipalities and counties, but these states govern the local government entities’ awards of such franchises and their conduct of franchise negotiations. We cannot predict the extent to which these rules and other developments will accelerate the pace of new entry into the video or data market or the effect, if any, they may have on our FTTH and cable operations.
Federal law imposes a 5% cap on franchise fees. The FCC has clarified that the value of in-kind contribution requirements set forth in cable franchises (such as channel capacity set aside for public, educational and governmental (“PEG”) use or free cable service to public buildings) is subject to the statutory cap on franchise fees, and it reaffirmed that state and local authorities are barred from imposing franchise fees on cable systems providing non-cable services such as internet services. Those rules were upheld by a federal court, but the court limited the amount of the in-kind franchise fee contribution credit to the operator’s marginal costs rather than its market valuation.
Pole Attachments. The Communications Act requires investor-owned (“IO”) utilities and telecommunications carriers to provide cable systems with access to poles and conduits and simultaneously subjects the rates, terms and conditions of access to either federal or state regulation. The FCC rules do not directly affect pole attachment rates in states that self-regulate (rather than allow the FCC to regulate) pole rates, but many of those states have substantially the same rate for cable and telecommunications attachments. Delaware, Kentucky, Ohio, Pennsylvania and West Virginia, five states in which we operate, self-regulate IO pole attachments, but do so using essentially the same rate formula and other pole attachment rules as the FCC. The FCC pole attachment rules also do not govern government or cooperatively owned utilities. States, however, are free to regulate such utilities and some do. Of the states in which Shentel operates, Virginia, Kentucky, Ohio and Delaware currently regulate cooperatively owned pole attachments. In addition, the FCC has interpreted another federal law governing state and local regulation of public rights of way to impose cost-based limitations on what government entities may charge for pole attachments.
“One touch” make-ready rules exist which allow new attachers to alter certain components of existing attachments for “simple make-ready” (i.e. where the alteration of existing attachments does not involve a reasonable expectation of a service outage, splicing, pole replacement or relocation of a wireless attachment). The rules are intended to promote broadband deployment and competition by facilitating competing communications providers’ service deployment. Certain aspects of the rules are still pending reconsideration at the FCC. Other aspects were upheld against challenge by the United States Court of Appeals for the Ninth Circuit. Although Kentucky, West Virginia and Pennsylvania self-regulate, each of these states has adopted the FCC’s “one touch” make-ready rules.
Privacy. The Company is subject to various federal and state laws intended to protect the privacy of end-users who subscribe to the Company’s services. For example, the Communications Act, limits our ability to collect, use and disclose customers’ personally identifiable information for our cable television/video, voice and internet services. We are subject to additional federal, state and local laws and regulations that impose additional restrictions on the collection, use and disclosure of consumer information. Further, the FCC, the Federal Trade Commission (“FTC”) and many states regulate and restrict the marketing practices of communications service providers, including telemarketing and sending unsolicited commercial emails. The FCC also has regulations that place restrictions on the permissible uses that we can make of customer-specific information, known as Customer Proprietary Network Information (“CPNI”), received from telecommunications service subscribers, and that govern procedures for release of such information in order to prevent identity theft schemes. Other laws impose criminal and other penalties for the violation of certain CPNI requirements and related privacy protections. The FCC or other regulators may expand these duties. For example, the FCC is currently considering a proposal to expand the CPNI breach reporting obligations for VoIP and telecommunications providers.
The FTC has the authority to enforce against unfair or deceptive acts and practices, to protect the privacy of internet service customers, including our use and disclosure of certain customer information.
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Many states and local authorities have considered legislative or other actions that would impose additional restrictions on our ability to collect, use and disclose certain information. We believe that Shentel’s operations continue to be in compliance with all state and local laws. We expect federal and state efforts to regulate online privacy, data security and cybersecurity to continue in 2026. We cannot predict whether any of these efforts will be successful, or how new legislation and regulations, if any, would affect our business. These efforts have the potential to create a patchwork of differing and/or conflicting state and/or federal regulations, and to increase the cost of providing our services.
In addition, restrictions exist, and new restrictions are considered from time to time by Congress, federal agencies and states, on the extent to which customers may receive unsolicited telemarketing calls, text messages, junk e-mail or spam. Congress, federal agencies and certain states also are considering, and may in the future consider imposing, additional requirements on entities that possess consumer information to protect the privacy of consumers. The Company is required to file an annual certification of compliance with the FCC’s CPNI rules. Complying with these requirements may impose costs on the Company or compel the Company to alter the way it provides or promotes its services.
Accessibility . The FCC imposes obligations on multi-channel video programming distributors (“MVPDs”), intended to ensure that individuals with disabilities are able to access and use video programming services and equipment. FCC rules require video programming delivered on MVPD systems to be closed captioned unless exempt and require MVPDs to pass through captions to consumers and to take all steps needed to monitor and maintain equipment to ensure that captioning reaches the consumer intact. Video programming delivered over the internet must be captioned if it was delivered previously on television with captions. An MVPD must also pass through audio description provided in broadcast and non-broadcast programming if it has the technical capability to do so, unless it is using the required technology for another purpose. FCC rules also require MVPDs to ensure that critical details about emergencies conveyed in video programming are accessible to persons with disabilities, and that video programming guides are accessible to persons who are blind or visually impaired. We cannot predict if or when additional changes will be made to the current FCC accessibility rules, or whether and how such changes will affect us.
Voice over Internet Protocol “VoIP” Services . We provide voice communications services over our cable and fiber networks utilizing interconnected VoIP technology and service arrangements. Although similar to telephone service in some ways, our VoIP service arrangement utilizes different technology. VoIP is subject to many of the same rules and regulations applicable to traditional telephone service.
Regulatory changes are being considered that could impact our VoIP service. The FCC and state regulatory authorities have considered, for example, whether certain common carrier regulations traditionally applied to incumbent local exchange carriers (including RLECs) should be modified or reduced, and the extent to which common carrier requirements should be extended to VoIP providers. The FCC has required VoIP providers to comply with several regulations that apply to other telephone services, including 911 emergency services, the Communications Assistance for Law Enforcement Act (“CALEA”), Universal Service Fund (“USF”) contribution, customer privacy and CPNI issues, number portability, network outage, rural call completion, disability access, battery backup, robocall mitigation, regulatory fees and discontinuance of service. We cannot predict whether the FCC will impose additional obligations on our VoIP services in the future.
We have registered with, or obtained certificates or authorizations from, the FCC and the state regulatory authorities in those states in which we offer competitive voice services in order to ensure the continuity of our services and to maintain needed network interconnection arrangements. Further, it is also unclear whether and how these and other ongoing regulatory matters ultimately will be resolved.
Other Issues. Our ability to provide our services may be affected by a wide range of additional regulatory and related issues, including FCC regulations pertaining to licensing of systems and facilities, set-top boxes, equipment compatibility, program exclusivity blackouts, commercial leased access of video channels by unaffiliated third parties, advertising, maintenance of online public files, accessibility to persons with disabilities, emergency alerts, equal employment opportunity, privacy, consumer protection, and technical standards. Further, the FCC recently adopted a plan to reallocate for other purposes certain spectrum currently used by satellite providers to deliver video programming to individual cable systems, which could be disruptive to the satellite video delivery platform we rely upon to provide our video services. We cannot predict the nature and pace of these and other developments or the effect they may have on our operations.
Regulation of Telephone Services
State Regulation . Shenandoah Telephone Company (“Shenandoah Telephone”) is a RLEC serving Shenandoah County, Virginia and portions of the Virginia counties of Rockingham, Frederick, and Augusta. The Chillicothe Telephone Company (“Chillicothe Telephone”) is a RLEC serving Ross County, Ohio. Shenandoah Telephone’s rates for local exchange service, intrastate toll service and intrastate access charges are subject to the review and approval of the Virginia State Corporation
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Commission (“VSCC”). The VSCC also oversees implementation of certain provisions of the federal and state telecommunications laws, including interconnection requirements, promotion of competition, and consumer protection standards. In addition, the VSCC regulates certain rates, service areas, service standards, accounting methods, affiliated transactions and certain other financial transactions. Further, Shenandoah Telephone is subject to certain obligations as the carrier of last resort in its service area, which has the effect of imposing greater operational costs and potential regulatory risks. Chillicothe Telephone’s rates are subject to the approval of the Ohio Public Utilities Commission (“PUC”) in certain circumstances. Further, Chillicothe Telephone is subject to certain obligations as the carrier of last resort in its service area, which has the effect of imposing greater operational costs and potential regulatory risks.
Interconnection. Federal law and FCC regulations impose certain obligations on incumbent local exchange carriers (including RLECs) to interconnect their networks with other telecommunications providers (either directly or indirectly) and to enter into interconnection agreements with certain types of telecommunications providers. Interconnection agreements typically are negotiated on a statewide basis and are subject to state approval. If an agreement cannot be reached, parties to interconnection negotiations can submit unresolved issues to federal or state regulators for arbitration. Disputes regarding intercarrier compensation can be brought in a number of forums (depending on the nature and jurisdiction of the dispute) including state public utility commissions (“PUCs”), the FCC, and the courts.
Regulation of Intercarrier Compensation. Shenandoah Telephone participates in the access revenue pools administered by the FCC-supervised National Exchange Carrier Association (“NECA”), which collects and distributes the revenues from interstate access charges that long-distance carriers pay us for originating and terminating interstate calls over our network. Shenandoah Telephone also participates in some NECA tariffs that govern the rates, terms and conditions of our interstate access offerings. Some of those tariffs are under review by the FCC, and we may be obligated to refund affected access charges collected in the past or in the future if the FCC ultimately finds that the tariffed rates were unreasonable. We cannot predict whether, when and to what extent such refunds may be due.
Universal Service Fund (“USF”). Shenandoah Telephone and Chillicothe Telephone receive disbursements from the federal USF. The Universal Service Administrative Company (“USAC”) administers the USF program under the FCC. On July 24, 2024, the U.S. Court of Appeals for the Fifth Circuit ruled that the current funding mechanism for the Universal Service Fund is an unconstitutional tax that violates the U.S. Constitution. On June 27, 2025, the U.S. Supreme Court reversed the Fifth Circuit ruling, thus upholding the FCC’s authority to tax and administer the USF. The Company is not able to predict if or when additional changes will be made to the USF, or whether and how such changes would affect the extent of our total federal universal service assessments, the amounts we receive, or our ability to recover costs associated with the USF.
If USAC were required to account for the USF program in accordance with generally accepted accounting principles for federal agencies under the Anti-Deficiency Act (the “ADA”), it could cause delays in USF payments to fund recipients and significantly increase the amount of USF contribution payments charged to wireline and wireless consumers. Each year since 2004, Congress has adopted short-term exemptions for the USAC from the ADA. Congress has from time to time considered adopting a longer term exemption for the USAC from the ADA, but we cannot predict whether any such exemption will be adopted or the effect it may have on the Company.
The FCC, USAC and other authorities have conducted, and in the future are expected to continue to conduct, more extensive audits of USF support recipients, as well as other heightened oversight activities. The impact of these activities on the Company, if any, is uncertain.
Other Regulatory Obligations. Shenandoah Telephone and Chillicothe Telephone are subject to requirements relating to the use and safeguard of customer proprietary network information, law enforcement access, interconnection, access to rights of way, number portability, number pooling, accessibility of telecommunications for those with disabilities, payment of various regulatory fees, robocall mitigation and protection of national security.
The FCC and other authorities continue to consider policies to encourage nationwide advanced broadband infrastructure development. For example, the FCC has largely deregulated DSL and other broadband services offered by RLECs. Such changes benefit our RLEC, but could make it more difficult for us (or for NECA) to tariff and pool DSL costs. Broadband networks and services are subject to CALEA rules, network management disclosure and prohibitions, requirements relating to consumer privacy, and other regulatory mandates.
