WOW(US:WOW)2023-08-08 16:04Financial Data and Key Metrics Changes - Total revenue decreased by 2% year-over-year to $172.6 million, driven by a 4% increase in high-speed data revenue and declines of 12.8% and 6.2% in Video and Telephony, respectively [25][31] - Adjusted EBITDA decreased by 3.5% year-over-year to $68.1 million, with an adjusted EBITDA margin of 39.5% [26][27] - High-speed data ARPU increased to a record $70, reflecting the impact of rate increases and higher data speed purchases [17] Business Line Data and Key Metrics Changes - High-speed data revenue increased by 4%, now comprising 62% of total revenue, up from 58% in the same period last year [25][27] - The Video business continued to decline, with expectations for this trend to persist as customers shift to streaming services [14][25] - The company lost 900 high-speed data RGUs in Q2, which was better than expected, resulting in approximately 508,000 high-speed data subscribers by the end of the quarter [13] Market Data and Key Metrics Changes - The company added 16,900 new homes passed in both Greenfield and Edge-Out areas, significantly exceeding the total from the last three years combined [8][18] - Penetration rates in new markets are strong, with the 2023 vintage of Edge-Outs at 23.4% and Greenfield markets averaging 30% penetration within 30 days of launch [20][21] - Nearly 94% of new customers in new markets are purchasing speeds of 500 meg and above, indicating strong demand for higher speeds [16] Company Strategy and Development Direction - The company is focused on market expansion, aiming to build 400,000 fiber Greenfield homes by 2027, and transitioning to a broadband-first model [7][23] - The partnership with YouTube TV is a strategic move to transition from low-margin video services to a high-margin streaming service, enhancing customer value and operational efficiency [10][12] - The company is on track to surpass 50,000 new homes passed in 2023, reflecting confidence in its expansion strategy [21][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing transformation and the positive impact of the YouTube TV partnership on subscriber growth and ARPU [23][35] - The company anticipates mid-single-digit EBITDA growth in the near future, driven by successful market expansion and improved operational efficiencies [37] - Management acknowledged the challenges posed by the transition to YouTube TV, which will initially lower total revenue but is expected to enhance EBITDA margins over time [32][33] Other Important Information - The company reported a net loss of $101.7 million due to a non-cash impairment charge related to stock price decline, which does not affect operational capabilities [31] - Total cash at the end of the quarter was $23 million, with total outstanding debt of $868.1 million and a leverage ratio of 3.1 times [29] Q&A Session Summary Question: Discussion on base business performance and promotions - Management noted improvements in the legacy base, with a net loss of only 1,300 RGUs without Greenfields, and highlighted the positive impact of YouTube TV on HSD net adds [39][40] Question: Details on price increases and ARPU growth - The company implemented rate increases in March and July, with the majority of the base affected in July, contributing to ARPU growth [43][44] Question: Insights on Greenfield market success and future plans - Management expressed confidence in the market selection criteria and the successful execution of their playbook, with plans to pass 50,000 homes this year [48][50]