Shenandoah Telecom nine-month loss widens to $32.6M
Glo Fiber expansion revenue increased as revenue declined in incumbent broadband and RLEC & Other markets.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Shenandoah Telecommunications Company (SHEN) reported third-quarter service revenue of $93.9 million, compared with $89.8 million a year earlier. For the nine months ended September 30, 2026, revenue was $279.5 million versus $266.3 million, and Adjusted EBITDA, a non-GAAP measure, was $97.0 million versus $85.7 million. Nine-month net loss was $32.6 million, compared with $27.6 million.
Quarterly Glo Fiber Expansion Markets revenue was $28.2 million versus $21.3 million, while Incumbent Broadband Markets revenue was $39.1 million versus $41.9 million. RLEC & Other revenue was $5.5 million versus $6.6 million. Nine-month interest expense was $29.6 million, compared with $17.7 million.
At September 30, 2026, gross debt was $759.9 million and long-term debt net of unamortized loan fees was $747.1 million. Available liquidity was $138.6 million, including restricted cash and grant reimbursements subject to agreement terms. Nine-month capital expenditures were $215.0 million. On October 1, the company contributed approximately $238.6 million of gross fiber assets to ABS Entities, adding approximately 116,500 homes passed and over 18,000 customers; cash flows from those assets will service ABS Notes, and the company anticipates additional VFN capacity.
2 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month revenue was $279.5 million, up 5.0% from 2025.
- Moderate pointNine-month Adjusted EBITDA was $97.0 million, versus $85.7 million.
Negative
- Moderate pointNine-month net loss increased to $32.6 million from $27.6 million.
Key Figures
Service revenue and other: $93.9 million
Service revenue and other: $279.5 million
Adjusted EBITDA: $97.0 million
+5 more
8 metrics
Service revenue and other
$93.9 million
Three months ended September 30, 2026; $89.8 million in 2025
Service revenue and other
$279.5 million
Nine months ended September 30, 2026; $266.3 million in 2025
Adjusted EBITDA
$97.0 million
Nine months ended September 30, 2026; $85.7 million in 2025
Net loss
$32.6 million
Nine months ended September 30, 2026; $27.6 million in 2025
Gross debt outstanding
$759.9 million
As of September 30, 2026
Available liquidity
$138.6 million
As of September 30, 2026
Capital expenditures
$215.0 million
Nine months ended September 30, 2026
Gross fiber network assets contributed
Approximately $238.6 million
October 1, 2026 contribution to ABS Entities
Key Terms
Adjusted EBITDA, anticipated repayment date, Variable Funding Note, homes passed, +1 more
5 terms
Adjusted EBITDA financial
"Adjusted EBITDA is a non-GAAP financial measure"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
anticipated repayment date financial
"contractually stated anticipated repayment date"
The anticipated repayment date is the future day when a borrower expects to pay back a loan, bond, or other obligation. Investors care because that date signals when they should receive principal and helps assess cash flow timing, credit risk and liquidity needs—like knowing when a friend plans to return borrowed money so you can decide whether to spend it or keep a cushion.
Variable Funding Note financial
"Shentel Issuer Variable Funding Note"
A variable funding note is a short-term borrowing tool a company uses to draw and repay different amounts of cash as needed, with interest and maturity that can change over time. Think of it like a corporate credit card: it gives flexible access to cash for day-to-day needs, so investors watch it because the use, size and cost of this funding affect a company’s liquidity, borrowing risk and how stable reported cash flows look.
homes passed technical
"considered passed if we can connect them to our network"
The number of residential units that a broadband or telecom network could be connected to because the provider’s infrastructure reaches them, whether or not those homes are currently customers. Think of it like counting every house on a street that has a visible cable or fiber at the curb: it shows the potential customer base and the scale of market opportunity that network capacity and future sales can target.
ARPU financial
"ARPU calculation = (Residential & SMB Revenue)"
ARPU, or Average Revenue Per User, measures how much money a company earns, on average, from each of its customers over a set period. It helps investors understand how effectively a business is generating income from its customer base, similar to calculating how much each customer spends at a store. Higher ARPU often indicates stronger sales per customer and better revenue performance.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What drove SHEN's third-quarter revenue changes?
Glo Fiber Expansion Markets revenue rose 32.2% to $28.2 million, primarily as data RGUs increased 31.8% with higher penetration and passings. Incumbent Broadband Markets revenue fell 6.8%, mainly from lower video and data revenue; video RGUs decreased 13.0% as customers switched to streaming services.
What made up SHEN's $138.6 million of available liquidity?
Available liquidity included $18.6 million of unrestricted cash, $27.0 million of restricted cash, $49.8 million of RCF availability, $16.3 million under the VFN, and $26.9 million of remaining government grant reimbursements, subject to fulfilling the underlying agreements.
When are SHEN's ABS Notes scheduled to repay?
The ABS Notes have a contractually stated anticipated repayment date of December 2030, except for the VFN. The VFN's initial anticipated repayment date is December 2029 and may be extended, at Shentel's option and subject to certain conditions, to December 2030. Each class of ABS Notes has a legal final maturity date in December 2055.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| For the transition period from__________ to __________ | |||||
Commission File No.: 000-09881
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) (Zip Code)
(540 ) 984-4141
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
| (Title of Class) | (Trading Symbol) | (Name of Exchange on which Registered) | (The number of shares of the registrant's common stock outstanding on October 22, 2026) | ||||||||
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
SHENANDOAH TELECOMMUNICATIONS COMPANY
INDEX
| Page Numbers | ||||||||||||||
| PART I. | FINANCIAL INFORMATION | |||||||||||||
| Item 1. | Financial Statements | |||||||||||||
| Unaudited Condensed Consolidated Balance Sheets | 3 | |||||||||||||
Unaudited Condensed Consolidated Statements of Operations | 4 | |||||||||||||
| Unaudited Condensed Consolidated Statements of Comprehensive Loss | 5 | |||||||||||||
Unaudited Condensed Consolidated Statements of Temporary Equity and Shareholders’ Equity | 6 | |||||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | 8 | |||||||||||||
| Notes to Unaudited Condensed Consolidated Financial Statements | 9 | |||||||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 | ||||||||||||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 34 | ||||||||||||
| Item 4. | Controls and Procedures | 34 | ||||||||||||
| PART II. | OTHER INFORMATION | |||||||||||||
| Item 1. | Legal Proceedings | 35 | ||||||||||||
| Item 1A. | Risk Factors | 35 | ||||||||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 35 | ||||||||||||
| Item 5. | Other Information | 36 | ||||||||||||
| Item 6. | Exhibits | 37 | ||||||||||||
| Signatures | 38 | |||||||||||||
2
Table of Contents
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash and cash equivalents | |||||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
| Income taxes receivable | |||||||||||
| Prepaid expenses and other | |||||||||||
| Total current assets | |||||||||||
| Investments | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| 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 | |||||||||||
| Current operating lease liabilities | |||||||||||
| Accrued liabilities and other | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, net of unamortized loan fees | |||||||||||
| Other long-term liabilities: | |||||||||||
| Deferred income taxes | |||||||||||
| Benefit plan obligations | |||||||||||
| Non-current operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total other long-term liabilities | |||||||||||
Commitments and contingencies (Note 13) | |||||||||||
| Temporary equity: | |||||||||||
| Redeemable noncontrolling interest | |||||||||||
| Shareholders’ equity: | |||||||||||
Common stock, no par value, authorized | |||||||||||
| Additional paid in capital | |||||||||||
| Retained earnings | |||||||||||
| Total shareholders’ equity | |||||||||||
| Total liabilities, temporary equity and shareholders’ equity | $ | $ | |||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
3
Table of Contents
| SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||
| (in thousands, except per share amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| 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 | ( | ( | ( | ( | ||||||||||||||||||||||
| Other (expense) income: | ||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
| Other income, net | ||||||||||||||||||||||||||
| Loss before income taxes | ( | ( | ( | ( | ||||||||||||||||||||||
| Income tax benefit | ( | ( | ( | ( | ||||||||||||||||||||||
| Net loss | ( | ( | ( | ( | ||||||||||||||||||||||
| Dividends on redeemable noncontrolling interest | ||||||||||||||||||||||||||
| Net loss attributable to common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Net loss per share attributable to common shareholders, basic and diluted: | ||||||||||||||||||||||||||
| Net loss per share | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
4
Table of Contents
| SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES | ||||||||||||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||||||||||||||||||||||
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||||
| Net change in unrealized gain | ||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | ( | ( | ||||||||||||||||||||||||
| Comprehensive loss | ( | ( | ( | ( | ||||||||||||||||||||||
| Dividends on redeemable noncontrolling interest | ||||||||||||||||||||||||||
| Comprehensive loss attributable to common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
5
Table of Contents
| SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF TEMPORARY EQUITY AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Redeemable Noncontrolling Interest | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares (no par value) | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends - paid in kind | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Redeemable Noncontrolling Interest | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares (no par value) | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Common stock issued | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Shares surrendered for settlement of employee taxes upon issuance of vested equity awards | — | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends - paid in kind | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
6
Table of Contents
| Redeemable Noncontrolling Interest | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares of Common Stock (no par value) | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Unrealized gain on interest rate hedge, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Redeemable Noncontrolling Interest | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares of Common Stock (no par value) | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Unrealized gain on interest rate hedge, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Common stock issued | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Shares surrendered for settlement of employee taxes upon issuance of vested equity awards | — | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends - paid in kind | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
7
Table of Contents
| SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES | |||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (in thousands) | Nine Months Ended September 30, | ||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of intangible assets | |||||||||||
| Stock-based compensation expense, net of amount capitalized | |||||||||||
| Deferred income taxes | ( | ( | |||||||||
| Provision for credit losses | |||||||||||
| Other, net | ( | ||||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Current income taxes | ( | ||||||||||
| Operating lease assets and liabilities, net | ( | ( | |||||||||
| Other assets | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Other deferrals and accruals | |||||||||||
| Net cash provided by operating activities - continuing operations | |||||||||||
| Net cash used in operating activities - discontinued operations | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Government grants received | |||||||||||
| Proceeds from escrow related to business acquisition | |||||||||||
| Cash disbursed for acquisitions, net of cash acquired | ( | ||||||||||
| Proceeds from sale of assets and other | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from credit facility borrowings | |||||||||||
| Principal payments on long-term debt | ( | ( | |||||||||
| Payments for debt issuance and amendment costs | ( | ( | |||||||||
| Taxes paid for equity award issuances | ( | ( | |||||||||
| Payments for financing arrangements and other | ( | ( | |||||||||
| Net cash provided by financing activities | |||||||||||
| Net decrease in cash and cash equivalents | ( | ( | |||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | |||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | $ | |||||||||
| Supplemental Disclosures of Cash Flow Information | |||||||||||
| Interest paid, net of amounts capitalized | $ | ( | $ | ( | |||||||
| Income taxes paid | $ | ( | $ | ( | |||||||
The following table provides the composition of the company’s cash, cash equivalents, and restricted cash balances as of September 30, 2026 and December 31, 2025 as shown above:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Cash, cash equivalents, and restricted cash | $ | $ | |||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
8
Table of Contents
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation and Other Information
Shenandoah Telecommunications Company and its subsidiaries (collectively, “Shentel”, “we”, “our”, “us”, or the “Company”) provide 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. These integrated networks are connected by a fiber network.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. All normal recurring adjustments considered necessary for a fair presentation have been included. Certain disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2025.
