WOW - Earnings call 1 2023 | WideOpenWest, Inc.

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Operator

My name is Tamika, and I will be your conference operator today. At this time, I would like to welcome everyone to the WideOpenWest Q1 2023 Earnings Conference Call. [Operator Instructions] I will now hand today's call over to Andrew Posen, Vice President, Head of Investor Relations. Please go ahead, sir.

Andrew Posen

Good morning, everyone, and thank you for joining our first quarter 2023 earnings call. Teresa Chief Chief Financial is John Officer; today WOW!'s Rego, Officer. me Elder, Executive WOW's and With

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

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

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

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

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

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

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

Teresa Elder

this strategy. our to Thanks, Andrew. pleased I our execute on expansion first as results to quarter WOW!'s continue call. especially quarter, with earnings am Welcome we

and drive foundation enabled clean on a with to a to focus asset strategy XXXX solid our growth. us which balance vision Our built sale, sheet, clear a

first our Florida significant report South our seeing we results, Central Carolina. in greenfield quarter are and we on As progress initiatives

As expectations. line in all results Alabama, fiber-to-the-home our in with that financial in as were well while our edge-out delivering

respectively. Importantly, we while operations by as increase year the leverage maintaining cash quarter, do very last X% revenue video from and revenue this X%, than period and with telephony, our to offset high-speed continue from which the in in was more ratio. In dropped a total data decreased X% first same a declines low XX%

expansion largely associated decreased the to XX.X%. million, Our margin and was EBITDA costs adjusted EBITDA with upfront Florida reflecting South $XX.X The X% our in Carolina. Central adjusted

our quarter, bringing XXX,XXX. During approximately X,XXX HSD quarter number in ending our also The metrics high-speed the HSD drove subscribers total RGUs the we lost the RGUs, decline reduction XXX,XXX. Despite subscribers our total of be to strong. more with data in than HSD reduction continue in to first RGUs, a operating

customers or X.X are gig customers customers XX% we For XXX speed maintained only. in taking Also new data purchasing approximately past with of with including average consecutive consistent rate HSD higher further momentum taking buying XX% quarter, of approximately the our XXth service. our quarters, meg, selling higher speeds an above

reinforces to demand ability statistics in network. our higher It the strong for number market services. These continue XXX X taking meg We in also of of where stronger our above, either or and base the customers normalized our from are we customers demonstrate And purchasing customers speeds markets, including quality the add a was fiber and new of gig speeds continue last HSD full customers and increase continue buying dynamic by our edge-outs of higher customers seeing we our see an to data greenfield to X share effect as portion year-over-year and reliability greenfield confidence in increased figure new October. of and existing a than We to introduced even speeds. of superior are and taking as higher ARPU HSD believe will to the ARPU upgrade more to in our speeds. XX% including faster our increase driven markets. last new quarter's $XX.XX, that rate

Our our vintages. positive expansion show strategy and momentum, continues build results in to especially recent most

our early which reported XX.X%. penetration XXXX in includes Our greenfield Florida, an rate market vintage, up Central new

XX.X%. be with And a particularly Our XX.X%. XXXX vintage rate showing vintage constant is its rate continues XXXX with penetration at XXXX edge-out to strong of increased XX%. staying vintage The penetration promise to early rate the penetration edge-out

As our have in business engine said our to and ability markets. those markets our in our for in supports growth of before, further quickly performance an we expansion confidence remains grow new strategy the

I spend couple like greenfield the Now, would minutes on of an update next to initiatives. expansion providing our

and we're significant progress as passed achieving last the months. market, reception homes Florida, X said making rate XX.X% quarter, of have of we a fantastic seen in we As than X,XXX in penetration March XX, less in Central where

I'm effort In January driving our first our customer particularly of fact, XX, we our progress team with this momentum. exceptional and considering added proud pleased on that of the

We expect the to of pace the increase year. passed adding throughout significantly homes

bring in well services advancing additional begin is we where We communities. Construction near first underway County, continued several to out also new providing areas XXX,XXX by in Carolina, footprint have in Central build in The state-of-the-art fiber the consumers our the Greenville of to passed progress to commitment communities South to network construction XXXX. to phase in expect these new service with homes in Florida our represents our reliable future. markets

the initial strategy are from are this cash our And low strong. about doing all of fiber enables of which leverage our to We with remain aspects new us core importantly, profile. returns edge-outs. and The we markets operations, maintain greenfield in our excited

over call to over more results the financial turn who John, go I'll in detail. Now will our

