WideOpenWest, Inc.

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Wide Open West Third Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. To withdraw your question, press star 1 again. I would now like to turn the conference over to Olivia Ponder, Senior Manager, Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining our third quarter 2022 earnings call. With me today is Teresa Elder, WOW's Chief Executive Officer, and John Rago, 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 security 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 the risk factors section of our Form 10-K 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 the 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. We have also included a presentation for this morning to complement our prepared remarks. Now, I will turn the call over to WOW's Chief Executive Officer, Theresa Elder. Thanks, Olivia.

Welcome to WOW's third quarter earnings call. I am pleased with our results this quarter, and I'm excited about our strategy and growth for the future, despite what we know will be a challenging fourth quarter. As a management team, we are extremely focused on executing our strategy to drive growth and bring value to our customers and shareholders. It is with that in mind and our continued confidence in our business strategy and outlook that we made a significant announcement this morning in our earnings release. Our board of directors has authorized us to repurchase up to $50 million of shares over the next 18 months. It is critical to reiterate that these capital allocation strategies will not materially affect our leverage profiles. which remains one of the lowest in the industry. Now let me get to our results. For the third quarter, our total revenue was down 5.6% as high-speed data revenue declined slightly from last year's record quarter, which included a one-time catch-up of previously deferred HSD revenue of $2.9 million. Without this one time $2.9 million last year, we would have had approximately a 2% HSD revenue increase this quarter. Video and telephony revenue declined 14% and 10% respectively from the same period last year. Our pro forma adjusted EBITDA increased nearly 3% to $68.5 million. reflecting the increased proportion of revenue from the high-margin, high-speed data business, which now represents nearly 60% of total revenue. The pro forma adjusted EBITDA margin was 39.4% for the quarter. During the quarter, we added 1,400 high-speed data RGU's, bringing our total to approximately 519,000. With consistent levels of low churn, we once again increased the number of subscribers, both year over year and sequentially, ending the quarter with more than 538,000. For the ninth consecutive quarter, we maintained an average sell-in rate above 87% of our customers purchasing high-speed data only, with the figure reaching nearly 89% this quarter. which further drives our core financial metrics higher, as John will discuss during his remarks. Also consistent with past quarters, new customers are buying the high-speed data tiers, with the majority taking speeds above 500 meg, including strong adoption of our recently offered 1.2 gig service. HSD ARPU of $65.80 has stayed largely consistent with prior quarters. As customers purchasing, higher data speeds have been offset by the cost of promotional activity, which contributed to the increase in HSD subscribers during the quarter. We believe we will begin to see HSD ARPU increase as existing customers continue buying higher speeds and as we add fiber customers in new markets. Our edge-out strategy continues to drive growth. especially in our 2021 vintage with penetration increasing to 45%. Our 2022 vintage continues to do well as we pass more homes and maintain a double digit penetration rate in the early stages of this vintage. Our 2020 vintage remains constant at a 23.5% penetration rate. As we've said before, we believe the performance from our edge-out investments supports our confidence in our ability to grow quickly in new markets, including our recently announced fiber edge-out into Hedland, Alabama, and greenfield markets in Central Florida and South Carolina. In addition to our greenfield expansion plans, we continue to focus on enhancing our infrastructure in our existing footprint. This includes a highly efficient path to implementing multi-gig service, leveraging high split architecture, and ultimately DOCSIS 4.0. Our technology organization is currently laying the groundwork for this in our lab and field activity will begin early next year. Our mobile partnership with Reach Mobile is also going well, and as of Q3, has been successfully deployed in all of our markets and through multiple sales channels. Now before I hand the call over to John to discuss our financial results, I'd like to spend a couple of minutes talking about the environment for HSD subscribers and the factors that drove us to reduce our expectations for HSD net ads for the remainder of the year. I would like to emphasize that we believe this issue has not dampened our outlook for our growth strategy. especially as we continue to be one of, if not the least leveraged company in the space. The first factor is the result of higher inflation, which has been rising faster than anyone expected, driving up interest rates more than anticipated, resulting in a material cooling off of the housing market, which translates into significantly fewer movers. Potential customers moving into our footprint are one key aspect of how we add subscribers. we have a proven track record of successfully competing for that business as demonstrated by the strength of our growing penetration rates. The second factor which negatively impacted our projected fourth quarter subscriber numbers also has to do with the economy as we have been working with a number of customers to help them stay connected despite customers competing financial priorities. To this end, we extended customer terms to help them stay on our platform rather than disconnecting their service. Although a portion of these customers did remain on the platform, unfortunately, many ultimately had to be disconnected. We are seeing the impacts of these disconnects flow through our net ads in the fourth quarter. To conclude, the core aspects of our strategy remain strong. Our edge outs continue to increase our penetration rates. Our greenfield expansion is making real progress with customers expected in the first quarter. And importantly, we are doing all of this with cash from operations, thereby enabling us to maintain our low leverage profile. Now I'll turn the call over to John, who will go over our financial results in more detail.