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an on-going basis we evaluate estimates and assumptions, including, but not limited to, revenue recognition, stock-based compensation, estimated useful lives of assets, impairment of goodwill and indefinite-lived intangible assets, realizability of intangible assets subject to amortization and the computation of income taxes. Future events and their effects cannot be predicted with certainty; accordingly, the Company’s accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the financial statements will change as new events occur, as additional information is obtained, and as the Company’s operating environment changes. Management evaluates and updates assumptions and estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.
New Accounting Standards
In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, “Disclosure Improvements: Codification Amendments in Response to the Securities and Exchange Commission’s (“SEC”) Disclosure Update and Simplification Initiative,” (“ASU 2023-06”), which aligns the disclosure and presentation requirements of a variety of the FASB’s Accounting Standards Codification (“ASC”) Topics with the requirements described in the SEC’s Disclosure Update and Simplification Initiative. ASU 2023-06 will become effective for each amendment on the effective date of the SEC’s corresponding disclosure rule changes; however, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is currently assessing the impact of adopting ASU 2023-06; however, the ASU is not expected to have a material effect on the Company's current financial position, results of operations or financial statement disclosures.
In November 2024, FASB issued ASU 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)” (“ASU 2024-03”). This accounting update requires disclosure of disaggregated expense in prescribed categories underlying any relevant income statement expense caption. The updated disclosure requirements are to be adopted for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently assessing the impact of adopting ASU 2024-03 on the consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities” (“ASU 2025-10”). This accounting update establishes guidance for the recognition, measurement, presentation and disclosure of government grants. The updated requirements are effective for public business entities for annual reporting periods beginning after December 15, 2028, and interim periods therein, with early adoption permitted. The Company is currently assessing the impact of adopting ASU 2025-10 on its consolidated financial statements and related disclosures.
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In April 2026, the FASB issued ASU 2026-01, “Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock” (“ASU 2026-01”). This accounting update clarifies the initial measurement of paid‑in‑kind dividends on equity‑classified preferred stock. The updated requirements are effective for public business entities or annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Company is currently assessing the impact of adopting ASU 2026-01 on its consolidated financial statements and related disclosures.
Note 2. Revenue from Contracts with Customers
The Company’s revenues by activity type were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Residential & SMB - Incumbent Broadband Markets1 | $ | $ | $ | $ | ||||||||||||||||||||||
Residential & SMB - Glo Fiber Expansion Markets2 | ||||||||||||||||||||||||||
| Commercial Fiber | ||||||||||||||||||||||||||
| RLEC & Other | ||||||||||||||||||||||||||
| Service revenue and other | $ | $ | $ | $ | ||||||||||||||||||||||
_______________________________________________________
1.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 fiber to the home (“FTTH”) networks in incumbent markets.
2.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.
Shentel had $21.9 million and $19.5 million of gross trade receivables from customers as of September 30, 2026 and December 31, 2025, respectively.
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Contract Assets and Liabilities
The following table presents the Company’s contract asset and contract liability balances and their respective locations in the unaudited condensed consolidated balance sheets:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Contract assets | |||||||||||
| Prepaid expenses and other | $ | $ | |||||||||
Deferred charges and other | |||||||||||
| Total contract assets | $ | $ | |||||||||
| Contract liabilities | |||||||||||
| Advanced billings and customer deposits | $ | $ | |||||||||
| Other liabilities | |||||||||||
| Total contract liabilities | $ | $ | |||||||||
The Company’s contract assets primarily include commissions incurred to acquire contracts with customers. The Company incurs commission expenses related to in-house sales teams and third-party vendors which are capitalized and amortized over the expected customer benefit period, which is approximately six years . The Company recognized $1.2 million and $1.0 million in amortization of capitalized commission expenses during the three months ended September 30, 2026 and 2025, respectively. The Company recognized $3.3 million and $2.9 million in amortization of capitalized commission expenses during the nine months ended September 30, 2026 and 2025, respectively. This expense is recorded in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations.
The Company’s contract liabilities include services that are billed in advance and recorded as deferred revenue, as well as installation fees that are charged upfront without transfer of commensurate goods or services to the customer. Shentel expects its current contract liability balances to be recognized as revenues during the twelve-month period following the respective balance sheet date. The majority of Shentel’s non-current contract liability balance is expected to be recognized as revenues within approximately 4 years. Revenues recognized related to contract liabilities existing at January 1, 2026 and 2025 were $0.9 million and $0.6 million for the three months ended September 30, 2026 and 2025, respectively, and $12.7 million and $11.3 million during the nine months ended September 30, 2026 and 2025, respectively.
Note 3. Investments
Investments consisted of the following:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| SERP investments at fair value | $ | $ | |||||||||
| Cost method investments | |||||||||||
| Equity method investments | |||||||||||
| Total investments | $ | $ | |||||||||
SERP investments at fair value: The fair value of the supplemental executive retirement plan (“SERP”) investments is based on unadjusted quoted prices in active markets and are classified as Level 1 of the fair value hierarchy.
Cost method investments: Shentel’s primary cost method investment in CoBank’s Class A common stock, derived from the CoBank patronage program, represented substantially all of the Company’s cost method investments with a balance of $12.2 million and $12.6 million as of September 30, 2026 and December 31, 2025, respectively. As further described in Note 8, Debt, on December 5, 2025, Shentel completed a refinancing of the Company’s debt arrangements which resulted in the repayment of the outstanding long-term debt obligations under the Previous Credit Agreement. CoBank patronage income will no longer be earned beginning in 2026.
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Note 4. Property, Plant and Equipment
Property, plant and equipment consisted of the following:
| ($ in thousands) | Estimated Useful Lives | September 30, 2026 | December 31, 2025 | ||||||||||||||
| Land | $ | $ | |||||||||||||||
| Land improvements | |||||||||||||||||
| Buildings and structures | |||||||||||||||||
| Cable and fiber | |||||||||||||||||
| Equipment and software | |||||||||||||||||
| Total plant in service | |||||||||||||||||
| Plant under construction | |||||||||||||||||
| Total property, plant and equipment | |||||||||||||||||
| Less: accumulated depreciation and amortization | ( | ( | |||||||||||||||
| Property, plant and equipment, net | $ | $ | |||||||||||||||
Property, plant and equipment, net increased primarily due to capital expenditures to support the Company’s Glo Fiber market expansion. The Company’s accounts payable as of September 30, 2026 and December 31, 2025 included amounts associated with capital expenditures of approximately $59.2 million and $55.6 million, respectively.
Note 5. Goodwill and Intangible Assets
Goodwill and intangible assets consisted of the following:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (in thousands) | Gross Carrying Amount | Accumulated Amortization and Other | Net | Gross Carrying Amount | Accumulated Amortization and Other | Net | |||||||||||||||||||||||||||||
| Goodwill | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||||||||||||||
| Indefinite-lived intangibles: | |||||||||||||||||||||||||||||||||||
| Cable franchise rights | — | — | |||||||||||||||||||||||||||||||||
| FCC Spectrum licenses | — | — | |||||||||||||||||||||||||||||||||
| Railroad crossing rights and other | — | — | |||||||||||||||||||||||||||||||||
| Total indefinite-lived intangibles | — | — | |||||||||||||||||||||||||||||||||
| Finite-lived intangibles: | |||||||||||||||||||||||||||||||||||
| Subscriber relationships | ( | ( | |||||||||||||||||||||||||||||||||
| Other intangibles | ( | ( | |||||||||||||||||||||||||||||||||
| Total finite-lived intangibles | ( | ( | |||||||||||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
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Amortization expense was $0.4 million and $0.5 million during the three months ended September 30, 2026 and 2025, respectively, and $1.2 million and $1.4 million during the nine months ended September 30, 2026 and 2025, respectively.
