WideOpenWest, Inc.

Good day and thank you for standing by. And welcome to the Wide Open Spaces first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, and that is going to be Andrew Posen, Vice President, Head of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining Wide Open West's first quarter 2021 earnings call. With me today is Teresa Elder, WOW's Chief Executive Officer, and John Rego, WOW's Chief Financial Officer. Before we get started, I would like to remind everyone that during our call, we will 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 that 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. We 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 the risk factors section of our Form 10-K filed with the SEC. In addition, please note that on today's call and in our earnings release, we 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 reported results can be found in the earnings press release issued today, a copy of which can be found on our website. Now I'll turn the call over to WOW's Chief Executive Officer, Teresa Elder.

Thanks, Andrew. Welcome to WOW's first quarter earnings call. In addition to our press release and quarterly trending schedule that are available on our investor relations page, we've also included a presentation that we are using to compliment our prepared remarks. This was another great quarter for WOW as the momentum we built throughout last year continued into the first quarter. Our broadband first strategy drove our results again this quarter, pushing our high-speed data revenue to its sixth consecutive record quarter as we added 10,000 HSD subscribers. In the first quarter, our total revenue increased 1% from the same period last year to $286 million. driven by growth in our high-speed data business, which grew 12% year over year to $153 million, more than offsetting a decline in video and telephony revenue during the quarter. Our first quarter adjusted EBITDA was $112 million, up more than 13% from the same period last year. 2020 was a monumental year for our industry in so many ways. Broadband utilization increased across practically every facet of our lives. From streaming video content to supporting education via remote learning, and the significant number of people who now work remotely, high-speed data services delivered over a high-quality network continue to be an extremely important aspect of our daily lives. In 2021, the reliance on high-speed data has not abated, which further underpins our broadband-first strategy and our strong results this quarter. While we are very focused on growing our high-speed data business, we continue to work with our customers to ensure that they have excellent video options to choose from, whether it's using WOW TV+, our IP-based video offering, or signing up with streaming alternatives. We remain aggressively focused on driving our total subscriber numbers higher. In fact, for the seventh consecutive quarter, we increased our total number of subscribers, as we have every quarter since launching our broadband first strategy in early 2020. During the first quarter, we added 10,000 high-speed data RGUs, bringing our total to nearly 824,000. Consistent with the past two quarters, 86% or the vast majority of our new customers are buying our high speed data only service. A significant increase from the same period last year when 66% of new subscribers purchased our high speed data service. In the first quarter of 2021, 88% of new customers purchased speeds of 200 meg or higher. which is up slightly from last quarter and substantially higher than Q1 last year when 51% of our new customers purchased 200 meg speeds or higher. HSD ARPU increased slightly from last quarter and remains significantly higher than the same period last year, largely reflecting customers purchasing higher speeds. In the first quarter of this year, HSD ARPU was 62.10, up from 57.70 in the same period last year. Our edge-out strategy continues to deliver growth in terms of both homes passed and RGU's, and is showing positive results with increasing penetration rates. Both the 2019 and 2020 edge-out vintages increased against this quarter. with the 2019 vintages increasing to 17.3% penetration, up from 16.3% last quarter. And the 2020 vintages increased to 17.7% penetration, up from 11.5% last quarter. Although the lingering effects of the pandemic are still limiting the full potential, we expect to see some incremental acceleration of edge-outs in the back half of this year. In the early stages of last year, we announced our broadband-first strategy and outlined our focus on high-speed data products and services, which enabled us to respond to customers' needs while still playing to our strengths. which clearly includes the quality of our network. This is one of the key reasons we feel confident about our ability to continue to execute this strategy. During the past few years, we've made strategic investments in all 19 of our markets to bolster our advanced fiber-rich network, including standardizing and simplifying it through the deployment of DOCSIS 3.1. which is now fully implemented across nearly all of WOW's footprint. These actions have enabled us to support IP-based products like WOW TV+, or alternative video options, including streaming services that ensure the network continues to deliver flexibility and the higher speeds consumers increasingly demand. The quality of our infrastructure has also been a key reason that we've been able to quickly respond to challenges. Last year during the pandemic, we experienced a peak increase of more than double our normal volume of broadband traffic. Due in large part to the network investments that we've made, the network successfully adapted to the significant growth in usage. Earlier this year, we experienced an EF4 tornado in Newman, Georgia. And within seven days, more than 90% of our affected customers had service fully restored. This not only reflects the quality of our infrastructure, but also WOW's commitment to our customers as employees work tirelessly to get everybody back up and running. WOW has always been recognized as a leader in providing value and accessibility in the products and services we provide. We're excited about the numerous federal programs being introduced and the opportunity they give us to connect and bring the value of WOW to more homes. These programs are being established to ensure that the infrastructure exists to promote affordability and accessibility of broadband. Last year, we introduced a number of products and initiatives, including Fiber Flex for small and mid-sized business, WOW's Internet Select 50 plan for low-income households, and we participated in the Keep America Connected pledge. We continue to be part of the ACA Connects and Education Superhighways K-12 Bridge to Broadband program for states and school districts, a program designed to provide internet access for students in low-income households. We now also offer the WOW Internet for Education program, where families who qualify will be eligible to receive WOW's Internet Select 50 plan. In addition to these WOW specific products, we joined the FCC's Emergency Broadband Benefit Program to support communities and households across the country that are struggling to afford internet service during the pandemic. The EBB program will allow eligible households to remain connected to services and resources they need for critical access to their jobs, healthcare information, and remote learning. Those participating in the FCC's EBB program can receive discounts toward their monthly broadband services, as well as discounts on necessary equipment, such as laptops, desktop computers, or tablets. These initiatives and our participation in the federal programs reflect WOW's larger mission to work to eliminate the broadband inequities that may continue to impact many communities. even in a post-pandemic world. To conclude, these were solid results and I'm really pleased with the momentum that has carried over from last year into the first half of this year. Demand for broadband remains high and we believe that WOW is extremely well positioned with the right people and the right strategy to continue capturing this exciting opportunity. Now I'll turn the call over to John, who will go over our financial results in more detail.