John Rego

XXXX to good Thanks, off is Teresa. a start.

a full revenue reflects in and of the revenue $XX.X margin higher to as X.X% base year-over-year low speed X.X% Construction reflect revenue largely as X.X last grow programming ratio, decreased decreased the million, is percentage a business our puts our which the In impact year the the along spending moving HSD, from a quarter, are increase and rate a by but applied this into year. March. our higher period to timing to mix to year effect markets. in the favorable total due us sequential increase with business Our of respectively. The our was largely year to to cost existing whilst increase rate upfront initiatives well operating the well video decline execute further great high-speed new last increases, quarter Adjusted million, which a in fantastic and reduction to and last same decreased upgrading maintaining our to X.X% year-over-year. The strong in a grow. results seeing driven X% to from incremental as expected expansion and by HSD the of corresponding expansion in contribution contribution continues plans. XX.X% shift increased effect tiers. in $XXX.X initial pace, customers revenue points continues the increase revenue data is our We're video The reflecting EBITDA coming at of took to period position leverage XX.X% on towards same this to increased portion a in high-speed core follow first to data on only. in we telephony last to costs The The increase quarter's as in base quarter. continue from Incremental total a customers shift from proportion same continued HSD inflation. related later which sequentially, January, revenue greater higher period margin new

alignment progress a divestiture the areas. for our following of service cost X Now update the on structure

to to by hit of $XX.X of We XXXX. on be pace continue target our end the million

to pace Although the reduction we our cost as shift tempered been expansion new somewhat has markets. count into of head

our we savings savings, be the approximately of We've leverage next environment. We years. of at We quarter on from for we million last reduction $XX.X to over these $XX.X the made XX% million, reported of tremendous as equate the diligent total the of realizing quarter, million, total cost $XX.X spend of few capital outstanding and total higher with debt ended inflationary ratio year. manage million million and up X.Xx. $XX $XXX.X we'll to our which with continue costs identified represents despite the As progress $XX.X total cash first million

first to on this million greenfields, on million $X.X and to core XX.X% in the greenfields business at million Florida Our services. heavily we fiber at edge-outs $XX.X Carolina. the of homes in growth continue South on In the CapEx an efficiency spent CapEx on throughout remained the quarter. level year. $XX.X trend additional increased Central to Greenville, first Expansion CapEx and spend quarter, million will $X.X as bring our and future continue Expansion invest we

$XX our in $XX.XX at flow, which for paid plans progress million on right the XX-Q as down and I'd over $XX.X a the price that we and to authorization. And the we million slide, call cash lawsuit $XX new not through at share be for our Since for end litigation markets. In higher including program the quarter, QX does the will repurchased we average $XX.X in we unlevered to in our full and second of the our an excited impact shares on for This provide million, decreased predominantly like primarily we finally, expansion paid free side any QX repurchase million million we less million and that X in million, million from spend define of in the per the program morning, approximately first years. share. the remainder and This X.X greenfields. settled approximately inception remain questions, about XXXX. we've $X adjusted quarter CapEx, Looking the expansion quarter, EBITDA outlook $XX.X was This first open the for driven repurchased of our way, by of shares results adjusted totaling XXXX before X.X year. the May $XX million our of XXXX disclosed infringement next patent

$XXX For million $XXX the be $XX and $XXX million, between between million to and second $XX be $XXX revenue be quarter, EBITDA total revenue we to expect between and and HSD to million. adjusted million million

momentum negative in maintaining our full business are and year We to additions new X. markets. base between We're and our strong in as be guidance also progress significant seeing expect X,XXX HSD we net

For $XXX $XXX million million revenue year, $XXX $XXX be we million, between expect and and be between related HSD million, to be $XXX continued market to adjusted between investments to total and expansion. EBITDA the to revenue million full and $XXX million reflecting

expect year. In closing, for the add more X,XXX and between throughout we add passings solid this to fiber-to-the-home HSD quarter. as another year We XX,XXX the RGUs was

the up growth line for strategy, our commitment strong. And our and prospects our we'd our to in hold our to and shareholders conviction open questions. now some Our like customers