911 Services . We are subject to FCC rules that require telecommunications carriers to make emergency 911 services available to their subscribers, including enhanced 911 services that convey the caller’s telephone number and detailed location information to emergency responders. As a 911 service provider that serves a public safety answering point (a “PSAP”) or other local emergency responder, we must take reasonable measures to ensure 911 circuit diversity, availability of backup power at
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central offices that directly serve PSAPs, and diversity of network monitoring links. Further, as a service provider offering multiline telephone system solutions to business and enterprise customers we must take certain additional actions to ensure emergency responders can properly respond to 911 calls, such as the delivery of specific location information and notices.
Long Distance Services . We offer long distance service to our customers through our subsidiary, Shenandoah Cable Television, LLC. Our long distance rates are not subject to FCC regulation, but we are required to offer long distance service through a subsidiary other than Shenandoah Telephone, to disclose our long distance rates on a website, to maintain geographically averaged rates, to pay contributions to the USF and make other mandatory payments based on our long-distance revenues, and to comply with other filing and regulatory requirements, including enhanced recordkeeping and quarterly reporting obligations and being subject to greater oversight.
Regulation of Our Other Services
Transfers, Assignments and Changes of Control of Spectrum Licenses. The FCC must give prior approval to the assignment of ownership or control of a spectrum license, as well as transfers involving substantial changes in such ownership or control. The FCC also requires licensees to maintain effective working control over their licenses.
Spectrum licenses are typically granted for ten-year terms. Our spectrum licenses for our service area are scheduled to expire on various dates. Spectrum licensees have an expectation of license renewal if they can satisfy three “safe harbor” certifications which, if made, will result in routine processing and grant of the license renewal application. Those certifications require the licensee to certify that it has satisfied any ongoing provision of service requirements applicable to the spectrum license, that it has not permanently discontinued operations (defined as 180 days continuously off the air), and that it has substantially complied with applicable rules and policies. If for some reason a licensee cannot meet these safe harbor requirements, it can file a detailed renewal showing based on the actual service provided by the station.
Human Capital Management
As of December 31, 2025, the Company employed 1,041 people, geographically located predominately in and around the Mid-Atlantic and Mid-West regions of the United States. Approximately 28% of our employees were female and approximately 24% of employees in management positions were female.
Our Chief Human Resources Officer (“CHRO”) is responsible for developing and executing the Company’s human capital management strategy in alignment with the business. This includes the attraction, acquisition, development, retention and engagement of talent to deliver on the Company’s strategy and the design of employee compensation and benefits programs. Our CHRO continuously evaluates, modifies and enhances our internal processes and technologies to increase employee engagement, productivity and effectiveness. In addition, our Chief Executive Officer (“CEO”) and CHRO regularly update the Company’s board of directors and its committees on the operation and status of these human capital trends and management programs. Key areas of focus include:
Culture, Values & Ethics
Shentel is committed to operating in a fair, honest, responsible and ethical manner and we expect our employees to commit to these same principles. The Company has adopted a Code of Business Conduct and Ethics, which is also clearly visible to our customers and vendors on our external Shentel website (https://investor.shentel.com/corporate-governance/governance-overview). Additionally, at time of hire and at least annually, we ask all employees and board members to review and certify their commitment to this Code.
In addition to compliance with our Code of Business Conduct and Ethics, the Company attempts to follow a Positive People Philosophy, which creates the foundation for how all employees work together to drive our collective success. Our culture is built upon values of always looking for opportunities to improve, taking ownership for resolving issues, effectively communicating to solve problems, working collaboratively as a team, and providing leadership by setting positive examples for others to follow.
Workplace Safety
The health and safety of our employees is our highest priority. Exceeding the Occupational Safety and Health Administration (“OSHA”) Regulations is the expectation for Shentel. We achieve this through our deliberate creation and management of both regional and corporate safety committees.
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Compensation and Benefits
We provide employees with compensation and benefits packages that are market-driven and aligned to a consistent Shentel Compensation and Rewards Philosophy. This philosophy is aligned with the needs of the business, and targeted to be competitive in the Company’s designated talent markets. As well as ensuring compensation competitiveness, the primary objectives of Shentel’s compensation programs are as follows:
• Create a competitive advantage to attract, motivate and retain the necessary talent for the Company;
• Focus both individual and organizational effort around strategy execution, accountability and Company core values for achieving key business outcomes;
• Emphasize individual performance-based differentiation linked to corporate and shareholder values.
• Establish job and salary structures that are market driven and reviewed on an ongoing basis in order to maintain long-term competitiveness;
• Ensure that pay processes are easily understood;
• Provide a consistent approach to delivering ongoing competitive compensation to employees of the Company. Consistency will be measured in terms of pay positioning relative to the Company’s defined competitive survey market as well as in comparison to the Company’s overall internal compensation philosophy and objectives; and
• Target the 50th percentile of the Company’s defined competitive survey market for each relevant compensation component.
Our compensation and rewards program consists of three primary components: Base Salary, Short-Term Incentive and Long-Term Incentive. Base Salary is paid for comparable knowledge, skills and experience. Short-Term Incentive is variable cash compensation designed to recognize and reward extraordinary performance and is based upon the achievement of a combination of Company-wide financial and service performance goals and achievement of individual objectives. Long-Term Incentive is equity based compensation that aligns eligible employees’ interests with those of shareholders and encourages a long term focus and retention.
We also provide eligible employees the ability to participate in a 401(k) Plan which has competitive Company contributions, as well as generous health and welfare benefits, paid time off, employee assistance programs, and educational assistance, among many others.
Training and Talent Management
To empower employees to realize their full potential, we provide a range of leadership development programs and learning opportunities, which emphasize skills and identify resources they can use to be successful. Our Shentel University platform supplements our talent development strategies and provides an online portal that enables employees to access virtual courses and self-directed web-based courses, leveraging both internally and externally developed and hosted content. In addition, we provide our employees with regular leadership and professional development events that focus on how we may best advance our team, effectively execute our business strategies, and continue to develop the talent and potential of our employees. We leverage our training and talent management efforts to ensure we have ready-now successors identified as the Company continues to grow and evolve. Our Board of Directors regularly reviews management development and management succession planning with our CEO, with more in-depth reviews of management development and succession planning designed to maximize the pool of internal candidates who can assume top management positions regularly conducted by the Compensation Committee.
Employee Engagement
Our annual employee satisfaction survey captures critical indicators of employee engagement and provides an overall understanding of employee favorability. During 2025, we conducted our annual enterprise-wide engagement survey, with the assistance of third-party consultants, which focused on measuring engagement, favorability and overall employee satisfaction. We will continue to poll our employees, as appropriate, and build action plans to address feedback shared by our team members.
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Information About Our Executive Officers
The following table presents information about our executive officers who, other than Christopher E. French, are not members of our board of directors. Our executive officers serve at the pleasure of the Board of Directors.
Name
Title
Age
Date in Position
Christopher E. French
Executive Chairman
September 2025
Edward H. McKay
President and Chief Executive Officer
September 2025
James J. Volk
Senior Vice President and Chief Financial Officer
June 2019
Tracy L. Willis
Vice President and Chief Accounting Officer
December 2024
Elaine M. Cheng
Senior Vice President and Chief Information Officer
March 2019
Heather K. Tormey
Vice President and Chief Human Resources Officer
July 2019
Richard W. Mason Jr.
Senior Vice President Engineering and Operations
July 2021
Angela M. Olsen
General Counsel, Vice President Legal and Corporate Secretary
August 2025
Dara Leslie
Senior Vice President Sales & Marketing
June 2022
Glenn E. Lytle
Senior Vice President Commercial Sales
April 2024
Mr. French is Executive Chairman for Shentel. He is responsible for all the business and affairs of the Board of Directors and primarily acts in an advisory capacity to assist the President and Chief Executive Officer. He has served as Executive Chairman since September 1, 2025 and previously served as President since 1988, and has been a member and Chairman of the Board of Directors since 1996. Prior to appointment as President, Mr. French held a variety of positions with the Company, including Vice President Network Service and Executive Vice President. Mr. French holds a bachelor’s degree in electrical engineering and an MBA, both from the University of Virginia. He has held board and officer positions in both state and national telecommunication associations, including service as a director of the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), membership on the Leadership Committee of the USTelecom Association, and was president and director of the Virginia Telecommunications Industry Association.
Mr. McKay is President and Chief Executive Officer for Shentel. He is responsible for providing overall leadership, setting strategic direction, and managing day-to-day operations for the Company. Together with the executive team, he oversees the execution of Board decisions and ensures effective implementation of the Company’s strategy. He joined Shentel in 2004 and has served as President and Chief Executive Officer since September 1, 2025. Mr. McKay has held a variety of leadership positions with the Company, including Executive Vice President and Chief Operating Officer, and Senior Vice President of Engineering and Operations. He played a key role in the growth and success of Shentel's former wireless business, led the expansion of the fiber-rich network supporting the Company’s broadband business, and has been responsible for delivering on Shentel’s Glo Fiber growth strategy. Mr. McKay began his telecommunications industry career in 1996, including previous management positions at UUNET and Verizon. He is a graduate of the University of Virginia, where he earned master’s and bachelor’s degrees in Electrical Engineering, and he represents the Company on the Board of ACA Connects.
Mr. Volk is Senior Vice President and Chief Financial Officer for Shentel. He joined Shentel in 2019, has more than 30 years of experience in the telecommunications industry and has served in a variety of senior financial management roles with both large corporations and high growth, early stage telecommunication providers. Prior to joining Shentel, he served as Vice President, Finance and Investor Relations of Uniti Group Inc. Prior to joining Uniti, he served as CFO of multiple public and private telecommunication companies, including PEG Bandwidth, Hargray Communications and UbiquiTel Inc. He previously held senior finance positions with AT&T and Comcast. Mr. Volk holds a Bachelor of Science Degree in Accounting from the University of Delaware and a Master of Business Administration from Villanova University.
Ms. Willis is Vice President and Chief Accounting Officer for Shentel. She leads all accounting, financial reporting, internal controls, SEC, Sarbanes-Oxley and income tax compliance. She joined Shentel in 2024. Prior to joining Shentel, Ms. Willis worked for The Walt Disney Company where she spent the last 35 years in progressive accounting and finance leadership positions including Vice President, Segment Controller of Parks and Resorts, Vice President, Senior Controller for The Walt
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Disney Company and most recently as Vice President, Senior Controller of Finance Transformation. Tracy is a CPA and graduate of the University of Delaware.
Mrs. Cheng is Senior Vice President and Chief Information Officer for Shentel. She leads the Information Technology organization, Enterprise Project Management Office (EPMO) and Enterprise Risk Management program, and is responsible for our Customer Care and Tech Support functions. She joined the Company in 2019 and has more than 30 years of experience in diverse business environments across all areas of Information Technology. Prior to joining Shentel, Mrs. Cheng served as Chief Information Officer and Managing Director of Global Strategic Design for CFA Institute in Charlottesville, Va. Prior to her time at CFA Institute, Mrs. Cheng held a number of different roles over 16 years with M&T Bank in Buffalo, NY, including Group Vice President, Technology Business Services, Vice President of Retail Operations and Assistant Vice President, Web Product Owner. She received her Bachelor of Arts degree from Vassar College and her Masters of Business Administration from the University of Rochester. Additionally, Mrs. Cheng is a founding board member of Charlottesville Women in Tech, a non-profit organization which encourages women to join and thrive in technology careers.
Ms. Tormey is Vice President and Chief Human Resources Officer at Shentel. She joined the Company in 2019. Ms. Tormey brings more than 25 years of experience in leading and managing strategic HR initiatives to Shentel. Prior to joining Shentel, Ms. Tormey was the Chief Human Resources Officer of American Woodmark, headquartered in Winchester, Virginia. Prior to American Woodmark, Ms. Tormey held numerous HR leadership positions with a variety of organizations across a range of industries, including Carlisle FoodService Products, UTC Aerospace Systems, Goodrich Corporation, Northern Power Systems, and IGT. She holds a Bachelor of Science in Psychology from Florida State University and a Master of Arts in Industrial Organizational Psychology from the University of New Haven.