Thanks, Teresa. Our first quarter delivered strong results that exceeded our expectations and reinforced the strength of our team and our broadband first strategy. In the first quarter, total revenue increased 1% to $286.3 million. reflecting a 12% increase in high-speed data revenue, partially offset by declines in video and telephony, which decreased 10% and 11%, respectively. The growth in high-speed data revenue predominantly reflects the addition of new customers, as well as existing customers buying higher-speed tiers. The outperformance in our high-speed data business contributed to our higher EBITDA in the first quarter, which increased more than 13% from the same period last year to $112.4 million, with an adjusted EBITDA margin of 39.3%, also a significant improvement from the same period last year. As you can see in this next slide, our incremental contribution margin saw a slight decline sequentially, but continues to be significantly higher than the same period last year, consistent with the improvements we are seeing in our adjusted EBITDA and EBITDA margin. In the first quarter, the incremental contribution margin was 67.2% up from 63.6% in the same period last year. In the first quarter, our CapEx increased by $1.3 million from the same period last year, predominantly due to timing issues, as a couple of items were pulled forward late in the quarter. We continue to expect our full-year CapEx to be consistent with or slightly lower than last year. Our total free cash flow increased by $23.9 million from a year ago to $18.3 million. And with regards to liquidity and leverage, we had $36.1 million of cash on hand and we've lowered our leverage ratio to five times. Finally, before we open the call for questions, I would like to talk about guidance. Last quarter, we reintroduced guidance for the quarter and held back on providing expectations for the full year. Although there still remains a degree of uncertainty regarding the pandemic, we are getting more visibility into the year and wanted to provide guidance for both the upcoming quarter and the full year. For the second quarter, We expect total revenue to be between 280 and 283 million, high-speed data revenue to be between 154 and 157 million, and adjusted EBITDA to be between 110 and 113 million. We also expect net additions to be between 3,500 and 5,500 in the quarter. For the full year, we expect total revenue to be between 1 billion, 118 million, to $1,121,000. High-speed data revenue to be between $629 and $632 million, and adjusted EBITDA to be between $458 and $462 million. We also expect high-speed data net additions to be between $28,000 to $32,000. This was another strong quarter for WOW. We're executing on our broadband first strategy, we're building on our momentum, and we're delivering strong results. And now we'd like to open the call for some questions.

