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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. ASU 2023-06 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.

The Company’s revenues by activity type were as follows:

						Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)						2026						2025						2026						2025
Residential & SMB - Incumbent Broadband Markets1						$	40,282					$	42,837					$	81,425					$	86,196
Residential & SMB - Glo Fiber Expansion Markets2						26,289						19,796						51,117						38,240
Commercial Fiber						21,386						19,483						41,928						39,095
RLEC & Other						5,505						6,452						11,145						12,935
Service revenue and other						$	93,462					$	88,568					$	185,615					$	176,466

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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 $20.7 million and $19.5 million of gross trade receivables from customers as of June 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)			June 30, 2026						December 31, 2025
Contract assets
Prepaid expenses and other			$	4,240					$	3,818
Deferred charges and other			10,682						9,288
Total contract assets			$	14,922					$	13,106
Contract liabilities
Advanced billings and customer deposits			$	14,474					$	13,436
Other liabilities			11,366						11,139
Total contract liabilities			$	25,840					$	24,575

The Company’s contract assets primarily include commissions incurred to acquire contracts with customers. The Company incurs commission expenses related to in-house and third-party vendors which are capitalized and amortized over the expected customer benefit period, which is approximately six years. The company incurred $1.1 million and $1.0 million in amortization of capitalized commission expenses during the three months ended June 30, 2026 and 2025, respectively. The company incurred $2.1 million and $1.9 million in amortization of capitalized commission expenses during the six months ended June 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 5 years. Revenues recognized related to contract liabilities existing at January 1, 2026 and 2025 were $1.1 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively, and $11.8 million and $10.7 million during the six months ended June 30, 2026 and 2025, respectively.

Investments consisted of the following:

(in thousands)			June 30, 2026						December 31, 2025
SERP investments at fair value			$	3,306					$	3,056
Cost method investments			12,853						13,250
Equity method investments			153						204
Total investments			$	16,312					$	16,510

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 June 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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Property, plant and equipment consisted of the following:

 

($ in thousands)			Estimated Useful Lives						June 30, 2026						December 31, 2025
Land									$	4,181					$	4,498
Land improvements			10 years						3,538						3,699
Buildings and structures			10 - 45 years						54,209						54,562
Cable and fiber			12 - 30 years						1,634,272						1,519,669
Equipment and software			4 - 12 years						497,619						476,939
Total plant in service									2,193,819						2,059,367
Plant under construction									176,383						181,060
Total property, plant and equipment									2,370,202						2,240,427
Less: accumulated depreciation and amortization									(698,736)						(638,818)
Property, plant and equipment, net									$	1,671,466					$	1,601,609

Goodwill and intangible assets consisted of the following:

			June 30, 2026																		December 31, 2025
(in thousands)			Gross Carrying Amount						Accumulated Amortization and Other						Net						Gross Carrying Amount						Accumulated Amortization and Other						Net
Goodwill			$	67,538					$	—					$	67,538					$	67,538					$	—					$	67,538
Indefinite-lived intangibles:
Cable franchise rights			64,334						—						64,334						64,334						—						64,334
FCC Spectrum licenses			12,122						—						12,122						12,122						—						12,122
Railroad crossing rights and other			591						—						591						557						—						557
Total indefinite-lived intangibles			77,047						—						77,047						77,013						—						77,013
Finite-lived intangibles:
Subscriber relationships			43,012						(31,600)						11,412						43,012						(30,792)						12,220
Other intangibles			537						(430)						107						537						(417)						120
Total finite-lived intangibles			43,549						(32,030)						11,519						43,549						(31,209)						12,340
Total intangible assets			$	120,596					$	(32,030)					$	88,566					$	120,562					$	(31,209)					$	89,353

Amortization expense was $0.4 million and $0.5 million during the three months ended June 30, 2026 and 2025, respectively, and $0.8 million and $0.9 million during the six months ended June 30, 2026 and 2025, respectively.

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As of October 1, 2025, management concluded that the estimated fair value of the broadband reporting unit exceeded the carrying value by 8%. During the three and six months ended June 30, 2026, the Company performed goodwill impairment monitoring procedures and identified no indicators of impairment or triggering events. The Company will continue to monitor its reporting unit for any triggers that could impact recoverability of goodwill.

