WideOpenWest (WOW) 8 Aug 24 2024 Q2 Earnings call transcript

In the second quarter of 2024, WideOpenWest (WOW!) held its earnings call, providing insights into its financial performance and strategic initiatives. Key executives, including Teresa Elder, CEO, and John Rego, CFO, discussed the company's results and future outlook, offering valuable information for investors and industry analysts.

Financial Performance

WOW! reported a decrease in HSD revenue of 1.6% year-over-year, attributed to the loss of subscribers due to the ending of the ACP program. Adjusted EBITDA increased by 2.8% year-over-year, reaching $70 million, with an adjusted EBITDA margin of 44.1%, up from 41.5% in the previous year. The company has achieved its target of $35.5 million savings ahead of schedule.

Expansion and Growth

WOW! has made significant progress in expanding its fiber footprint, with the addition of 7,000 new homes in Greenfield markets and 1,900 new homes through Edge-Outs. The company's efforts to increase penetration rates in these areas have been successful, with Greenfield markets seeing a nearly 3 percentage point increase in penetration rates to 15.4%. The Edge-Outs have also shown promising results, with the 2024 vintage increasing to 38.6%, up from 32.6% in the previous quarter.

Challenges and Strategies

The company has faced challenges due to the ending of the ACP program, which led to a net loss of 4,700 high-speed data subscribers. However, WOW! has introduced strategies such as speed upgrades, simplified pricing plans, and partnerships like YouTube TV to mitigate these losses and strengthen its subscriber base. The success of these initiatives has given the company confidence in its ability to manage its legacy footprint effectively.

Looking Ahead

For the third quarter, WOW! expects HSD net adds to be between negative 5,000 and negative 3,000, with HSD revenue projected to be between $106 million and $109 million. The company anticipates a reduction in capital spend on expansion initiatives, which could potentially lower HSD subscriber numbers in these markets. Despite these challenges, WOW! remains optimistic about its future, focusing on expanding its fiber footprint and leveraging partnerships to drive growth.

Key Takeaways

WOW!'s earnings call highlighted the company's strong focus on fiber expansion and cost reduction strategies, which have contributed to its financial success. The company's ability to manage the impact of the ACP program and maintain low churn rates demonstrates its resilience in the face of market challenges. WOW!'s strategic initiatives, including simplified pricing plans and partnerships, position the company well for continued growth in the evolving broadband landscape.