WideOpenWest (WOW) 4 Nov 242024 Q3 Earnings call transcript

Hello, and welcome to the WideOpenWest Third Quarter 2024 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Andrew Posen, Vice President, Head of Investor Relations.

You may begin.

Good afternoon, everyone, and thank you for joining our third quarter 2024 earnings call. With me today is Teresa Elder, WOW!'s Chief Executive Officer; and John Rego, WOW!'s Chief Financial Officer.

business I we to statements will expected results, started, during everyone about get matters operating call, other our make our we would our remind like that our relating Before to and business. strategy some forward-looking are risks, statements on reliance to factors our or may uncertainties the and in provisions subject to actual the and cause financial performance securities other be laws forward-looking made from are harbor position operating known of those forward-looking in These implied safe federal statements. different and or results, unknown materially that expressed our

You obligation are to to reliance undue any forward-looking forward-looking such on statements. such cautioned not update disclaim statements. We place

to to information statements, that forward-looking For concerning filed differ statements section of filings financial our well could from our factors SEC, results release. XX-K Form the our section the with Risk please Factors our the the forward-looking as press SEC, actual our including refer additional affect materially with results or of cause as

call may note release afternoon, this In addition, non-GAAP issued we on we press the and to measures. that in financial certain refer please today's

While can reported which the can financial found schedules, in investors, be provide is information financial the non-GAAP presented presentation releases -- found company in for our accordance with non-financial website. GAAP. for trending Reconciliations results isolation metrics information our our between be information not a GAAP on these and historical non-GAAP and our of earnings this be to considered substitute for these the intended useful in measures as believes or

complement to this also remarks. We presentation have included prepared afternoon a our

Teresa over call turn Officer, I'll the WOW!'s to Chief Now Elder. Executive

third call. WOW!'s earnings Thanks, Andrew. Welcome to quarter

regained proud conditions our out who were our difficult started, affected. of employees our continue especially customers thoughts get Most work now been by and to to who am Milton. to to who service. help say affected we under I like have Helene Hurricanes tirelessly Before of all I have would go those

we up financial the we business, our be Although held expect to the on saw impact business network and to well, not extremely our impact some do significant.

October, August, of $XXX enhancing balance passed toward liquidity, new number reaccelerate as priority progress XXX,XXX as to any Since to our Greenfield next markets fiber term to don't work have our information our super a Note we few in In of that puts closed strong Crestview taking sheet improve a unsolicited early end bringing Greenfield to be remarks, communities new liquidity continue our at nonbinding position strategy in expansion. network our acquisition our we at we we a this new fiber regarding reaccelerate we and goal homes fiber us high-speed increasing take over time. share million new you DigitalBridge have on the several Partners spoke topic. of our loan, on fiber proposal the will made the we questions any questions from while not will we this And and to grow years. which fronts we in penetration our and and fiber our solid

July, X.X% migrate $XXX.X our which further increase, our from quarter, impact platform X.X% the as and into well rate of EBITDA align year-over-year Now quarter, EBITDA third revenue relationship but million our In increases went ARPU million benefits data would of increased record Adjusted year-over-year of a adjusted simplified the pricing, improvement in as XX.X%. adjusted of included record small YouTube discuss an penetration continuing I high-speed we which was increased from margin in drive in quarter higher. to business reflects to across with and our our decreased in initiatives. TV. predominantly EBITDA accrued off a the the fiber adjusted the customers benefits reflecting efficiency of with and as of like which second expansion X% The results, our third rates significant EBITDA drove $XX.X significant video effect

rates During and the further in across new XXXX as third the quarter, we penetration progress Greenfield well increased vintages and fiber expansion XXXX our our made fiber as markets.

Greenfield construction are in on successfully we improved while Although on a our markets. new now new our at super quarter, homes XX.X%, residential with expansion penetration driven by passed loan, to position customer than initiatives. the our the growing rates million fiber capital, of additional during new a penetration The in our business, in more the fiber with fiber X outperformance XX%. $XXX strong slowed from in increased liquidity reaccelerate to our percentage successful end our XX.X% once And penetration where secured growth the have again we highly are up above priority markets within we points fiber rates teams our second quarter Greenfield focused that the base being

Greenfield newest Florida. I'm Hernando that customers to County, have also fiber pleased adding begun our announce market, in we

this results saw XXXX which increased percentage Our over XX%, Edge-out again especially strong quarter. also to the X growing vintage, points.

