WideOpenWest Inc (WOW) Q3 2024 Earnings Call Highlights: Navigating Revenue Declines and ...

In This Article:

  • Total Revenue: $158 million, a decrease of 8.7% year over year.

  • High-Speed Data (HSD) Revenue: $107.5 million, a decrease of 2.1% year over year.

  • Adjusted EBITDA: $77.3 million, an increase of 9% year over year.

  • Adjusted EBITDA Margin: 48.9%.

  • Total Cash: $21.6 million.

  • Total Outstanding Debt: $973 million.

  • Leverage Ratio: 3.4 times.

  • Capital Expenditure (CapEx): $40.5 million, down $24 million from last year.

  • Unlevered Adjusted Free Cash Flow: $36.8 million.

  • HSD Subscribers Lost: 4,400 during the quarter.

  • Fiber Penetration Rate: Increased to 17.5% from 15.4% in the previous quarter.

  • Video Subscribers: 66,300, a 34% decrease from the same period last year.

  • Guidance for Full Year HSD Revenue: $422 million to $426 million.

  • Guidance for Full Year Total Revenue: $629 million to $633 million.

  • Guidance for Full Year Adjusted EBITDA: $284 million to $288 million.

Release Date: November 04, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • WideOpenWest Inc (NYSE:WOW) achieved record adjusted EBITDA of $77.3 million, marking a 9% increase year over year with a margin of 48.9%.

  • The company successfully closed a $200 million super priority term loan, enhancing liquidity and supporting the reacceleration of its Greenfield fiber expansion strategy.

  • Penetration rates in Greenfield fiber markets increased to 17.5%, with residential business penetration rates exceeding 20%.

  • WOW's simplified pricing strategy and complementary speed upgrades have contributed to increased ARPU and reduced churn.

  • The company has begun adding customers in its newest Greenfield fiber market, Hernando County, Florida, indicating successful market expansion.

Negative Points

  • High-speed data revenue decreased by 2.1% year over year, reflecting a decline in HSD subscribers.

  • Total revenue for the third quarter decreased by 8.7% due to significant drops in video and telephony revenue.

  • WOW lost a total of 4,400 HSD subscribers during the quarter, with 1,900 losses attributed to the ending of the ACP program.

  • The traditional video business continues to decline, with a 34% decrease in subscribers from the same period last year.

  • The company faces uncertainties related to the impact of hurricanes and the discontinuation of the ACP program, affecting subscriber numbers.

Q & A Highlights

Q: Can you provide insights on the underlying broadband trends for Q4, excluding the ACP impact and storm, and discuss the competitive environment? Also, how will the additional $10 million CapEx for Greenfield expansion affect year-end results? A: Teresa Elder, CEO: The ACP impact resulted in a loss of 1,900 customers this quarter, totaling 6,900 for the year. We don't expect further ACP impacts in Q4. The hurricane's impact is estimated at 6,000 to 7,000 customers, mainly in Augusta. Despite these challenges, we've seen positive trends in legacy markets due to speed upgrades and simplified pricing. Our Edge-out and Greenfield markets are showing strong penetration. John Rego, CFO: We slowed CapEx in Q3 but will spend an additional $10 million on Greenfield in Q4, bringing the total to around $70 million for 2024. Total CapEx will be $205-$210 million, with similar spending expected next year.

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