Frontier Communications Parent (FYBR) 4 Aug 232023 Q2 Earnings call transcript

Good morning. Thank you for attending today's Frontier Communications Second Quarter 2023 Earnings Call. My name is Megan, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answers at the end.

I would now like to pass the conference over to Spencer Kurn, Senior Vice President, Investor Relations at Frontier Communications.

to second welcome call. XXXX and morning, Frontier quarter Communications earnings Good is of Head Kurn, Relations. This Frontier’s Investor Spencer

Joining me Beasley, and within Presentation Chief Officer. on section our presentation the Executive Jeffery, the Today's Investor the Officer, call webcast today of available and Events be our Scott can our in Financial are Chief followed Nick and President website. Relations

that a may please disclaimer that actual on This expressed statements is harbor include uncertainties see call Slide today. conference safe reminder risks our start, this may we results Before materially that and to involve forward-looking from X. cause differ those

During which may are also earnings we the reconciled and to in our call, and certain measures, defined release, presentation, non-GAAP financial press refer schedule. trending

the Executive over and call President turn Officer, Jeffrey. our Chief to that, With Nick I'll

Spencer, everybody. good morning, and Thanks,

As press you another strong operational we quarter of delivered saw our results. release, in

we Before at briefly back look and the a take dynamics. let's dive into market step our quarter,

On underpinned speeds positioned in Slide lower an government X, you'll the best latency industry, funding Fiber wireless usage reliable broadband this as that is cable explosive with critical influx demand connectivity. in by either which technology, a and of high-speed recognizes meet operate symmetrical data attractive or an for growth need to see faster that we than is and alternatives.

There are four factors broadband from other that companies. differentiate Frontier fiber

significant the and speed a on cost fiber advantage us gives build. our scale our Firstly, of

delivering we speeds. we markets competing the operate, Secondly, or in where of capable one who gigabit in of zero XX% have with Frontier competitors are

best in driving quarter. They of fourthly, after believe our and disciplined, cash back we the high-return And quarter our business, flow expansion. force grit. business that team operating experienced, the results we into Thirdly, I the our have is what are of reinvest generates fiber healthy full carefully

copper is approximately capture our penetration available thesis our XX% the which X simple. fiber markets, is broadband minimum to deliver a infrastructure in Build and best times investment fiber today. of Our product penetration

Over this and well last years, again two executed the the we've our quarter. against course delivered strategy team of the

turn second quarter. to to the Now highlights Slide review let's X of our

build locations quarter quarter, fiber well and the that's bring versus to last it fiber had line from changes fiber Our our with to on sequentially, of made built. expect I of upwards up another the million X% ARPU on remains in Halfway XX% the we working. are And fiber. achieving year. year, will broadband We've are our QX market is trend we've We X.X added strong our through in selling target customers up and here. ARPU XX,XXX way the track.

While was this we're performance segment. the single who the continue time to the broke high our through quarter Business pleased in wholesale revenue our of more That's declines six of years. mid telecom against profound business in report digit territory even in with star backdrop the and first revenue business, consumer to to positive and wholesale segment. our for the peers

are I'm return our growth When pleased our margin company video turned outside to haven't top-line positive we on through the EBITDA of growth the yet, And just our low year. first of positive year-over-year half growth we the positive while business. showing has revenue and bottom operational performance to year described XXXX, we we it And the as that to strong started on that line. both top team's share the would we powered

first funding stable later about the talk traded market reserved is high which fiber $X.X that priced exclusively I capital of to The to businesses with securitization fiber fund our committed to will use highlight securitization Lastly, for our the expansion. infrastructure, transaction, publicly to billion want US quality in more We're and cash this proud predictable secure in valuations. to will recent and we that flows incredibly support fiber-to-the-home call. the for attractive Scott company be continue

impressive changes If the use both are direction. we that gift services, prices plus trending even slide, next the unbundled choose base in our see more our and whilst you adjusted fiber our right results. that to growth What's fiber customer turn delivered our adds We customers net is our measurable you'll gig incentivized grew of and disciplined and These market, to reduced packaging. cards, to making to value-added pricing changes speeds. customer

