MachTen Reports Financial Results for the Full Year 2024 & First Quarter of 2025

/EIN News/ -- TRAVERSE CITY, Mich., April 29, 2025 (GLOBE NEWSWIRE) -- MachTen, Inc. (OTC: MACT) today announced financial results for the full year ended December 31, 2024, and the first quarter of 2025.

Financial Highlights		Year Ended
(In thousands, except per share data)		December 31, 2024				December 31, 2023
Operating revenue		$	16,976			$	15,939
Operating income		$	5,750			$	6,072
Net income		$	3,874			$	4,317
Earnings per share		$	1.21			$	1.36
EBITDA		$	8,757			$	8,102
		Quarter Ended
		March 31, 2025				March 31, 2024
Operating revenue		$	4,139			$	4,176
Operating income		$	1,144			$	1,126
Net income		$	594			$	597
Earnings per share		$	0.19			$	0.19
EBITDA		$	2,035			$	1,906

“We achieved record revenue and EBITDA in 2024, a year of significant investment and transition for MachTen, with continued momentum to start 2025,” commented Dan Miller, Chief Executive Officer.

“Our team deserves credit for overcoming considerable challenges in our first year as a standalone company, including the implementation of new systems and processes for accelerating the growth of our fiber-based network. We are now well along the path towards building the infrastructure required to become the most reliable provider of broadband communications in the communities we serve, and to surfacing long-term value for shareholders.”

Revenue for the full year 2024 was approximately $17 million vs. $15.9 million in the prior year, primarily attributable to an increase in support from Enhanced-ACAM (“E-ACAM”).

Broadband revenue increased to $3.4 million from $3.2 million in the prior year, offset by a loss of voice customers in several wire centers in which the electric company began offering fiber-based Internet.

Operating profit was $5.8 million in 2024, compared to $6.1 million 2023, largely attributable to a $900 thousand increase in depreciation expense.

Net income was $3.9 million, down from $4.3 million in the prior year. In addition to higher depreciation, interest expense increased $150 thousand, and operating expense was also marginally higher to reflect the addition of staff and software.

EBITDA was $8.7 million in 2024 vs. $8.1 million in the prior year.

Capital Investments & Operational Highlights

MachTen invested nearly $10 million in new fiber infrastructure in 2024, spanning more than 100 miles and 2,900 new passings. An additional 60 miles and 1,300 passings were completed in the first quarter of 2025, despite difficult weather conditions.

Key 2024 projects included:

• St. Ignace: 50-mile FTTH (Fiber-to-the-Home) network passing over 2,000 locations, with early adoption by more than 300 customers.
  
  
• Wallace and Carney Expansion: Completed a $4 million project funded by a Connecting Michigan Communities 3.0 grant.
  

As of March 31, 2025, Michigan Broadband has approximately 1,600 fiber broadband customers across 10k passings, with the take rate expected to improve throughout 2025.

Construction began in late 2024 on the ReConnect America 3 (“RC3”) grant projects that will ultimately bring improved connectivity to more than 2,500 locations over 500 miles. These grants were awarded by the United States Department of Agriculture’s Rural Utility Service and will impact areas that are considered amongst the highest cost to serve. On a combined basis, the RC3 grant projects may have a total cost of approximately $85 million over a 5-year period, inclusive of a matching investment from MachTen of up to $16 million. A 10-mile project in Donken was completed in January, and another 10-mile project in Grace Harbor is expected to commence in May.

Most significantly, the deployment of broadband services to more than 9,000 locations supported by the E-ACAM will accelerate in 2025. It is anticipated that fiber-based service will reach almost 3,500 new passings in 2025, bringing total E-ACAM locations served to almost 4,500, or 50% of the amount required by the end of 2026. This puts Michigan Broadband a year ahead of schedule.

We continue to monitor potential developments related to E-ACAM funding in light of the recent ruling in the 5^th Circuit Court of Appeals. The ruling impacts the funding mechanism and oversight of the Universal Service Fund and will be reviewed by the US Supreme Court in 2025.

Michigan Broadband continues to invest significant capital in equipment, software, and personnel to update systems and processes following its spin-off from LICT Corporation. This includes an upgrade to the switching and routing environment that began in early 2025, and will allow for greater reliability, throughput and redundancy as fiber-based service replaces copper-based DSL.

Balance Sheet

As of March 31, 2025, cash and cash equivalents were $1.9 million.

MachTen executed a $20 million term loan from the National Cooperative Services Corporation (NCSC) in August 2024, of which $16 million has been drawn down at an interest rate of approximately 5.5%.

Strategic Opportunities

On March 19, 2025, it was announced that Michigan Broadband will enter into an Operating Services Agreement with UP Fiber, Inc. in connection with its acquisition of wireline assets from AT&T. As a result of this partnership, Michigan Broadband will provide customer service, billing, sales, marketing and other administrative support that will generate additional revenue and improve profitability.

About MachTen, Inc.

