WOW(US:WOW)2019-08-03 13:49Financial Data and Key Metrics Changes - Total revenue for Q2 2019 was $289.7 million, down 0.5% year-over-year [15][23] - Adjusted EBITDA for Q2 2019 was $108.9 million, up 6.6% year-over-year, with an adjusted EBITDA margin of 37.6%, representing a margin expansion of over 250 basis points year-over-year [16][23] - Net income for Q2 2019 was $9.4 million [23] - Total subscribers increased by 11,200 or 1.4% year-over-year, while total net HSD RGUs increased by 17,700 or 2.4% year-over-year [24] Business Line Data and Key Metrics Changes - Business Services subscription revenue grew 5.2% year-over-year, totaling $34.3 million in Q2 2019 [25] - HSD RGUs were up 2.4% over Q2 2018, but total subscribers declined by 1,200 in Q2 2019 [13][24] - Video RGUs decreased by 9,900 in Q2 2019, indicating a shift in product mix towards higher-margin HSD [24] Market Data and Key Metrics Changes - The company extended its network by more than 152,000 new homes passed as of June 30, 2019, through its Edge-Out initiative [14] - Edge-Out nodes from 2016 have achieved 33.5% penetration, while those from 2017 and 2018 have penetrations of 27.5% and 15.3%, respectively [26] Company Strategy and Development Direction - The company is focused on broadband as its lead offering, leveraging its fiber and hybrid fiber-coax infrastructure [10] - There is a commitment to enhancing customer experience and reducing churn, with record low churn rates reported [13][21] - The company is exploring various strategic alternatives but remains optimistic about its growth potential in existing markets [35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of major system changes on HSD growth but expressed confidence in future momentum [38] - The company adjusted its full-year guidance for HSD RGU growth to between 10,000 and 20,000 RGUs, and total revenue to be between $1.145 billion and $1.155 billion [30][29] Other Important Information - Employee voluntary turnover dropped below 15% on an annualized basis, reflecting improved employee satisfaction [18] - The company is focused on removing unnecessary service calls to enhance operational efficiency [19] Q&A Session Summary Question: Strategic options for creating value - Management remains optimistic about growth and churn rates, and is always considering various strategic alternatives [35] Question: Drivers of broadband growth weakness - Major systems changes impacted HSD growth, but management is confident about future momentum [38] Question: Programming costs and free cash flow growth - Programming costs are not reflected in current financials due to timing, and management sees no structural issues preventing free cash flow growth [45][46] Question: Declining video ARPU - Changes in video ARPU are attributed to revenue reallocation under ASC 606 and customer acquisition pricing [51][57] Question: Focus on video products - The company leads with broadband but continues to address customer demand for video products [67] Question: Edge-Out penetration differences - Penetration varies by market due to different investment characteristics, but management is optimistic about future growth [68]