Prepaid expenses and other, classified as current assets, included the following:

(in thousands)			June 30, 2026						December 31, 2025
Prepaid maintenance expenses			$	6,777					$	7,055
Broadband contract acquisition costs			4,240						3,818
Other			3,645						4,325
Prepaid expenses and other			$	14,662					$	15,198

Deferred charges and other assets, classified as long-term assets, included the following:

(in thousands)			June 30, 2026						December 31, 2025
Broadband contract acquisition costs			$	10,682					$	9,288
Other			7,866						9,364
Deferred charges and other assets			$	18,548					$	18,652

Accrued liabilities and other, classified as current liabilities, included the following:

(in thousands)			June 30, 2026						December 31, 2025
Accrued programming costs			$	3,420					$	3,232
Other			14,470						10,847
Accrued liabilities and other			$	17,890					$	14,079

Other liabilities, classified as long-term liabilities, included the following:

(in thousands)			June 30, 2026						December 31, 2025
Noncurrent portion of deferred revenue			$	27,105					$	27,246
Other			5,985						5,094
Other liabilities			$	33,090					$	32,340

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 end of 2026. During the three and six months ended June 30, 2026, Shentel recorded $0.1 million and $2.2 million, respectively, in expense primarily related to severance costs and retention bonuses, included in restructuring, integration and acquisition expense in the condensed consolidated statements of operations. The Company did not make any payments in Q1. For the six months ended June 30, 2026, the Company made severance payments of $0.4 million.

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 June 30,												Six Months Ended June 30,
(in thousands)									2026						2025						2026						2025
Finance lease cost
Amortization of leased assets			Depreciation and amortization						$	197					$	180					$	386					$	368
Interest on lease liabilities			Interest expense						58						22						95						46
Operating lease cost			Operating expense1						1,017						1,241						2,032						2,405
Lease cost									$	1,271					$	1,443					$	2,512					$	2,819

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(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 June 30, 2026:

(in thousands)						Operating Leases						Finance Leases						Total
2026 (remainder of the year)						$	1,867					$	2,431					$	4,298
2027						2,985						409						3,394
2028						2,328						413						2,741
2029						1,803						417						2,219
2030						1,550						417						1,967
2031 and thereafter						7,097						4,929						12,026
Total lease payments						17,630						9,016						26,646
Less: Interest						(4,725)						(3,427)						(8,152)
Present value of lease liabilities						$	12,905					$	5,589					$	18,494

Other information related to operating and finance leases was as follows:

			June 30, 2026						December 31, 2025
Finance leases
Weighted average remaining lease term (years)			16.9						17.3
Weighted average discount rate			6.9		%				6.5		%
Operating leases
Weighted average remaining lease term (years)			8.6						8.4
Weighted average discount rate			6.5		%				6.3		%

						Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)						2026						2025						2026						2025
Cash paid for operating lease liabilities						$	1,109					$	1,140					$	2,221					$	2,404
Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases)						742						372						1,473						423

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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 $3.5 million for the three and six months ended June 30, 2026, respectively, and $1.7 million and $3.4 million for the three and six months ended June 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 June 30, 2026 is as follows:

(in thousands)						Operating Leases
2026 (remainder of the year)						$	2,115
2027						3,948
2028						3,738
2029						3,498
2030						3,240
2031 and thereafter						15,738
Total						$	32,277

Shentel’s outstanding long-term debt obligations as of June 30, 2026 and December 31, 2025 are as follows:

(in thousands)			Interest Rates						June 30, 2026						December 31, 2025
Shentel Issuer Class A-2 Notes			5.64%						$	489,142					$	489,142
Shentel Issuer Class B Notes			6.03%						78,263						78,263
Shentel Issuer Variable Funding Note ("VFN")			Floating(1)						68,000						—
Shentel Broadband Revolving Credit Facility ("RCF")			Floating(2)						93,000						75,000
Total debt									728,405						642,405
Less: unamortized loan fees									(13,378)						(14,168)
Long-term debt, net of unamortized loan fees									$	715,027					$	628,237

(1) The VFN bears interest at one-month term SOFR plus a fixed margin. This interest rate was 5.40% at June 30, 2026.

(2) The RCF bears interest at one-month term SOFR plus a margin. The margin is variable and determined by the Company’s net leverage ratio. This interest rate was 6.15% at June 30, 2026 and 6.19% at December 31, 2025.

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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 $68.0 million for the six month period ended June 30, 2026. As of June 30, 2026, the available capacity of the VFN was $1.9 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) 6.25x 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 $93.0 million as of June 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)			June 30, 2026						December 31, 2025
Shentel Issuer Class A-2 Notes			$	491,783					$	494,278
Shentel Issuer Class B Notes			78,654						77,676

Commitment Fees

Shentel is charged commitment fees on unutilized portions of its debt. The Company recorded $0.2 million and $0.5 million related to these fees for the three and six months ended June 30, 2026, respectively, and $0.2 million and $0.4 million related to these fees for the three and six months ended June 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 June 30,												Six Months Ended June 30,
(in thousands)						2026						2025						2026						2025
Interest expense						$	11,245					$	8,733					$	22,371					$	15,995
Less: capitalized interest						(1,549)						(2,730)						(3,240)						(5,100)
Interest expense, net of capitalized interest						$	9,696					$	6,003					$	19,131					$	10,895