If you would like to ask a question, please press star 1 on your telephone keypad. The first question comes from the line of Tim Nolan with Macquarie.

Hi, everyone. Thanks very much. A couple things, I guess. First, just to double-check the trends going into Q2, looking at the guidance of the HSD net ads. If I'm looking at this right, it looks like a bit of a slowdown in the year-over-year growth rate, and yet looks like pretty decent revenue growth, implying now the ARPU is going to be Still strong. And both of those, I'm guessing, are just comps versus what was a very unusual quarter last year. If you could just confirm that I'm looking at that the right way, and then the second half maybe is a bit more of a straight line.

Yeah, I'll start it if you'd like to. Excuse me. A lot of folks think 2019 is the better comp for 2021. 2020 was pretty unusual, and be that as it may. We're seeing a bit of that, but our expectations for the balance of the year are pretty strong. I think we're expecting a little bit of return to normalcy. And, you know, historically in these types of businesses, Q3 is usually a very powerful quarter. That's when people move their homes and kids go back to school, et cetera, et cetera. So that's part of it. You know, the ARPU, we still expect and anticipate that the ARPUs will continue to increase. We're still seeing a lot of folks tearing up to higher speeds. We see people taking a whole home Wi-Fi solution, and they're going to be into the reproducts that will be sold to the Wi-Fi customers as well. So I think we have paths to get there. So I'll start with that and see if Teresa wants to jump in.

Yeah, I think that's right. It's hard to know, but we think maybe this year we'll have more of a return to normal seasonality, especially as we get into Q3 with back to school. And we also know that it was really in 2020 that we also did our pivot to broadband first. So we are thinking that, you know, 2019 is an interesting comp, but we have, you know, aspirations to do better than 2019, certainly. And we believe with all the vaccinations, the economy is starting to open up, which will certainly help. And we also don't know yet quite what to expect from some of the programs like the emergency broadband benefit program. It could be that it just helps churn. It could be some net additions, but we're not quite sure on that. But all of those we think are some good trends for the future.

Yeah, great. A lot of unusual factors in Q2 last year, obviously. Can I ask another question, please, on video? You mentioned your WOW TV Plus is now in 95% of your footprint. Could you talk a little bit about what the actual take-up of that is, the shift from linear to that, and also comparing that versus any other streaming alternatives that you mentioned, not a WOW TV Plus, but people just taking another video service?

Yeah, so what we're seeing overall is, especially in new customer acquisition, as we stated, the vast majority of our customers who are coming in are HSC only, as well as HSC only with some kind of a streaming service. So in terms of the new customer takeoff, it's small, but it is an alternative for customers who like that curated video product. And we're happy to provide it. It provides functionality like our traditional services haven't before. We're now launched on things like mobile tablets and devices. So it really provides a robust experience for our customers. We're really just now starting to kind of reactively, when customers want to upgrade of our existing base, move them to the IPTV or WOW TV Plus service. And we'll continue to do that more as time goes on in transitioning customers over. But we've been very pleased so far. I don't think we give out actual numbers on the uptake. I think we continue to see overall curated video as a product declining as a business. But for those customers that still take it, we always want to provide a high-quality service, and we are.

Okay, great. Thanks for the info.

Your next question comes from the line of James Ratcliffe with Evercore ISI.

Hi. Thanks for taking the question. A couple, if I could. First of all, on the EBPT and similar programs, can you give us an idea, like, how large the potential population for upselling on your existing customer base are, customers you believe are qualified for these subsidies? And secondly, a lot of discussion around broadband infrastructure spending and the like. And I'm curious what your views are on the costs and ability to increase your upstream speed, because depending on how broadband is defined for these programs, clearly you've got no problem with the downstream. But if the federal government does decide that, say, 100 by 100 is qualified for broadband, then you need to expand your upstream and what the costs and opportunities there are. Thanks.