Note 6. Other Assets and Accrued Liabilities
Prepaid expenses and other, classified as current assets, included the following:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Prepaid maintenance expenses | $ | $ | |||||||||
| Broadband contract acquisition costs | |||||||||||
| Other | |||||||||||
| Prepaid expenses and other | $ | $ | |||||||||
Deferred charges and other assets, classified as long-term assets, included the following:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Broadband contract acquisition costs | $ | $ | |||||||||
| Other | |||||||||||
| Deferred charges and other assets | $ | $ | |||||||||
Accrued liabilities and other, classified as current liabilities, included the following:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Accrued programming costs | $ | $ | |||||||||
| Other | |||||||||||
| Accrued liabilities and other | $ | $ | |||||||||
Other liabilities, classified as long-term liabilities, included the following:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Noncurrent portion of deferred revenue | $ | $ | |||||||||
| Other | |||||||||||
| Other liabilities | $ | $ | |||||||||
Reduction in Force
On February 23, 2026, the Company announced a reduction in force of approximately 10 % of its employees to prepare and align the business with the wind-down of the Glo Fiber construction phase that is expected to be substantially complete by the end of 2026. During the three and nine months ended September 30, 2026, Shentel recorded $0.1 million and $2.3 million, respectively, in severance expense, included in restructuring, integration and acquisition expense in the unaudited condensed consolidated statements of operations. For the nine months ended September 30, 2026, the Company made severance payments of $0.5 million.
Note 7. Leases
The Company leases various broadband network sites, fiber optic cable routes, warehouses, retail stores and office facilities for use in our business.
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The components of lease costs were as follows:
| Classification | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Finance lease cost | |||||||||||||||||||||||||||||
| Amortization of leased assets | Depreciation and amortization | $ | $ | $ | $ | ||||||||||||||||||||||||
| Interest on lease liabilities | Interest expense | ||||||||||||||||||||||||||||
| Operating lease cost | Operating expense1 | ||||||||||||||||||||||||||||
| Lease cost | $ | $ | $ | $ | |||||||||||||||||||||||||
_________________________________________
(1)Operating lease expense is presented in cost of services or selling, general and administrative expense based on the use of the relevant facility.
The following table summarizes the expected maturity of lease liabilities as of September 30, 2026:
| (in thousands) | Operating Leases | Finance Leases | Total | |||||||||||||||||
| 2026 (remainder of the year) | $ | $ | $ | |||||||||||||||||
| 2027 | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||
| 2029 | ||||||||||||||||||||
| 2030 | ||||||||||||||||||||
| 2031 and thereafter | ||||||||||||||||||||
| Total lease payments | ||||||||||||||||||||
| Less: Interest | ( | ( | ( | |||||||||||||||||
| Present value of lease liabilities | $ | $ | $ | |||||||||||||||||
Other information related to operating and finance leases was as follows:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Finance leases | |||||||||||
| Weighted average remaining lease term (years) | |||||||||||
| Weighted average discount rate | % | % | |||||||||
| Operating leases | |||||||||||
| Weighted average remaining lease term (years) | |||||||||||
| Weighted average discount rate | % | % | |||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Cash paid for operating lease liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
| Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases) | ||||||||||||||||||||||||||
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The Company also has other operating lease arrangements which generate revenue from leasing the excess fiber capacity of its fiber network assets. Contract terms for these arrangements can range from 1 to 40 years and are billed monthly. Lease revenue from these arrangements was $1.8 million and $5.2 million for the three and nine months ended September 30, 2026, respectively, and $1.7 million and $5.1 million for the three and nine months ended September 30, 2025, respectively. These amounts are presented in service revenue and other in the Company’s unaudited condensed consolidated statements of operations. Contractual minimum rental receipts expected under the lease agreements in place as of September 30, 2026 is as follows:
| (in thousands) | Operating Leases | |||||||
| 2026 (remainder of the year) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 and thereafter | ||||||||
Total | $ | |||||||
Note 8. Debt
Shentel’s outstanding long-term debt obligations as of September 30, 2026 and December 31, 2025 are as follows:
| (in thousands) | Interest Rates | September 30, 2026 | December 31, 2025 | ||||||||||||||
| Shentel Issuer Class A-2 Notes | $ | $ | |||||||||||||||
| Shentel Issuer Class B Notes | |||||||||||||||||
| Shentel Issuer Variable Funding Note ("VFN") | Floating(1) | ||||||||||||||||
| Shentel Broadband Revolving Credit Facility ("RCF") | Floating(2) | ||||||||||||||||
| Total debt | |||||||||||||||||
| Less: unamortized loan fees | ( | ( | |||||||||||||||
| Long-term debt, net of unamortized loan fees | $ | $ | |||||||||||||||
(1) The VFN bears interest at one-month term SOFR plus a fixed margin. This interest rate was 5.66 % at September 30, 2026.
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Refinancing Activities
Shentel Broadband, an indirect wholly owned subsidiary of Shentel, previously had a credit agreement which contained (i) a $150 million revolving credit facility (the “Revolver”) and $525 million in delayed draw amortizing term loans (the “Term Loans” and collectively with Revolver, the “Previous Credit Agreement”). On December 5, 2025, Shentel, through formation of Shentel Guarantor LLC, Shentel Issuer LLC (“Shentel Issuer”), Shentel Asset Entity I LLC and Shentel Asset Entity II LLC (collectively, the “ABS Entities"”), completed a refinancing of the Previous Credit Agreement with an Asset Backed Securitization (“ABS”) financing, secured by most of our fiber businesses, which resulted in the issuance of the Class A-2 Notes, Class B notes, the VFN, and a Liquidity Funding Note (“LFN”) (collectively, the “ABS Notes”). Concurrently, Shentel Broadband entered into a new RCF and the Company used the proceeds from the issuance of the ABS Notes and RCF to repay the outstanding long-term debt obligation under the Previous Credit Agreement.
The ABS Notes include $489.1 million and $78.3 million in borrowed Class A-2 Notes and Class B Notes, respectively. In connection with the same ABS Indenture, Shentel Issuer issued the VFN which has a borrowing capacity of $175.0 million, of which Shentel has borrowed $74.5 million for the nine month period ended September 30, 2026. As of September 30, 2026, the available capacity of the VFN was $16.3 million. The available capacity of the VFN will increase based on the secured fiber network revenue growth from Shentel Asset Entity I LLC and Shentel Asset Entity II LLC (each a bankruptcy-remote subsidiary of the Company), multiplied by (i) a margin as defined in the agreements governing the VFN (the “ABS Indenture”) and (ii) 6.25 x multiple.
Also, in connection with the same ABS Indenture, Shentel Issuer issued the LFN which has an undrawn borrowing commitment of $25.0 million. 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 RCF, as amended March 20, 2026, has a borrowing capacity of $175.0 million, of which Shentel has borrowed $118.0 million as of September 30, 2026.
Fair Values
The carrying amounts of the Company’s long-term debt under the Previous Credit Agreements, which had floating interest rates, approximated their fair values. Similarly, the carrying amount of the Company’s VFN and RCF, each of which has a floating interest rate, approximates its fair value. The estimated fair values of Shentel’s Class A-2 Notes and Class B Notes were based on Level 2 inputs that use interest rates available to us for debt with similar terms and remaining maturities. The fair values of Shentel’s the Class A-2 Notes and Class B Notes were as follows:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Shentel Issuer Class A-2 Notes | $ | $ | |||||||||
| Shentel Issuer Class B Notes | |||||||||||
Commitment Fees
Shentel is charged commitment fees on unutilized portions of its debt. The Company recorded $0.2 million and $0.7 million related to these fees for the three and nine months ended September 30, 2026, respectively, and $0.2 million and $0.6 million related to these fees for the three and nine months ended September 30, 2025, respectively, which are included in interest expense in the unaudited condensed consolidated statements of operations.
Interest Expense
Shentel pays interest on a monthly basis. Interest expense recorded in Shentel’s unaudited condensed consolidated statements of operations consisted of the following:
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| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Interest expense | $ | $ | $ | $ | ||||||||||||||||||||||
Less: capitalized interest | ( | ( | ( | ( | ||||||||||||||||||||||
Interest expense, net of capitalized interest | $ | $ | $ | $ | ||||||||||||||||||||||
Maturity Dates and Other Information
Shentel Broadband’s debt includes various covenants, including total net leverage ratio and debt service coverage ratio financial covenants.
The ABS Notes have a contractually stated anticipated repayment date (“ARD”) of December 2030 with the exception of the VFN described below. The legal final maturity date of each class of the ABS Notes is in December 2055. If Shentel has not repaid or refinanced any of the ABS Notes prior to the relevant ARD, the ABS Indenture requires mandatory prepayment of Note principal on each payment date on a pro-rata basis based on the alphanumerical designation of each class of Notes and additional interest (2.0 % per annum on Class A-2 Notes, 2.4 % per annum on Class B Notes, and 5.0 % per annum on VFN) will be charged until the Notes are refinanced or fully redeemed. Amortization on Shentel Issuer’s ABS Notes could be required prior to the ARD if Shentel Issuer’s debt service coverage ratio is below certain thresholds in the ABS Indenture.