MachTen is a holding company for Michigan Broadband Services, Upper Peninsula Telephone Company (UPTC), Michigan Central Broadband Company (MCBC), and Alpha Enterprises Ltd. MachTen’s subsidiaries provide broadband internet access and communications services, including voice, video, home automation and managed hosting services. Investors should refer to filings that have been posted to www.machteninc.com

MachTen, Inc. and Subsidiaries
Condensed Consolidated Statements of Financial Condition
(in thousands, except per share data)
		March 31,				December 31,				December 31,
			2025				2024				2023
		(Unaudited)				(Unaudited)				(Audited)
Assets
Cash and cash equivalents		$	1,972			$	1,683			$	1,533
Accounts receivable			1,046				1,061				1,555
Materials and supplies			2,992				3,013				2,276
Other current assets			621				379				332
Current assets		$	6,631			$	6,136			$	5,696
Property, plant and equipment, net			33,596				32,697				25,725
Right-of-use assets, net			544				544				679
Goodwill			100				100				100
Other noncurrent assets			105				129				256
Total assets		$	40,976			$	39,606			$	32,456
Liabilities and Shareholders' Equity
Current liabilities:
Trade accounts payable		$	2,127			$	1,991			$	2,020
Note payable to LICT			-				-				15,000
Accrued liabilities			2,907				2,268				386
Current operating lease liability			60				60				78
Total current liabilities			5,095				4,319				17,484
Deferred income taxes			2,851				2,852				2,864
Term Loan (NCSC)			16,000				16,000				-
Long term operating lease liability			572				572				644
Other noncurrent liabilities			162				159				147
Total Long-Term Liabilities			19,585				19,583				3,655
Shareholders' equity
Common Stock			3				3				3
Preferred Stock			514				514				-
Additional paid-in capital			10,530				10,530				10,530
Unearned Compensation			(405	)			(405	)			(405	)
Retained earnings			5,656				5,062				1,189
Total shareholders' equity			16,298				15,704				11,317
Total liabilities and shareholders' equity		$	40,978			$	39,606			$	32,456
Basic shares outstanding			3,192				3,192				3,172

MachTen, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
		12 Months Ended
		Dec 31, 2024				Dec 31, 2023
Operating Revenue:
Regulated Revenue		$	12,922			$	12,138
Broadband			3,370				3,173
Video & Other			684				628
Total operating revenue			16,976				15,939
Operating Costs:
Cost of revenue			5,961				5,765
General and administrative			2,258				2,072
Depreciation and accretion			3,007				2,030
Total costs			11,226				9,867
Operating income			5,750				6,072
Other Income (Expense):
Interest expense			(503	)			(350	)
Investment income			15				36
Total non-operating income / (loss)			(488	)			(314	)
Income before provision for income taxes			5,262				5,758
Provision for income taxes			1,388				1,441
Net income		$	3,874			$	4,317
Earnings per share attributable to common stockholders:
Basic		$	1.21			$	1.36
Diluted		$	1.18			$	1.32
Weighted average shares outstanding:
Basic			3,192				3,172
Diluted			3,272				3,272

MachTen, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
		3 Months Ended
		Mar 31, 2025				Mar 31, 2024
Operating Revenue:
Regulated Revenue		$	3,162			$	3,208
Broadband			812				801
Video & Other			164				167
Total operating revenue			4,138				4,176
Operating Costs:
Cost of revenue			1,479				1,614
General and administrative			625				656
Depreciation and accretion			891				780
Total costs			2,995				3,050
Operating income			1,143				1,126
Other Income (Expense):
Interest expense			(222	)			(255	)
Investment income			5				5
Total non-operating income / (loss)			(217	)			(250	)
Income before provision for income taxes			926				876
Provision for income taxes			333				279
Net income		$	593			$	597
Earnings per share attributable to common stockholders:
Basic		$	0.19			$	0.19
Diluted		$	0.18			$	0.18
Weighted average shares outstanding:
Basic			3,192				3,172
Diluted			3,272				3,272

EBITDA

EBITDA is an established non-GAAP financial measure of operating performance and liquidity that is commonly reported and widely used by analysts, investors, and other interested parties in the telecommunications industry because it eliminates many differences in financial, capitalization, and tax structures. We believe that EBITDA trends are a valuable indicator of whether our operations are able to produce sufficient operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures.

EBITDA is calculated as Operating Profit from Continuing Operations plus depreciation and amortization expense and corporate expenses.

EBITDA Reconciliation	12 Months Ended
	December 31, 2024				December 31, 2023
Operating Profit	$	5,750			$	6,072
Depreciation & Amortization		3,007				2,030
Total EBITDA		8,757				8,102

EBITDA Reconciliation	3 Months Ended
	March 31, 2025				March 31, 2024
Operating Profit	$	1,143			$	1,126
Depreciation & Amortization		891				780
Total EBITDA		2,034				1,906

Contact:		Dan Miller Chief Executive Officer (914) 921-5193