Wideopenwest ((WOW)) has held its Q1 earnings call. Read on for the main highlights of the call.
WideOpenWest’s recent earnings call painted a mixed picture for investors, with notable successes in adjusted EBITDA and ARPU, alongside impressive fiber expansion in greenfield markets. However, these achievements were tempered by declines in high-speed data revenue, total revenue, and HSD subscribers, as well as a significant drop in traditional video subscribers.
Greenfield Market Expansion
The company reported significant progress in its greenfield market expansion, having passed an additional 13,700 homes, bringing the total to 75,600. This expansion has achieved a penetration rate of 16.3%, underscoring the company’s strategic focus on these markets.
Record Adjusted EBITDA Margin
WideOpenWest achieved a record adjusted EBITDA margin of 51.1%, with adjusted EBITDA increasing 13.8% year-over-year to $76.7 million. This reflects the company’s strong operational efficiency and cost management strategies.
High ARPU Achievement
The company reported a 3.7% year-over-year increase in ARPU, reaching a record high of $75. This indicates a successful strategy in maximizing revenue per user, contributing positively to the overall financial performance.
Successful Fiber Expansion Strategy
WideOpenWest’s fiber expansion strategy continues to yield positive results, particularly in greenfield markets. This strategic focus is proving to be a key driver of growth and competitive advantage.
Decrease in High-Speed Data Revenue
Despite the successes, high-speed data revenue saw a slight decline of 0.8% year-over-year, falling to $105.4 million. This decrease highlights challenges in maintaining growth in this segment.
Decline in Total Revenue
The company experienced a 7.1% decrease in total revenue for the quarter, dropping to $150 million. This decline was primarily driven by reductions in video and telephony revenue.
Decrease in HSD Subscribers
WideOpenWest lost 4,500 HSD subscribers during the quarter, reflecting ongoing challenges in subscriber retention and acquisition.
Traditional Video Business Decline
The traditional video segment saw a significant decline, with subscribers dropping 38% from the previous year to 48,900. This trend highlights the broader industry shift away from traditional video services.
Forward-Looking Guidance
Looking ahead, WideOpenWest provided guidance for the second quarter, anticipating high-speed data revenue between $101 million and $104 million, and total revenue ranging from $141 million to $144 million. Adjusted EBITDA is expected to be between $65 million and $68 million. The company also projects HSD net adds to be between a negative 6,500 and a negative 4,500. Despite these challenges, the company plans to invest $60 million to $70 million in greenfield expansions in 2025, demonstrating a commitment to long-term growth.
In summary, WideOpenWest’s earnings call highlighted a mix of achievements and challenges. While the company is making strides in greenfield market expansion and achieving record EBITDA margins, it faces headwinds in subscriber growth and revenue retention. The forward-looking guidance suggests cautious optimism, with strategic investments aimed at sustaining growth in the coming quarters.