Mr. Mason is Senior Vice President Engineering and Operations at Shentel and is responsible for leading our network strategy, engineering, construction and operations functions. Mr. Mason has served in his current role since 2021. He joined Shentel in 2019 as Vice President and Head of Business Operations responsible for Enterprise Program Management, Performance Management and Process Excellence across all business segments. Prior to joining Shentel, Mr. Mason was Head of Install and Repair Operations at Google Fiber. Before that, he held a variety of leadership roles over his more than 20 years career with Cincinnati Bell, culminating in Vice President of Field Operations. He received his Bachelor of Science degree in Electrical Engineering from Ohio University and has an MBA from Xavier University.
Ms. Olsen is General Counsel, Vice President Legal and Corporate Secretary for Shentel. She joined Shentel in 2025 and is responsible for all legal and regulatory compliance matters for the Company. She also acts as Corporate Secretary to the Company’s Board of Directors. Ms. Olsen joined Shentel from AquaBounty Technologies, Inc., where she served as General Counsel and Corporate Secretary from 2019 to 2025, during which time she advised the company on strategic growth-oriented business and legal strategies in complex global markets. Prior to AquaBounty, she served as Senior Advisor and Associate General Counsel at E.I. du Pont de Nemours and Company (DuPont), where she led legal and commercial matters in the areas of biotechnology, agriculture, government interactions, and global trade. She was also a trial attorney at the US Department of Justice and served in private practice at both Jones Day and Latham & Watkins, LLP. Ms. Olsen holds a Juris Doctorate from American University, Washington College of Law, a Bachelor of Arts from Hamilton College and a Master of Science from Catholic University of America.
Ms. Leslie is Senior Vice President of Sales and Marketing for Shentel. She joined Shentel in 2022 and has over 20 years of experience in the broadband industry, including 10 years with Comcast as Vice President of Sales and Marketing for the Big South Region and Vice President of Marketing for the Central Division, seven years with Atlantic Broadband as Vice President/General Manager of the Maryland-Delaware markets and Vice President of Customer Care and Marketing, and six years with Charter in various leadership roles. Ms. Leslie has a master’s degree from Old Dominion University and a bachelor’s degree from the University of North Carolina at Greensboro.
Mr. Lytle is Senior Vice President Commercial Sales for Shentel. He joined Shentel in 2024 and has over 25 years of telecommunications experience. Mr. Lytle most recently served as Chief Revenue Officer at Horizon from 2019 to 2024. Prior to Horizon, Mr. Lytle served as Vice President of Sales at Segra, where he was responsible for developing and growing the enterprise business, and he has also held a senior leadership role at Comcast. Mr. Lytle earned a bachelor’s degree from Baldwin Wallace University.
Websites and Additional Information
The Company maintains a corporate website at www.shentel.com. We make available free of charge, through our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8‑K and all amendments to those reports,
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as soon as reasonably practicable after we electronically file or furnish such reports with or to the SEC. The contents of our website are not a part of this report. In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding the Company.
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ITEM 1A. RISK FACTORS
Our business and operations are subject to a number of risks and uncertainties. The risks set forth under “Part I Item 1. Business” and the following risk factors should be read carefully in connection with evaluating our business. The following risks (or additional risks and uncertainties not presently known to us) could materially affect our financial condition, liquidity, or operating results, as well as the price of our common stock.
Risks Related to Our Business
Intensifying competition may limit our ability to continue to grow our revenue.
The increasing demand for faster residential internet bandwidth driven by working and learning from home since the outbreak of COVID-19 has increased the availability of capital to fund FTTH and cable overbuilds. Approximately 30% of the passings in our incumbent broadband business currently have an FTTH or cable competitor. All of our Glo Fiber passings have an incumbent cable competitor and approximately 12% have an incumbent telephone competitor with FTTH services. Wireless and satellite providers have also entered the market for broadband. In some areas, wireless providers have partnered with broadband providers to offer a converged bundle of broadband and wireless. If competitive overbuilds increase in our incumbent cable or Glo Fiber service areas, more of our subscribers may select other providers’ offerings based on price, bandwidth speeds, capabilities or personal preference. Additionally, a recent trend towards convergence of wireless and fiber broadband service offerings has started consolidation in the FTTH segment. If this trend continues, mergers, acquisitions and strategic alliances with large wireless carriers could also increase the level of competition we face. Further, if new competitors offer lower prices, we may need to offer more value to retain our customers, driving lower revenue per subscriber.
Additionally, our HFC cable network will require upgrades in the future in order to meet expected demand from customers and to maintain network parity with potential FTTH competitors. These upgrades will require significant capital investment and management oversight. If we are unable to complete these upgrades, we may lose customers to our competitors and our Incumbent Broadband revenues could be adversely affected in the future.
Consumers are increasingly accessing video content from direct broadcast satellite providers and alternative sources, such as internet-based “over the top” providers such as Netflix, YouTube TV, Hulu, Disney+, Amazon and related platforms. The influx of competitors in this area, together with the development of new technologies to support them, are resulting in significant changes in the video business models and regulatory provisions that have applied to the provision of video and other services. These developments have led to a loss of video subscribers due to “cord cutting” as customers adopt alternative sources of accessing video content. We expect these trends to continue, which may lead to a decline in the demand, price and profitability of our video services.
We have experienced reductions in the number of access lines and DSL subscriptions in our RLEC markets, and we anticipate that the long-term trend may continue. Further, competitors in our RLEC markets may receive support under the Broadband Equity, Access, and Deployment (“BEAD”) Program to build broadband facilities to unserved homes that do not meet the minimum broadband speeds in some areas already served by our DSL networks. As a result, new competitors may overbuild these markets and our RLEC revenue decline may accelerate.
The Company’s commercial fiber business faces intense competition from several local and national providers. Most of our competitors possess greater resources, have greater brand recognition, have more extensive coverage areas, have access to technologies not available to us, are able to offer bundled service offerings that we are not able to duplicate and offer more services than we do. If a significant number of our customers elect to move to competing providers, our Commercial Fiber revenues could be adversely affected.
Our future growth is primarily dependent upon our expansion strategy, which may or may not be successful.
We are strategically focused on driving growth by expanding our broadband network in order to provide service in communities that are near or adjacent to our network. This expansion strategy includes our FTTH broadband service, which we offer under the Glo Fiber brand. The Glo Fiber brand, which is also used in our Commercial Fiber business, is relatively new in the marketplace and the success of our strategy will depend on the degree to which we are able to successfully establish and continue to enhance this brand, which is not assured. The expansion strategy requires considerable management resources and capital investment and it is uncertain whether and when it will contribute to positive free cash flow and the degree to which we will otherwise achieve our strategic objectives, on a timely basis or at all. As a result, we expect our capital expenditures to exceed the cash flow provided from continuing operations through 2026.
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Furthermore, attaching the Company’s cables to utility poles governed by the pole attachment agreements requires significant coordination with the owners of the utility poles which may result in delays if the owners of the utility poles cannot dedicate sufficient resources to assist in the attachment process. Similarly, Shentel must coordinate with local utility service providers when installing cables underground to ensure all current infrastructure, such as existing cabling or gas lines, is properly located. Delays related to locate services may result in delays in Shentel’s overall expansion strategy.
Difficulty in obtaining necessary resources may also adversely affect our go-to-market strategy as we expand into new markets, as could our ability to adequately market a new brand to customers unfamiliar to us as we expand to markets where we do not currently operate. We may face resistance from competitors who are already in markets we wish to enter. Incumbent telephone competitors may choose to overbuild their copper networks with fiber after we invest. If our expectations regarding our ability to attract customers in these communities are not met, or if the capital requirements to complete the network investment or the time required to attract our expected level of customers are incorrect, our financial performance and returns on investment may be negatively impacted.
We face additional risks associated with the wind down of the Glo Fiber construction phase. As we complete open projects and align staffing levels, contract resources, and inventory levels with our post-construction needs, we could incur unexpected expenses, experience employee turnover, or face outsourced construction labor shortages that could adversely affect earnings and the number of constructed passings.
We may be materially adversely affected by regulatory, legal and economic changes relating to our physical plant.
Our systems depend on physical facilities, including transmission equipment and miles of fiber and cable. Significant portions of those physical facilities occupy land in the public rights-of-way and are subject to local ordinances and governmental regulations. Other portions occupy private property under express or implied easements, and many miles of the cable are attached to utility poles governed by pole attachment agreements. No assurances can be given that we will be able to maintain and use our facilities in their current locations and at their current costs. Changes in governmental regulations or changes in these relationships could have a material adverse effect on our business and our results of operations. Additionally, lapses in U.S. federal government funding, such as the government shutdown experienced in the U.S. in October 2025, and other disruptions to government agency operations may have an adverse effect on our business and results of operations.
Some of our competitors are larger than we are and possess greater resources than we do.
In some instances, we compete against companies that have greater financial and personnel resources, greater brand name recognition, more extensive coverage areas, access to spectrum or technologies not available to us and long-established relationships with regulatory authorities and customers. These additional resources may allow these competitors to offer bundled service offerings that we are not able to duplicate and offer more services than we do. We may not be able to successfully compete with these larger competitors to attract new customers and key personnel and retain existing customers and key personnel. As a result, we could experience lower revenues, higher sales and marketing expenses and lower earnings, which could have an adverse effect on our business and our results of operations.
Alternative technologies, changes in the regulatory environment and current uncertainties in the marketplace may reduce future demand for existing telecommunication services and materially increase our capital expenditures.
The telecommunications industry is experiencing significant technological change, evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new products and enhancements and changes in end-user requirements and preferences. Technological advances, industry changes and changes in the regulatory environment could cause the technology we use to become obsolete. We may not be able to respond to such changes and implement new technology on a timely basis or at an acceptable cost. Additionally, we may be required to select one developing or new technology over another and may not choose the technology that is ultimately determined to be the most economic, efficient or attractive to customers. We may also encounter difficulties in implementing new technologies, products and services and may encounter disruptions in service as a result. Additionally, as adoption of Artificial Intelligence (AI) technologies becomes a critical component of business, our pace of adoption for AI could impact our cost structure relative to peers. Should we be or in leveraging AI appropriately, our operating margins may be lower relative to peers. We have started leveraging AI in our operations and, as a result, introduce new risks associated with AI to our operations including AI and dependence on AI models which could become , biased or operationally if not properly monitored and adjusted. If used or implemented, issues with AI could impact customer interactions or operational . As a result, AI could impact our financial performance.
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Our programming costs continue to increase, and our relative size limits our ability to negotiate more favorable terms, which may have an adverse effect on our business and our results of operations.
The cable television industry has continued to experience an increase in the cost of programming, especially sports programming and retransmission fees. In addition, as we add programming to our video services for existing customers or distribute existing programming to more customers, we incur increased programming expenses. Broadcasters affiliated with major over-the-air network services have been increasing their demands for cash payments and other concessions for the right to carry local network television signals on our cable systems. As compared to large national providers, our smaller base of subscribers limits our ability to negotiate lower programming costs. While we pass programming rate increases on to our video customers, we may experience higher churn and lower revenues. If we are unable to raise our customers’ rates, these increased programming costs could have an adverse impact on our results of operations. Moreover, as our programming contracts and retransmission agreements with programming providers expire, there can be no assurance that they will be renewed on acceptable terms, which could lead to a loss of video customers and could have an adverse effect on our business and our results of operations.
We may not benefit from our acquisition strategy.
As part of our business strategy, we regularly evaluate opportunities to enhance the value of the Company by pursuing acquisitions of other businesses. Although we remain subject to financial and other covenants in our financing arrangements that may limit our ability to pursue certain strategic opportunities without lender approval, we intend to continue to evaluate and, when appropriate, pursue strategic acquisition opportunities as they arise. We cannot provide any assurance, however, with respect to the timing, likelihood, size or financial effect of any potential transaction involving the Company, as we may not be successful in identifying and consummating any acquisition or in integrating any newly acquired business into our operations.
