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WI

WideOpenWest, Inc. (WOW)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $152.6 million ($0.153B), down 9.6% year over year and down 3.4% sequentially; adjusted EBITDA rose 3.5% YoY to $73.7 million with a 48.3% margin as WOW continues to migrate off legacy video and drive cost efficiencies .
  • HSD revenue was $104.9 million (−3.5% YoY), including ~$1.9 million hurricane credits; net loss improved to $(10.6) million (net margin −6.9%) vs $(43.5) million in Q4 2023 .
  • Greenfield fiber expansion passed 31,500 new homes in 2024; penetration reached 16.6% by year-end (down from 17.5% at Q3 due to denominator growth), while Edge-out 2024 vintage achieved ~39.8% penetration .
  • Liquidity strengthened via a new Priority Credit Agreement; total debt was $1,017.4 million, cash $38.8 million, net leverage 3.5x LTM adjusted EBITDA; Q1 2025 guidance: revenue $147–$149 million, adj. EBITDA $72–$74 million, HSD net adds −6,000 to −4,500 .
  • S&P Global Wall Street consensus for Q4 2024 EPS/Revenue was unavailable at time of writing; estimate comparisons could not be verified (SPGI daily limit) [Values retrieved from S&P Global unavailable].

What Went Well and What Went Wrong

  • What Went Well

    • Adjusted EBITDA growth and margin expansion: Q4 adj. EBITDA $73.7 million (+3.5% YoY), margin 48.3% (vs 42.2% LY), driven by restructuring away from video and operating efficiencies . Quote: “Adjusted EBITDA of $73.7 million increased 3.5% year-over-year with an adjusted EBITDA margin of 48.3%” .
    • Expansion momentum: 2024 greenfield build passed 31,500 new homes; Edge-out 2024 vintage ~39.8% penetration; ongoing fiber launches in Michigan and Florida .
    • ARPU resilience and churn improvement supported by simplified pricing and YouTube TV bundles; ARPU ~$73.50 YoY up ~1% in Q4, despite hurricane credits .

  • What Went Wrong

    • Top-line pressure: total revenue down 9.6% YoY; subscription revenue down 9.8% YoY on lower Video/HSD RGUs and volume; video RGUs fell 33% YoY to 60,600 .
    • HSD RGU losses: −10,200 in Q4, including ~5,400 from Hurricanes Helene/Milton; total subscribers fell to 478,700 .
    • SG&A spiked in Q4 (+26.9% YoY) due to legal/professional fees tied to financing and M&A-related activities; though full-year SG&A fell 22.7% YoY; integration/restructuring items elevated in non-GAAP bridge .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Total Revenue ($USD Millions)$168.8 $158.8 $158.0 $152.6
HSD Revenue ($USD Millions)$108.7 $105.0 $107.5 $104.9
Video Revenue ($USD Millions)$35.0 $30.8 $28.0 $25.6
Telephony Revenue ($USD Millions)$11.8 $10.7 $10.5 $9.8
Adjusted EBITDA ($USD Millions)$71.2 $70.0 $77.3 $73.7
Adjusted EBITDA Margin (%)42.2% 44.1% 48.9% 48.3%
Net Loss ($USD Millions)$(43.5) $(10.8) $(22.4) $(10.6)
Net Profit Margin (%)(25.8)% (6.8)% (14.2)% (6.9)%
Diluted EPS ($)$(0.54) $(0.13) $(0.27) $(0.13)

Segment breakdown (Revenue mix):

Segment RevenueQ4 2023Q2 2024Q3 2024Q4 2024
Total Subscription ($USD Millions)$155.5 $146.5 $146.0 $140.3
Other Business Services ($USD Millions)$5.3 $5.0 $4.5 $4.8
Other ($USD Millions)$8.0 $7.3 $7.5 $7.5

KPIs:

KPIDec 31, 2023Jun 30, 2024Sep 30, 2024Dec 31, 2024
Homes Passed1,932,200 1,956,700 1,952,200 1,962,100
Total Subscribers504,100 495,200 490,500 478,700
HSD RGUs490,100 485,000 480,600 470,400
Video RGUs90,800 71,600 66,300 60,600
Telephony RGUs79,500 75,700 73,700 71,600

Notes:

  • Q4 HSD revenue includes ~$1.9 million hurricane credits; full-year credits ~$2.5 million .
  • Business interruption proceeds of $1.5 million recorded in Q4 SG&A .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
HSD Revenue ($USD Millions)FY 2024$422.0 – $426.0 Actual: $423.6 Met (within range)
Total Revenue ($USD Millions)FY 2024$629.0 – $633.0 Actual: $630.9 Met (within range)
Adjusted EBITDA ($USD Millions)FY 2024$284.0 – $288.0 Actual: $288.4 At high end
HSD Net Adds (RGUs)FY 2024(19,500) – (16,500) Actual: (19,700) HSD RGUs Slightly worse than low end
HSD Revenue ($USD Millions)Q1 2025N/A$102.0 – $104.0 New
Total Revenue ($USD Millions)Q1 2025N/A$147.0 – $149.0 New
Adjusted EBITDA ($USD Millions)Q1 2025N/A$72.0 – $74.0 New
HSD Net AddsQ1 2025N/A(6,000) – (4,500) New