$XX and our half date. report two second the In to channels, of took the months new customers than value customers sales our speeds, of added our chose force and intake June gig refocusing or new optimizing climbed one range. ARPU into We I'm first best the was quarter, second the then that more service, and of thrilled third spent more quarter new our our to customer sales month one plus

detail On in delivered how there's quarter we six more slide, our the next wholesale and in years. business on best

the For segment growth. the revenue overall. our a fiber second row, and had SMB for And growth quarter standout revenue business in enterprise digit double quarter, driving a wholesale had

operations. business data ago, wholesale Now, brought areas like line agreement with years a centers. growth market, customer, We largest and towards in shifted our to overhaul and pricing fiber-to-the-tower began our we our the two strategic signed our with edge

the a talked strong are a the fiber-based it's the legacy infrastructure past copper year The business. we've And growth. about from now to quarter. our encouraging into revenue highlights That see for transformation digital business that successfully covers bookings converting from into

to the slide value our and that about realizing our turn fiber X. talk path build Please creates value. let's to Now

quarter, IRRs halfway to XX we've fiber X As so at thought. initially over more IRRs the with least end very million our to just and the locations with pass attractive attractive as are plan high we and do at locations, the remain teens. fiber At the there shared, as mid million than to in is second we of

both markets million. capital stable, pass we committed million remain build and to to be and active We annually and of out in complete in participants confident a programs pursue and least footprint. to our to climate fiber while locations like XX far macro that plan additional clear plan fiber XX beyond million new path our Assuming BEAD our go ambitions we're locations, government in And X.X see opportunities, that. at our to

to value, as of we possible our it's that build build as all benefit goal value our We we and stakeholders. the for much fiber, build as know

Now, over pause review want Scott, our for to performance moment to against I turn to strategy. before our it a I

another and customers, want see base initial and that to doubling and quarter. savings on goal. that Slide I is high It's transformational we this performing yet while in we for them teams You our XX% cost transformation way all serve our results, can our driving the XX% thank X journey, these expanded increased by operational now improving customer fully frontline our started since our footprint fiber our are We've strong flight. and by delivering

appreciate an the work all in a play have role it really, like I We important business And to this America. turn Gigabit hard to around. building takes really

So thank you all.

on Lastly, Journal sheath I'd like cables. Wall recent to articles lead Street address the

and we the about of customers, health the deeply foremost, people, and care and serve. First we safety communities our

Our reason harm. policy has believe always cable safety environmental in to that been occupational and to health Frontier have all comply no and has lead regulations, we environmental or any with called

that the on these assessment. based network. on metallic detail own XXX,XXX our an we topic in any roughly call. digit preliminary, lead will a update to additional estimate our cabling of miles cables cloud are while provide percentage this results provide Based we wanted our total on represent internal still And of during on our analysis, initial we able our not And evaluation, single to be

now Scott, you. So, to over

$X data was XX% $XXX had million strong growth our Thank I'll as was significant in morning, quarter. up with reductions. adjusted fiber up you, financial offset everyone. more than in net second of year-over-year as million we which of the adjusted million net This good of billion, a Nick, sequentially Revenue combined while we came of We services voice growth income declines EBITDA and loss products. and video. $X.XX start from earned our revenue EBITDA. highlights with of and cost was internet $XXX

pleased to the milestone through were EBITDA the a major for year, half We to Frontier. first of growth in break

operations cash XX cash operations, $X.X $XXX billion million bringing of over from generated we net trailing our Additionally, months. the from to

cash profile the before demonstrates of flow business. CapEx our Our healthy underlying cash generation

Slide our growth the strength expansion markets. XX and of customer fiber across shows base

our locations, In highlighted, points penetration our months. million As grew XX.X%. broadband over to XX X.X fiber basis year-over-year base last base Nick the our customer XX increased of footprint XX%

sequentially, at the at due be in expected our of half three first it in gains end track XX% target two least to to dipped rate seasonality we Although footprint, of of to penetration we where the are on the put half to of our our the first years. ahead achieve next us And year.

ability team's a the our with rapidly high which suite expansion XXXX markets, half of a Its target constantly is XX-month first cohort X.X improving locations. value-added product the In large roughly and was of a new win end of services. highlights of superior penetration range, of our XX%, million at customers our to

penetrated two at Our years, at target below XXXX XX% was slightly range. cohort our

As shared cohorts, we and build half locations that calls, was started lagged this that on have in mid-XXXX. cohort other of our given integrated previous consistently prior XXX,XXX built execution has to first it we

XXXX XX into the second the to As range. reach of our half the locations rise target expect rate penetration additional in overall this months we year,

the X% XX, overall and broadband accelerated to consistent with quarter, and consumer growth. revenue slide performance. Business prior driven consumer revenue to driving declined business revenue accelerated year-over-year fiber Copper XX% fiber growth. Moving fiber fiber in X% healthy growth, by to to to Consumer accelerated quarters. XX% growth, wholesale