Operator

first Your Instructions] line from [Operator the with Frank Raymond Louthan James. of question is

Frank Louthan

Great.

again subscribers subs? year you down So of going subscribers through you've a of build the to you're been can hitting Maybe significant calling you of Can the half is. are in in active in kind results down through couple midpoint been And the quarters, or that that's seeing of to inflection positive going homes also us couple the years, but pretty flat. the guidance. just in talk to better why reported last for the QX. us for the And and last cause mode that back in walk you've what's you of the get

Teresa Elder

Thanks, Yes, things. a of Frank. couple

homes did quarter, all, There passed although, out with the this are on for are units that starting past the built some every passed always than add kind that both were multiple greenfield homes so and originally of that we areas. where there had We some to homes of First of dwelling overall adjustments in maybe course, some was edge-outs cleanup of flat fewer were the done planned. often.

kind all netted that of that So out.

passed. of you're of into that we before build go build you we walkout the in the course, actually homes why activated on process, seeing deliver process charts, that and the terms that's did been we've what dynamic of permitting all things the have actually you show homes But building. And passed. So the the on and

really is off. there take seeing and machine the time, ramp-up that start So we're to

experienced this we to well as the connects, as trends seeing our at as as new in year, with look very the for low at fourth significant tactics we that's quarter we're would start demand as well we But build quarter. And So continues be in The we churn saw the see macroeconomic to seeing WOW!. just we're be macroeconomic adds with compared of and of in on better. well, subscribers new really to greenfield, well as am I as the bit that be just that going we're the that legacy base those on to legacy really net I side where local we to loss homes those say, force, continues soft a that pleased in of off conditions. as improvement as the might something getting they look half come the back the at improvement some take within business as to

So does that Frank? question, answer your

Frank Louthan

you're So confidence what business? in that seen see And to use homes of going what you so tactics the haven't we the to growth are the legacy that the sort the that going the coming on are far? to tide gives explosion of new turn

Teresa Elder

the little the really with pickup. year some at that are we fast, in reliable we're Yes. can And to seeing seeing we one of We softness localize has find that soft last of connect really out our for with Well, bit what WOW! compete customers. there is the that do so we're the best although well whole that is or we many network strategies. at with the just a our things the of offerings that seems well been have, economy, prices extremely of resonate

even the of seen the quarter, we've first beginning the of a second end little bit at quarter the and So some very upticks.

with edge-out get in seeing pops as good legacy where greenfield selected areas about pleased we very of we and the seen, very you've the we So business. And feel quickly. that these penetration for have that incredible both can

Florida, we're for seeing The January mid-February. started in Alabama, we XX.X%, already there XX. that Headland, Central So penetration started that XX.X% we example, in just

the very those markets. those we're are that we're reaction quick So with results seeing pleased and in

as why sales. of I So that's confidence execute driving ability have in a well buildings to lot our as both

Frank Louthan

And cable you there? you Okay. main in win? the Great. what's that bundles throwing -- What the overarching competitors is you're that would not look Is you and it factor winning competitive when don't the a you when sort when sort helpful. factor? That's customer wireless -- the at say are of of

Teresa Elder

Yes. I would win. say head-to-head, usually we

perhaps just market. the just really switch to or fewer if it's be So customer in factor to a choosing continues our wireless not is moves. Fixed there's

So of close we have are in our customer, be say successful I to the we front opportunity a very rates. would if with

Operator

Your from is next line B. with question Riley Day Dan the Securities. of

Daniel Paul Day

you wages? seeing related there where dig Is else to from you mentioned inflation. in an business operating core little just costs it John, inflation Maybe So just higher if there Is a in inflation? the more that in just anything you're perspective? has that could you exactly OpEx been hitting

John Rego

it's we board. [ -- one. No, we so that got nothing mean the of little average pricing year, across dramatic. of bit course, national increase, have A the increases ] I every merit

at bigger year or looking I really things spend greenfield. year last relating if think year versus EBITDA upfront OpEx the to and of cost versus introduces we're we this is an more last see, upfront

stuff not we get capitalized go lot of campaign. the a end. marketing you a remember, that a So do front do have on you like Blitzkrieg into There's market, to does

what increases seeing. pricing in Slight of raises. and some we're annual that's So

that's the pressure. inflationary So

Daniel Paul Day

you revolver in Okay. And it the looks pulled the like quarter. then on

it Just part decision I'm about the influenced talk up. it know CapEx just by to now. litigation. the don't of assuming the patent is is settlement that the do ramping if greenfield I of was

to over there? amount plan any the next really couple quarters? is And commentary Just pull of that full the