The evaluation of business acquisition opportunities and the integration of any acquired businesses pose a number of significant risks, including the following:
• acquisitions may place significant strain on our management and financial and other resources by requiring us to expend a substantial amount of time and resources in the pursuit of acquisitions that we may not complete, or to devote significant attention to the various integration efforts of any newly acquired businesses, all of which will require the allocation of limited resources;
• acquisitions may not have a positive impact on our cash flows or financial performance;
• even if acquired businesses eventually contribute to an increase in our cash flows or financial performance, such acquisitions may adversely affect our operating results in the short term as a result of transaction-related expenses we will have to pay or the higher operating and administrative expenses we may incur in the periods immediately following an acquisition as we seek to integrate the acquired business into our operations;
• we may not be able to realize anticipated synergies, achieve the desired level of integration of the acquired business or eliminate as many redundant costs;
• we may not be able to maintain relationships with customers, suppliers and other business partners of the acquired business;
• our operating and financial systems and controls and information services may not be compatible with those of the businesses we may acquire and may not be adequate to support our integration efforts, and any steps we take to improve these systems and controls may not be sufficient;
• our business plans and projections used to justify the acquisitions and expansion investments may be based on assumptions of revenues per subscriber, penetration rates in specific markets where we operate and expected operating costs and these assumptions may not develop as projected, which may negatively impact our profitability or the value of our intangible assets;
• growth through acquisitions will increase our need for qualified personnel, who may not be available to us or, if they were employed by a business we acquire, remain with us after the acquisition; and
• acquired businesses may have unexpected liabilities and contingencies, which could be significant.
The future outbreak of another significant pandemic, like the COVID-19 pandemic, could disrupt the operation of our business resulting in adverse impacts to our financial condition, results of operations and cash flow and could create significant volatility in the trading and value of the Company’s common stock.
The COVID-19 pandemic negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets, and another pandemic in the future could have similar effects. Given the ongoing
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and dynamic nature of the circumstances, it is difficult to predict how future pandemics will impact the Company, and there is no guarantee that efforts by Shentel, designed to address adverse impacts of future pandemics, will be effective.
Although the Company has instituted a distributed-first work environment, the COVID-19 pandemic did, and a future pandemic could, have material and adverse effects on our ability to successfully operate and on our financial condition, results of operations and cash flows.
Shentel has implemented policies and procedures designed to mitigate the risk of adverse impacts of a future pandemic on the Company’s operations, but we may still incur additional costs to ensure continuity of business operations caused by future pandemics, which could adversely affect its financial condition and results of operations.
Disruptions of our information technology infrastructure or operations could harm our business.
A disruption of our information technology infrastructure or overall operations, or the infrastructure or operations of certain vendors who provide information technology or overall operations services to us or our customers, could be caused by a natural disaster, power failure, manufacturing defect, telecommunications system failure, ransomware attack, cybersecurity attack or intrusion, terrorist attack, defective or improperly installed new or upgraded business management systems, or construction failure, including but not limited to a utility line strike. Although we make significant efforts to maintain the security and integrity of the Company’s operations and information technology infrastructure, there can be no assurance that our security efforts, business impact planning and disaster recovery measures will be effective or that attempted security breaches or would not be or , especially in light of the growing sophistication of cyber-attacks and intrusions sponsored by state or other interests. Portions of our information technology infrastructure also may experience , or cessations of service or produce in connection with systems integration or migration work that takes place from time to time. In the event of any such , we may be to conduct our business in the normal course. Moreover, our business involves the processing, storage and transmission of data, which would also be affected by such an event. A significant of our information technology infrastructure or operations could result in to our reputation and credibility, customer and ultimately a of customers or revenue. Significant of customers or revenue, or significant increase in costs of serving those customers, could affect our growth, financial condition and results of operations. We also could incur significant expense in repairing system and taking other remedial measures. Like many organizations, we increasingly rely on third party software and infrastructure supports to deliver our services. , , , or other security experienced by those third parties could cause operational impacts, our reputation, affect our financial impacts, or our business if significant in nature.
Our earnings, margins and stock price may be adversely impacted by our current cost structure as a result of our relative size.
Our sales, general and administrative (“SG&A”) costs, including corporate overhead, are a higher percentage of revenue than larger broadband companies due to a lack of relative scale. We anticipate it may take multiple years of growth to reduce our SG&A as a percentage of revenue to be comparable to our broadband peers. If we cannot further grow our revenues at a faster pace than our expenses, our earnings and margins may be lower than our peers which may affect the value of our stock price.
Our success depends on consistent supply of physical goods and services to build and sustain services to customers. Significant disruptions to the supply chain, including increased tariffs, could adversely impact our growth, operations and revenue projections.
The supply of critical supplies, such as modems, consumer Wi-Fi equipment, energy, optical equipment and fiber is important to our business operations. These materials form the core components needed to deliver both video and data services to our customers. We work to ensure we have a forward-looking supply of these items and redundancy of supply types and suppliers. However, global impacts to supply chains, including cost increases as a result of changes to federal tariffs or retaliatory tariffs by the U.S. or foreign governments, across some or all suppliers and manufacturers could result in significant supply issues and/or increased cost. If supplies of these items became severely impacted, our plans to build out new networks could be adversely impacted. Additionally, the lack of certain equipment and/or supplies could limit our ability to service existing customers. Significant impact to supply chains could materially and adversely affect our business, including reduced revenues, loss of customers, significantly increased costs, and limitations on future growth. Additionally, at times we choose to leverage third-party suppliers to help us deliver services to customers because of reasons or because third-parties provide a service we cannot replicate . Should those third-party suppliers be impacted by a of materials, equipment or resources, their to provide services to us could also impact our ability to deliver network services or build out future network.
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Our success largely depends on our ability to retain and recruit key personnel, and any failure to do so could adversely affect our ability to manage our business.
Our historical operational and financial results have depended, and our future results will depend, upon the retention and continued performance of our management team, as well as the attraction and retention of relevant key roles across our organization. Specifically, the highly-competitive market for talent for key roles in our industry, including executive officers and key personnel to support our engineering, sales, service delivery, information technology, finance and accounting functions, could adversely impact our ability to retain and hire new key employees and contractors. The loss of the services of key members of executive management or other employees or contractors in critical roles, and the inability or delay in hiring new key employees and contractors could materially and adversely affect our ability to manage and expand our business and our future operational and financial results. Moreover, an inability to retain sufficient qualified personnel throughout our organization or to attract new personnel as we grow our business could adversely affect our ability to achieve our operational, sales and financial goals impacting our financial results, financial condition and our stock price.
We could suffer a loss of revenue and increased costs, exposure to significant liability, reputational harm and other serious negative consequences if we sustain cyber-attacks or other data security breaches that disrupt our operations or result in the dissemination of proprietary or confidential information about us or our customers or other third parties.
We utilize our information technology infrastructure to manage and store various proprietary information and sensitive or confidential data relating to our operations. We routinely process, store and transmit large amounts of data for our customers, including sensitive and personally identifiable information. We depend on our information technology infrastructure to conduct business operations and provide customer services. We may be subject to data breaches and disruptions of the information technology systems we use for these purposes. Our industry has witnessed an increase in the frequency, intensity and sophistication of cybersecurity incidents caused by threat actors such as foreign governments, criminals, hacktivists, terrorists and insider threats. Threat actors may be able to penetrate our network security and misappropriate or compromise our confidential, sensitive, personal or proprietary information, or that of third parties, and engage in the unauthorized use or dissemination of such information. They may be to create system , or cause . actors may be to develop and deploy viruses, malware, ransomware and other software programs that attack our products or otherwise security of our systems causing operational that could impact our ability to serve customers and result in financial . In addition, sophisticated hardware and operating system software and applications that we procure from third parties may contain in design or manufacture, including “bugs,” cybersecurity and other that could with the operation or security of our systems.
Like many other companies, we increasingly leverage third-party Software as a Service (“SaaS”) solutions and external service providers to help us deliver services to our customers. In the delivery of these services, we are dependent on the security infrastructure of those third-party providers. These providers are also vulnerable to the myriad of possible cyber-attacks. In the case where a third-party provider becomes victim to an attack, it could have an impact on our operations or ability to service customers.
To date, interruptions of our information technology infrastructure and third party suppliers have been infrequent and have not had a material impact on our operations. However, because technology is increasingly complex and cyber-attacks are increasingly sophisticated and more frequent, there can be no assurance that such incidents will not have a material adverse effect on us in the future. The consequences of a breach of our security measures or those of a third-party provider, a cyber-related service or operational disruption, or a breach of personal, confidential, proprietary or sensitive data caused by a hacker or other malicious actor could be significant for us, our customers and other affected third parties. For example, the consequences could include damage to infrastructure and property, impairment of business operations, disruptions to customer service, financial costs and harm to our liquidity, costs associated with remediation, of revenues, of customers, competitive , legal expenses associated with , regulatory action, or or to our brand and reputation.
In addition, the costs to us to eliminate or address the foregoing security challenges and vulnerabilities before or after a cyber-incident could be significant. In addition, our remediation efforts may not be successful and could result in interruptions, delays or cessation of service. We could also lose existing or potential customers for our services in connection with any actual or perceived security vulnerabilities in the services.
We are subject to laws, rules and regulations relating to the collection, use and security of user data. Our operations are also subject to federal and state laws governing information security. In the event of a data breach or operational disruption caused by an information security incident, such rules may require consumer and government agency notification and may result in regulatory enforcement actions with the potential of monetary forfeitures as well as civil litigation. We have incurred, and will
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continue to incur, expenses to comply with privacy and security standards and protocols imposed by law, regulation, industry standards and contractual obligations. Notification to customers could also result in reputational damage which could result in loss of customers or future customers due to a lack of confidence in our ability to secure their data.
Climate change could disrupt our operations and our distribution networks, cause us to incur increased costs related to such events, or otherwise negatively affect our business.
Our distribution networks may be subject to weather-related events that could damage our networks and impact service delivery, such as downed transmission lines, flooded facilities, power outages, fuel shortages, damaged or destroyed property and equipment, work interruptions, or network congestion, delays or failures, . It is predicted that warming global temperatures will increase the frequency and severity of such weather-related events. If there are more weather-related events, and should such events impact the region covered by our networks more frequently or more severely than in the past, our revenues and expenses could be materially adversely impacted. Concern over climate change may result in new or increased legal and regulatory requirements to reduce or mitigate the effects of climate change. Further, climate change regulations may require us to alter our proposed business plans or increase our operating costs due to increased regulation or environmental considerations, and could affect our business and reputation.
Service Level Agreements (“SLAs”) with our largest customers may cause material fluctuations in our financial results.
Approximately 28% of commercial revenues are with the national wireless service providers who have carrier grade SLAs for network reliability and mean time to restore outages. If the Company and its network vendors providing off-network backhaul circuits to certain cellular towers do not meet the SLAs, contractual monetary penalties may be incurred which would have an adverse effect on revenues and profitability. Network investments may be required to remediate the issues.
Risks Related to Regulation and Legislation
Regulation by government agencies may increase our costs of providing service or require changes in services, either of which could impair our financial performance.
Our operations are subject to varying degrees of regulation by the FCC, the FTC, the Federal Aviation Administration, the Environmental Protection Agency and the Occupational Safety and Health Administration, as well as by state and local regulatory agencies and franchising authorities. Action by these regulatory bodies could negatively affect our operations and our costs of doing business.
Changes to the FCC’s Universal Service Fund (“USF”) framework may adversely impact our Broadband revenue, which may have a material adverse effect on our financial performance and our results of operations.
The FCC’s USF provides regulatory support to rural local exchange carriers to promote universal service and to eligible schools and libraries through the e-rate program and to regional healthcare providers and hospitals through the Rural Healthcare Program to obtain subsidized internet access and telecommunication services. Although unsuccessful, recent lawsuits against the USF have raised questions in Congress regarding future funding for the USF. Any reduction in the USF from similar successful lawsuits, or funding changes by Congress, could negatively impact the regulatory support revenue received by the Company’s RLEC business and the ability for schools, libraries, and healthcare providers to pay the Company for internet access and telecommunication services.
Changes to key regulatory requirements can affect our ability to compete.
Our industry is subject to governmental regulation, which impacts many aspects of our operations. Legislators and regulators at all levels of government frequently consider changing, and sometimes do change, existing statutes, regulations, and interpretations thereof. Future legislative, judicial, or administrative actions may increase our costs or impose additional challenges and restrictions on our business.