Shentel Issuer has not made any borrowings under its LFN as of September 30, 2026. Amounts borrowed under the LFN do not have an anticipated repayment date and have a final maturity date of December 2055.
Shentel Issuer’s VFN matures on December 5, 2029 which may be extended, at the option of Shentel, to December 5, 2030, subject to the satisfaction of certain conditions. No principal payments on Shentel’s VFN are required prior to the final maturity date.
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 has executed letter of credit arrangements totaling $7.2 million that reduce the available balance of the RCF. The letter of credit arrangements were executed primarily pursuant to the requirements of the National Telecommunications and Information government grant program, discussed further in Note 12, Government Grants. These amounts are not considered borrowed, as no cash has been disbursed to Shentel or other parties.
The ABS Notes and the VFN are guaranteed by Shentel Asset Entity I LLC, Shentel Asset Entity II LLC and the Shentel Issuer’s parent, Shentel Guarantor LLC (each, a “Notes Guarantor” and together with Shentel Issuer LLC, the “ABS Entities”), and such guarantees and the ABS Notes are secured by security interests in the equity interests the ABS Issuer and substantially all of the assets of the ABS Issuer and the other ABS Entities. The ABS Entities are not in any way liable for the obligations of Shentel Broadband or its non-ABS Entities. Likewise, Shentel and its non-ABS Entities have no recourse to the loans of the ABS Entities.
The RCF is fully secured by a pledge and unconditional guarantee from substantially all of Shentel Broadband’s subsidiaries, excluding the ABS Entities. This provides the lenders a security interest in substantially all of the assets of the Company, excluding assets held by the ABS Entities.
Variable Interest Entities
Under the ASC 810, Consolidation (“ASC 810”), the ABS Entities are considered, as a whole, a variable interest entity (“VIE”) and are consolidated in Shentel’s consolidated financial statements because the Company is the primary beneficiary with both the power to direct the activities of the entity that most significantly impact the entity’s performance and the obligation to absorb losses or the right to receive benefits of the entity. Therefore, the assets and liabilities owned by the ABS Entities and related to Shentel’s VIE arrangements are used to service the obligations under Shentel's ABS Notes and may not be freely transferred to the Non-ABS Entities. Additionally, certain cash and cash equivalent amounts may be restricted from general use by Shentel based on covenants related to the ABS Notes.
The assets and liabilities related to Shentel’s VIE arrangements included in the Company’s unaudited condensed consolidated balance sheets were as follows:
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| (in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||
| ASSETS | ||||||||||||||
| Restricted cash and cash equivalents | $ | $ | ||||||||||||
| Accounts receivable | ||||||||||||||
| Prepaid expenses and other | ||||||||||||||
| Property, plant and equipment, net | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Deferred charges and other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Advanced billings and customer deposits | ||||||||||||||
| Current operating lease liabilities | ||||||||||||||
| Accrued liabilities and other | ||||||||||||||
| Long-term debt, less current maturities, net of unamortized loan fees | ||||||||||||||
| Non-current operating lease liabilities | ||||||||||||||
| Other liabilities | ||||||||||||||
| Total liabilities | $ | $ | ||||||||||||
Note 9. Income Taxes
The Company files U.S. federal income tax returns and various state income tax returns. The Company is currently involved in one state and no federal income tax audits as of September 30, 2026. The Company’s income tax returns are generally open to examination from 2022 forward. The net operating losses acquired from Horizon are open to examination from 2013 forward.
The effective tax rates for the three and nine months ended September 30, 2026 and 2025, differ from the statutory U.S. federal income tax rate of 21% primarily due to the state income taxes, excess tax benefits and other discrete items.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| State income tax benefit, net of federal tax effect | ( | ( | ( | ( | ||||||||||||||||||||||
| Excess tax deficiency from share-based compensation and other expense, net | ||||||||||||||||||||||||||
| Income tax benefit | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Note 10. Redeemable Noncontrolling Interest
On October 24, 2023, Shentel Broadband Holding Inc. (“Shentel Broadband”), a wholly-owned subsidiary of Shentel, entered into an investment agreement (the “Investment Agreement”) with ECP Fiber Holdings, LP, a Delaware limited partnership (“ECP Investor”), and, solely for the limited purposes set forth therein, Hill City Holdings, LP, a Delaware limited partnership affiliated with ECP Investor. Subject to the terms and conditions set forth in the Investment Agreement, on April 1, 2024, Shentel Broadband issued to ECP Investor 81,000 shares of Shentel Broadband’s 7 % Series A Participating Exchangeable Perpetual Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), at a purchase price of $1,000 per share in exchange for $81 million in cash. As of September 30, 2026, 100,000 shares of the Series A Preferred Stock were authorized for issuance and 81,000 shares of the Series A Preferred Stock were outstanding.
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The Series A Preferred Stock is exchangeable at the option of the Investor in certain circumstances for shares of Common Stock at an exchange price of $24.50 per share, which may be adjusted pursuant to the terms of the Investment Agreement. As of September 30, 2026, the Series A Preferred Stock was exchangeable for 3,875,154 shares of Common Stock.
Dividends on the Series A Preferred Stock accrue at 7 % per annum compounded and payable quarterly in arrears, and, at Shentel’s option, may be paid in cash or in kind (such dividends paid in kind, “PIK Dividends”). The Company has historically elected to issue PIK Dividends which increase the liquidation preference of the Series A Preferred Stock. As of September 30, 2026, the Series A Preferred Stock had a liquidation preference of $94.9 million.
Note 11. Stock Compensation and Earnings (Loss) per Share
Activity related to the Company’s equity compensation, which includes the Company’s restricted stock units (“RSUs”) and performance stock units (“PSUs”), was as follows:
| (in thousands, except weighted average grant price) | Number of Shares | Weighted Average Grant Price | |||||||||
Outstanding awards, December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
Outstanding awards, September 30, 2026 | $ | ||||||||||
The total fair value of RSUs and PSUs vested was $6.8 million during the nine months ended September 30, 2026.
Activity related to the Company’s Relative Total Shareholder Return RSUs (“RTSRs”) was as follows:
| (in thousands, except weighted average grant price) | Number of Shares | Weighted Average Grant Price | |||||||||
Outstanding awards, December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | |||||||||||
| Forfeited | ( | ||||||||||
Outstanding awards, September 30, 2026 | $ | ||||||||||
Stock-based compensation expense was as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Stock compensation expense | $ | $ | $ | $ | ||||||||||||||||||||||
| Capitalized stock compensation | ( | ( | ( | ( | ||||||||||||||||||||||
| Stock compensation expense, net | $ | $ | $ | $ | ||||||||||||||||||||||
As of September 30, 2026, there was $7.8 million of total unrecognized compensation cost related to non-vested RSUs, PSUs, and RTSRs which is expected to be recognized over weighted average period of 2.4 years.
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The following table indicates the computation of basic and diluted earnings (loss) per share:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Calculation of net loss per share: | ||||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Amounts attributable to common shareholders | ||||||||||||||||||||||||||
Net loss attributable to common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Basic and diluted weighted average shares outstanding | ||||||||||||||||||||||||||
Per share amounts attributable to common shareholders | ||||||||||||||||||||||||||
| Net loss per share | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
The Company applies the two-class method when computing net loss per share attributable to common shareholders as the Company has issued preferred stock that meets the definition of a participating security. The Company considers Series A Preferred Stock to be a participating security as the holders are entitled to receive cumulative dividends.
The Company determines the dilutive impact of the Series A Preferred Stock (on an as-converted basis) and the equity awards by applying the if-converted method and the treasury stock method, respectively. The following table presents potentially dilutive instruments:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Potentially dilutive shares related to the Series A Preferred Stock | ||||||||||||||||||||||||||
Potentially dilutive equity awards | ||||||||||||||||||||||||||
| Total potentially dilutive instruments | ||||||||||||||||||||||||||
Potentially dilutive instruments were excluded from the calculation of diluted weighted average shares outstanding due to the fact that they were anti-dilutive as a result of the Company’s income loss for the periods.
Note 12. Government Grants
The Company was awarded $152.3 million in grants to build broadband services to unserved residencies in Virginia, Maryland, West Virginia and Ohio and upgrade the middle mile network in Ohio. The Company has substantially completed its grant obligations in Virginia as of September 2026 and expects to substantially complete the remaining obligations by year-end 2026.
The purpose of the grant programs described above was to subsidize the expansion of the Company’s broadband network; therefore, most amounts recognized under these programs have been recorded as a reduction to the related property, plant and equipment, and cash receipts are presented as cash flows from investing activities in the Company’s unaudited condensed consolidated statements of cash flows. One government grant allows reimbursements for direct capital expenditures and indirect operating expenses. The portion of government grant reimbursements related to indirect expenses are recorded as reductions of the related cost of service expense or selling, general and administrative expense in the Company’s unaudited condensed consolidated statements of operations and are presented as cash flows from operating activities in the Company’s unaudited condensed consolidated statements of cash flows.
