WOW(US:WOW)2024-03-13 13:59Financial Data and Key Metrics Changes - High-speed data (HSD) revenue for Q4 2023 was $108.7 million, up 1.5% year-over-year, while total revenue declined by 6.5% to $168.8 million due to drops in video and telephony revenue [9][22] - Adjusted EBITDA for Q4 2023 was $71.2 million, a decrease of 4.6% year-over-year, but with a record adjusted EBITDA margin of 42.2% [9][22] - For the full year, HSD revenue increased 4.4% to $430.4 million, while adjusted EBITDA declined by 1.7% to $275.4 million, with an adjusted EBITDA margin of 40.1% [10] Business Line Data and Key Metrics Changes - HSD revenue now constitutes 64% of total revenue, up from 59% in the same period last year, indicating a shift towards higher-margin services [22] - HSD average revenue per user (ARPU) reached a new high of $72.90, with expectations for further increases in 2024 [16] Market Data and Key Metrics Changes - The company passed 48,400 new homes in 2023, with 30,400 in Greenfield markets and 18,000 in Edge-outs, marking the most robust quarterly expansion in its history [10][11] - Penetration rates in Greenfield markets decreased to just under 10% in Q4 due to increased homes passed, but cohorts showed strong penetration rates averaging over 20% within the first six months after activation [18] Company Strategy and Development Direction - The company is focusing on market expansion and has seen positive early indicators in legacy markets to stabilize subscriber losses [8] - A simplified pricing model with no data caps and price locks has been introduced, which has been well received by customers [14] - The partnership with YouTube TV is expected to enhance content offerings and capitalize on the shift to video streaming [17] Management's Comments on Operating Environment and Future Outlook - Management noted that subscriber losses in Q4 were in line with expectations due to a challenging macro environment, but improvements are anticipated in Q1 2024 [13][32] - The company expects HSD subscribers to decline between 2,000 and 500 in Q1, a significant improvement from Q4 [33] Other Important Information - The company ended Q4 with total cash of $23.4 million and total outstanding debt of $934.5 million, with a leverage ratio of 3.3 times [26] - Expansion capital expenditures increased by $26.3 million year-over-year, with a focus on future growth [27] Q&A Session Summary Question: Guidance on improved broadband subscriber trajectory in Q1 - Management indicated that Q4 results were unusual due to a large rate increase and significant promo roll-offs, and they expect improvements in Q1 due to new strategies [34][35] Question: ACP program exposure and churn mitigation - The company has 30,000 customers on the ACP program, with 99% opting to continue services post-program, indicating confidence in subscriber retention [38] Question: Competitive landscape regarding telco fiber overlap - Management acknowledged some telco overlap but expressed confidence in competing effectively in those areas [40] Question: Subscriber losses versus new builds - Management noted that while there are losses in legacy markets, they are seeing improvements and expect a reversal of trends [46][47] Question: Customer churn reasons and competitive pressures - The majority of churn is to larger competitors like Comcast and Charter, but management is implementing strategies to reduce churn [50][51] Question: Liquidity position and CapEx plans - The company plans to be free cash flow positive for the full year, with reduced discretionary spending on expansion capital [64][66]