Federal law strictly limits the scope of permissible cable rate regulation, and none of our local franchising authorities currently regulate our rates for video services. Our rates for broadband services have historically not been subject to rate regulation. However, as broadband service is increasingly viewed as an essential service, governments could adopt new laws or regulations related to the prices we charge for our services that could adversely impact our existing business model, revenues, earnings and the value of cable industry stock prices.
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The Company provides data services and operates cable television systems in largely rural areas of Virginia, West Virginia, Maryland, Pennsylvania, Kentucky, Delaware, Ohio and Indiana pursuant to local franchise agreements. These franchises are not exclusive, and other entities may secure franchise authorizations in the future, thereby increasing direct competition to the Company.
Many franchises establish comprehensive facilities and service requirements, as well as specific customer service standards and monetary penalties for non-compliance. In many cases, franchises are terminable if the franchisee fails to comply with significant provisions set forth in the franchise agreement governing system operations. Franchises are generally granted for fixed terms and must be periodically renewed. Franchising authorities may resist granting a renewal if either past performance or the prospective operating proposal is considered inadequate. Franchise authorities often demand concessions or other commitments as a condition to renewal. If our local franchises are not renewed at expiration, we would have to cease operations or operate under either temporary operating agreements or without a franchise while negotiating renewal terms with the local franchising authorities. Although we have historically renewed our franchises without incurring significant costs, we cannot offer assurance that we will be able to renew, or to renew as favorably, our franchises in the future. A termination of or a sustained failure to renew a franchise in one or more key markets, or obtaining such franchise on terms, could affect our business in the affected geographic area.
Pole attachments are wires and cables that are attached to utility poles. Cable and fiber system attachments to investor-owned public utility poles historically have been regulated at the federal or state level, generally resulting in reasonable pole attachment rates for attachments used to provide cable service. In contrast, utility poles owned by municipalities or cooperatives are not subject to federal regulation and are, with exceptions, generally exempt from state regulation and their attachment rates tend to be higher. Future regulatory changes in this area could impact the pole attachment rates we pay utility companies.
The timing of receipt of or an altogether lack of government grant payments may adversely affect our liquidity and ability to complete our performance obligations.
Although the Company has executed contracts with several municipalities to reimburse a portion of the costs to construct broadband networks to unserved homes, delays in receipt of the grant payments may adversely affect the Company’s liquidity and our ability to complete our performance obligations. Additionally, recent uncertainty related to future U.S. government budget, operations and spending decisions could result in disruptions of governmental operations and payments from federal agencies. Such disruptions could also impact municipalities’ ability to fund grant payments. If we do not receive such grant payments on the expected timeline or at all, we may default on certain financial obligations, which would have an adverse effect on our business and results of operations.
The Company may fail to complete its performance obligations in regard to government grant awards and incur liquidated damages and/or create an event of default that could allow the municipality to cancel the grant.
Shentel has been awarded grants through various broadband infrastructure grant programs in Virginia, Maryland, West Virginia, Ohio and through the federal National Telecommunications and Information Administration (“NTIA”). As of December 31, 2025, the Company has been awarded grants totaling approximately $151.2 million. Most of the grants awarded under the above programs are funded through the American Rescue Plan Act. As the recipient of these grants, the Company has committed to expand its broadband network and improve broadband services to approximately 26,900 unserved homes in the states of Virginia, Maryland, West Virginia and Ohio and upgrade our middle mile network in Ohio within a specified period, as agreed to by the Company and each municipality. In the event the Company does not fulfill its commitment to extend its existing broadband network within the time frame allotted, the performance of the broadband network is inadequate, the Company is considered insolvent or the Company fails to meets its funding requirements of the grant projects, the Company may be declared in default of the grant contract. If the default is not cured in a timely manner, the grant contract could be terminated, grant reimbursements maybe withheld by the municipalities and the Company may be required to repay grant monies previously received, as well as additional and . Furthermore, the Company may be liable to pay interest, administrative charges, collection costs, attorneys’ fees, expert fees, consultant fees, and other applicable fees, and interest on any outstanding repayment, all of which could lead to higher Company capital requirements, which may not be available, lower homes passed and financial results for the Company.
Regulatory and technology constraints could impact our ability to adequately address increases in broadband usage and may cause network capacity limitations, resulting in service disruptions, reduced capacity or slower transmission speeds for our customers.
Video streaming services, gaming, peer-to-peer file sharing applications, and increased AI use requires significantly more bandwidth than other internet activity such as web browsing and email. As use of these services continues to grow, our broadband customers will likely use much more bandwidth than in the past. If this occurs, we could be required to make
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significant capital expenditures to increase network capacity in order to avoid service disruptions, service degradation or slower transmission speeds for our customers. Alternatively, we could choose to implement network management practices to reduce the network capacity available to bandwidth-intensive activities during certain times in market areas experiencing congestion, which could negatively affect our ability to retain and attract customers in affected markets. Competitive or regulatory constraints may preclude us from recovering costs of network investments designed to address these issues, which could adversely impact our operating margins, results of operations, financial condition and cash flows.
Our services may be adversely impacted by legislative or regulatory changes that affect our ability to develop and offer services or that could expose us to liability from customers or others.
The Company provides broadband internet access services to its fiber and cable customers. As the internet has matured, it has become the subject of increasing regulatory interest. Congress and Federal regulators have adopted a wide range of measures directly or potentially affecting internet use. The adoption of new internet regulations or policies could adversely affect our business.
The FCC imposes obligations on telecommunications service providers, including broadband internet access service providers, and multichannel video program distributors, like our Company. We cannot predict the nature and pace these requirements and other developments, or the impact they may have on our operations.
Risks Related to our Indebtedness
We may not be able to repay future indebtedness.
As of December 31, 2025, Shentel Issuer had $567.4 million of outstanding Notes consisting of $489.1 million 5.64% Series 2025-1, Class A-2 term notes, $78.3 million 6.03% Series 2025-1, Class B term notes, each with an anticipated repayment date in December 2030 (collectively, the “Notes”). If Shentel Issuer is unable to refinance the Notes maturities on terms acceptable to us or if we are not able to generate sufficient cash flows from ABS Entities operations to repay our outstanding indebtedness when such indebtedness becomes due, the ABS Indenture requires mandatory prepayment of principal of the Notes on each payment date on a pro-rata basis based on the alphanumerical designation of each class of Notes and additional interest will be charged until the Notes are refinanced or fully redeemed.
As of December 31, 2025, we had $75.0 million borrowed against a $175.0 million RCF due December 2030. If Shentel Broadband is unable to refinance our RCF maturities on terms acceptable to us or if we are not able to generate sufficient cash flows from Shentel Broadband operations, excluding the ABS Entities, to repay our outstanding indebtedness when such indebtedness becomes due, this could cause an event of default of the RCF and, if not cured or waived, allow lenders to exercise remedies in the RCF credit agreement, including the liquidation of assets, excluding the ABS Entities, to repay RCF indebtedness.
Our level of indebtedness could adversely affect our financial health and ability to compete.
As of December 31, 2025, we had $642.4 million of total indebtedness. Our level of indebtedness could have important adverse consequences. For example, it may:
• require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, dividends and other general corporate purposes; and
• place us at a competitive disadvantage relative to companies that have less indebtedness.
Failure to comply with financial and operating covenants or make scheduled payments related to our Notes and the RCF may restrict our ability to borrow and could accelerate repayment of outstanding debt.
Under the ABS Indenture, Shentel Issuer is required to report specified Debt Service Coverage Ratios (“DSCR”) for each monthly payment date. If the monthly DSCR is below specific thresholds as outlined in the ABS Indenture, a portion of customer collections from the prior month held by indenture trustee will be retained as reserves or will be used to begin amortization of the Notes on a pro-rata basis based on the alphanumerical designation of each class of Notes until the monthly DSCR is above the threshold. In addition, if the DSCR is not above certain thresholds at the time we wish to borrow funds from the VFN, we will be unable to borrow VFN funds until the DSCR is above the threshold. If Shentel Issuer fails to comply with specified payment and operating covenants as outlined in the ABS Indenture, this will trigger an event of default and could
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trigger an acceleration of the maturity of the Notes upon written direction of more than 50% of the aggregate outstanding class principle balance of all classes of Notes.
Under the RCF credit agreement, Shentel Broadband is required to comply with specified financial and operating covenants. Our failure to comply with any of these covenants or to meet any payment obligations under the RCF credit agreement could result in an event of default which, if not cured or waived, would result in any amounts outstanding, including any accrued interest and unpaid fees, becoming immediately due and payable. Shentel Broadband might not have sufficient working capital or liquidity to satisfy any repayment obligations in the event of an acceleration of those obligations. In addition, if we are not in compliance with the financial and operating covenants at the time we wish to borrow funds, we will be unable to borrow RCF funds.
General Risk Factors
Adverse economic conditions in the United States and in our market area involving significantly reduced consumer spending or high inflation could have a negative impact on our results of operations.
Unfavorable general economic conditions could negatively affect our business. Although it is difficult to predict the impact of general economic conditions on our business, these conditions could adversely affect the affordability of, and customer demand for our services, and could cause customers to delay or forgo purchases of our services or could negatively impact customer payment for already contracted services. Any national economic weakness, restricted credit markets, high interest rates, high inflation or high unemployment rates could depress consumer spending, increase our expenses and harm our operating performance. In addition, any adverse economic conditions that affect our geographic markets in particular could have a disproportionately negative impact on our results.
Negative outcomes of legal proceedings may adversely affect our business and financial condition, results of operations and cash flows.
We become involved in legal proceedings from time to time. While we are not currently involved in any material legal proceedings, potential future proceedings may be complicated, costly and disruptive to our business operations. We might also incur significant expenses in defending these matters or may be required to pay significant fines, awards and settlements. Any of these potential outcomes, such as judgments, awards, settlements or orders could have a material adverse effect on our business, financial condition, operating results or our ability to do business.
Our business may be impacted by new or changing tax laws or regulations and actions by federal, state and/or local agencies, or how judicial authorities apply tax laws.
In connection with the products and services we sell, we calculate, collect and remit various federal, state and local taxes, surcharges and regulatory fees to numerous federal, state and local governmental authorities, including federal USF contributions and regulatory fees. In addition, we incur and pay state and local taxes and fees on purchases of goods and services used in our business.
Tax laws are subject to change as new laws are passed and new interpretations of the law are issued or applied. In many cases, the application of tax laws is uncertain and subject to differing interpretations, especially when evaluated against new technologies and telecommunications services, such as broadband internet access and cloud related services.
In the event that we have incorrectly calculated, assessed or remitted amounts that were due to governmental authorities, we could be subject to additional taxes, fines, penalties or other adverse actions, which could materially impact our business, financial condition and operating results. In the event that federal, state and/or local municipalities were to significantly increase taxes on our network, operations or services, or seek to impose new taxes, it could have a material adverse effect on our business, financial condition, operating results or ability to do business.
A material impairment in the carrying value of acquired goodwill or other intangible assets could negatively affect our results of operations.
A portion of our assets are goodwill and other intangible assets, the majority of which are not amortized but are reviewed for impairment at least annually and more often if indicators of impairment exist. If the carrying value of these assets exceeds the current estimated fair value, the asset is considered impaired, and this would result in a noncash charge to earnings, which could be material. Events and conditions that could result in impairment include a sustained drop in the market price of our common
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stock, increased competition or loss of market share, obsolescence, deterioration in macroeconomic conditions, or declining financial performance in comparison to projected results.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk Management & Strategy
Shentel’s Risk Management Program defines the framework for risk identification and assessment, including cybersecurity risks. Our overall Risk Management Program integrates processes for assessing, identifying and managing material risks from cybersecurity threats. Cybersecurity risks are identified through various means including, but not limited to, regularly conducted security assessments, external and internal penetration testing, data privacy assessments, external security evaluations, the testing and implementation, as applicable, of new technologies, and continuing education and awareness of existing and new threat vectors, industry trends, changes in the environment and changes in the overall technology landscape. Pursuant to our Information Security Program, once a cybersecurity risk is identified, the Information Security team, in collaboration with other areas of the organization, will assess the risk and implement an appropriate response. Security risk assessments comprise the reasonably foreseeable impacts to the Company and its stakeholders due to the threats and known vulnerabilities associated with the operation and use of information systems and the environments in which those systems operate.