The Company recognizes grant receivables at the time it becomes probable that the Company will be eligible to receive the grant, which is estimated to correspond with the date when specified build-out milestones are achieved. As a result of these programs, and inclusive of reimbursement for indirect expenses, the Company received $23.8 million and $39.9 million in cash receipts during the nine months ended September 30, 2026 and 2025, respectively, and had approximately $1.3 million and $10.5 million in accounts receivable as of September 30, 2026 and December 31, 2025, respectively.
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Note 13. Commitments and Contingencies
We are committed to make payments to satisfy our lease liabilities. The scheduled payments under those obligations are summarized in Note 7, Leases. We also have outstanding unconditional purchase commitments to procure marketing services and IT software licenses through 2031.
Note 14. Segment Information
The Company operates as one
The Company’s Chief Operating Decision Maker (“CODM”) assesses company performance at a consolidated level and decides how to allocate resources based on Earnings before Interest, Taxes, Depreciation and Amortization, as adjusted for certain non-recurring items, (“Adjusted EBITDA”) from operations of the Broadband business.
The measure of segment assets is reported on the balance sheet as total consolidated assets.
The CODM uses (loss) income from operations and Adjusted EBITDA to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the operations of the Company or for other purposes, such as for acquisitions or to pay dividends.
Adjusted EBITDA is used to monitor budget versus actual results. The CODM also uses Adjusted EBITDA to analyze the Company’s growth by monitoring current results versus prior year results. The analyses are used in assessing performance of the Company and in establishing management’s compensation.
Adjusted EBITDA is a non-GAAP financial measure. The Company defines Adjusted EBITDA as income or loss from operations calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization, impairment expense, other income (expense) net, interest income, interest expense, income tax expense (benefit), stock compensation expense, transaction costs related to acquisition and disposition events (including professional advisory fees, integration costs, and related compensatory matters), restructuring expense, tax on equity award vesting and exercise events, and other non-comparable items. The Company believes that the exclusion of the expense and income items eliminated in calculating Adjusted EBITDA provides management and investors a useful measure for period-to-period comparisons of the Company’s core operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to the Company’s ongoing operations. Accordingly, the Company believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating the Company’s operating results.
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The following table summarizes the Company’s revenue, loss from operations, Adjusted EBITDA and significant expenses:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Service revenue and other | $ | $ | $ | $ | ||||||||||||||||||||||
| Significant expenses and other items: | ||||||||||||||||||||||||||
| Cost of services exclusive of depreciation and amortization | ||||||||||||||||||||||||||
| Selling, general and administrative exclusive of stock-based compensation | ||||||||||||||||||||||||||
| Adjusted EBITDA | ||||||||||||||||||||||||||
| Stock-based compensation expense, net of amount capitalized | ||||||||||||||||||||||||||
| Restructuring, integration and acquisition | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
Other (income) expense, net1 | ( | ( | ( | ( | ||||||||||||||||||||||
| Income tax benefit | ( | ( | ( | ( | ||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
1 Other primarily includes patronage income, interest income, and benefit plan gains.
Note 15. Subsequent Events
On October 1, 2026, and pursuant to the securitization agreement governing the ABS Notes, the Company contributed approximately $238.6 million of gross additional fiber network assets and added approximately 116,500 homes passed and over 18,000 customers to the ABS Entities. The consolidated Trust collateral pool increased to approximately 431,200 homes passed and 102,200 data customers. The cash flow from these contributed assets will be used to service the obligations under Shentel's ABS Notes and the Company anticipates that the contribution of these assets will create additional available capacity on the VFN.
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ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following management’s discussion and analysis includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “will,” “should,” “could” or “plan” and similar expressions as they relate to Shenandoah Telecommunications Company or its management are intended to identify these forward-looking statements. All statements regarding Shenandoah Telecommunications Company’s expected future financial position, operating results and cash flows, business strategy, financing plans, forecasted trends relating to the markets in which Shenandoah Telecommunications Company operates and similar matters are forward-looking statements. We cannot assure you that the Company’s expectations expressed or implied in these forward-looking statements will turn out to be correct. The Company’s actual results could be materially different from its expectations because of various factors, including, but not limited to, those discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2025 (“2025 Form 10-K”). The forward-looking statements included in this Form 10-Q are made only as of the date of the statement. We undertake no obligation to revise or update such statements to reflect current events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events, except as required by law.
The following management’s discussion and analysis should be read in conjunction with the Company’s 2025 Form 10-K, including the consolidated financial statements and related notes included therein.
Overview
Shenandoah Telecommunications Company (“Shentel”, “we”, “our”, “us”, or the “Company”) is a provider of a comprehensive range of broadband communication services in eight contiguous states in the eastern United States.
Recent Developments
Additions to ABS Trust
On October 1, 2026, and pursuant to the securitization agreement governing the ABS Notes, the Company contributed approximately $238.6 million of gross additional fiber network assets and added approximately 116,500 homes passed and over 18,000 customers to the ABS Entities. The consolidated Trust collateral pool increased to approximately 431,200 homes passed and 102,200 data customers. The cash flow from these contributed assets will be used to service the obligations under Shentel's ABS Notes and the Company anticipates that the contribution of these assets will create additional available capacity on the VFN.
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Results of Operations
Three Months Ended September 30, 2026 Compared with the Three Months Ended September 30, 2025
The Company’s unaudited condensed consolidated results from operations are summarized as follows:
| Three Months Ended September 30, | Change | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | % of Revenue | 2025 | % of Revenue | $ | % | ||||||||||||||||||||||||||
| Broadband operating revenue | ||||||||||||||||||||||||||||||||
| Residential & SMB - Incumbent Broadband Markets | $ | 39,103 | 41.6 | % | $ | 41,935 | 46.7 | % | $ | (2,832) | (6.8) | % | ||||||||||||||||||||
| Residential & SMB - Glo Fiber Expansion Markets | 28,166 | 30.0 | % | 21,305 | 23.7 | % | 6,861 | 32.2 | % | |||||||||||||||||||||||
| Commercial Fiber | 21,126 | 22.5 | % | 19,957 | 22.2 | % | 1,169 | 5.9 | % | |||||||||||||||||||||||
| RLEC & Other | 5,539 | 5.9 | % | 6,599 | 7.3 | % | (1,060) | (16.1) | % | |||||||||||||||||||||||
| Total revenue | 93,934 | 100.0 | % | 89,796 | 100.0 | % | 4,138 | 4.6 | % | |||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||
| Cost of services, exclusive of depreciation and amortization | 32,919 | 35.0 | % | 32,384 | 36.1 | % | 535 | 1.7 | % | |||||||||||||||||||||||
| Selling, general and administrative | 29,153 | 31.0 | % | 29,791 | 33.2 | % | (638) | (2.1) | % | |||||||||||||||||||||||
| Restructuring, integration and acquisition | 152 | 0.2 | % | 293 | 0.3 | % | (141) | (48.1) | % | |||||||||||||||||||||||
| Depreciation and amortization | 33,687 | 35.9 | % | 34,492 | 38.4 | % | (805) | (2.3) | % | |||||||||||||||||||||||
| Total operating expenses | 95,911 | 102.1 | % | 96,960 | 108.0 | % | (1,049) | (1.1) | % | |||||||||||||||||||||||
| Operating loss | (1,977) | (2.1) | % | (7,164) | (8.0) | % | 5,187 | (72.4) | % | |||||||||||||||||||||||
Other (expense) income: | ||||||||||||||||||||||||||||||||
| Interest expense | (10,497) | (11.2) | % | (6,789) | (7.6) | % | (3,708) | 54.6 | % | |||||||||||||||||||||||
| Other income, net | 246 | 0.3 | % | 1,589 | 1.8 | % | (1,343) | (84.5) | % | |||||||||||||||||||||||
| Loss before income taxes | (12,228) | (13.0) | % | (12,364) | (13.8) | % | 136 | (1.1) | % | |||||||||||||||||||||||
| Income tax benefit | (3,048) | (3.2) | % | (2,974) | (3.3) | % | (74) | 2.5 | % | |||||||||||||||||||||||
| Net loss | (9,180) | (9.8) | % | (9,390) | (10.5) | % | 210 | (2.2) | % | |||||||||||||||||||||||
| Dividends on redeemable noncontrolling interest | 1,633 | 1.7 | % | 1,523 | 1.7 | % | 110 | 7.2 | % | |||||||||||||||||||||||
| Net loss attributable to common shareholders | $ | (10,813) | (11.5) | % | $ | (10,913) | (12.2) | % | $ | 100 | (0.9) | % | ||||||||||||||||||||
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 by $2.8 million, or 6.8%. The decrease was primarily due to lower video and data revenue. Video revenue declined due to a 13.0% decrease in video RGUs as customers switched to streaming video services. Data revenue declined primarily due to a 3.0% decline in data ARPU, driven in part by our rate card in markets where we face a fixed broadband competitor and in part due to our recently implemented rate card in lower demographic markets experiencing softer demand.
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 by $6.9 million, or 32.2%. The increase was primarily due to a 31.8% increase in data RGUs driven by the Company’s increase in penetration rates and increase in passings.
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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 by $1.2 million, or 5.9%. The increase was due to increases in recurring revenue from additional circuit services sold to both new and existing customers.
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 Universal Service Fund (“USF”).
RLEC & Other revenue decreased by $1.1 million, or 16.1%. The decrease was primarily due to a 35.5% decrease in DSL RGUs and, to a lesser extent, a decrease in government support revenue.