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 principle 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 June 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 ABS 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)						June 30, 2026						December 31, 2025
ASSETS
Restricted cash and cash equivalents						$	30,899					$	20,945
Accounts receivable						9,732						12,580
Prepaid expenses and other						5,947						5,344
Property, plant and equipment, net						819,656						793,874
Intangible assets, net						7,765						8,234
Operating lease right-of-use assets						10,269						10,199
Deferred charges and other assets						128,183						129,635
Total assets						$	1,012,451					$	980,811
LIABILITIES
Accounts payable						$	8,697					$	7,561
Advanced billings and customer deposits						10,072						8,953
Current operating lease liabilities						1,256						1,236
Accrued liabilities and other						3,979						2,658
Long-term debt, less current maturities, net of unamortized loan fees						622,426						554,288
Non-current operating lease liabilities						5,031						4,925
Other liabilities						29,815						28,703
Total liabilities						$	681,276					$	608,324

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 June 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 six months ended June 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 June 30,												Six Months Ended June 30,
(in thousands)						2026						2025						2026						2025
Expected tax benefit at federal statutory rate						$	(2,151)					$	(2,540)					$	(6,321)					$	(4,693)
State income tax benefit, net of federal tax effect						(546)						(653)						(1,605)						(1,206)
Excess tax deficiency from share-based compensation and other expense, net						156						145						1,277						1,732
Income tax benefit						$	(2,541)					$	(3,048)					$	(6,649)					$	(4,167)

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 June 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 June 30, 2026, the Series A Preferred Stock was exchangeable for 3,808,506 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 June 30, 2026, the Series A Preferred Stock had a liquidation preference of $93.3 million.

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			1,187						$	15.39
Granted			732						13.44
Vested			(503)						15.82
Forfeited			(22)						14.61
Outstanding awards, June 30, 2026			1,394						$	14.22

The total fair value of RSUs vested was $6.8 million during the six months ended June 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			360						$	15.77
Granted			118						13.42
Vested			—						—
Forfeited			—						—
Outstanding awards, June 30, 2026			478						$	15.19

Stock-based compensation expense was as follows:

						Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)						2026						2025						2026						2025
Stock compensation expense						$	2,595					$	2,493					$	7,566					$	6,390
Capitalized stock compensation						(292)						(306)						(465)						(486)
Stock compensation expense, net						$	2,303					$	2,187					$	7,101					$	5,904

As of June 30, 2026, there was $10.3 million of total unrecognized compensation cost related to non-vested RSUs and RTSRs which is expected to be recognized over weighted average period of 2.5 years.

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The following table indicates the computation of basic and diluted earnings (loss) per share:

						Three Months Ended June 30,												Six Months Ended June 30,
(in thousands, except per share amounts)						2026						2025						2026						2025
Calculation of net loss income per share:
Net loss						$	(7,699)					$	(9,048)					$	(23,450)					$	(18,180)
Amounts attributable to common shareholders
Net loss attributable to common shareholders						$	(9,304)					$	(10,545)					$	(26,632)					$	(21,149)
Basic and diluted weighted average shares outstanding						55,779						55,103						55,664						55,032
Per share amounts attributable to common shareholders
Net loss per share						$	(0.17)					$	(0.19)					$	(0.48)					$	(0.38)

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 June 30,												Six Months Ended June 30,
(in thousands)						2026						2025						2026						2025
Potentially dilutive shares related to the Series A Preferred Stock						3,809						3,553						3,808						3,553
Potentially dilutive equity awards						727						436						617						431
Total potentially dilutive instruments						4,536						3,989						4,425						3,984

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.

The Company was awarded $151.2 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 June 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, the Company received $22.3 million and $17.3 million in cash receipts during the six months ended June 30, 2026 and 2025, respectively, and had approximately $0.7 million and $10.5 million in accounts receivable as of June 30, 2026 and December 31, 2025, respectively.

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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.

The Company operates as one segment. The accounting policies of the Company’s segment are the same as those described in the summary of significant accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2025.

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 June 30,												Six Months Ended June 30,
(in thousands)						2026						2025						2026						2025
Service revenue and other						$	93,462					$	88,568					$	185,615					$	176,466
Significant expenses and other items:
Cost of services exclusive of depreciation and amortization						32,703						32,624						64,527						65,654
Selling, general and administrative exclusive of stock-based compensation						28,719						27,556						57,308						54,831
Adjusted EBITDA						32,040						28,388						63,780						55,981
Stock-based compensation expense, net of amount capitalized						2,303						2,187						7,101						5,904
Restructuring, integration and acquisition						134						206						2,574						716
Depreciation and amortization						30,619						35,103						65,590						64,561
Interest expense						9,696						6,003						19,131						10,895
Other (income) expense, net1						(472)						(3,015)						(517)						(3,748)
Income tax benefit						(2,541)						(3,048)						(6,649)						(4,167)
Net (loss) income						$	(7,699)					$	(9,048)					$	(23,450)					$	(18,180)

1 Other primarily includes patronage income, interest income, and benefit plan gains.

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