WideOpenWest - Earnings Call - Q3 2025

Executive Summary

• Q3 2025: Revenue $144.0M (-8.9% YoY), Net Loss $35.7M, Adjusted EBITDA $68.8M (47.8% margin); revenue slightly beat S&P Global consensus while normalized EPS slightly missed. Revenue estimate $142.94M vs actual $144.0M; Primary EPS estimate -$0.157 vs actual -$0.164 (normalized)*.
• Greenfield fiber build momentum: 15.5k homes passed and ~2.5k subs added; total greenfield homes passed 106.6k at 16.0% penetration, sustaining strong uptake despite rapid footprint growth.
• Mix shift away from video accelerated: video revenue fell to $16.9M (from $28.0M YoY) and programming expense dropped by $8.3M, supporting margins despite RGU declines.
• Leverage/liquidity: Net leverage 3.7x LTM Adj. EBITDA; cash $22.9M; revolver maturity extended to June 30, 2027 (and to Sept. 11, 2028 upon closing of take‑private).
• Catalyst: Pending $5.20/share take‑private by DigitalBridge/Crestview continues to anchor trading and overshadow guidance/commentary; management did not provide forward guidance this quarter.

What Went Well and What Went Wrong

What Went Well

• Sustained greenfield adoption: added 15.5k homes passed and ~2.5k fiber HSD subs; greenfield penetration remained 16.0% while rapidly expanding footprint. “Maintaining our strong penetration rates as we continue to grow, demonstrates the strength of our strategy and the value we bring to our customers.” — Teresa Elder, CEO.
• Margin discipline via video transition: operating expenses fell $8.7M YoY, largely from $8.3M lower programming costs, aligning with video RGU reductions.
• HSD ARPU strength and customer metrics in expansion markets; CFO highlighted Adjusted EBITDA margins “nearly 48%” with operating efficiencies.

What Went Wrong

• Top-line pressure: total revenue down 8.9% YoY, driven by service mix shifting (−$10.6M) and volume declines (−$7.3M) across services; ARPU increases only partially offset.
• Subscriber erosion: net loss of 4.9k HSD RGUs in Q3; total subscribers fell to ~464.5k vs 469.6k in Q2 and 473.8k in Q1.
• Higher net loss and profit margin compression: net loss widened to $35.7M with net profit margin −24.8% vs −14.2% YoY, reflecting tax expense swing and continued interest burden.

Transcript

Andrew Posen (VP and Head of Investor Relations)

Good morning, everyone, and thank you for joining our third quarter of 2025 earnings call. Earlier this morning, we issued a press release with our financial and operating results for the third quarter of 2025, which is now available on our Investor Relations website. We also published a trending schedule with additional historic and financial and operating metrics. On August 11, 2025, we announced that WideOpenWest entered into a definitive agreement under which affiliated investment funds of DigitalBridge Investments and Crestview Partners will acquire all of the outstanding shares of Common Stock of WOW, not already owned by Crestview and its affiliates. In light of this pending transaction, we will not be making any comments on our results this quarter. However, we will take questions related to this morning's earnings release.

I am joined this morning by our CEO, Teresa Elder, and our CFO, John Rego, who are here to answer questions. I would like to remind everyone that we may make some forward-looking statements about our expected operating results, our business strategy, and other matters relating to our business. These forward-looking statements are made in reliance on the safe harbor provisions of the federal securities laws and are subject to known and unknown risks, uncertainties, and other factors that may cause our actual operating results, financial position, or performance to be materially different from those expressed or implied in our forward-looking statements. You are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update such forward-looking statements.

For additional information concerning factors that could affect our financial results or cause actual results to differ materially from our forward-looking statements, please refer to our filings with the SEC, including risk factors section of our Form 10-K and most recent Form 10-Q filed with the SEC, as well as the forward-looking statement section of our press release. In addition, please note that on today's call and in the press release we issued this morning, we may refer to certain non-GAAP financial measures. While the company believes these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations between GAAP and non-GAAP metrics for our historical reported results can be found in our earnings releases and our trending schedules, which can be found on our website.

Operator, are there any questions in the queue?

Operator (participant)

Yes, we do have one question from Frank Luouthan at Raymond James.

Frank Louthan (Analyst)

Great. Hey, thank you. When you guys are looking out in the market, where are you seeing competition from? Who's kind of reared up? Is it more fixed wireless? Is it the cable companies or fiber? I mean, how should we think about who you guys are up against? I'm talking more about in your legacy markets versus the greenfield builds. Thanks.

Teresa Elder (CEO)

Thank you, Frank. Yes, this is Teresa. In our legacy markets, we have been, since the day we first started at WOW, a challenger brand. We really challenge the cable companies. Comcast and Charter are our primary competitors in our legacy markets. We certainly also have competition from fixed wireless. What we have seen, though, in this last quarter is that we've been able to have strong HSDR pool growth, and our churn is near record lows. We are very pleased with how we continue to compete in our markets. In greenfield, we actually have been on a tear. We are also competing with the traditional cable companies, new fiber entrants, as well as fixed wireless. In those markets, we've added over 15,000 homes in this last quarter, bringing our total greenfield homes to 106,000. The penetration keeps growing at a robust rate.

We're maintaining that 16% in greenfield, even though we're adding so many homes. Also, in legacy, of course, we have long had an edge-out strategy, and we added another 3,700 homes in our legacy markets. The 2025 vintage is already near 30%, and the former vintages also continue to perform extremely well. That information is in our trending schedule. It is somewhat the same mix of characters, but I think customers really resonate with our no contract, no data caps, reliable network, high speed, and the very best value with our simplified pricing. That mix has continued to work for us.

Frank Louthan (Analyst)

All right. Great. Are Charter and Comcast really leaning into their mobility product? I mean, is that their main thrust of their marketing in your territories, or is it something different that's having them get a little bit more traction?

Teresa Elder (CEO)

You probably have to ask them. I would just say it looks like they're doing a lot of national advertising that's consistent within our markets as well, emphasizing mobile. We have found that the simple approach that we've had with all-in pricing with an optional price lock has really cut through. Customers don't have to be confused by how many mobile lines versus this versus that they have to have with WOW. You always get that same clear value at high speeds without having a bunch of other strings attached.

Frank Louthan (Analyst)

Great. Okay. Thank you very much.

Teresa Elder (CEO)

Okay.

Operator (participant)

There are no further questions.

Teresa Elder (CEO)

Perfect. Thank you so much. As always, we appreciate all of you joining our call. As always, I would like to thank the people of WOW who continue to wow our customers every day and provide the value to our customers. I appreciate the time on this call this morning. Thank you.

Operator (participant)

This concludes today's conference call. Thank you for your participation. You may now disconnect.