Cost of services, exclusive of depreciation and amortization
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 by $0.5 million, or 1.7%. The increase was partially due to increased building & fleet maintenance and fuel expenses as well as increased pole attachment rent expense from expansion of the Glo Fiber network and regulatory fees with the growth in customers.
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 decreased by $0.6 million, or 2.1%. The decrease was partially due to lower advertising and stock compensation expense, offset in part by higher operating and property taxes, software maintenance expenses, and payroll related expenses.
Restructuring, integration and acquisition
Restructuring, integration and acquisition expense decreased by $0.1 million, or 48.1%, primarily due to transaction fees incurred in the prior year that did not recur in 2026.
Depreciation and amortization
Depreciation and amortization decreased by $0.8 million, or 2.3%. The decrease was primarily due to a $3.2 million decline in write-offs, partially offset by new depreciation associated with assets placed in service as part of the continued expansion of the Glo Fiber network.
Interest expense
Interest expense increased by $3.7 million, or 54.6%. The increase was primarily due to an increase in the Company’s outstanding debt as well as less capitalized interest due to less plant under construction than in prior year.
Other income, net
Other income, net decreased by $1.3 million, or 84.5%. The decrease was primarily due to a reclassification of gains on interest rate swap from accumulated other comprehensive income in the prior year that did not recur in 2026, as well as lower patronage income.
Income tax benefit
Income tax benefit increased by $0.1 million, or 2.5%. The increase was primarily due to changes in the annual effective tax rate year over year.
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Nine Months Ended September 30, 2026 Compared with the Nine Months Ended September 30, 2025
The Company’s unaudited condensed consolidated results from operations are summarized as follows:
| Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | % of Revenue | 2025 | % of Revenue | $ | % | ||||||||||||||||||||||||||
| Broadband operating revenue | ||||||||||||||||||||||||||||||||
| Residential & SMB - Incumbent Broadband Markets | $ | 120,528 | 43.1 | % | $ | 128,131 | 48.1 | % | $ | (7,603) | (5.9) | % | ||||||||||||||||||||
| Residential & SMB - Glo Fiber Expansion Markets | 79,283 | 28.4 | % | 59,545 | 22.4 | % | 19,738 | 33.1 | % | |||||||||||||||||||||||
| Commercial Fiber | 63,054 | 22.6 | % | 59,052 | 22.2 | % | 4,002 | 6.8 | % | |||||||||||||||||||||||
| RLEC & Other | 16,684 | 5.9 | % | 19,534 | 7.3 | % | (2,850) | (14.6) | % | |||||||||||||||||||||||
| Total revenue | 279,549 | 100.0 | % | 266,262 | 100.0 | % | 13,287 | 5.0 | % | |||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||
| Cost of services, exclusive of depreciation and amortization | 97,446 | 34.9 | % | 98,038 | 36.8 | % | (592) | (0.6) | % | |||||||||||||||||||||||
| Selling, general and administrative | 93,562 | 33.5 | % | 90,526 | 34.0 | % | 3,036 | 3.4 | % | |||||||||||||||||||||||
| Restructuring, integration and acquisition | 2,726 | 1.0 | % | 1,009 | 0.4 | % | 1,717 | 170.2 | % | |||||||||||||||||||||||
| Depreciation and amortization | 99,277 | 35.5 | % | 99,053 | 37.2 | % | 224 | 0.2 | % | |||||||||||||||||||||||
| Total operating expenses | 293,011 | 104.8 | % | 288,626 | 108.4 | % | 4,385 | 1.5 | % | |||||||||||||||||||||||
| Operating loss | (13,462) | (4.8) | % | (22,364) | (8.4) | % | 8,902 | (39.8) | % | |||||||||||||||||||||||
Other (expense) income: | ||||||||||||||||||||||||||||||||
| Interest expense | (29,628) | (10.6) | % | (17,684) | (6.6) | % | (11,944) | 67.5 | % | |||||||||||||||||||||||
| Other income, net | 763 | 0.3 | % | 5,337 | 2.0 | % | (4,574) | (85.7) | % | |||||||||||||||||||||||
| Loss before income taxes | (42,327) | (15.1) | % | (34,711) | (13.0) | % | (7,616) | 21.9 | % | |||||||||||||||||||||||
| Income tax benefit | (9,697) | (3.5) | % | (7,141) | (2.7) | % | (2,556) | 35.8 | % | |||||||||||||||||||||||
| Net loss | (32,630) | (11.7) | % | (27,570) | (10.4) | % | (5,060) | NMF | ||||||||||||||||||||||||
| Dividends on redeemable noncontrolling interest | 4,815 | 1.7 | % | 4,492 | 1.7 | % | 323 | NMF | ||||||||||||||||||||||||
| Net loss attributable to common shareholders | $ | (37,445) | (13.4) | % | $ | (32,062) | (12.0) | % | $ | (5,383) | NMF | |||||||||||||||||||||
Residential & SMB - Incumbent Broadband Markets revenue
Residential & SMB - Incumbent Broadband Markets revenue decreased by $7.6 million, or 5.9%. The decrease was primarily due to lower video and data revenue. Video revenue declined due to a 13.9% decrease in video RGUs as customers switched to streaming video services. Data revenue declined primarily due to a 2.4% decline in data ARPU, driven in part by our rate card in markets where we face a fixed broadband competitor and in part due to our recently implemented rate card in lower demographic markets experiencing softer demand.
Residential & SMB - Glo Fiber Expansion Markets revenue
Residential & SMB - Glo Fiber Expansion Markets revenue increased by $19.7 million, or 33.1%. The increase was primarily due to a 32.5% increase in data RGUs driven by the Company’s increase in penetration rates and increase in passings.
Commercial Fiber revenue
Commercial Fiber revenue increased by $4.0 million, or 6.8%. The increase was due to increases in recurring revenue from additional circuit services sold to both new and existing customers.
RLEC & Other revenue
RLEC & Other revenue decreased by $2.9 million, or 14.6%. The decrease was primarily due to a 31.4% decrease in DSL RGUs and a decrease in government support revenue.
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Cost of services, exclusive of depreciation and amortization
Cost of services decreased by $0.6 million, or 0.6%. The decrease was due to indirect cost reimbursements on government grant projects and decreases in network and field maintenance and payroll related expenses, offset by increased building & fleet maintenance and fuel expenses as well as increased pole attachment rent expense.
Selling, general and administrative
Selling, general and administrative expense increased by $3.0 million, or 3.4%. The increase was due to increases in stock compensation, operating and property taxes, software maintenance expenses, and payroll related expenses.
Restructuring, integration and acquisition
Restructuring, integration and acquisition expense increased by $1.7 million, or 170.2%, primarily related to severance costs incurred associated with the previously announced reduction in force in 2026.
Depreciation and amortization
Depreciation and amortization increased by $0.2 million, or 0.2%. The increase is largely due to depreciation associated with new assets placed in service as part of the Company’s expansion of the Glo Fiber network, offset by lower inventory asset write-offs in 2026 as compared to the prior year as well as fewer project cost write-offs for markets under construction but cancelled due to higher costs to build.
Interest expense
Interest expense increased by $11.9 million, or 67.5%. The increase was primarily due to an increase in the Company’s outstanding debt and debt issuance costs, and less capitalized interest due to less plant under construction than in the prior year.
Other income, net
Other income, net decreased by $4.6 million, or 85.7%. The decrease was primarily due to a favorable settlement of the Horizon acquisition related escrow claim and reclassification of gains on interest rate swap from accumulated other comprehensive income in the prior year that did not recur in 2026 as well as lower patronage income in the current year.
Income tax benefit
Income tax benefit increased by $2.6 million, or 35.8%. The increase was due to higher pre-tax loss than in the prior year.
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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 hybrid fiber coaxial cable networks. We also lease dark fiber and provide Ethernet, Dedicated Internet Access 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 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. These integrated networks are connected by over 20,000 route miles of fiber.
The following table indicates selected operating statistics.
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Homes and businesses passed (1) | ||||||||||||||
| Incumbent Broadband Markets | 254,019 | 248,002 | ||||||||||||
| Glo Fiber Expansion Markets | 500,584 | 400,323 | ||||||||||||
Total homes and businesses passed | 754,603 | 648,325 | ||||||||||||
| Residential & SMB RGUs: | ||||||||||||||
| Incumbent Broadband Markets | 110,032 | 111,900 | ||||||||||||
| Glo Fiber Expansion Markets | 108,787 | 82,662 | ||||||||||||
| Broadband Data | 218,819 | 194,562 | ||||||||||||
| Video | 34,325 | 36,601 | ||||||||||||
| Voice | 27,350 | 26,477 | ||||||||||||
Total Residential & SMB RGUs (excludes RLEC) | 280,494 | 257,640 | ||||||||||||
| Residential & SMB Penetration (2) | ||||||||||||||
| Incumbent Broadband Markets | 43.3 | % | 45.1 | % | ||||||||||
| Glo Fiber Expansion Markets | 21.7 | % | 20.6 | % | ||||||||||
| Broadband Data | 29.0 | % | 30.0 | % | ||||||||||
| Video | 4.5 | % | 5.6 | % | ||||||||||
| Voice | 3.8 | % | 4.4 | % | ||||||||||
| Residential & SMB ARPU (3) | ||||||||||||||
| Incumbent Broadband Markets | $ | 79.84 | $ | 82.34 | ||||||||||
| Glo Fiber Expansion Markets | $ | 75.96 | $ | 76.81 | ||||||||||
| Broadband Data | $ | 77.95 | $ | 80.03 | ||||||||||
| Video | $ | 128.85 | $ | 125.38 | ||||||||||
| Voice | $ | 31.87 | $ | 32.62 | ||||||||||
| Fiber route miles | 20,085 | 18,077 | ||||||||||||
| Total fiber miles (4) | 2,133,729 | 1,957,272 | ||||||||||||
_______________________________________________________
(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 users by the number of passings or available homes, as appropriate.