John Rego

so the levered. at My again, X.Xx levered. we big -- X.Xx was mean X.Xx I not. at levered. it's debt, we below to to were first When X.Xx us did No, keep we in commitment are reduction

intention. So that's not the

spending $XX on a million. authorized same which going greenfield. got The heavily repurchase the the the authorized Board program, we've couple We're on we share of at doing So things time.

that litigation. almost quarter, $XX realize of you million got the we're And the the we at end done. So you were Sprint

to So drawing plan. if that -- think put on not the not that down levered, total, keep that's I the nothing intention X.Xx is us up to just to it I which but take did, its at

Operator

the line from question KeyBanc. Brandon next with Nispel Your is of

Brandon Nispel

a when Following revenue, at you revenue the HSD subscribers. obviously. guide, first on EBITDA look more need versus million question, you you you of get needs running HSD your $XXX $XX my the little to million to in the to $XX And quarterly run quarterly expect less you bit million based HSD to guide in minus get second to $XXX quarter X,XXX EBITDA versus than and HSD a quarter need million. the versus adds up specifically this rate that ramp you're at get to about talk half, on and On math, net versus half Frank's in X,XXX, can a need

you more and just in guidance guide appreciate would year. be sort end how of low shouldn't to bit this terms expecting point this little at detail I of of So the your we get why the a

John Rego

Yes.

being So, massive [ as -- homes There a ] we is are speak. homes are Frank the new the built ramp.

about So if towards initiative. greenfield we million $XX spent think -- you in we the today QX disclosed

minimis initiative higher that from a where factors competition very remember, a of we just looked were when So penetration of very we've service quickly was sell homes large of at price. back you. at, And be next there handpicking the to thousands very, more small good with sell will to built a coming we that we that very providing the principal and homes but and into report of seen. myriad whole ability we those one factors rates there the into are are think did as pace, as into tens quarter player player the new greenfield the is markets maybe de to at homes The

numbers. that built we're So we in our going greenfield what fiber seen to edge-out based really on in we've markets those hit comfortable the and feel markets

the think and what I is So going for happen back and year, sure. big have see going yes, that's that's right, a we to to what of you're half you're modeled

Brandon Nispel

on just when I tens new looks lose XX,XXX XX,XXX? business and When in back can terms just say address reported greenfield John, or talking core I And mean, XX,XXX the continues numbers, of are additions it follow of edge-out core talking like or HSD we thousands we out the subscribers. business are you homes, about of to adds? we net from about the up you can greenfield that. XX,XXX, then

as when can you some turn on provide will that So color well?

Teresa Elder

I team Just Maybe jump in we can let little, -- feel John, into it. and -- then me a tag

the we're quarter, get second the machine to passed. in think I deliver homes really starting to So those rolling

be XX,XXX mark think -- ramps quarter. homes at second I for working that we close Keep So passed. markets, cumulatively, there. really will then mind, multiple to from that one be in could delivering not just And it we in

the subscribers. I is So them the ramp you year significant, course, see that, with will penetration of think all for and that the following

number feel we So we been our there with legacy said, that. With of and a also within progress doing good the are that offerings. a lot that pleased we've markets about with making

But going in is great from have more So continued getting it I'd we're growth, a and ARPU has to the come reception of low we're very legacy everything efficient to say, local clearly, terms doing at just while to new effectively churn grow in most upside where we seeing markets, the compete and of the basis. continue from just markets of really very in customers. these

Operator

today's over to Thank call you. now I for Teresa Elder will closing any remarks. back hand

Teresa Elder

support WOW!. appreciate great much your day. Have continued and you, and joining and all us, interest a of Thank I you for thank so

Operator

call. concludes This Thank joining. today's you for

You disconnect lines. your may now

WideOpenWest (WOW) 4 May 232023 Q1 Earnings call transcript