To mitigate or address risks, Shentel leverages acceptable and well-known security tools and services allowing Shentel to maintain a robust security posture. Our Information Security Program addresses risks through a wide spectrum of measures, including enhanced monitoring, endpoint protection, multifactor authentication, privileged account security, web and email filtering and comprehensive internal employee training. Our security protocols are rooted in industry standards and guidelines issued by respected bodies such as the National Institute of Standards and Technology, the Department of Homeland Cybersecurity and Infrastructure Security Agency, and the Center for Internet Security. In addition, we regularly consult with external advisors regarding opportunities to enhance and strengthen our policies and practices.
With respect to third-party service providers, our Information Security Program includes conducting due diligence of relevant service providers’ information security programs prior to onboarding. We also contractually require third-party service providers with access to our information technology systems, sensitive business data or personal information to implement and maintain appropriate security controls and contractually restrict their ability to use our data, including personal information, for purposes other than to provide services to us, except as required by law. To oversee the risks associated with these service providers, we work with them to help ensure that their cybersecurity protocols are appropriate to the risk presented by their access to or use of our systems and/or data, including notification and coordination concerning incidents occurring on third-party systems that may affect us . Our service providers are contractually required to notify us promptly of actual or reasonably suspected information security incidents occurring on their systems that may affect our systems or data, including personal information.
Should a security breach or incident occur, the Chief Information Officer (the “CIO”) in collaboration with the Company’s General Counsel and Chief Accounting Officer (the “CAO”) will evaluate the materiality of any specific incident. The Company’s Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”) will ultimately decide if an incident is material. Considerations of materiality will include a variety of factors, including, for example, the extent of expected financial cost, customers impacted, operational impacts, and/or data exposed or lost as a result of the incident.
The Information Security Program is intended to provide effective governance and oversight for assessing cybersecurity risks, recognizing that no program, no matter how well designed and implemented, can prevent all potential cybersecurity risks and that the benefits of any potential controls or mitigations should be considered in relation to their costs. While we have experienced cybersecurity incidents in the past, to date, cybersecurity incidents and threats have not materially affected our business strategy, results of operations or financial condition . Although we have invested in the protection of our data and information technology and monitor our systems on an ongoing basis, there can be no assurance that such efforts will in the future prevent material compromises to our information technology systems that could have a material adverse effect on our business. For more information on our cybersecurity related risks, see Item 1A. Risk Factors of this Form 10-K.
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Governance
Our Board of Directors has risk oversight responsibility for the Company and administers this responsibility both directly and with assistance from its committees. If applicable, these committees periodically report to the Board of Directors on their risk oversight activities. Cybersecurity is a critical component of our enterprise risk management program and our Board of Directors is involved in reviewing our information security and technology risks and opportunities (including cybersecurity) and discusses these topics on a regular basis. The Audit Committee, comprised solely of independent directors, oversees our enterprise risk management process and assists the Board of Directors in fulfilling its oversight responsibility with respect to our information security and technology risks, including cybersecurity.
Our Director of Information Security leads the Information Security Program and reports to the CIO, who also provides additional oversight of the Program. The Director of Information Security has over 20 years of experience in the information technology and information security fields and the CIO has over 30 years of experience in the information technology and information security fields. In addition, we have established a Security Steering Committee that provides guidance and direction to the CIO regarding the Information Security Program, including approval of the Program mission and its objectives. The Security Steering Committee meets regularly and its membership includes, at a minimum, the Director of Information Security, the CIO, the CFO, the Sr. Vice President of Engineering and Operations, the VP of Legal/General Counsel and the CEO. Information security risks are reviewed with the Security Steering Committee periodically or as needed.
The CIO, in connection with the General Counsel and CEO, updates the Audit Committee regularly on cybersecurity and other information technology risks and opportunities. Additionally, the CIO with guidance from General Counsel and CEO, provides updates to the Board of Directors on the Information Security Program at least annually. In the case of an information security incident or breach, the Director of Information Security and CIO will follow the Company’s Incident Response Plan and follow communication protocols within the plan, which, depending on the severity of the incident, include escalation timelines and responsibilities that involve updating the Audit Committee and the Board of Directors, as applicable.
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ITEM 2. PROPERTIES
The Company owns or leases switching and data centers, office and retail space, warehouses, fiber optic hubs and points of presence that support its operations located across a multi-state area covering Virginia, Pennsylvania, West Virginia, Maryland, Kentucky, Delaware, Ohio and Indiana. The Company considers the properties owned or leased generally to be in good operating condition and suitable for its business operations.
ITEM 3. LEGAL PROCEEDINGS
We are currently involved in, and may in the future become involved in, legal proceedings, claims and investigations in the ordinary course of our business. Although the results of these legal proceedings, claims and investigations cannot be predicted with certainty, we do not believe that the final outcome of any matters that we are currently involved in are reasonably likely to have a material adverse effect on our business, financial condition, results of operations or cash flows. Regardless of final outcomes, however, any such proceedings, claims, and investigations may nonetheless impose a significant burden on management and employees and be costly to defend, with unfavorable preliminary or interim rulings.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
The Company’s stock is traded on the Nasdaq Global Select Market under the symbol “SHEN.” The following table indicates the closing high and low sales prices per share of common stock as reported by the Nasdaq Global Select Market for each quarter during the last two years:
High
Low
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
High
Low
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Stock Performance Graph
The following graph and table show the cumulative total shareholder return on the Company’s common stock compared to the Nasdaq US Index and the Nasdaq Telecommunications Index for the period between December 31, 2020 and December 31, 2025. The graph tracks the performance of a $100 investment, with the reinvestment of all dividends, from December 31, 2020 to December 31, 2025.
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Shenandoah Telecommunications Company
NDAQ US
NDAQ Telecom Stocks
Holders
As of February 23, 2026, there were 3,926 holders of record of the Company’s common stock.
Dividend Policy
Under the RCF, Shentel Broadband is subject to restrictions on its ability to pay dividends or make other distributions to Shentel Broadband Holding Inc. (“Shentel Holdings”), parent of Shentel Broadband and wholly subsidiary of Shentel. So long as no default exists, the Shentel Broadband may declare and pay lawful cash dividends or make distributions to Shentel Holdings within the limits set forth in the RCF credit agreement. Specifically, the financing arrangements permit: (i) annual cash dividends on Shentel’s common stock up to $7.5 million; (ii) additional distributions when the Borrower’s Total Net Leverage Ratio (as defined in the RCF credit agreement) is less than 2.50:1.00 on a pro forma basis; (iii) additional distributions to Shentel Holdings or Shentel with the proceeds received from the ABS Entities and (iv) certain non-cash distributions and employee-related redemptions. Dividends beyond these limits are prohibited unless the leverage ratio condition is satisfied.
The table below sets forth the cash dividends per share of our common stock that our board of directors declared during the following years:
Years Ended December 31,
Cash Dividend
Cash dividends in 2021 include a special dividend of $18.75 per share declared in the third quarter of 2021 following the sale of our Wireless operations and assets.
Future dividend payments remain subject to the discretion of the Board of Directors.
Dividend Reinvestment Plan
The Company maintains a dividend reinvestment plan (the “DRIP”) for the benefit of its shareholders. When shareholders remove shares from the DRIP, the Company issues whole shares in book entry form, pays out cash for any fractional shares, and cancels the fractional shares. In conjunction with the vesting of shares or exercise of stock options, the grantees may surrender awards necessary to cover the statutory tax withholding requirements and any amounts required to cover stock option strike prices associated with the transaction.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers
None.
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ITEM 6. [Reserved]
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. In addition to historical consolidated financial information, the following discussion and analysis may contain forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from those anticipated by forward-looking statements as a result of many factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Annual Report on Form 10-K, including those set forth under “Part I. Cautionary Statement Regarding Forward-Looking Statements” and “Part I. Item 1A. Risk Factors”.
Overview
Shenandoah Telecommunications Company (“Shentel”, “we”, “our”, “us”, or the “Company”), provides broadband services through its high speed, state-of-the-art fiber-optic and cable networks to customers in eight contiguous states in the eastern United States. The Company’s services include: broadband internet, video and voice; high-speed Ethernet, dedicated internet access and dark fiber leasing; and managed network services. The Company owns an extensive regional network with approximately 19,000 route miles of fiber.
2025 Developments
Refinancing Activities
Shentel Issuer, a limited-purpose, bankruptcy remote indirect wholly-owned subsidiary of Shentel, closed its inaugural offering of $567.4 million aggregate principal amount of secured fiber network revenue term notes, consisting of $489.1 million 5.64% Series 2025-1, Class A-2 term notes (the “Class A-2 Notes”) and $78.3 million 6.03% Series 2025-1, Class B term notes (the “Class B Notes”), each with an anticipated repayment date in December 2030. The Class A-2 Notes and Class B Notes are secured by certain fiber network assets and related customer contracts in the states of Virginia, Ohio, Pennsylvania, Indiana, Maryland and West Virginia.
As part of the same agreement governing the Class A-2 Notes and Class B Notes (the “ABS Indenture”) and fiber network assets and related customer contracts that govern and secure the ABS Notes, Shentel Issuer entered into a revolving $175.0 million variable funding note facility (the “VFN”) due December 2029 with a group of financial institutions. VFN advances will be subject to certain pro-forma leverage and debt service coverage ratios as defined in the ABS Indenture. The VFN will bear interest at term Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.75%. The Company had no borrowings under the VFN at Closing.
As part of the same ABS Indenture and fiber network assets and related customer contracts that govern and secure the ABS Notes, Shentel Issuer entered into a $25 million delay draw Liquidity Funding Note facility (the “LFN”, together with the Class A-2 Notes, Class B notes, and the VFN, the “ABS Notes”) with Bank of America. The LFN is subject to the same collateral and covenant framework, including pro-forma leverage and debt service coverage ratios as defined in the ABS Indenture. Shentel Issuer may draw on the LFN solely for the purpose of funding amounts due and payable for certain Priority of Payments as defined in the ABS Indenture and when restricted cash funds required by ABS Indenture are insufficient. The LFN will bear interest at the Prime Rate plus a spread of 3.0%. The Company had no borrowings under the LFN at Closing.
Concurrently, Shentel Broadband, a wholly-owned indirect subsidiary of the Company, entered into a new $175.0 million Revolving Credit Facility (the “RCF”) due December 2030 with a group of financial institutions. The RCF is secured by substantially the cash flows and all of the assets and equity interests of its subsidiaries excluding Shentel Issuer; Shentel Guarantor LLC, a wholly-owned subsidiary of Shentel Broadband and parent of Shentel Issuer; Shentel Asset Entity I LLC, a wholly-owned subsidiary of Shentel Issuer; and Shentel Asset Entity II LLC, a wholly-owned subsidiary of Shentel Issuer. Borrowings under the RCF will bear interest at term SOFR plus a margin ranging from 2.50% to 3.00%. Shentel Broadband borrowed $75.0 million from the RCF at Closing.
Shentel and its non ABS Entities have no recourse of the loans of the ABS Entities. Likewise, the ABS Entities have no recourse of the loans of Shentel Broadband.
Shentel used a portion of the proceeds from the issuance of the ABS Notes and the RCF to repay the outstanding principal on the Company’s existing debt. Refer to Note 10, Debt in Shentel’s Consolidated 2025 Financial Statements for more information.
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Management Transitions
On July 31, 2025, the Company announced that its Board of Directors appointed Edward H. “Ed” McKay, the Company’s former Executive Vice President and Chief Operating Officer, as President and Chief Executive Officer (“CEO”), effective September 1, 2025. Christopher E. French, Shentel’s previous President and CEO, stepped into the role of Executive Chairman of the Board of Directors and remains active in steering the Company’s strategy while continuing to work closely with the senior leadership team and the Board of Directors.
Virginia Fiber Acquisition
In April 2025, the Company executed an Asset Purchase Agreement to acquire FTTH assets and operations of a fiber business based in Virginia for $5 million, including passings of approximately 1,500 homes and approximately 700 customers. The Company completed the acquisition on July 9, 2025.