(3)ARPU calculation = (Residential & SMB Revenue) / average RGUs / 3 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 borrowing capacity available 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 $152.3 million in grants to serve 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 September 30, 2026, and including indirect cost reimbursements, the Company has received a total of $125.4 million in cash receipts and has $26.9 million in remaining reimbursements available under these grant programs. The Company expects to substantially complete its obligations under these programs by the end of 2026.
As of September 30, 2026, the Company’s total available liquidity was $138.6 million, consisting of (i) unrestricted cash and cash equivalents totaling $18.6 million; (ii) restricted cash as required by the ABS Indenture totaling $27.0 million (iii) $49.8 million of availability under Shentel Broadband’s RCF; (iv) $16.3 million.under Shentel Issuer’s VFN; and (v) an aggregate of $26.9 million remaining reimbursements available under government grants, which reimbursements are subject to fulfilling the terms of the underlying agreements. In addition, the Company has $84.2 million of VFN commitments that are not available to draw as of September 30, 2026. 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) a 6.25x multiple.
Net cash provided by operating activities from continuing operations was approximately $76.6 million during the nine months ended September 30, 2026, representing an increase of $2.2 million compared with the prior year period, primarily driven by timing of changes in working capital.
Net cash used in investing activities was approximately $192.1 million during the nine months ended September 30, 2026, representing a decrease of $17.8 million compared with the prior year period. The primary driver was a $36.5 million decrease in capital expenditures due to the substantial completion of government grant construction projects in Incumbent Broadband Markets in 2025, partially offset by a $17.8 million decrease in cash receipts from government grant programs.
Net cash provided by financing activities was approximately $112.9 million during the nine months ended September 30, 2026, representing a decrease of $1.1 million compared with the prior year period. This decrease was primarily driven by higher payments on financing arrangements than the prior year.
Indebtedness:
As of September 30, 2026, the Company’s net indebtedness was approximately $747.1 million, including $759.9 million in outstanding ABS Notes, the VFN, and the RCF, net of unamortized loan fees of $12.8 million. The borrowed Class A-2 Notes and the Class B Notes incur interest at 5.64% and 6.03%, respectively. The borrowed VFN and RCF bear interest at a variable rate determined by one-month term SOFR, plus a margin based on net leverage. The weighted-average interest rate was 5.84% for the ABS Notes, VFN, and RCF at September 30, 2026.
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 Issuer’s VFN has an outstanding balance of $74.5 million. Shentel’s RCF has an outstanding balance of $118.0 million. The ABS Notes have a contractually stated anticipated repayment date (“ARD”) of December 2030 with the exception of the VFN. The initial anticipated repayment date for the VFN is December 2029 which may be extended, at the option of Shentel, to December 2030, subject to the satisfaction of certain conditions. Shentel has not made any borrowings under its LFN as of September 30, 2026. 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 8, Debt, in the Company’s unaudited condensed consolidated financial statements within this Form 10-Q and Note 10, Debt, in the Company’s consolidated financial statements in the Company’s 2025 Form 10-K for more information about the outstanding debt.
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As of September 30, 2026, the Company was in compliance with the financial covenants related to our outstanding debt.
We expect our cash on hand, restricted cash, cash flows from 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 nine months ended September 30, 2026, our capital expenditures of $215.0 million exceeded our net cash provided by operating activities by $138.4 million, and we expect our capital expenditures to exceed the cash flows provided from operations through 2026, in line with the timing of our Glo Fiber network expansion.
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, and other conditions. Our ability to attract and maintain a sufficient customer base 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 September 30, 2026, all of the Company’s commercial fiber network assets and approximately 316,000 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.
Supplemental Financing Reporting Requirements:
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 are the unaudited condensed consolidating balance sheets as of September 30, 2026 and December 31, 2025, and the unaudited condensed consolidating statements of operations for the three and nine months ended September 30, 2026.
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| As of September 30, 2026 | ||||||||||||||||||||||||||
| (in thousands) | Unrestricted Subsidiaries (ABS Entities) | Restricted Subsidiaries (Non-ABS Entities) | Eliminations | Consolidated | ||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||||||
| Cash and cash equivalents | $ | — | $ | 18,647 | $ | — | $ | 18,647 | ||||||||||||||||||
| Restricted cash and cash equivalents | 27,009 | — | — | 27,009 | ||||||||||||||||||||||
| Accounts receivable | 9,868 | 21,107 | (8,590) | 22,385 | ||||||||||||||||||||||
| Prepaid expenses and other | 6,095 | 16,374 | (2,405) | 20,064 | ||||||||||||||||||||||
| Total current assets | 42,972 | 56,128 | (10,995) | 88,105 | ||||||||||||||||||||||
| Investments | — | 355,266 | (338,958) | 16,308 | ||||||||||||||||||||||
| Property, plant and equipment, net | 819,838 | 891,306 | — | 1,711,144 | ||||||||||||||||||||||
| Goodwill and intangible assets, net | 7,515 | 148,196 | — | 155,711 | ||||||||||||||||||||||
| Operating lease right-of-use assets | 9,997 | 9,019 | — | 19,016 | ||||||||||||||||||||||
| Deferred charges and other assets | 127,693 | 8,606 | (117,334) | 18,965 | ||||||||||||||||||||||
| Total assets | $ | 1,008,015 | $ | 1,468,521 | $ | (467,287) | $ | 2,009,249 | ||||||||||||||||||
| LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||||||||
| Accounts payable | $ | 11,603 | $ | 65,206 | $ | (8,590) | $ | 68,219 | ||||||||||||||||||
| Advanced billings and customer deposits | 10,254 | 10,620 | (2,405) | 18,469 | ||||||||||||||||||||||
| Accrued compensation | — | 16,816 | — | 16,816 | ||||||||||||||||||||||
| Accrued liabilities and other | 5,770 | 15,533 | (1,493) | 19,810 | ||||||||||||||||||||||
| Total current liabilities | 27,627 | 108,175 | (12,488) | 123,314 | ||||||||||||||||||||||
| Long-term debt, less current maturities, net of unamortized loan fees | 629,472 | 117,619 | — | 747,091 | ||||||||||||||||||||||
| Other long-term liabilities: | ||||||||||||||||||||||||||
| Deferred income taxes | — | 147,921 | — | 147,921 | ||||||||||||||||||||||
| Other liabilities | 34,011 | 128,778 | (115,840) | 46,949 | ||||||||||||||||||||||
| Total other long-term liabilities | 34,011 | 276,699 | (115,840) | 194,870 | ||||||||||||||||||||||
| Temporary equity: | ||||||||||||||||||||||||||
| Redeemable noncontrolling interest | — | 93,321 | — | 93,321 | ||||||||||||||||||||||
| Shareholders’ equity: | ||||||||||||||||||||||||||
| Total shareholders’ equity | 316,905 | 872,707 | (338,959) | 850,653 | ||||||||||||||||||||||
| Total liabilities, temporary equity and shareholders’ equity | $ | 1,008,015 | $ | 1,468,521 | $ | (467,287) | $ | 2,009,249 | ||||||||||||||||||
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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 | $ | — | $ | 27,259 | $ | — | $ | 27,259 | ||||||||||||||||||
| Restricted cash and cash equivalents | 20,945 | — | — | 20,945 | ||||||||||||||||||||||
| Accounts receivable | 12,580 | 31,880 | (12,963) | 31,497 | ||||||||||||||||||||||
| Prepaid expenses and other | 5,344 | 14,803 | (2,405) | 17,742 | ||||||||||||||||||||||
| Total current assets | 38,869 | 73,942 | (15,368) | 97,443 | ||||||||||||||||||||||
| Investments | — | 392,737 | (376,227) | 16,510 | ||||||||||||||||||||||
| Property, plant and equipment, net | 793,874 | 807,735 | — | 1,601,609 | ||||||||||||||||||||||
| Goodwill and intangible assets, net | 8,234 | 148,657 | — | 156,891 | ||||||||||||||||||||||
| Operating lease right-of-use assets | 10,199 | 9,458 | — | 19,657 | ||||||||||||||||||||||
| Deferred charges and other assets | 129,635 | 7,794 | (118,777) | 18,652 | ||||||||||||||||||||||
| Total assets | $ | 980,811 | $ | 1,440,323 | $ | (510,372) | $ | 1,910,762 | ||||||||||||||||||
| LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||||||||
| Accounts payable | $ | 7,561 | $ | 66,757 | $ | (12,963) | $ | 61,355 | ||||||||||||||||||
| Advanced billings and customer deposits | 8,953 | 10,361 | (2,405) | 16,909 | ||||||||||||||||||||||
| Accrued compensation | — | 13,334 | — | 13,334 | ||||||||||||||||||||||
| Accrued liabilities and other | 3,894 | 14,116 | (1,112) | 16,898 | ||||||||||||||||||||||
| Total current liabilities | 20,408 | 104,568 | (16,480) | 108,496 | ||||||||||||||||||||||
| Long-term debt, less current maturities, net of unamortized loan fees | 554,288 | 73,949 | — | 628,237 | ||||||||||||||||||||||
| Other long-term liabilities: | ||||||||||||||||||||||||||
| Deferred income taxes | — | 157,618 | — | 157,618 | ||||||||||||||||||||||
| Other liabilities | 33,628 | 131,159 | (117,665) | 47,122 | ||||||||||||||||||||||
| Total other long-term liabilities | 33,628 | 288,777 | (117,665) | 204,740 | ||||||||||||||||||||||
| Temporary equity: | ||||||||||||||||||||||||||
| Redeemable noncontrolling interest | — | 88,506 | — | 88,506 | ||||||||||||||||||||||
| Shareholders’ equity: | ||||||||||||||||||||||||||
| Total shareholders’ equity | 372,487 | 884,523 | (376,227) | 880,783 | ||||||||||||||||||||||