is vintage of in to Our markets, XX.X%, subscribers X,XXX last XX%. improvement penetration in strong rate drop Of and also remains fiber our XXXX ACP footprint. approximately quarter. the which to a the from at great down Edge-out due during X,XXX partially subscribers the in quarter. With our X,XXX that, which HSD to a regard the last markets of we legacy vintage HSD Edge-out program, quarter. a Greenfield subscribers, X,XXX total offset X,XXX of our increased lost The We were our added lost from ending expansion XXXX

of our no optional half of data we caps back the complementary speed benefit very in as All pricing our such -- charts modem low bottom steps to strengthen well our The and year, the rose and of upgrades simplified on across simplified growing particular reflects in which our that our included, ARPU and as markets. business, includes as rate plans, footprint. the that shift markets. fiber our a showing Greenfield The base. first continue the we in half strategy to price continued a July contracts continuing success expansion of significantly year-over-year, pricing expansion strength introduced an both our our no are during a in lock, as fiber during the especially is highlight sequentially our initiatives success the as strategy, effect of -- legacy see the all, quarter, particularly slide which impact driven our by to churn increase well took

anticipate the in increasingly expansion to our As customers TV quarter, the as a declined from TV, XX% has traditional now same we We dropped transition buying further trend will where video especially the XX,XXX expected, are during continue our markets, year. YouTube and period this to last HSD/YouTube subscribers, decrease business bundle.

us and growth how go our is a John, on now Our and detail. for more to this new partnership markets. to to To growing opportunity offer content I these turn significance I much fantastic momentum conclude our the building and success. the capitalize handing continued the to before this provides a setting on want reinforce video of results more in I'll at will reaccelerating call who shift financial call to John, in the to penetration streaming. better up over customers our look to forward over value rates to

impact X.X% X.X% X% HSD HSD for telephony reported an integration quarter which million Total the EBITDA $XX.X increased same from from XX% business we reflects the XX.X%. to In and period reflecting This presented in Thanks, with of revenue our the quarter, aggressively last away and in revenue, of year release. adjusted during in in respectively, more the million platform. and is subscribers. revenue the and EBITDA to restructuring the as third decreased decline $XXX.X The our third in $XXX earnings restructure quarter. our beginning decreased of the presentation video video and X.X%, largely addition in the in year-over-year, reflected to is growth EBITDA Theresa. to million, adjusted adjusted dropped reconciliation HSD EBITDA change revenue decrease Adjusted our margin

XX% Costs the in with we broadband incremental business. increased execute subsequently reflected ended the as the our continued the and continue and quarter revenue of proportionate more last We the by $XX.X margin The take same driven cost integration and increase come $XXX contribution completely total grow down at of in period be associated restructuring year-over-year, HSD year. than XX% this of out million million to to with from leverage our quarter, strategy cash sequentially up total revenue, which X.Xx. of in with increased of this debt and to ratio outstanding total will

million. over super term interest XXth, to priority strategy the work a will $XXX X%. mature us enable for will new plus fiber we XXX,XXX new rate loan XXXX, However, bears few passing in additional homes goal to liquidity as on years. credit our SOFR of This toward equal to December continue at Greenfield reaccelerate agreement next new the we This our October secured

reported which expansion a down from last decrease a spend $XX significant last year in We reflecting from total and $XX.X was quarter, million CapEx. million, $XX.X capital of million

we efficiency same quarter, up year last the lighting decreased million as homes we've million $X.X passed period CapEx last and $X on services. core the $X.X from emphasized additional on in was spent quarter. markets. Our million third Expansion million $XX.X Edge-outs XX.X% expansion Greenfields, the the our from CapEx and $X.X on we million third an In and business in quarter, increasing penetration

which $XX the term to consistent the loan, million closing third core another quarter expect fourth with largely Greenfields, total be in With of would to bring new fourth quarter our the the the we our -- now quarter. CapEx for in spend

was improvement unlevered driven the from free cash increase in a Our as quarter, the CapEx. define for expansion last EBITDA million in we which and flow, EBITDA adjusted third less the CapEx, quarter, reduction significant adjusted by adjusted $XX.X

Finally, provide full guidance I year. for the like our would to

million to $XXX revenue million. to revenue be be and and our be million between expect million million, $XXX total $XXX to between $XXX and and We between $XXX million adjusted HSD $XXX EBITDA

a We be subscriber a negative negative XX,XXX XX,XXX. and between expect our numbers HSD to

lost the so and However, Thank X,XXX line X,XXX discontinuation now of the the in up that hurricanes some an quarter approximately of year. of to ACP estimate we'll due for questions. loss approximately the to the to earlier due fourth subscribers subscribers and X,XXX includes open you much, this

the {Operator question of comes from Batya Instructions] Levi line Your first UBS. with

upon underlying following the we storm, Maybe could increased bundles. and an also just you impact you trends, excluding emphasis you hear provided. an the on if touch And if and recent with cable commentary XQ from improvement environment on continue? on operators change competitive to CapEx the ACP seeing? question And up next you do the expect converged how the in that with year year new the million that over think we will pace you're maybe any the And $XX on builds there Is or Greenfield expansion? a the so? of the CapEx. should incremental Where about CapEx activity the and end broadband

turn then and Thanks, on I'll commentary Great. over on Batya. start to question. John CapEx it broadband the the

So customers for full which ACP quarter. had of impact mentioned, program for the as brings do was quarter, ACP any of X,XXX year about deduction originally us in rolling in anticipate than away, those anticipated. impact ACP this we John We not less the the customers, when went more X,XXX. roll-off off. that federal is fourth That