XX, to XXXX. Turning of first year adjusted EBITDA the compared the our to grew we Slide through half

the included $X roughly Second benefit. EBITDA quarter flat was adjusted tax XXXX quarter million a of year-over-year, one-time second but

rapid Our EBITDA function and factors, effective two growth growth, primarily reduction. fiber is revenue a of cost

to growth mid-single half into move we two EBITDA into expect we these As range. factors the digit the of the second year, accelerate

XX. capital Turning on expenditures to Slide

of in working guidance we and cost CapEx lower range. benefit $X.X consume on pre-work, build mix. second track meet capital, decline CapEx are the in reduce to to We will billion a significantly from year billion our half full $X.X as

range. remain CapEx versus decline current also will in confident XXXX year's that this We

markets, an transaction of in transaction grade On build. investment slide, rated billion level. total $X.X our roughly securitization capital discuss the XX% fund this transaction. from provides approximately at with of the locations fiber nature net flow of as We cash a fiber to priced our fully priced next Dallas committed our of recently path XXX,XXX securitized a fiber the we'll We transformational

I'll on make importance the three securitization. of key fiber the points

bill. provides fiber it fund path clear fully to our First, a

investment to to access capital reduce pool digital our should benefited other investors a of classes as the of strategy of new their to diversified capital total part This a like over capital. into our time, of to way attracted and investment this our it structure. class cost pool of grade with have more cost flows. We migrate towers lower grade can continue from capital cash the a of stability infrastructure investors structure new centers asset Second, investment that data long-term similar

include We to our traditional debt. long-term expect capital structure securitization both and

value cash and debt Finally, from We mature transaction $X,XXX assets. the highlighting highlights resilience the of per the flows the fiber value passings. of fiber passing, raised stability at of roughly

on liquidity and to liquidity, of end turn fiber the Slide approximately XX. to the securitization. now do add will recently of quarter, had are These June the We'll the the not $X.X reflect second we of we proceeds billion of as numbers securitization. At priced end which of the

liquidity, balance strong debt Approximately this at have any earlier XX% do remains XXXX. to our is addition we of And our significant fixed healthy. maturities not sheet than rates. In

on unchanged. XX remains see XXXX that Slide can guidance our You

expect $X.XX to $X.XX to adjusted continue We billion the range. billion in EBITDA

$X.X cash pass to capital expect locations We to to X.X additional $X.X billion with million billion. expect approximately and in fiber expenditures of continue XXXX

operational by America I'm and digital connect proud our With the close that, that of to of to is work team millions economy. businesses doing strong for results. I'll of our build another quarter the personally thanking and Gigabit consumers team

I'll turn to line to back now call the questions. open the Spencer over for

up Scott. the Operator, Q&A. let's for Thanks, open lines

[Operator line from of Cowen. Williams question Greg Our with first comes Instructions] TD the

open. now is line Your

Great. Thanks for taking my questions.

value accelerate I valuing are equity mean, lot markets second or at is, good on And than as math Slide higher to LTV, if see I light just are. is raise, and trying look a XX, then other question homes go $X your do remarks XX And But the Slide over or ABS $X,XXX game I raises. quarter, ABS get on your be of from I could it well, the you the get in can and the a Wave the see capital you seems as capacity loan shed like Just, I implied here. home you changer the to per debt would debt a in Would to? in security correctly, congrats fund markets this home you What these that we're your refi per for was rates. value, metrics some even billion at hoping X? on noted builds, priorities? Thanks. stack

Scott. is This Greg. Sure, Yeah.

Let me sequence. in take those

It's still middle So not the of the in on LTV, transaction. but closed. we're priced

attractive So investors. I my need we LTV it's But for our remarks. think very to a limit

If play you in per multiples look fiber XX at -- multiples the in teens typically are to those the times space, XX pure range.