No guidance was provided on OpEx, OI&E line items, tax rate, or dividends.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Fiber Greenfield ExpansionQ2: 52.5k homes passed; penetration 15.4% . Q3: liquidity improved via $200m term loan; greenfield penetration 17.5% .31.5k homes passed in 2024; penetration 16.6%; continued new launches in MI/FL Building; re-accelerating with funding
Video Migration / YouTube TVQ2: Transition driving low churn bundles . Q3: record adj. EBITDA; decline in legacy video subs; YTTV bundle traction .Continued migration away from video; 60.6k video RGUs; YTTV supports churn reduction Structural shift; supports margins
Pricing & ARPUQ2: Simplified pricing, speed upgrades; ARPU up YoY . Q3: ARPU rose YoY & seq. .ARPU ~$73.50 (+~1% YoY); hurricane credits drove sequential dip Stable-to-improving ARPU
Competitive Landscape (Fixed Wireless/Fiber/Cable)Q2: Softening fixed wireless impact; speed upgrades .Mix of cable/fixed wireless competition; churn trending down with pricing and YTTV Manageable; churn down
Network Evolution (DOCSIS 4.0 vs FTTH)Not explicit in Q2/Q3; focus on fiber builds.Path to DOCSIS 4.0 in selected legacy markets; 3.1 everywhere; 1.2Gbps; targeted CapEx ROI Targeted upgrades; balanced with ROI
Liquidity & Capital PlanQ2: exploring funding; aiming ≤$60m greenfield CapEx . Q3: $200m super priority term loan; plan to spend +$10m Q4 .New Priority Credit tranches; potential additional $175m in Oct-2025; 2025 greenfield CapEx $60–$70m Improved liquidity; planned spend
External Events (ACP/Hurricanes)Q2: ACP drove −5k HSD; mitigation efforts . Q3: ACP impact −1.9k; hurricane impacts expected in Q4 .Q4: −10.2k HSD net loss incl. ~5.4k from hurricanes; $1.5m insurance proceeds Extraordinary items fading

Management Commentary

  • CEO perspective: “I am pleased with the progress we made in 2024, especially in our Greenfield markets where we passed an additional 31,500 new homes and increased our penetration rate to 16.6%” .
  • CFO on margins and restructuring: “Adjusted EBITDA increased 3.5%... The growth... reflects the impact of our continued approach to aggressively restructure our business away from our video platform” .
  • Strategy on churn and pricing: “Our simplified pricing... with an optional price lock, modem included, no data caps and no contracts are continuing to benefit our business [with] very low churn” .
  • Network evolution: “We have 3.1 everywhere... providing 1.2 gig speed... we are on the path to [DOCSIS] 4.0... proceeding with selected targeted markets” .
  • Capital plan: “We did [the] $200 million [in October]... we can do another $175 million in October of 2025... gets us pretty far along [toward 400k homes]” .

Q&A Highlights

  • M&A proposal status: Management repeatedly declined to provide updates on the unsolicited DigitalBridge/Crestview proposal; “nothing has changed” from prior updates .
  • Liquidity runway and build plan: New $200m term loan plus potential $175m in late 2025 supports fiber build; may need incremental capital beyond that for full plan .
  • Q1 subscriber outlook: Guided to HSD net adds of −6,000 to −4,500; hurricanes and ACP impacts largely behind; churn trending down .
  • Non-GAAP adjustments clarity: Integration/M&A/professional fees include Sprint settlement, video discontinuation costs, and potential M&A-related costs; expected to diminish through 2025–2027 .
  • Competitive environment/convergence: WOW is not aggressively pushing mobile; focuses on pricing certainty, reliable HSD, YTTV bundling to reduce churn .
  • Technology roadmap: Maintain strong FTTH focus in expansion markets while advancing targeted DOCSIS 4.0 upgrades in legacy footprint .

Estimates Context

  • S&P Global Wall Street consensus for Q4 2024 (EPS/Revenue/EBITDA) could not be retrieved due to SPGI rate limits; therefore, comparisons vs consensus are unavailable. Values retrieved from S&P Global unavailable.
  • Near-term estimate adjustments likely focus on: sustained adjusted EBITDA margin improvement (high-40s), sequential revenue pressure from video declines, and HSD net add trajectory influenced by greenfield penetration re-acceleration and diminishing extraordinary items .

Key Takeaways for Investors

  • Margin story intact: Adjusted EBITDA up YoY with sustained high-40s margins as video exits reduce programming costs and opex; continued focus on integration/restructuring supports profitability .
  • Fiber-led growth optionality: Liquidity improved with Priority Credit Agreement; potential +$175m in 2025 provides capacity to re-accelerate greenfield; expect 2025 greenfield CapEx $60–$70m .
  • HSD trajectory: Q4 hurricane impacts masked underlying improvement; churn declines and pricing/YTTV bundle support stabilization; watch Q1 HSD net adds (−6k to −4.5k) for inflection signals .
  • Top-line headwinds: Video/telephony declines will continue; monitor ARPU resilience and greenfield penetration to offset volume/mix pressure .
  • Balance sheet/leverage: Net leverage at 3.5x LTM adj. EBITDA; cash $38.8m; execution on fiber build and cost initiatives key to maintaining liquidity and leverage targets .
  • M&A optionality: Special committee reviewing unsolicited proposal; outcome uncertain; stock could react to any credible update; management will not comment until appropriate .
  • Trading setup: Near-term catalysts include Q1 print vs guidance (revenue $147–$149m, adj. EBITDA $72–$74m), greenfield build news flow (MI/FL), and any acquisition disclosures; watch for normalization post hurricanes .