Rocket Companies Inc Earnings - Q3 2026 Analysis & Highlights
Block Communications’ Q3 2026 call focused on sequential broadband subscriber growth amid continued year-over-year revenue pressure, fiber investment and operating-cost reductions, telecom improvement, the planned exit from publishing, and a cautious outlook without 2027 EBITDA guidance.
Key financial results
Q3 consolidated revenue was $80 million and EBITDA was $25.6 million, down $8.9 million, or 25.8%, year over year; the prior-year comparison included divested operations and a $6.6 million gain on billboard asset sales.
Nine-month consolidated EBITDA was $78.7 million, down 8.7% year over year.
Broadband EBITDA was $26.2 million, down 15% year over year; broadband revenue declined 14%.
Telecom EBITDA was $3.9 million, up 23% year over year, and nine-month telecom EBITDA increased 13%.
Capital spending was $15.2 million in Q3: $12.9 million for broadband and $2.3 million for telecom.
Business segment results
Broadband: Q3 data revenue fell 9% year over year, with data subscribers down 2.4% and data ARPU down 5.8%; video revenue fell 33%, reflecting a 19% decline in video subscribers and a 13% decrease in video ARPU.
Broadband, sequential trends: Data subscribers grew 1% from Q2, while data revenue declined 3.7% and data ARPU fell 4%; video subscribers declined 2.5% and video revenue declined 4.3%.
Broadband operating expenses declined 8% year over year, including reductions of 36% in video product costs, 36% in voice product costs, and 49% in Zone TV-related costs; SG&A fell 3% despite a 24% increase in marketing and promotion expenses.
Telecom: Revenue declined 1% year over year, with communications revenue down 6% and networking revenue up nearly 3%; operating expenses decreased 6%.
Telecom’s Milo operating system entered daily production for new customers and can process customers from quoting through fulfillment; management reported operating expenses down 6% quarter to date and 5% year to date.
Telecom sales generated $309,000 in monthly recurring revenue during Q3, and the company quoted $1.8 million in new revenue; quarterly EBITDA was its highest in four years.
Publishing: Q3 EBITDA loss was $1.7 million; excluding the prior-year billboard gain, publishing EBITDA improved $2 million, which management attributed to the Post-Gazette divestiture and avoided operating losses.
Remaining publishing operations’ revenue declined 21% in Q3 and 12% year to date, while operating expenses fell 24% and 16%, respectively; the ongoing operations’ EBITDA loss was $1.1 million, a 24% improvement year over year.
Capital allocation
Management expects full-year 2026 capital spending of $52 million to $54 million, similar to its prior guidance.
The company ended Q3 with $450 million outstanding in senior secured notes, no revolver borrowings, and $42.3 million of cash; total leverage was 4.0x and net leverage was 3.7x, based on trailing EBITDA of $111.4 million.
The CFO expected year-end cash of $35 million to $40 million, citing delayed obligations related to divestitures as a factor in the expected cash reduction; she did not expect a significant cash drain to fund CapEx.
Management said the company would sell or discontinue the Toledo Blade, its last remaining publishing operation, and planned to complete the final settlement of its non-union pension plan.
Industry trends and dynamics
Management described broadband as facing a difficult current environment, while arguing that the industry has a strong long-term future as connectivity becomes increasingly important to residential users and data centers.
The company cited declining high-speed data, video, and landline trends across much of the industry, alongside competitive pressure and consumers’ increasing price sensitivity.
Peak bandwidth usage per customer increased 21% in the Buckeye system and 11% in Macrocell systems year over year; 51% of new customers selected a gigabit tier or higher.
Management said fiber expansion remains important and cited lower maintenance costs, fewer truck rolls, reduced latency issues, and lower energy and power costs relative to coaxial systems.
Competitive landscape
Management cited competitive threats from fixed wireless and other providers, and said Rocket is intended to help retain customers seeking lower-cost alternatives; approximately 70% of Rocket subscribers were new to Buckeye.
At September 30, Block had approximately 8,900 Rocket subscribers, 55% of whom were taking a gigabit tier; Rocket’s reported ARPU was $26.80.
Management positioned its fiber network’s capacity, reliability, and multi-gigabit symmetrical speeds as competitive advantages, and said fiber voluntary churn was 1.1%, versus 1.5% for coaxial service.
Management attributed video pressure partly to programmers’ pricing and said the company had cut channel families, which contributed to subscriber losses but also generated programming-cost savings.
The CEO said Starlink was not a threat to Block in his view, and characterized it as more of a threat to conventional mobile service providers.
Macroeconomic environment
Management’s discussion centered on industry transition, competition, and changes in consumer behavior and price sensitivity; it did not provide a specific forecast for inflation, tariffs, recession, or other macroeconomic indicators.
Growth opportunities and strategies
Block said it was pursuing a two-tier broadband marketing strategy: Rocket as a separately branded lower-cost offer and additional “bolt-ons” to increase customer value and ARPU.
Rocket had approximately 8,900 subscribers at September 30, and the company projected more than 13,000 by year-end; 16% of Rocket customers had selected one or both currently available add-ons.
Management said Rocket’s reference price for new subscribers was being raised after the company reached growth targets, with the aim of increasing ARPU from new customers; it also planned to expand the available bolt-ons.
The company planned to launch Digital Priority, a tiered loyalty program for higher-value customers, with outside-provider benefits and premium products or services.
Fiber investment and conversion are central to the broadband strategy: fiber data subscribers reached 73,312, up 13% year over year and 2.3% sequentially, while fiber passings rose 14.6% year over year and 9.7% during Q3.
Management said Q3 fiber penetration temporarily declined after the company added passings before completing customer conversions and marketing in those areas; it aims to increase penetration in newly fibered areas from the high 30% range to the low 40% range.
The company continued migrating high-speed data customers to TV Select, which grew more than 114% in Q3, and added the OATI channel directly to its guide with a streaming-assist feature.
In telecom, management cited Milo-enabled process improvements: the operation processed 31% more orders with one-third fewer personnel and completed orders in half the time.
Financial Guidance and Outlook
Block did not provide forward-looking EBITDA guidance while it was budgeting for 2027.
Full-year 2026 CapEx guidance was $52 million to $54 million; management expected year-end cash of $35 million to $40 million.
The CEO said the company aimed to stabilize broadband and total revenue, but did not guarantee when revenue growth would return; he cited video churn and the broader top-line challenge.
Management expected further telecom operating-expense savings into Q4 and 2027, and projected revenue growth through the remainder of 2026 after sequential growth in Q3.
Management said broadband profitability was improving despite revenue challenges, citing year-to-date broadband EBITDA margins rising from 41.5% to 45.3%.
