WOW(WOW) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2024, high-speed data (HSD) revenue decreased by 3.5% year-over-year to $104.9 million, impacted by$ 1.9 million in revenue credits due to Hurricane Halide and Milton [9][17] - Adjusted EBITDA for Q4 2024 increased by 3.5% year-over-year to $73.7 million, with an adjusted EBITDA margin of 48.3% [9][18] - For the full year, high-speed data revenue decreased by 1.6% to$ 423.6 million, including $2.5 million in hurricane credits [10] - Total revenue for Q4 2024 decreased by 9.6% to$ 152.6 million, with video and telephony revenues dropping by 26.9% and 16.9%, respectively [17] Business Line Data and Key Metrics Changes - The company doubled its all-fiber footprint in 2024, passing an additional 31,500 homes, with penetration rates increasing from just under 10% at the end of 2023 to 16.6% at the end of 2024 in greenfield markets [8][11] - HSD subscribers decreased by 10,200 during the quarter, with approximately 5,400 losses attributed to hurricanes [13] - Traditional video business subscribers dropped to 60,600, a 33% decrease from the same period last year [15] Market Data and Key Metrics Changes - The company reported a high ARPU of $73.50, which increased by around 1% year-over-year despite a sequential decrease due to hurricane impacts [14] - The greenfield markets showed strong performance, with low churn rates and positive trends in ARPU driven by customer upgrades to high-value services [8][36] Company Strategy and Development Direction - The company is focused on expanding its greenfield fiber market, with plans to pass 400,000 new homes over the next few years [20] - A new super priority term loan of$ 200 million was secured to support this expansion strategy [20] - The transition to YouTube TV is expected to continue, with significant growth in subscribers [16][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory for 2025, highlighting improvements in customer acquisition and retention strategies [35][49] - The company anticipates continued competition in the market but believes its pricing strategies and service offerings will help maintain customer satisfaction and reduce churn [37][40] Other Important Information - Total capital spend for Q4 2024 was $51.7 million, down from the previous year but up from the last quarter, primarily due to hurricane remediation efforts [21] - The company expects to spend between$ 60 million to $70 million on greenfield expansion CapEx in 2025 [22] Q&A Session Summary Question: Confirmation on acquisition proposal engagement - Management stated they have no updates regarding the unsolicited acquisition proposal from DigitalBridge and Crestview Partners [27] Question: Liquidity from new financing and CapEx goals - The company confirmed that the$ 200 million financing provides significant liquidity, with an additional $175 million available in 2025, which will support their expansion goals [30] Question: Anticipated broadband subscriber losses and competition - Management acknowledged competition but noted improvements in customer retention and ARPU, particularly in greenfield markets [36][37] Question: Performance of mobile product and convergence strategy - The company has a mobile product but does not prioritize it as aggressively as peers, focusing instead on reliable high-speed internet offerings [39] Question: Clarification on adjusted EBITDA and nonrecurring fees - Management explained that nonrecurring professional fees are part of their ongoing business strategy and are expected to decrease after 2025 [44][46] Question: Outlook for HSD net adds - Management is optimistic about regaining customers affected by hurricanes and expects improvements in HSD net adds for the full year [50][52]