| Total liabilities, temporary equity and shareholders’ equity | $ | 980,811 | $ | 1,440,323 | $ | (510,372) | $ | 1,910,762 | ||||||||||||||||||
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| (in thousands) | Unrestricted Subsidiaries (ABS Entities) | Restricted Subsidiaries (Non-ABS Entities) | Eliminations | Consolidated | ||||||||||||||||||||||
| Service revenue and other | $ | 45,311 | $ | 62,046 | $ | (13,423) | $ | 93,934 | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Cost of services exclusive of depreciation and amortization | 18,993 | 21,081 | (7,155) | 32,919 | ||||||||||||||||||||||
| Selling, general and administrative | 7,939 | 27,482 | (6,268) | 29,153 | ||||||||||||||||||||||
| Restructuring, integration and acquisition | — | 152 | — | 152 | ||||||||||||||||||||||
| Depreciation and amortization | 16,141 | 17,546 | — | 33,687 | ||||||||||||||||||||||
| Total operating expenses | 43,073 | 66,261 | (13,423) | 95,911 | ||||||||||||||||||||||
| Operating (loss) income | 2,238 | (4,215) | — | (1,977) | ||||||||||||||||||||||
| Other (expense) income: | ||||||||||||||||||||||||||
| Interest expense | (8,844) | (1,653) | — | (10,497) | ||||||||||||||||||||||
| Other income (expense), net | 236 | 10 | — | 246 | ||||||||||||||||||||||
| Loss before income taxes | (6,370) | (5,858) | — | (12,228) | ||||||||||||||||||||||
| Income tax benefit | — | (3,048) | — | (3,048) | ||||||||||||||||||||||
| Net loss | $ | (6,370) | $ | (2,810) | $ | — | $ | (9,180) | ||||||||||||||||||
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| (in thousands) | Unrestricted Subsidiaries (ABS Entities) | Restricted Subsidiaries (Non-ABS Entities) | Eliminations | Consolidated | ||||||||||||||||||||||
| Service revenue and other | $ | 132,401 | $ | 185,595 | $ | (38,447) | $ | 279,549 | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Cost of services exclusive of depreciation and amortization | 55,018 | 62,438 | (20,010) | 97,446 | ||||||||||||||||||||||
| Selling, general and administrative | 22,619 | 89,380 | (18,437) | 93,562 | ||||||||||||||||||||||
| Restructuring, integration and acquisition | — | 2,726 | — | 2,726 | ||||||||||||||||||||||
| Depreciation and amortization | 48,398 | 50,879 | — | 99,277 | ||||||||||||||||||||||
| Total operating expenses | 126,035 | 205,423 | (38,447) | 293,011 | ||||||||||||||||||||||
| Operating (loss) income | 6,366 | (19,828) | — | (13,462) | ||||||||||||||||||||||
| Other (expense) income: | ||||||||||||||||||||||||||
| Interest expense | (25,337) | (4,291) | — | (29,628) | ||||||||||||||||||||||
| Other income (expense), net | 685 | 78 | — | 763 | ||||||||||||||||||||||
| Loss before income taxes | (18,286) | (24,041) | — | (42,327) | ||||||||||||||||||||||
| Income tax benefit | — | (9,697) | — | (9,697) | ||||||||||||||||||||||
| Net loss | $ | (18,286) | $ | (14,344) | $ | — | $ | (32,630) | ||||||||||||||||||
Horizon Acquisition - Representation and Warranty Insurance Claim:
On April 1, 2024, Shentel completed the acquisition of Horizon Acquisition Parent LLC, a Delaware limited liability company (“Horizon”), pursuant to the terms of an Agreement and Plan of Merger, dated October 24, 2023 (the “Merger Agreement”), by and among Shentel, Horizon, the sellers set forth on the signature pages thereto, and the other parties thereto. Horizon made customary representations and warranties in the Merger Agreement relating to periods prior to, and as of, the closing of the acquisition. Shentel purchased representation and warranty insurance (“RWI”), with a policy limit of $40.0 million to cover potential losses resulting from a breach of these representations and warranties. In June 2026, the Company submitted claims to the RWI carrier seeking coverage for losses arising out of the alleged breaches of representations and warranties in the Merger Agreement. Although we believe that the breaches and our claims are meritorious, no assurance can be given as to whether we will recover all, or any part, of the incurred loss. No gains or receivables have been recognized related to this RWI claim as of and for the period ended September 30, 2026. The RWI claim is separate and unrelated to the Horizon acquisition related escrow claim, which was settled in 2025.
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Critical Accounting Policies
There have been no material changes to the critical accounting policies previously disclosed in Part II, Item 8 of our 2025 Form 10-K for the year ended December 31, 2025.
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of September 30, 2026, the Company has an outstanding debt balance of $759.9 million, which includes ABS Notes, VFN, and the RCF. 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. The borrowed Class A-2 Notes and the Class B Notes incur interest at the fixed rate 5.64% and 6.03%, respectively; therefore, the Class A-2 and the Class B Notes are not subject to fluctuations in market interest rates. The borrowed RCF bears interest at a variable rate determined by one-month term SOFR, plus a margin based on net leverage. The borrowed VFN bears interest at a variable rate determined by a one-month term SOFR, plus a fixed margin.
As of September 30, 2026, the Company had $74.5 million and $118.0 million of gross variable rate debt outstanding under the VFN and RCF, respectively. The interest rate was 5.66% and 6.66% for the VFN and RCF, respectively, at September 30, 2026. An increase in market interest rates of 1.00% would add approximately $1.9 million to annual interest expense.
ITEM 4.CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer and Principal Accounting Officer (the certifying officers) have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2026. Our certifying officers concluded that our disclosure controls and procedures were effective as of September 30, 2026.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the fiscal quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
ITEM 1. 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.
ITEM 1A. RISK FACTORS
We discuss in our Annual Report on Form 10-K various risks that may materially affect our business. We use this section to update this discussion to reflect material developments since our Form 10-K was filed. As of September 30, 2026, and except as noted below, there have been no material changes to the risk factors previously disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on February 26, 2026.
Modification of Risk Factors
The Company has modified the following risk factor, previously included under the caption “Item 1A. Risk Factors - Risks Related to Regulation and Legislation” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, to take into account risks associated with potential spending program decisions by the Federal Communications Commission (“FCC”).
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.
Further, the FCC periodically reviews the spending programs within the USF and has authority to make changes through a majority vote of the commissioners. If the FCC decides to reduce support for certain programs for universal service or subsidized internet access and telecommunications services, our Broadband revenues may be adversely impacted, which may have a material effect on our financial performance and our result of operations.
Additional Risk Factors
The Company has identified an additional risk factor, included below, due to ongoing global geopolitical conflicts and actions taken by governments globally in response to such conflicts including sanctions and trade restrictions.
Continued geopolitical instability or further governmental actions globally could result in additional increases in oil and fuel costs, which may adversely affect our operating expenses and financial results.
Ongoing geopolitical tensions and military conflicts in the Middle East, including the conflict involving Iran, may adversely affect our operations. Escalating conflict in or near major oil‑producing or shipping corridors could lead to higher fuel and energy prices, increasing our transportation and other operational costs. Any sustained increase in fuel prices could negatively impact our margins and may have an adverse effect on our business and results of operations.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
None.
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Use of Proceeds from Registered Securities
None.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers
In conjunction with the vesting of stock awards 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. The following table provides information about shares surrendered during the quarter ended September 30, 2026, to settle employee tax withholding obligations related to the vesting of stock awards.
| (in thousands, except per share amounts) | Number of Shares Surrendered | Average Price Paid per Share | |||||||||
| July 1 to July 31 | — | $— | |||||||||
| August 1 to August 31 | — | — | |||||||||
| September 1 to September 30 | — | — | |||||||||
| Total | — | ||||||||||
ITEM 5. OTHER INFORMATION
During the three months ended September 30, 2026, none of our officers or directors adopted terminated
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ITEM 6. Exhibits Index
| Exhibit No. | Exhibit Description | ||||||||||
31.1* | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | ||||||||||
31.2* | Certification of Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | ||||||||||
32** | Certifications pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. § 1350. | ||||||||||
| (101) | Formatted in Inline XBRL (Extensible Business Reporting Language) | ||||||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document | ||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||||||||
* Filed herewith
** This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (Securities Act), or the Exchange Act.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SHENANDOAH TELECOMMUNICATIONS COMPANY | |||||
| /s/ James J. Volk | |||||
| James J. Volk | |||||
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | |||||
| Date: October 28, 2026 | |||||
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