And LTV that billion, so $X.X we would compensated. well make investors are sure a that debt that raised -- given at conservative assume

mature showed that is always investment that investors On doesn't pool a the the total of this I will we've cash fiber that And said I highlight flows. cash $X,XXX stability understand flows, -- show we Again, passing. marker to the stable cash fiber, good resilient this think your of mature and grade quite of values value reiteration per market flows. new the

that's one valuation. point So on

spot add our go we're them. we're and now mean to a hit has faster, sweet plus before, sales plus go if said to all you if And faster. our pool of the Nick able accelerate on is to and the build two, kind But have capital include, we think capacity priorities, X.X build balancing installation. able now access our of of to of priorities machine I additional I million to

is build. refinance see traditional this capital the refinance long-term over and we us then our a to I've of and target debt. that at pool the become once Xs, a time reiterated of to flow this path cash the also pay We gives debt mid free down end leverage as in

business if the that chest there be out $XX BEAD decide and our committed it's we a try to that and war bit to in And million. grow of other ways that funding aggressive to the of then win I'd even are accelerate if we do add also stuff beyond footprint a to

with I game a So, agree notion your that changer. it's

a industry. step step and for for a the it's think great us great I

Thank you.

line Phil Morgan. Our Cusick next comes from question of the with JP

open. now is line Your

you. the it was think I to subscriber XX,XXX. dig want guys. Hi, growth numbers. into Thank I quarter, fiber Last

obviously although there's This than quarter, Company And, Cable in less saw XX,XXX. The there, some normal seasonality. seasonality

there on you more So seasonality. increase. a I you is and seasonality. Number on cut two, three, talk lot you've gift a there's than number one, cards, did think competition going about, number price Can back

how sort you're growth us the very help So of by allocate a in and assuming slowdown confident forward? going Thanks rebound much. there

Phil. that Yeah, take Hi, it’s Nick. I'll one.

other years, at the just calls price. turnaround, previous on promotional with to up same pricing at our really and the price get its offer two a at the our this and And services core midst this product we've over whilst improved and about talked in course, to significantly we've we've strategy gig engine so attractive time, is same of gift product sales got the And we've think on. and I best had of going. been very build engine last of course, card value-added the activity, in plus going that the extended and offerings way use

to the of we discount a While at doing fiber market. was still that, bit ARPU a were

QX, offers, I and line we in changes the disciplined bring way designed to made in competitors more pricing ARPU with very our package market. our some in So think said our with as we to line we

for. use think For speeds. some exactly example, we results I choose adjustments, doing reduced our the services gift and And to of we're we looking incentivized unbundled price cards, the we've plus so, market customers value-added we gig to achieved in implemented

gig taking added double one-third the services in free plus previously [Technical or new more that for. all for example, we of service, half they customers For had for than which speeds. second pay given charging unbundled our we with one value quarter, value-added started away of customers now and new more Difficulty] and chose The

up has ARPU now climbed And simultaneously, new intake the range. $XX into customer

sales of month quantity, took far. second for the June month these on, into to we we so the And kind changes, couple actually, made record. so our had of was and a whilst months So few sales ARPU, and optimize changes best quality, channel a had take on we've best personnel sales when account we've was June

course, on spoken I into channel competitive have come others the channels. strong back to seasonality really We same And, the the got next see question. say I it best deliver think -- about I turn in now to and just quarter, product, there’s yes, we So, year, results. Those proposition headwinds offer, their some mix Thank we've and right tailwinds tuned and thing. Operator, often really in on our value. think you. of of later the volume

Absolutely.

Feldman Our the with next Goldman comes line question of Brett from Sachs.

open. is now line Your

follow-up I'll on that. just Thanks.

obviously you what the other net that said, back the determining how words, should the of way little a what half add back trying in metrics standpoint. see one achieve investors more performance we what's other on compares assess based tailwind you're the ARPU Nick, of that balance -- whether of In with over So, words, versus your that seasonal the just we're towards operational year? has it In half an not trajectory right what those in a other? the on to to indexing of

a year out than will the Scott, at be year this Should second be half to to that in your pointed is half expect for out what somewhat you it year then, investment us back just a had based you the what next to the overall year. capital we you. Thank seasonal is of and of -- going spend just run lower on being going guidance pointed And you capital as looking is. capital too rate, this indicative you're of And be extrapolate? lot be or to lower

of half in XXXX. the versus was, and, perhaps I'll course, revenue, It’s on the start improvement X.X% was significant Scott, the on Look, I'll Brett. year, hand you. to a revenue over first -- of that decline Hi, Yeah. through Nick, down which

pricing fiber strategy clear think accelerate, And that So it's the it's growth continues now revenue working. digits. and is our we approaching double the to really strategy

to a the mentioned of report segment. milestone which time continue to telecom peers we in years really done broke and revenue As our this remarks, that prepared the major we've wholesale in in first six business quarter, positive through whilst is declines lot a that, growth in

in improve back the to we So half, two will think see continue revenue growth. I that drivers

to The half. that fiber improvement the second the revenue our of see and mix, in base. second begin overall of the up the ARPU pricing the in so improving mix, that, broadband fiber into if is overall Scott, through consumer to we'll an half in as will you know I fiber want secondly, grow first pick changes new our wash that. And percentage don't an And,

