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WI

WideOpenWest, Inc. (WOW)·Q3 2025 Earnings Summary

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 .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$150.0 $144.2 $144.0
Net Loss ($USD Millions)$13.9 $17.8 $35.7
GAAP EPS ($USD)-$0.17 -$0.22 -$0.43
Adjusted EBITDA ($USD Millions)$76.7 $70.3 $68.8
Adjusted EBITDA Margin (%)51.1% 48.8% 47.8%
Operating Expenses excl. D&A ($USD Millions)$59.0 $55.2 $53.9
SG&A ($USD Millions)$31.5 $35.9 $38.1
Depreciation & Amortization ($USD Millions)$50.8 $50.7 $49.7
Net Profit Margin (%)-9.3% -12.3% -24.8%

Segment revenue breakdown:

Segment Revenue ($USD Millions)Q1 2025Q2 2025Q3 2025
HSD$105.4 $104.8 $106.6
Video$22.9 $18.5 $16.9
Telephony$10.2 $9.6 $9.5
Other Business Services$4.9 $4.9 $4.9
Other$6.6 $6.4 $6.1
Total$150.0 $144.2 $144.0

KPIs:

KPIQ1 2025Q2 2025Q3 2025
Homes Passed1,977,600 1,997,100 2,018,800
Total Subscribers473,800 469,600 464,500
HSD RGUs465,900 462,000 457,100
Video RGUs48,900 42,500 40,000
Telephony RGUs69,200 67,000 65,300
Total RGUs584,000 571,500 562,400
Greenfield Homes Passed (‘000)75.6 91.1 106.6
Greenfield Penetration (%)16.3% 16.0% 16.0%

Actual vs S&P Global consensus:

MetricQ1 2025 EstimateQ1 2025 ActualQ2 2025 EstimateQ2 2025 ActualQ3 2025 EstimateQ3 2025 Actual
Revenue ($USD)$148.17M*$150.0M*$143.62M*$144.2M*$142.94M*$144.0M*
Primary EPS (Normalized, $USD)-$0.192*-$0.0144*-$0.185*-$0.0561*-$0.157*-$0.164*
# of Estimates (Revenue)4*—4*—3*—
# of Estimates (EPS)4*—4*—3*—
Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
Total RevenueQ2 2025$141.0–$144.0M $144.2M Raised/Beat top end
HSD RevenueQ2 2025$101.0–$104.0M $104.8M Beat top end
Adjusted EBITDAQ2 2025$65.0–$68.0M $70.3M Beat
HSD Net AddsQ2 2025(6,500)–(4,500) (3,900) Better than guided loss
Company GuidanceQ3 2025Not provided (pending transaction) Not provided Maintained suspension

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Competition landscapeChallenger vs cable; focus on ARPU/churn improvements Cost base lower via video; record HSD ARPU, low churn Competing vs Comcast/Charter, fiber entrants, fixed wireless; churn near record lows Stable competition; WOW positioning resonates
Greenfield expansion75.6k homes passed; 16.3% penetration 91.1k homes; 16.0% penetration 106.6k homes; 16.0% penetration Rapid build, stable penetration
Pricing/ARPU strategyRecord ARPU; simplified value proposition Record HSD ARPU highlighted “All‑in pricing” and optional price lock cutting through vs competitors Consistent ARPU strength
Video transition & costsProgramming expense reductions Programming expense −$9.2M YoY Programming expense −$8.3M YoY Ongoing mix shift; cost relief
Liquidity & leverageNet leverage 3.4x; cash $28.8M Net leverage 3.5x; cash $31.8M Net leverage 3.7x; cash $22.9M; revolver extension Slight leverage up; extended runway
M&A/take‑privateProposal update (Special Committee) Signed $5.20 offer; revolver extension Pending acquisition reiterated; guidance suspended Transaction dominates narrative

Management Commentary

  • “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 .
  • “Our results this quarter reflect strong HSD ARPU, Adjusted EBITDA margins of nearly 48% and great customer metrics in our expansion markets…” — John Rego, CFO .
  • On competition and positioning: “Customers really resonate with our no contract, no data caps, reliable network, high speed, and the very best value with our simplified pricing.” — Teresa Elder .

Q&A Highlights

  • Competitive landscape: Primary competitors are Comcast and Charter in legacy markets; competition also includes fixed wireless and new fiber entrants. WOW emphasized low churn, strong HSD ARPU, and simplified “all‑in pricing” vs bundled mobile plays from incumbents .
  • Guidance/commentary: Due to pending take‑private, management refrained from broader commentary and did not provide guidance this quarter .

Estimates Context

  • Q3 revenue beat consensus (actual $144.0M vs $142.94M estimate); normalized EPS modest miss (−$0.164 actual vs −$0.157 estimate) with three covering estimates. EBITDA consensus ~$70.5M vs SPGI “EBITDA actual” ~$52.2M*, while WOW reports Adjusted EBITDA $68.8M — definition differences matter . Values retrieved from S&P Global.*
  • Prior quarters showed similar pattern: revenue slightly above consensus; normalized EPS better than expected in Q1 and Q2*, suggesting sell-side may reassess mix-shift impacts and ARPU strength.

Key Takeaways for Investors

  • Greenfield growth remains the core driver: footprint expanded to 106.6k homes with 16% penetration, supporting medium-term revenue stabilization even as legacy RGUs decline .
  • Mix shift away from video is structurally reducing programming costs (−$8.3M YoY in Q3), sustaining margins despite top-line pressure; expect continued video declines to aid opex .
  • Adjusted EBITDA margins remain high (47.8%) but trending down from Q1 peak as subscriber losses and capex ramp weigh; monitor margin trajectory into Q4 .
  • Leverage at 3.7x LTM Adj. EBITDA with cash $22.9M; revolver extension provides liquidity runway ahead of anticipated transaction close .
  • Near-term trading likely anchored by $5.20/share take‑private; operational beats/misses may have limited stock impact unless transaction risk emerges .
  • Revenue resilience vs consensus and persistent ARPU strength suggest estimates may need modest upward adjustments on revenue, while normalized EPS could remain pressured by interest and tax expense swings* . Values retrieved from S&P Global.*
  • No forward guidance provided due to transaction; use internal KPIs (greenfield build rate, penetration, HSD RGU trends) and cost line items (programming, SG&A) to track execution .

Notes: EBITDA comparisons reflect differing definitions (SPGI “EBITDA” vs company “Adjusted EBITDA”); anchor margin assessments on company-reported Adjusted EBITDA and reconciliations .