So that's done. we believe that,

the when impact are of home, In will relocated hurricane, for X,XXX back. customers we've be, out their but because and terms X,XXX, the that we what temporarily figuring which exactly to just is might really coming estimate are to damage of as still we be understanding quarter an that they of are given

most in communities. that bit Really, is And pretty bit really shape, the So Florida that grateful little in has impacted in we but market of significantly as that we're flux was the Augusta. market our with recovery returned impact good there, the a market. worse a certainly to still continue for wasn't us, one work

the two we're the them are kind thinking quarter. things how those So and fourth about unusual of for

from more X,XXX the ACP guessing nothing X,XXX we're for So hurricane. to and

of back our customers have at have months March. of trends. at things been of seen basis, beginning we pleased legacy, two positive We certainly, a the year-over-year -- And end with I a tiers rest of ago, doing. at look on did upgrades for speed When the lowest actually impact the that the we we're very the few complementary very upgrades, the speed some or

we so And really that down loyalty helped and among churn our increase think customers. has drive

-- those our which on customers that lock, plans, if helped enroll many an price that their are We we and they stabilize charge but certainty which a in also have promotion roll-off. our option they for, certainty really taking be that amount choose strong everyday customer legacy base. extra for things future. increased very satisfaction, the are These We have customers launched is pricing like the the simplified pricing, bill what optional gives have churn decreased which will so to our don't feel

in Greenfield we've that Edge-outs continued The certainly are our deepening penetration about, excited and our to see other we thing markets.

in been added quarter. And cultivating the with up last have machine the of we've bringing we in new those capital in couple new as passed launch influx again Hernando look County. we forward from that year in on as So earlier that this the we the Greenfield homes turned our now more we we new to of weeks debt deal, have last homes, customers such the

feel So about about on that going good we've markets markets. we very and on where the the -- chosen good trends the we're expansion

you little markets. unusual Greenfield and the two and things, the a about Hurricane, gives legacy, that bit So ACP Edge-Outs

to second do John, answer you want So CapEx? around the half

quarter transaction. Greenfield bit 'XX will million a $XX clearly Total $XXX at on we $XX spending while we worked around third million down That to got million $XXX and new Yes, is to million $XXX it range. you sort worked bring for liquidity Greenfield the were CapEx -- million. in QX. -- on spend the million on spend the $XXX preserving another of in little debt so, reported, We'll the Batya, in the can as probably in tell from we numbers slowed -- CapEx

year, haven't like in to X excuse what We forward spending but spent money next year think the me, forward. given XXXX going look expansion probably pace next is or going of going is spend 'XX in the -- -- for the guidance I

of reason slowdown, go that again. capital. the out cranked raise So but to machine And and predominant we had the more kind was some a we've up

-- $XX you plan with CapEx, that many more XQ? how to million Just you incremental homes were Greenfield do in build

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we today days. are Ziply these we answer, homes back fiber fiber to We don't clearly valuable February the Yes. you We're learned report. from building when we give that but again. can And tell homes in pretty announcement, as

Nispel of next KeyBanc question Your Brandon Markets. the line with comes from Capital

the you you just When on context projections the financing the the -- Can of in guys some be financial you should the markets over projections and you And modeling could we the of if business. how about the overall, with transaction, please? trajectory the those announced how adjusted secondly, put see next thinking profitability out about us share talk legacy focus business you EBITDA of of Greenfield couple progressing, years? markets on the

Yes.

that actually could was pretty speaking. the be the starting were was So What we that the out, put That this was we what raised. the raising trajectory -- John your was of is out -- thing Brandon, point. baseline model money that, used while be anticipate would funds. One that didn't

think to So next like give we we quarter's what We'll more to to look at light. 'XX I going do clarity when looks that you're have it think in call.

is versus yet. will and -- so As ton hit Legacy inflection a profitable it point Greenfield Greenfield still legacy let's legacy flow relates take of to its future. [indiscernible] generates legacy hasn't and the foreseeable cash built. first. just It still, is getting for

negative cash by shareholder value doing it. but a we're clearly is Greenfield draw, incredible So building

kind it's an thing. of odd So

yet, reached we promise point plus the you bifurcate but sense to that's haven't enough at it. how I A makes for show where look big it and it we you me and equals B isn't It C,

on and information out the the you'll just 'XX the the So, if then that you put modeling, X-K, same sort you some just call. baseline patient. can put in was little the to be you to bit I'll happens clarity money to a And take you lenders that want raise have saw next what is do on numbers. if what give which on envision

Louthan next the James. comes Frank from question Your Raymond of with line

Great.

wanted were private involved comment, you still pursuit go on you Is the both that the if out? deal? but if dropped DigitalBridge to can that? for see Crestview else you anything around I the You anyone has in and confirm Or comment can just or probably can't anyone there approached

guess what nothing you. changed that say we we've updates can previous is given that I our has from

call I'll to question-and-answer session. for the remarks. the closing That concludes turn Teresa

Well, afternoon. in much. for thank your appreciate joining interest -- this thank WOW!, Okay. you and you so you us We

concludes thank This for We you today's call. joining. conference

disconnect You your may lines. now