Sure, question, Brett. down year. CapEx the the of your in rate, drivers question the I'll kind On through why Then year walk next second it will your run half. is about of go into exiting

will that it will of drivers. second we're So three in year half confident due to it this decline

First, consume we'll inventory.

us saw continue in bit QX consume in You QX and a that of and QX. should inventory

built in to half we beginning the quarter, second that. last we're the remember, If year first you and inventory consume of in

Secondly, that, of ’XX, all into infrastructure will be in build, first states we'll in completed pre-work second now consume for pre-work. geographies. in opened the intermediate of in the the We kind that the of of, out this spent half we've in locations half of ’XX, We're second and and offices central CapEx a building new lot half year. in the XX

we'll have mix. third, then cost a lower And build

some mix. also we're As topography. where include units, integrated We'll lower mentioned we're cost multi-dwelling in that units, the aerial we with cost lower locations higher expensive And prepared businesses. states a in I have then, less passing small multi-tenant remarks, have build

than in question like? this look in range And with second does significant billion your be be a year And it XXXX. loaded for next a peak think Operator, year. the to what be bit half. We CapEx decline said then due We confident have will our should $X.X a year, we're seasonality. about $X.X altogether, to billion So that XXXX end it range front question. will next lower

Absolutely.

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

open. line Your now is

sure the the through opportunity? marketing side how on thinking construction network in wholesale? And you the Great. that about you're and the to make business having success in you you're us can forward going maximize tell you that Thanks. that's what Thank you. have Can walk attracting changed us

the Yeah. overall a we Hi, It's part segment. really Look, Frank, we're quarter of And with the that across all Frontier already pricing. been order improvements, year, just business now this wholesale, agreement Nick ago, talked part in driven of this AT&T with If it. a breakout sharp about units, shift different really has to increase on welcomed to look leading past helped sales for much monetizing of order signed big of on to new towards we leadership quarters through higher business that new to been really, is also been we're is across from growth. strong strong the a a here. volume, it has got, driving infrastructure pleased kind strategic more seeing Frontier's that which these units. couple right that by based in we selling three earlier favorable significant sort services a improvements translating mix, which digital us financial way we And the And that's that in a by offers the infrastructure of a but like segments. book

said growth. And of segment our number differed as from this ways segment our before us in I've a return helped peers to significantly which though, business

the and keep have to mind. market, is of we're a think part back of The our small that we of I actually first which the at

customers. small peers market we're we're So not don't But as of the we as because reflect to and exposed be reflect large market. -- dynamics enterprise really our equally, too most

we we're access higher talk customers customers fiber-based internet enterprise, we real medium products buy propensity when mean about small with selling have quality. enterprise to that much really kinds at And and the SMBs. So and providing really deliver good and those and a of

natural towards expertise. a teams and our focus up got our and building the efforts we've that's smaller we are affinity segments think where I So and

the hard let's overall it's in not past, fact the segment have lastly, been. well that as then managed avoid the was And as enterprise could say, to it

around. come taking those focused almost been sort mindful results pretty in of and And we're on wanted of three incrementally businesses, which we're milestones every turning this we opportunities improvement and to how through. we're really are there business now so part And we've And kind we had of seeing those hit.

which was fiber we in The sequentially to first business achieved inflect XXXX.

key growth milestone quarter third first the to to copper year-over-year, three we've declines, the first we now grow quarters. offset in achieved fiber milestone in this for six second for years. year for is And The consecutive which the was business achieved time fiber which

So execution, again, really just knocking day changing our business prices, day people, down refining market, in, in And enterprise out good channels, those hiring brand, the out and hustling. great milestones, being our our building a good that's does. what

Now, got growth we've the of wholesale am work by a in to lot having sustainable achieve business positive momentum stable achieving remain do growth But segment in can and really -- XXXX. before the in total our said got that, we've year-over-year confident we encouraged and business overall. segment I

half want how do And you we Now of customers for other products these developing your do how be give I the and for about capital. interesting suppose, of uses into balance, that the Scott, versus second capital people. insight because practically might was question to need that might services we of some kind that

what's did the one build on was things Frank, of develop Yeah. plan. an integrated early we called

to It's close So build those. that integrated not just sure fiber our opportunities tower to we're across a driven build of committed priority for customers, and of our out we're build we're as of obviously build. getting consumer SMB. really a million, passing to out XX close wholesale building want for but It's to have at make customer, optimizing as million passing the enterprise getting the that network, we network, XX looking we

very plan we're our us return returns, focused. going going the best to get to optimize on is So, tune capital. returns we're the Whatever to

you. Operator, thank

question. Next

Absolutely.