H.R.1 - 119th Congress (2025-2026)
On July 4, 2025, H.R.1 was signed into law and includes numerous changes to existing tax law, including provisions providing current deductibility of certain property additions and limitations on interest deductions based on a tax EBITDA framework. These provisions are generally effective beginning in 2025, and we currently anticipate they will partially defer our income tax payments in future years. The legislation did not have a material impact on our consolidated financial statements for the year ended December 31, 2025.
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Results of Operations
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
The Company’s consolidated results from operations are summarized as follows:
Year Ended December 31,
Change
($ in thousands)
% of Revenue
% of Revenue
External revenue
Residential & SMB - Incumbent Broadband Markets
Residential & SMB - Glo Fiber Expansion Markets
Commercial Fiber
RLEC & Other
Total revenue
Operating expenses
Cost of services, exclusive of depreciation and amortization
Selling, general and administrative
Restructuring, integration and acquisition
Depreciation and amortization
Total operating expenses
Operating loss
NMF
Other (expense) income:
Interest expense
Other income, net
Loss from continuing operations before income taxes
Income tax benefit
Loss from continuing operations
Income from discontinued operations, net of tax
NMF
Net (loss) income
NMF
Dividends on redeemable noncontrolling interest
Net (loss) income attributable to common shareholders
NMF
Shentel acquired Horizon on April 1, 2024 and consequently, results for the year ended December 31, 2024 included nine months of Horizon revenue, whereas the comparable year ended December 31, 2025 included twelve months of Horizon revenue. Information about year over year variances noted below includes the results of the acquired Horizon markets during the first three months of 2025 and explanations of the remaining consolidated changes.
Shentel updated the presentation of certain Residential & SMB - Incumbent Broadband Market, Residential & SMB - Glo Fiber, Commercial Fiber and RLEC & Other revenues for the prior year to conform with changes in how management currently views these lines of business.
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Residential & SMB - Incumbent Broadband Markets revenue
Revenue from residential and small and medium business (“SMB”) customers in Incumbent Broadband Markets is primarily earned through the Company’s provision of data, video and voice services over primarily HFC cable and to a lesser extent FTTH networks in incumbent markets.
Residential & SMB - Incumbent Broadband Markets revenue decreased $5.1 million, or 2.9%. Shentel recognized $1.7 million of revenues earned in the acquired Horizon markets in the first quarter of 2025. The remaining decrease of $6.8 million was primarily due to lower video revenues from a 14.5% decline in video revenue generating units (“RGUs”), lower USF revenues and a 1.6% decline in data average revenue per unit (“ARPU”).
Residential & SMB - Glo Fiber Expansion Markets revenue
Revenue from residential and SMB customers in Glo Fiber Expansion Markets is primarily earned through the Company’s provision of data, video and voice services over FTTH networks in new greenfield expansion markets.
Residential & SMB - Glo Fiber Expansion Markets revenue increased $24.7 million, or 42.7%. Shentel recognized $0.7 million of revenues earned in the acquired Horizon markets in the first quarter of 2025. The remaining increase of $24.0 million was primarily due to 42.0% year-over-year growth in data RGUs and 16.3% year-over-year growth in video RGUs associated with the Company’s investment in expanded geographies for Glo Fiber.
Commercial Fiber revenue
Shentel’s Commercial Fiber revenue is primarily earned through the Company’s provision of high-speed Ethernet, dedicated internet access, wavelength services, dark fiber leasing and managed services over fiber optic networks to commercial customers.
Commercial Fiber revenue increased $9.3 million, or 13.2%. Shentel recognized $9.9 million of revenues earned in the acquired Horizon markets in the first quarter of 2025. The remaining decrease of $0.6 million was primarily due to non-cash deferred revenue adjustments for a carrier customer and early termination fees earned in the prior year.
RLEC & Other revenue
Shentel’s RLEC & Other revenue is primarily earned through the Company’s provision of voice and DSL telephone services over copper networks, primarily in Shenandoah County, Virginia and Ross County, Ohio. Shentel also earns governmental support revenue through the federal USF.
RLEC & Other revenue increased $1.0 million, or 3.9%. Shentel recognized $2.9 million of revenues earned in the acquired Horizon markets in the first quarter of 2025. The remaining decrease of $1.9 million was primarily due to lower data service line (“DSL”) revenue from a 19.8% decline of DSL RGUs, partially due to customers migrating to our broadband data service in the recently constructed passings supported by government grants.
Cost of services
Cost of services primarily consist of costs to acquire and deliver video programming, internal labor to maintain our network and service our customers, third party network maintenance, and line expenses.
Cost of services increased $2.0 million, or 1.6%. Shentel incurred $7.6 million of costs incurred in the acquired Horizon markets in the first quarter of 2025. The remaining decrease of $5.6 million was primarily due to decreases in network payroll and line costs driven by synergy savings and decreased programming expenses associated with the declines in video RGUs.
Selling, general and administrative
Selling, general and administrative expenses consist of employee compensation, advertising, software maintenance, stock-based compensation, and operating taxes.
Selling, general and administrative expense increased $3.0 million, or 2.6%. Shentel incurred $3.2 million of selling, general and administrative costs incurred in the acquired Horizon markets in the first quarter of 2025. The remaining decrease of $0.2 million was primarily due to decreases in employee compensation, professional fees driven by synergy savings and lower bad debt, partially offset by increases in operating taxes and advertising costs.
Restructuring, integration and acquisition
Integration and acquisition expense decreased $13.3 million, or 91.9%. Restructuring, integration and acquisition expense in 2024 related primarily to expenses incurred to effect the Horizon transaction and integration expenses incurred during the post-acquisition period.
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Depreciation and amortization
Depreciation and amortization increased $32.8 million, or 33.2%. Shentel incurred $9.2 million of depreciation and amortization related to the tangible and intangible assets acquired in the Horizon Transaction in the first quarter of 2025. The remaining increase of $23.6 million was due to the Company’s expansion of its Glo Fiber network and a $7.4 million write-off of inventory assets no longer expected to be used.
Interest expense
Interest expense increased by $9.5 million, or 59.6% primarily due to an increase in the Company’s outstanding debt.
Other income, net
Other income, net increased by $0.3 million, or 4.6% primarily due to a favorable settlement of the Horizon acquisition related escrow claim and a reclassification of unrecognized gains on interest rate swaps accumulated in other comprehensive income to the Company’s consolidated statements of operations with the termination of the hedging program. These gains were partially offset by higher interest income earned in the prior year.
Income tax benefit
The Company recognized $8.9 million of income tax benefit for 2025, compared with $9.7 million for 2024 due to higher excess tax benefits derived from vesting of restricted stock in 2025 compared to 2024.
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Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023
The Company’s consolidated results from operations are summarized as follows:
Year Ended December 31,
Change
($ in thousands)
% of Revenue
% of Revenue
External revenue
Residential & SMB - Incumbent Broadband Markets
Residential & SMB - Glo Fiber Expansion Markets
Commercial Fiber
RLEC & Other
Total revenue
Operating expenses
Cost of services, exclusive of depreciation and amortization
Selling, general and administrative
Restructuring, integration and acquisition
Depreciation and amortization
Total operating expenses
Operating (loss) income
NMF
Other income (expense):
Interest expense
Other income, net
(Loss) income from continuing operations before income taxes
NMF
Income tax (benefit) expense
NMF
(Loss) income from continuing operations
NMF
Income from discontinued operations, net of tax
NMF
Net income
NMF
Net income attributable to redeemable noncontrolling interest
NMF
Net income attributable to common shareholders
NMF
Shentel updated the presentation of certain Residential & SMB - Incumbent Broadband Market, Residential & SMB - Glo Fiber, Commercial Fiber and RLEC & Other revenues for the prior year to conform with changes in how management currently views these lines of business.
Residential & SMB - Incumbent Broadband Markets revenue
Residential & SMB - Incumbent Broadband Markets revenue decreased by $0.1 million. Shentel recognized $5.2 million of revenues earned in the newly acquired Horizon markets. The remaining decrease of $5.3 million was primarily due to lower video revenue from a 15.3% decline in video RGUs and lower voice revenue from a 21.5% decline in voice ARPU.
Residential & SMB - Glo Fiber Expansion Markets revenue
Residential & SMB - Glo Fiber Expansion Markets revenue increased by $22.8 million, or 64.9%. Shentel realized a $21.4 million increase in legacy Shentel markets and recognized $1.4 million of revenues earned in the newly acquired Horizon markets. The increase in legacy Shentel markets revenue was primarily due to 50.9% year-over-year growth in data RGUs associated with the Company’s investment in expanded geographies for Glo Fiber and a 7.3% increase in data ARPU.
Commercial Fiber revenue
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Commercial Fiber revenue increased by $25.8 million, or 58.1%. Shentel recognized $31.3 million of revenues earned in the newly acquired Horizon markets. The remaining decrease of $5.6 million was primarily due to the previously disclosed T-Mobile backhaul revenue churn associated with the decommissioning of the former Sprint network.
RLEC & Other revenue
RLEC & Other revenue increased by $10.3 million, or 68.7%, primarily due to $9.9 million of revenues earned in the newly acquired Horizon markets and an increase in governmental support revenue.
Cost of services
Cost of services increased by $27.3 million, or 27.0%. Shentel incurred $25.3 million of costs incurred in the newly acquired Horizon markets. The remaining increase of $2.0 million was primarily due to network maintenance costs for Glo Fiber market expansion.
Selling, general and administrative
Selling, general and administrative expense increased by $15.9 million, or 16.0%. Shentel incurred $11.7 million of selling, general and administrative costs incurred in the newly acquired Horizon markets. The remaining increase of $4.2 million was primarily due to higher advertising costs and sales headcount associated with the Company’s expansion of Shentel’s Glo Fiber network.
Restructuring, integration and acquisition
Integration and acquisition expense increased by $11.6 million primarily due to non-recurring Horizon acquisition-related costs related to banking, legal, insurance and software expenses.
Depreciation and amortization
Depreciation and amortization increased by $32.9 million, or 49.9%. Shentel incurred $25.5 million of depreciation and amortization related to the tangible and intangible assets acquired in the Horizon Transaction. The remaining increase of $9.6 million was primarily due to legacy Shentel’s expansion of its Glo Fiber network. Shentel also recognized $2.2 million less in impairment charges in 2024 compared to 2023.
Interest expense
Interest expense increased by $11.7 million, or 277.4%, primarily due to a higher outstanding debt balance during 2024 as compared to 2023.
Other income, net
Other income, net increased by $0.9 million, or 15.6%, primarily due to other income incurred in the newly acquired Horizon markets.
Income tax (benefit) expense
The Company recognized $9.7 million of income tax benefit for 2024, compared with $0.5 million of income tax expense for 2023. The income tax benefit was driven by higher pre-tax loss from continuing operations during 2024.
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Additional Information
Shentel provides broadband internet, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania, Kentucky, Delaware, Ohio and Indiana, via fiber optic and HFC cable networks. We also lease dark fiber and provide Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. Shentel’s Broadband business also provides voice and DSL telephone services as a RLEC to customers in Shenandoah County and portions of adjacent counties in Virginia, and in Ross County and portions of adjacent counties in Ohio. These integrated networks are connected by 19,067 route miles of fiber.
The following table indicates selected operating statistics. Shentel updated the presentation of certain revenues and voice RGUs in the prior year to conform with changes in how management views these lines of business. This reclassification resulted in updated ARPU and voice RGUs for the prior period.
December 31,
December 31,
December 31,
Homes and businesses passed (1)
Incumbent Broadband Markets
Glo Fiber Expansion Markets
Total homes and businesses passed
Residential & SMB RGUs:
Incumbent Broadband Markets
Glo Fiber Expansion Markets
Broadband Data
Video
Voice
Total Residential & SMB RGUs (excludes RLEC)
Residential & SMB Penetration (2)
Incumbent Broadband Markets
Glo Fiber Expansion Markets
Broadband Data
Video
Voice
Residential & SMB ARPU (3)
Incumbent Broadband Markets
Glo Fiber Expansion Markets
Broadband Data
Video
Voice
Fiber route miles
Total fiber miles (4)
(1) Homes and businesses are considered passed (“passings”) if we can connect them to our network without further extending the distribution system. Passings is an estimate based upon the best available information. Passings will vary among video, broadband data and voice services.