Thanks, James. I'll start out with the first one. On the EBV program, you probably know I haven't launched yet, so it's really hard for us to know. We have been approved and qualified. We're ready to go when it launches, which I believe is set now for May 12th next week. So we'll know more once we get our toe in the water and see what's happening there. In terms of upselling from some of our existing plans that we have that are for more challenged income families, we have seen some upsell opportunities as customers realize that the additional speeds can help them work and learn from home more. And we have seen people upgrading. And I think once the subsidy program is in place and they have the roughly $50 a month for those kinds of services, I think people will take advantage of that, which is what the program was intended to do. So once again, we're starting to see a little bit of that, but we will really know more after some of these programs actually launch. In terms of infrastructure spending and speed, I can tell you right now that customers are very happy with the speeds that we have. We have our one gig offering as well as the 500 meg offering and 200 meg, and that really does accommodate customers' needs. As we look at a residential customer, most of the bandwidth usage they have is in download. The upload speeds that we currently have are more than adequate for customers' needs, whether they're gaming, or video conferencing, remote learning, or video streaming. We do have the DOCSIS 3.1 that is now deployed in virtually all of our footprint. And I believe the DOCSIS platform really is a terrific platform which will allow us to continue to grow over time should customers need those kinds of services. symmetrical speeds or higher speeds for upload. And we have the ability to easily transition to do that without having to tear up streets and build a whole new network. So we feel very good about our technology path and our engineers are continuing to work on that path. And that's why we've been able to respond to our customers' needs so well with the dramatic rise in bandwidth demand throughout the pandemic. Great. Thank you.

And your next question comes from the line Cutgun Morrell with RBC Capital Markets.

Good morning, and thanks for taking the questions. If I could, I'd like to ask about broadband subscribers again, and maybe M&A first. I know you just talked about this, but I was hoping you would provide more color on the broadband subscriber outlook and what's really embedded in the 2021 guidance, especially as you think about the back half. You did mention some expectations for a return to normal seasonality, I think, starting in Q3. I guess, as the country continues to reopen, there's a sense out there that market churn may start to pick up. That might be offset by more gross ad opportunities. But maybe the question is, would you expect that, as there are more selling opportunities in the marketplace, that might drive up competitive intensity? And how do you expect to react to that?

Yeah, we have continued to see our churn numbers be at historic record lows. So we have had record low churns for quite some time now, and it has stayed at those levels. And we're thrilled that our customers are loyal and are delighted with our services. So I think in terms of the market competitiveness, in some ways when there is, I think, less market activity, there is more competitiveness as competitors are scrambling for net ads. So as the market opens up, I don't know what will happen. It's hard to predict what people will do. In terms of switchers, WOW has always been very successful at getting customers who are switchers, and by that I mean maybe people who aren't moving but are looking at the need for more reliable services, a better value, and WOW tends to do extremely well in those situations. With customers moving more, and as we get to summer, more customers move, and we're starting to see a little bit of a pickup in that, our markets are very attractive markets for people to move to, especially as people are looking at lower-cost places to more permanently work from home. So we're looking forward to both of those trends.

I appreciate that. Thank you. And just if I could, is there any update you could provide on what you're seeing from an M&A perspective? I know the folks right now is running the business, but are there any developments you can or would like to share?

Well, of course, you know, we don't comment on any kind of rumors or anything like that. But I think, you know, we've always been transparent in the fact that we like some of the valuations that we've seen on some companies that are very similar to us in the marketplace. We've talked before about the Astound transaction back last year or even the Hargrave transaction more recently this year. In either case, you know, and we've talked about this, I think, on every quarter, we're always focused on lowering our leverage ratio, and we're open to inorganic ways to do that as well, just as we have been over the last 20 years buying and selling markets in our business. But I did want to note that we're very close to achieving a leverage ratio organically through our adjusted EBITDA growth of less than five times. So we're excited to get close to that milestone.

Fantastic. Thank you so much.

Our next question comes from the line of Batya Levy with UBS.

Great, thank you. Can you talk a little bit about the competitive environment in high-speed data and if you're seeing any change in fiber builds in your footprint? And a question on edge-out. It looks like the 2020 cohort actually started to do better than the 2019 cohort. Is there anything to highlight there? And what's your expectation for edge-out builds this year? Thank you.

