WideOpenWest, Inc.

Hello and welcome to the Wide Open West third quarter 2024 earnings 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. And if you would like to ask a question, please press star one on your telephone keypad. I would now like to turn the conference over to Andrew Posen, Vice President, Head of Investor Relations. You may begin.

Good afternoon, everyone, and thank you for joining our third quarter 2024 earnings call. With me today is Theresa Elder, Weill's Chief Executive Officer, and John Rego, Weill'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. You are cautioned not to place undue reliance on such forward-looking statements. We just claim 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 afternoon, we may 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 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 this afternoon to complement our prepared remarks. Now, I'll turn the call over to WOW's Chief Executive Officer, Theresa Elder.

Thanks, Andrew. Welcome to WOW's third quarter earnings call. Before we get started, I would like to say our thoughts go out to all who have been affected by Hurricanes Helene and Milton. I am especially proud of our employees who continue to work tirelessly under difficult conditions to help those who were affected. Most of our customers have now regained service. Although we saw some impact to the business, our network held up extremely well and we do not expect the financial impact on our business to be significant. Since we spoke to you in August, we have made solid progress on several fronts as we grow penetration in our new fiber markets and improve our liquidity to re-accelerate our greenfield fiber expansion. In early October, we closed a $200 million new super priority term loan, enhancing our balance sheet and increasing our liquidity, which puts us in a strong position to re-accelerate our fiber greenfield strategy and continue bringing our high-speed fiber network to a number of new communities as we work toward our goal of 400,000 fiber homes passed over the next few years. Note that we don't have any new information to share regarding the unsolicited non-binding acquisition proposal from DigitalBridge and Crestview Partners at this time. And while we will take questions at the end of our remarks, We will not be taking any questions on this topic. Now I would like to discuss our third quarter results, which included record adjusted EBITDA and significant increases in penetration rates across our fiber expansion initiatives. In the third quarter, high-speed data revenue of $107.5 million decreased 2.1% year-over-year but increased 2.4% from the second quarter, reflecting the impact of a small rate increase, which went into effect in July, as well as the benefits of simplified pricing, which drove ARPU higher. Adjusted EBITDA of 77.3 million was a record and increased 9% year over year with an adjusted EBITDA margin of 48.9%. The significant improvement in adjusted EBITDA predominantly reflects the benefits accrued from continuing to drive efficiency in our business as we migrate our customers off of our video platform and further align our relationship with YouTube TV. During the third quarter, our fiber expansion made further progress as we increased penetration rates across the 2023 and 2024 vintages, and as well in our new greenfield fiber markets. Although the construction on new fiber homes past slowed during the quarter while we secured additional capital, our teams successfully focused on growing our customer base within our new fiber markets. And now that we have improved our liquidity with a new $200 million Super Priority Loan, we are once again in a strong position to re-accelerate our highly successful greenfield fiber expansion initiatives. The penetration rates in our greenfield fiber markets increased more than two percentage points to 17.5%, up from 15.4% at the end of the second quarter, with the growth in penetration being driven by outperformance in our residential business, where penetration rates are above 20%. I'm also pleased to announce that we have begun adding customers in our newest greenfield fiber market, Hernando County, Florida. Our edge-outs also saw strong results again this quarter, especially the 2024 vintage, which increased to 45%, growing over six percentage points. Our 2023 edge-out vintage increased to a penetration rate of 29.7%, which is also a great improvement from last quarter. The 2022 vintage remains strong at 31%. With regard to our HSD subscribers, we lost a total of 4,400 during the quarter. Of that, approximately 1,900 subscribers were lost due to the ending of the ACP program, down from 5,000 last quarter. We added 1,100 fiber HSD subscribers in our greenfield markets and 1,200 in our edge-out expansion markets, which partially offset the drop in our legacy footprint. All in all, we continue to see very low churn across our base. The steps we introduced during the first half of the year such as our complimentary speed upgrades and our simplified pricing plans, which includes an optional price lock, modem included, no data caps, and no contracts, are continuing to benefit our business, especially in our expansion markets. The charts on the bottom half of the slide highlight a shift that reflects the growing success of our fiber expansion strategy as well as the impact of our initiatives to strengthen our legacy footprint. ARPU rose significantly during the quarter, both sequentially and year-over-year, driven by a rate increase that took effect in July, as well as continued success of our simplified pricing strategy, which is showing a particular strength in our greenfield fiber markets. As expected, Our traditional video business declined further during the quarter and has now dropped to 66.3 thousand subscribers, a 34% decrease from the same period last year. We anticipate this trend will continue as we transition to YouTube TV, especially in our expansion markets where customers are increasingly buying the HSD YouTube TV bundle. Our partnership provides a fantastic opportunity to offer more content to customers at a much better value and to capitalize on the shift to video streaming. To conclude before handing the call to John, I want to reinforce the significance of growing our penetration rates and how this is setting us up for continued success. I look forward to re-accelerating our growth and building on this momentum in these new markets. I'll now turn the call over to John, who will go over our financial results in more detail.