WideOpenWest Inc (WOW), a prominent broadband provider, unveiled its financial results for the third quarter (Q3)ending September 30, 2023, on November 8, 2023. The company reported a historic high-speed data revenue of $109.8 million, marking a 7% surge compared to the corresponding period last year, underscoring the robustness of its core broadband operations. Nevertheless, the overall revenue experienced a slight dip to $173.1 million, down by $0.6 million from Q3 2022.
This resulted in a significant plummet in WideOpen West’s stock value. Following the previous day’s close at $7.40, the stock commenced trading today at $4.94 and is presently valued at $3.17.
At the time of this publication, WideOpenWest Inc stock (WOW) has witnessed a decline.
WideOpenWest Inc
Current Price: $3.15
Change : -4.25
Change (%): (-57.43%)
Volume: 1.8M
Source: Tomorrow Events Market Data
WideOpenWest Q3 2023 Results:
WOW’s total subscription revenue witnessed a marginal decline of $0.1 million, primarily attributed to a reduction in Video and Telephony RGUs, partly offset by an uptick in average revenue per unit (ARPU) stemming from rate hikes and the acquisition of higher speed offerings. Other Business Services Revenue held steady at $5.4 million, while Other Revenue experienced a 6% decrease, totaling $7.4 million.
Operating expenses, excluding depreciation and amortization, saw a 4% reduction to $75.6 million, chiefly due to cutbacks in programming expenses and an increase in capitalized labor. Selling, General, and Administrative expenses also recorded a 6% drop, amounting to $37.5 million, primarily attributed to decreased stock compensation and marketing expenditures.
In spite of these expense curtailments, the company disclosed a net loss of $104.5 million, in contrast to a net income of $0.5 million in Q3 2022. This loss was primarily driven by a non-cash impairment charge of $131.7 million on intangible assets. The net profit margin for the quarter stood at (60.4)%, a marked decrease from the 0.3% reported in the same period last year.
Adjusted EBITDA and Capital Expenditures:
In Q3 2023, Adjusted EBITDA reached $70.9 million, a $2.4 million upswing from Q3 2022, with the Adjusted EBITDA margin demonstrating improvement, climbing to 41.0% from 39.4%. Capital expenditures for the quarter totaled $64.5 million, representing a $26.8 million surge compared to Q3 2022, primarily attributed to endeavors aimed at market expansion.
Customer Data and Market Growth Initiatives:
As of September 30, 2023, WOW tallied a total of 517,400 subscribers, reflecting a 4% decrease of 20,700 compared to the preceding year. High-Speed Data (HSD) RGUs also saw a 3% decrease, settling at 503,400. The company’s market expansion initiatives have encompassed a total of 106,700 homes passed, with 25,800 subscribers since inception.
Financial Flexibility and Debt Position:
By September 30, 2023, WOW’s cumulative outstanding long-term debt and finance lease obligations amounted to $889.1 million, while cash and cash equivalents stood at $22.6 million. The total net leverage ratio was 3.1x based on a Last Twelve Months (LTM) Adjusted EBITDA basis.
WOW’s management expressed confidence in their strategic vision and outlook for the forthcoming year, accentuating the shift in their business landscape through the foray into new markets and the amplification of their broadband operations. The company intends to provide a comprehensive update on its projections for the remainder of the year during its upcoming earnings call.