Thanks, Maria. And let's see, in terms of the competitiveness in HSD, I think the kinds of services we offer, especially on the consumer side, are always quite competitive. And that's sort of the DNA of WOW. We have been a challenger brand since the day that we were established. And so we are always going to compete. And we compete on many different aspects, not just pricing, but really the speed and reliability of our network, providing an alternative or a choice to some of the larger brands. We've really worked hard on doing more to make sure we are easy to do business with. And of course, for 20 years, we've had a real legacy of being customer-centric. So those things are still there. I think in the environment now where people are still, to some degree, struggling with budgets in some markets, that there is some pressure on promotions. And we participate strategically on a by-market basis where we need to to make sure that we're continuing to get our share, and that's worked well. But as you can see, we also go about making sure customers are matched with the right speed for them, and that often is helping us drive enhanced ARPU growth. In terms of the fiber builds, I think it's still very much the way that we talked about it last quarter. And we do have some overlap, quite a bit of overlap with AT&T, for example. And most of that, by far, the vast majority, is with their DSL service. And, of course, we already have our advanced fiber-rich network that can deliver one gig speeds. And so we're very competitive on that. At the end of the day, I think customers don't come to us asking for a certain technology. What they want is a service that meets their needs. and they trust us to deliver it with a competitive price, with a service that is reliable, that has the array of offerings, not just broadband, but also services like our whole home Wi-Fi mesh network product, which customers just love, that really gives them also a great Wi-Fi experience in their homes. So taken together with things we do, like even same-day installs, those are, I think, the things that really help us be competitive and delight our customers. think the third area you talked about was edge outs and yes we're pleased with our edge out production in terms of the deeper penetration which is what we wanted to do this year that was our strategy we've built about 200 000 homes past over the last many years and we want to deepen the penetration in those edge outs and we've had some good success especially as the weather gets better as people are out and about more And I'm thrilled with some of the growth that we've seen. And I think the growth of the 2019 versus the 2020 edge-out could be just a little bit, you know, where the weather is better, where people are moving. But we're pleased, and all of the edge-out vintages that we've had are reaching those kind of business case metrics that we had hoped to have. So we're pleased with the production.

And, Pacha, I would say on the edge outs, looking at vintages, remember in 2020 we pulled back construction quite a bit when the pandemic hit. And it was like our lowest capex for edge outs in like a really long time. And we've changed the focus to penetrating more. So you're just hitting a higher number on a smaller base for the 2020 vintage. I think that's part of it. But, again, as we said last year when it hit and, again, applies to 2021 where we're still going to not go back to historic Agile CapEx, focus right now is penetrating and putting customers on the platform.

Got it. Thank you very much.

Your next question comes from the line of Frank Luthan with Raymond James.

Great. Thank you. Do you have an estimate for how many folks in your territory might be impacted by the EVVP plan? That would be the first question. And the second question, can you walk us through the bad debt reserves you took last year during the pandemic and how you've been releasing those and what changes might have made in the last 12 months on bad debt when we get to more of a normalized level? Thanks.

Okay. Why don't I take the first one and John can take the second. So in terms of the EBB percentage, we've done some estimates and we do think that there could be especially a lot of prospects. So non-customers today who could be eligible within our footprint for the EBB program. So we're looking forward to being able to serve those customers with something that will meet their budgets, but we think it could be a significant number. But like I said, it doesn't start until next week, so we really don't know exactly what the uptick will be or if, you know, we're going to certainly promote the program and make sure people know that they could be eligible. And so we've got a plan around that as well. But I think we'll know a lot more next quarter after we have a little bit of experience with the number of adults. Okay.

And on the bad debt question, Frank, yeah, quite frankly, in Q1 of 20, we beefed up the bad debt reserves in anticipation of not knowing what was going to happen. I think our experience was better than we thought it was going to be. We did have bad debt. We were part of the pledge, you know, et cetera, et cetera. But I think overall we did better than we thought we were going to be. I think we're down to, in 2021, more historic levels. So to put some dollars around it for you, I think we stepped up the reserves by a couple million dollars, okay, and used some of it, not all of it.

Okay, great. And then just a clarification on EBVP. So you're all going to market that. Do you expect this to be something that exists more? Where do you think the majority of this will go within your customer base? Will it be existing customers that are eligible to start to take it, or is this going to be a net new additions? And then how does a customer qualify? Do they just tell you they're eligible, or do they have to pull something from the FCC? Can you walk us through that? sort of what the challenges are for the customers actually to get the voucher or whatever you call it?