(2) Penetration is calculated by dividing the number of RGUs by the number of passings or available homes, as appropriate.
(3) Average Revenue Per RGU calculation = (Residential & SMB Revenue) / average RGUs / 12 months.
(4) Total fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance. For example, a 10 mile route with 144 fiber strands would equal 1,440 fiber miles.
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Financial Condition, Liquidity and Capital Resources
Sources and Uses of Cash: Shentel’s principal sources of liquidity are our cash and cash equivalents, restricted cash, cash generated from operations, government grants and capacity under the Company’s VFN and RCF.
In 2021, Congress passed the American Rescue Plan Act and the Infrastructure Investment and Jobs Act to subsidize the deployment of high-speed broadband internet access in unserved areas. We have been awarded approximately $151.2 million in grants to serve approximately 26,900 unserved homes in the states of Virginia, Ohio, Maryland and West Virginia and to upgrade the capacity of the Ohio middle mile network. The grants will be paid to the Company as certain milestones are completed. As of December 31, 2025, the Company had received a total of $101.6 million in cash receipts and had $49.6 million in grants available. The Company has constructed broadband service to approximately 20,000 previously unserved homes and expects to fulfill the majority of its obligations under these programs by 2026.
As of December 31, 2025, the Company’s total available liquidity was $234.9 million, consisting of (i) cash and cash equivalents totaling $27.3 million; (ii) restricted cash as required by the ABS indenture totaling $20.9 million (iii) $92.8 million of availability under the Shentel Broadband’s RCF; (iv) $44.3 million under Shentel Issuer’s VFN; and (v) an aggregate of $49.6 million remaining reimbursements available under government grants, which reimbursements are subject to fulfilling the terms of the underlying agreements. In addition, the Company has $130.7 million of VFN commitments that are not available to draw as of December 31, 2025. The available capacity of the VFN will increase based on the secured fiber network revenue growth from the ABS Entities multiplied by (i) a margin as defined in the ABS Indenture and (ii) 6.25x multiple.
Net cash provided by operating activities from continuing operations was approximately $103.3 million in 2025, representing an increase of $33.9 million compared with 2024, primarily driven by increases in revenue and changes in working capital.
Net cash used in investing activities from continuing operations was approximately $294.7 million in 2025, representing an decrease of $350.6 million compared with 2024, primarily driven by a $342.4 million decrease in cash disbursed for acquisitions, a $43.3 million increase in cash receipts from government grant programs and a $6.5 million receipt from a business acquisition escrow, partially offset by a $39.8 million increase in capital expenditures driven by government-subsidized network expansion projects in previously unserved areas of Incumbent Broadband Markets.
Net cash provided by financing activities from continuing operations was approximately $195.6 million in 2025, representing an increase of $11.7 million compared with 2024, primarily driven by an increase of $691.7 million in borrowings under various debt facilities, partially offset by an increase of $585.9 million in principal payments on long-term debt, a decrease of $79.4 million in cash inflows from issuance of redeemable noncontrolling interests and an increase of $14.1 million in payments for debt issuance and amendment costs.
Indebtedness : As of December 31, 2025, the Company’s net indebtedness was $628.2 million, including $642.4 million in outstanding ABS Notes and the RCF, net of unamortized loan fees of $14.2 million. The borrowed Class A-2 Notes and the Class B Notes incur interest at 5.64% and 6.03%, respectively. The borrowed RCF bears interest at a variable rate determined by one-month term SOFR, plus a margin based on net leverage. The weighted-average interest rate was 5.75% for the ABS Notes and RCF at December 31, 2025.
Shentel’s ABS Notes, which include Class A-2 Notes and Class B Notes, have outstanding balances of $489.1 million and $78.3 million, respectively. Shentel’s RCF has an outstanding balance of $75.0 million. The ABS Notes have a contractually stated anticipated repayment date (“ARD”) of December 2030 with the exception of the VFN described below. Shentel has not made any borrowings under its VFN or LFN as of December 31, 2025. In the event borrowings are made in the future, the initial anticipated repayment date for the VFN is December 2029 which may be extended, at the option of Shentel, to the December 2030, subject to the satisfaction of certain conditions. Amounts borrowed under the LFN do not have an anticipated repayment date. The legal final maturity date of each class of the ABS Notes is in December 2055. If Shentel has not repaid or refinanced any Series 2025-1 Notes prior to the relevant ARD, additional interest will accrue on outstanding principal. Shentel Broadband’s RCF matures on December 5, 2030. No principal payments on Shentel Broadband’s RCF are required prior to the final maturity date.
Shentel and its non ABS Entities have no recourse of the loans of the ABS Entities. Likewise, the ABS Entities have no recourse of the loans of Shentel Broadband.
Refer to Note 10, Debt in the Company’s 2025 Consolidated Financial Statements for information about the Company's outstanding debt.
As of December 31, 2025, the Company was in compliance with the financial covenants related to our outstanding debt.
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We expect our cash on hand, restricted cash, cash flows from continuing operations, availability of funds from our RCF and VFN agreements and government grants will be sufficient to meet our anticipated liquidity needs for business operations for the next twelve months. There can be no assurance that we will continue to generate cash flows at or above current levels.
During the year ended December 31, 2025, our capital expenditures of $358.9 million, net of government grants of $62.5 million, exceeded our net cash provided by operating activities from continuing operations by $193.1 million, and we expect our capital expenditures, net of government grants received, to exceed the net cash flows provided by continuing operations through 2026, as we expand our Glo Fiber broadband network.
The actual amount and timing of our future capital requirements may differ materially from our estimates depending on the demand for our products and services, new market developments and expansion opportunities.
Our cash flows from operations could be adversely affected by events outside our control, including, without limitation, changes in overall economic conditions including rising inflation, regulatory requirements, changes in technologies, changes in competition, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and other adverse public health developments, such as COVID-19, and other conditions. Our ability to attract and maintain a sufficient customer base, particularly in our Broadband markets, is critical to our ability to maintain a positive cash flow from operations. The foregoing events individually or collectively could affect our results.
During 2025, Shentel formed Shentel Guarantor LLC, Shentel Issuer LLC, Shentel Asset Entity I LLC and Shentel Asset Entity II LLC (collectively, the “ABS Entities”), each a bankruptcy-remote subsidiary of the Company. The ABS Entities were formed as part of a securitization transaction, pursuant to which certain of the Company’s fiber network assets and related customer contracts primarily in Virginia, Ohio, Pennsylvania, Indiana, Maryland and West Virginia were contributed to Shentel Asset Entity I LLC and Shentel Asset Entity II LLC (collectively, the “ABS Asset Entities”). As of December 31, 2025, all of the Company’s commercial fiber network assets and approximately 302,000 Glo Fiber passings were contributed to the ABS Asset Entities. The cash flow from these contributed assets are used to service the obligations under Shentel’s ABS Notes.
Our RCF requires consolidated financial statements of restricted subsidiaries under the RCF (the “Non-ABS Entities” or the “Restricted Subsidiaries”) and unrestricted subsidiaries (the “ABS Entities” or the “Unrestricted Subsidiaries”). Below is the consolidating balance sheet as of December 31, 2025 and the consolidating statement of operations for the year ended December 31, 2025. The ABS Entities consolidating statement of operations reflects the activity from December 5, 2025 (date of refinancing) through December 31, 2025.
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As of December 31, 2025
(in thousands)
Unrestricted Subsidiaries (ABS Entities)
Restricted Subsidiaries (Non-ABS Entities)
Eliminations
Consolidated
ASSETS
Current assets:
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable
Prepaid expenses and other
Total current assets
Investments
Property, plant and equipment, net
Goodwill and intangible assets, net
Operating lease right-of-use assets
Deferred charges and other assets
Total assets
LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Advanced billings and customer deposits
Accrued compensation
Accrued liabilities and other
Total current liabilities
Long-term debt, less current maturities, net of unamortized loan fees
Other long-term liabilities:
Deferred income taxes
Other liabilities
Total other long-term liabilities
Temporary equity:
Redeemable noncontrolling interest
Shareholders’ equity:
Total shareholders’ equity
Total liabilities, temporary equity and shareholders’ equity
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Year Ended December 31, 2025
(in thousands)
Unrestricted Subsidiaries
Restricted Subsidiaries
Eliminations
Consolidated
Service revenue and other
Operating expenses:
Cost of services exclusive of depreciation and amortization
Selling, general and administrative
Restructuring, integration and acquisition
Depreciation and amortization
Total operating expenses
Operating (loss) income
Other (expense) income:
Interest expense
Other income, net
(Loss) income from continuing operations before income taxes
Income tax (benefit) expense
Net loss
Critical Accounting Estimates
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenue and expenses, as well as related disclosures. To the extent that there are material differences between these estimates and actual results, our financial condition or operating results would be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting estimates, which we discuss further below.
Valuation and Impairment Testing of Goodwill and Cable Franchise Rights
Goodwill
Goodwill results from business combinations and represents the excess amount of the consideration paid over the fair value of tangible net assets and identifiable intangible assets of the businesses acquired. As discussed in Note 2, Summary of Significant Accounting Policies , Shentel has only one reporting unit. Shentel’s total goodwill balance increased $0.5 million in the year ended December 31, 2025 as a result of the Virginia Fiber Acquisition discussed above.
Shentel tests goodwill for impairment at least annually or more frequently whenever events or substantive changes in circumstances indicate that the assets might be impaired. The impairment test is performed at the reporting unit level by analyzing quantitative or qualitative factors, or both. When performing a quantitative assessment, we estimate the fair value of our reporting unit primarily based on a discounted cash flow analysis that involves significant judgment, including market participant estimates of future cash flows expected to be generated by the business, estimate of a terminal growth rate and the selection of a discount rate. When performing this analysis, we also consider the reconciliation of the Company's market capitalization to the reporting unit value and consideration of an appropriate control premium. When performing a qualitative assessment, we assess whether events and circumstances indicate that it is more likely than not (that is, a likelihood of more than 50%) that an impairment exists. Events and circumstances considered include the impact of macroeconomic conditions, industry and market conditions, company specific events, changes in circumstances, after tax cash flows, and market capitalization trends.
We evaluated goodwill for impairment on October 1, 2025 on the basis of the quantitative factors described above. Based on this assessment, we concluded that the fair value of our reporting unit was higher than its carrying value.
Cable franchise rights
Cable franchise rights represent the value attributable to agreements with local franchising authorities, which allows access to homes and businesses via public rights of way. Shentel’s cable franchise rights were primarily acquired through business
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combinations. Cable franchise rights have an indefinite life; therefore, no amortization is recorded for these assets. Costs incurred in negotiating and renewing cable franchise rights are expensed as incurred.
Shentel tests its cable franchise rights for impairment at least annually, or more frequently whenever events or substantive changes in circumstances indicate that the assets might be impaired. The impairment test is performed by analyzing quantitative or qualitative factors, or both. When performing a quantitative evaluation, we estimate the fair values of our cable franchise rights primarily based on a greenfield model, a method under the income approach, which reflected the expected discounted cash flows of a notional start-up business with no assets other than the cable franchise rights being valued. The greenfield model involves significant judgment, including the estimate of revenue growth, the amount and timing of capital expenditures, EBITDA margins, terminal growth rates and the discount rate utilized. When performing a qualitative assessment, we assess whether events and circumstances indicate that it is more likely than not (that is, a likelihood of more than 50%) that an impairment exists. Events and circumstances considered include the impact of macroeconomic conditions, industry and market conditions, company specific events, changes in circumstances, after tax cash flows, and market capitalization trends.
Shentel evaluated cable franchise rights and spectrum licenses for impairment on October 1, 2025 using a quantitative assessment. As a result of this assessment, management concluded that the estimated fair value of the cable franchise rights exceeded the carrying value. As such, no impairment charge was recognized during the period.
Recently Issued Accounting Standards
Recently issued accounting standards and their expected impact, if any, are discussed in Note 2, Summary of Significant Accounting Policies in our consolidated financial statements.
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