Nuvera Communications Reports Mixed Q3 Results, Revenue Growth Offset by Decline in Net Income

Nuvera Communications, Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, showing a mixed performance in revenue and profitability compared to the previous fiscal period.

For the third quarter of 2024, operating revenues increased to $17.6 million, up 7.61% from $16.4 million in Q3 2023. This growth was primarily driven by increased governmental support revenues and data services, despite declines in legacy service revenues, particularly in voice and video services. The breakdown of operating revenues for Q3 2024 included $1.1 million from voice services, $745,268 from network access, $2.9 million from video services, $7.5 million from data services, and $4.2 million from A-CAM/FUSF support.

Operating income for the third quarter rose to $2.8 million, a 19.33% increase from $2.3 million in the same quarter last year. However, net income significantly decreased to $81,698, down 83.09% from $483,170 in Q3 2023. For the nine months ended September 30, 2024, net income was $384,167, a sharp decline from $5.2 million in the prior year. The decrease in net income was attributed to increased costs and a rise in interest expenses, which surged by 57% to $3.1 million in Q3 2024.

Total operating expenses for Q3 2024 were $14.8 million, compared to $14.0 million in Q3 2023. The increase in expenses was driven by higher selling, general, and administrative costs, which rose by 5.70% due to customer acquisition efforts related to the fiber-to-the-premise (FTTP) network initiative. Depreciation and amortization expenses also increased by 13.85% to $4.5 million, reflecting ongoing investments in infrastructure.

As of September 30, 2024, the company reported total assets of $274.9 million, up from $263.9 million at the end of 2023. Cash reserves decreased to $584,284 from $1.3 million, while total liabilities increased, with long-term debt rising to $137.6 million from $122.9 million. The company has secured a $180 million credit facility with CoBank, which includes a $125 million term loan and a $25 million delayed draw term loan, aimed at supporting its fiber expansion plans.

Nuvera's strategic focus remains on enhancing its advanced fiber communications network and expanding broadband services, despite facing challenges from competition and changing consumer preferences. The company has also suspended dividend payments to maximize capital for its ongoing projects.