New from the Street Chaplin Our next line of question with comes Research. Jonathan

now Your open. is line

Thanks, guys.

wanted way drives just pursue eligible aggregate I in if the those then your and your intrigued sorry, mention committed on that to you returns that that opportunities, to sort or once financed XXX,XXX wondering eligible builds units million we access the know the finally, all capital love -- to look a initial more your if in at bringing outside after of other within And partner it little And sort footprint quantify footprint. of you own can beyond partner. parts in fiber XX then And units, sense ABS there I'm are your XX -- the love out-of-footprint would you bit. We'd those X up the BEAD are to the to about million matches around in We that have of of the BEAD deploy or with So what estimates. opportunity opportunity And estimate opportunities that, million? to this a be markets. market that a there's a get go interest some then envisage the to be? by a of the sort insight of opportunity of with would do still that the into I'm

with start just I'll that. Jonathan. Thanks,

build is fiber million that actively total other great I most with And day-to-day now is parts attractive back of converging market, IRRs. converging committed in operational As in bit, And that scarcest asset, passed market inaccessible the and US fiber and world. remains many the little that many most the the before, very creation We're of reconfirming XX said seen we've that homes ways. source step build, our as a focus. clear the a difficult value a the it's high if to of times in our today. a we've take and just But --

know got in beyond to So those we builder and we asset, we things scarce the the And second the as valuable US, go of and provider the the interested course, XX US, fiber time. we've of fiber play million a in are all options the fiber certainly and largest in passed. largest pure homes at all about think looking

fact that evolution cable fragmented It's kind at how the the is consolidate. the that is fiber I from of consolidation. that our And if in, IRRs role to to day an operationally playing play pure out our we committed very market in market consolidated million provider, the likely good consolidated the and in high in see how certainly build. past, The XX as that the But cellular inevitable deliver the the and the come ourselves important market and returns also of to largest day look past. evolution we of fiber fiber focus back also

on might of change Scott, horizon to will you about BEAD that's talk kind Now, things. and want that looming because

right. that's Yeah,

attractive our haven't and of number. said now FCC some be maths get closer confirming after, we the able outside that going a machine in BEAD be BEAD given money tune still we because how to But to committed you just regions think, -- million and of with be we is So fine to the new reviewing expand X would our some We're of as specific several we've eligible go million. know, million before we'd our eligible. much to that build, and footprint likely XX it's our

on still eligibility. exact So of BEAD work the numbers

part and returns And around might was impact returns. the how second of question your the for BEAD committed me build

I think right. you're exactly

high that to homes improve to to that a mid returns build pass that specific million funding to of help build. that IRR that said, getting As to private BEAD with extent subsidize we've teens we're the build homes perhaps committed set to set able private is going we going capital but loan, were the for of of our of win XX a

there. we'll to economy, aggressively active our underserved BEAD. think right going an and all homes participant the So country thing we're We to go connect after to be digital the it's

team recently funding to that other fiber think possibilities securitization it, we business continue think up does and those all capital great possibilities I BEAD look of going leading when new have for independent us we and at to be successfully of the worth expansion in the And, efficient Scott, saying, at open that provider just look about it's we range isn't the deal and US, that for so delivered a a us the as the source and really you forward. for

I we'll that be considerations So that's laying Jonathan. future, in think something into else our the

next for you thank please. your Operator, So question question.

you. Thank

with Our Supino come of Wolfe line question Research. next from will Peter the

Your line is now open.

shows that the coverage ladder lower own question A Frontier, on heard so your long you that with most wondered about of opportunity? stock, your big extent and Good passing into expectations? us experienced to vintage that penetration morning. some deliver Thanks. light, much could question who And you. underappreciate you've don't I Thank Yet pushback launched And about, Having recent capital. does vintages built if will concern what's returns passings penetration. in returns your talk just your of on far. what higher picture than from of term we've

Yeah. Thanks, Peter. is This Scott.