Yeah, it's a good point. It is a fairly rigorous program that has been set up by the federal government and we're just now implementing all the kind of rules that are in place and training our representatives to handle that. So a customer call in and they do have to meet, there's a whole list of criteria and I believe it's even on the FCC's website. about the EDD program and how customers have to qualify. There's a number of different things, whether it's income or if they qualify for maybe some of the food programs. There's a variety of ways to qualify. But then a customer calls into us and we have to work with them to get into this federal database to have them validated by the government so it's not something we can just take their word for we can independently say that they qualify it is through this federal database similar to some of the lifeline services, the telephone side to come up familiar with. So it's a pretty rigorous process to go through all that. And lastly, I think just by definition, probably there are more customers who don't have broadband today than those who do that qualify because the whole idea is to try to make sure more customers can have access to broadband. We certainly think there could be some of our existing customers that also qualify. And for those, we will certainly help them get that subsidy so it can take some of the weight off of their budgets and maybe even allow them to get to a higher speed that better meets their needs. Does that help, Frank?

Yep. No, that's great. Thank you very much.

Okay. Our next question comes from the line of Brandon Hispel with KeyBank Capital Markets.

Okay. Great. Thanks for taking the questions. I think one for Theresa and two for John. For Theresa, the selling mix on HSD is pretty strong. Could you update us on where the base stands? And for John, could you provide an update in terms of guidance for the year in CapEx, cash taxes, cash interest expense? And then just given the focus on the federal subsidies program, Is there any expectation built-in guidance for net subscriber additions from the subsidy programs? Thanks.

Okay. I'll take the first one. Thanks. So we do have a trending schedule that we have put out as well. So in there, we can say for the first quarter of this year, we're sitting at about 824,000 high speed data customers. And of those, 291,000 have video. So we virtually don't have any customers that take video who don't also have high speed data. And then we have 173,000 telephony customers. So that's our current mix.

I was more along the lines of penetration of speeds within the base of 100 megs, 200 megs of the different product sets. Thanks.

OK. And I believe we put out on the web slides some mix on that that shared that. I think we just kind of say 200 meg and above. I don't believe we've shared exactly what the mix is for 1 gig and 500. But I can tell you that continues to grow and grow as customers' applications really grow. to lend themselves to higher speeds. So we're currently sitting with this mix of I guess we put out the selling for the mix of new acquisitions, and we show that at 88%. It's certainly a little lower than that for the existing base as customers upgrade, but we're seeing similar trends where customers are upgrading faster and faster. And, of course, we also in December of last year upgraded our minimum speeds to 100 meg across the board.

Okay, shall I jump in on finance questions?

Yes, sure, go ahead.

All right, so, Brendan, on our forecasting models that we build when we go to guidance, there's nothing specifically built in that's going to assume we're getting some generous, you know, getting generous HSD as because of programs like EBB. I would venture to say in my upside case I might have done that, but not the baseline case. So the reality is, you know, what we're suggesting is, you know, just more HSE, more tearing up, and hopefully a return to normalcy where Q3 again becomes like the killer quarter for this type of business. Cash taxes are the bit of us. I mean, we still have $900 million of net operating costs, so I don't expect that we'll be paying significant taxes anytime soon. On the interest expense, more interesting question. This is I have been waiting for this month since I got here. So on May 31st, the hedge turns out. The interest rate hedge, which fixed LIBOR at 2.76% on $1.3 billion of notional value, goes away. That's an annual cash interest savings of $23 million, of which for this year we will get $13.5 million. So we won't be paying the hedge starting on June 1st. excuse me, that'll be rather accretive to our free cash flow for sure. So that answers it.

And CapEx?

Yeah, so CapEx, our guide was flat to slightly down from last year. We did pull some stuff in to Q1 from Q2, particularly CPE, a little bit of CPE purchases that we were doing and some of the infrastructure build that we were doing. But my expectation is flat to down, like we said on the last call.

Great. Thank you for taking the questions.

You bet.

There are no further questions in the queue. I would now like to turn the conference over to Teresa Aylor for closing remarks.

Thanks so much for joining us this morning, and thank you for your continued interest and support of WOW. We really look forward to speaking with many of you in the coming weeks, so have a great day.

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