WideOpenWest (NYSE:WOW) Reports Q3 In Line With Expectations

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WideOpenWest (NYSE:WOW) Reports Q3 In Line With Expectations

Broadband and telecommunications services provider WideOpenWest (NYSE:WOW) met Wall Street’s revenue expectations in Q3 CY2024, but sales fell 8.7% year on year to $158 million. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $631 million at the midpoint. Its GAAP loss of $0.27 per share was 162% below analysts’ consensus estimates.

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WideOpenWest (WOW) Q3 CY2024 Highlights:

  • Revenue: $158 million vs analyst estimates of $157.5 million (in line)

  • EPS: -$0.27 vs analyst estimates of -$0.10 (-$0.17 miss)

  • EBITDA: $77.3 million vs analyst estimates of $69.4 million (11.4% beat)

  • EBITDA guidance for the full year is $286 million at the midpoint, above analyst estimates of $275.7 million

  • Gross Margin (GAAP): 60.4%, up from 56.3% in the same quarter last year

  • Operating Margin: 1.5%, up from -70% in the same quarter last year

  • EBITDA Margin: 48.9%, up from -41.4% in the same quarter last year

  • Free Cash Flow was $5.7 million, up from -$15.3 million in the same quarter last year

  • Subscribers: 490,500, down 26,900 year on year

  • Market Capitalization: $423.7 million

"During the third quarter we demonstrated the strength of our strategy in our expansion markets where we increased penetration rates to higher levels and grew ARPU," said Teresa Elder, WOW!'s CEO.

Company Overview

Initially started in Denver as a cable television provider, WideOpenWest (NYSE:WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.

Wireless, Cable and Satellite

The massive physical footprints of cell phone towers, fiber in the ground, or satellites in space make it challenging for companies in this industry to adjust to shifting consumer habits. Over the last decade-plus, consumers have ‘cut the cord’ to their landlines and traditional cable subscriptions in favor of wireless communications and streaming video. These trends do mean that more households need cell phone plans and high-speed internet. Companies that successfully serve customers can enjoy high retention rates and pricing power since the options for mobile and internet connectivity in any geography are usually limited.

Sales Growth

A company’s long-term performance can give signals about its business quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. WideOpenWest’s demand was weak over the last five years as its sales fell by 10.8% annually, a rough starting point for our analysis.

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