let get said me of It's kind have We've we priced. and back talk competitively cohorts. then product. that take me long step into a a term So penetration, I'll specific superior about let

footprint ago. to new out new offers, It's roughly was a of few that XX% we we've our a able XX% at at now term to it base product, as on years should of We footprint. And have And market, the And look least value-added not at we base at XX% new growing track a goal. a XX% consistently more, rolled if win services. be think marker penetration. of set roughly grown our be we We've set XX.X% consistently as there, experiences. long and customer

good eventually indication a is base we of where expansion take penetration. can So

lagged Now, build, XXXX, of in single months, on people XX of quarter, penetration cohort. It's the one together into part always always And that which range. the the cohorts get our management said period, versus those targets, a targets. I'd back the our always as -- of we later first time And company was a still year, only into target at operating our XX%. that should was small, XXXX of beginning as yet we in get We XXXX, stock not XX quarters the caution two XX% too weren't point put that to has much where months. all bankruptcy of look month team, XX below months, is ahead of a targets. have single for specific expansion, We've XX cohort long the

And surprise transparent us. that's XXXX. to been So the since market with no very we've

It's largest XXXX really had the The and we've that of year. penetration best with cohort. XXXX our XXXX. good ever. cohort (ph) that penetration [X.XXX] built is had about the any million news build is passings We

XX As the XXXX months. the months. rest of cohort to high expect into stay penetration at XX to XX% you ages saw today, And we're the as that we end for range XX% at the of

once to playbook, fiber. those our at marketing gotten cohorts that we've shows and we've open day of we've as pre-marketing, with fine-tuned one for that understand on, think fiber, better moved Frontier at at make things I better sure then the So staying and better expansion they choose are value sale,

penetration confident in and expansion Operator, momentum. next our that we're So look to forward continuing question.

Thank you.

Our next Deo of MoffettNathanson. Del line question Nick comes from the with

now line open. Your is

morning, guys. Good Okay.

have are earlier, this fiber about you. weighed of then suppose thinking and Nick, level, in mix second Scott, competitive other a to securitized for it's types Thank capital I quarter structure degree for other you versus how dependent, but, versus of to market changes Phil's appropriate at And debt factors? what just the time? First the on ads over high intensity debt question might on follow-up

and Hi, look, we market. a Nick. I structure rational of also There's in that. much market very I think doubt the inflationary a, favor have market, industry’s is to also objective now. good in the But fiber is our rational -- That's of about logical a competitors. a Yeah, competitive competitor. and be got backdrop And right national is sort are of no it's think, which course, in

difficult white now terms equipment none scale. somewhere to setting we overbuilders an you fiber -- capital and of competitors, so right really and labor competition. marketing new of so start else course, And we've space we sales a of owner at in could and all got of it's start fiber kind kind and you we engine proposition crazy were how when sure overbuilding I off of market if have much build be with the our and I'm a of us complexities there's that. the to really build. humming we do to competing see think Frontier right in but as some, And Plus little and the very now. there's would would In new time US, where firstly on, given of that not

activity. of see a lot So overbuilder don't we

kind in that's to market suppressed we've going be I think of got. this higher that rate inflationary, higher interest

to and less And practices we that's of major continue from to I the think and introductory primary incentivized seeing. prices past operators to of where our them end. take prices going customers was gain. of we're what source share at we in exactly is primarily. our us. then that. cable like They don't that, compete with That's course, customer capital competitors, of the And of kind jacking with do kind up continue be up low we share don't know it than the And private

us I you've big plus of But we're cable seems broadly market suits add very one I I anything Scott, priced that us to don't well. rational, mean, for our it's brand. that. So think our if be and inflationary. the points of The know competitors. of respectful to to kind And

part second securitization traditional the just and mix And debt, the question Yeah. of on your of Nick.

I securitization. provides why grade your That's structure debt. of factor flexibility investment transformational just towers. a to key, think it it's it's fiber and like point, of over transaction. our traditional data just time us and It a you're cost across on. To our important capital The to fully gives capital debt exactly And centers the let securitization reduces done optimize right our reiterate we path think me such fund build. for

And eventually across we'll financed historically traditional debt. XXX% move it flexibility securitization, of a to have traditional that's balanced We've there, that we now more through debt. something

transaction, to now, of have those of the then really it last we'll and highlights the between mature We And important fiber assets. part be the markets value access flexible securitization both two markets.

before, I of $X,XXX question. cash at As level. and of per roughly rated grade investment it fiber passing, mature We shows was debt stable raised the an next value said of flow Operator, assets. XX%

Thank you.

Simon from Morgan question comes the Stanley. next Flannery of with Our line

line now is Your open.

into bit continuing you a we morning. XXXX, I to said guess, you you XXXX, cost the financing, at could where said Great. mid-year into little I program, fully Thank clarify funded through I productivity path are what you. drill on ‘XX. were see funded. And million $XXX beyond to Good think just Previously, and mid Scott, the that improvements. you the just you'd on think

get the Thanks. this does in what what is to terms recent funding timeline? So the you and of status raise

Sure.

that well on on we'll release the that next give in details progress to quarters do this press a the have achieved today $XXX in let So get to continue cost of two of year. we'll kind think year, we of the get end make to more I by $XX the more few kind program we're -- the cost you said We evergreen. still So next -- me the And mean, of had million. update that. is a quick there track quarters we on there. million program. that's on we'll this share remaining I the savings is And, It

funding question on second Your status.

a give few So me we you this finish securitization let transaction. as notes

Worth But our funds XX% passings end we us XXXX, And $X the billion of billion So That from $X.X think had securitization. we proceeds We roughly at end $X liquidity represent of roughly years then in total at of the Dallas-Fort more. importantly, liquidity. or about the markets gives late XXXX. roughly least QX. into of billion only add at of so of X.X fiber us that

securitization we've a we've have build. the of locations, but finish fiber still provides final that fiber million locations the So path leverage and get build the XX X.X our base Slide And we back the long-term built. additional And fund got we fiber mature we to down operator, mid-Xs, on X.X take as got million we we mid-Xs deck, to out will other target in laid question. fully then a when our expansion

Absolutely.

Our last of comes Rollins Michael Citi. from question the line with

open. Your line is now

Thanks, and good morning.

could. if two Just I

allocation you when So are first, copper the EBITDA the EBITDA, expenses relatively that and finding you stable. fiber to of at look are allocations the

time. still gets segments, that adjusted leverage in just a just operating the and these the is to it's that's mix natural business forward, of as the evolves fiber question changes, each going time copper or something So there still, versus from of of

secondly, what growth talked cadence half back of Thank you you. year the of and of work where just the revenue? totals for into you're of that kind all type opportunity overall about, revenue the aggregate get for to going just how up doing opportunity I'm about trying XXXX, into work revenue the throughout to that then should components call, And to the growth. think and

Scott. This Michael. Sure, is

me questions. On two stable. me copper relatively EBITDA and Let take they let allocations, those are fiber

on based customers. that customers or operating So costs either wires certain they're copper based typically customers are or fiber direct on --

our continue So growing, EBITDA changing to mix. we would on that's shrinking. EBITDA fiber But copper continue expect to basically based our the

where out much wire taking network We we don't have don't centers many cost of have as are support there. or as customers declining aggressively to

we'd continue. expect same to those So trends

half the second and me on Now next a points on moving and few of growth, EBITDA year. then revenue into let kind make

plus the big this half. that milestone Frontier. mid-single this before, part a XXXX. XXXX. for confident in versus by the a still EBITDA half think EBITDA we year So half good we're a the last grew first about EBITDA. as first of in in half the spot half second first turnaround, the I grow in second puts decade the to in grow we're of And expect a very EBITDA first said year year, to EBITDA the And million for then for the time up we into -- think, it a really a full in critical And year. of second good was growth grew do We've that is -- half but in for Nick $X we EBITDA we'll half. And organically that momentum huge was heading this at has us digit milestone with accelerate. said is in We

you, you all for thank indeed, questions. Thank your And Scott.

quickly before the end quarter. like the call, for the to we Just I'd summarize key points

just Firstly, the our and we year on half Scott and track milestone grew EBITDA in in growth, said, major EBITDA, is this a full transformation. first are as to

ever up Secondly, drive in overall. it it’s delivered helped the taking ARPU customer quarter a increase we range $XX ARPU best sequential and new of our into

for the wholesale truly Frontier. a investment is the quarter. to It progress team And years. tremendous I positive in and look really year the a announced and forward incredibly another highlights every finally, segment first last revenue solid the building you proud deal six of week unlocks important that transformational value am delivering funding in business for our source highly most updating setting quarter, had Thirdly, in of securitization fiber of are the next grade our again time our so breakout yet, digital that we attractive we for infrastructure quarter day. on I all

everyone thank call. the for you joining So

Frontier have Second of I your XXXX Call. you day. wonderful a Quarter That concludes Earnings rest for the Communications your hope participation. you Thank