WideOpenWest, Inc. (“WOW!” or the “Company”) (NYSE: WOW), one of the nation’s leading broadband providers, with an efficient, high-performing network that passes 1.9 million residential, business and wholesale consumers, today announced financial and operating results for the second quarter ended June 30, 2022.
Second Quarter 2022 Highlights (1)(2)
- Total Revenue from continuing operations of $176.1 million, a decrease of $5.8 million or 3%, compared to the second quarter of 2021
- HSD Revenue from continuing operations totaled $102.6 million, an increase of $3.9 million, or 4%, compared to the second quarter of 2021
- Net Income from continuing operations was $4.0 million for the quarter ended June 30, 2022
- Net Profit Margin was 2.3% compared to 4.3% for the second quarter of 2021
- Pro Forma Adjusted EBITDA was a record $70.6 million, an increase of $6.3 million, or 10%, compared to the second quarter of 2021
- Pro Forma Adjusted EBITDA Margin was a record 40.1% compared to 35.3% for the second quarter of 2021
- Added 2,200 HSD RGUs
- Announced the launch of 1.2 Gig speeds across entire footprint
- Greenfield progress on track and construction has begun in Central Florida
“I am pleased with our second quarter results which reflect the strength of our broadband-first strategy and the progress we have made on our strategic initiatives as we delivered record Adjusted EBITDA and Adjusted EBITDA margin,” said Teresa Elder, WOW!’s CEO. “We continue to meet our operational goals as we grow our high-speed data subscriber base, increase edge-out penetration and accelerate our Greenfield expansion.”
“Our HSD revenue grew 4% from the same period last year and Pro Forma Adjusted EBITDA grew by nearly 10% from last year, to a record high $70.6 million and a record Pro Forma Adjusted EBITDA margin of 40.1%,” said John Rego, WOW!’s CFO. “The combination of HSD revenue growth and the realization of strategic efficiencies has brought our Pro Forma Adjusted Margin very close to the levels attained prior to last year’s divestitures.”
Revenue
Total Revenue from continuing operations was $176.1 million for the quarter ended June 30, 2022, down $5.8 million, or 3%, as compared to the corresponding period in 2021.
Total Subscription Revenue from continuing operations for the quarter ended June 30, 2022 was $163.2 million, down $5.4 million, or 3%, as compared to the corresponding period in 2021. The decrease is primarily driven by a shift in service offering mix as we continue to experience a reduction in Video and Telephony RGUs, partially offset by an increase in average revenue per unit (“ARPU”) as HSD customers continue to purchase higher speed tiers coupled with HSD and Video rate increases issued in the first quarter of 2022 and an increase in volume attributable exclusively to the addition of HSD subscribers.
| (1) | Refer to “Non-GAAP Financial Measures” “Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures,” and “Subscriber Information” in this Press Release for definitions and information related to Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA margin and reconciliation of non-GAAP measures to the closest comparable GAAP measures and why our management thinks it is beneficial to present such non-GAAP measures. |
| (2) | During the second half of 2021, the Company completed of the sale of five of its service areas. For presentation purposes, the financial results of these five service areas were classified as discontinued operations. Refer to tables that follow for the reconciliation of continuing and discontinued operations. |
Other Business Services Revenue from continuing operations totaled $5.4 million for the quarter ended June 30, 2022, down $0.3 million as compared to the corresponding period in 2021. The decrease is primarily due to a decrease in data center revenue.
Other Revenue from continuing operations totaled $7.5 million for the quarter ended June 30, 2022, down $0.1 million as compared to the corresponding period in 2021, primarily related to decreases in advertising and line assurance revenue partially offset by an increase in late fee revenue.
Costs and Expenses
Operating Expenses (excluding Depreciation and Amortization) from continuing operations totaled $83.0 million for the quarter ended June 30, 2022, down $12.1 million, or 13%, compared to the corresponding period in 2021 primarily driven by decreases in direct operating expenses, specifically programming expense, which aligns with the reduction in Video RGUs between periods and lower bad debt expense, partially offset by decreases in capital eligible expenses. Selling, General, and Administrative expenses from continuing operations totaled $39.3 million for the quarter ended June 30, 2022, down $6.2 million, or 14%, compared to the corresponding period in 2021 primarily attributable to decreases in costs associated with digital transformation initiatives, marketing, and legal and professional services expenses, partially offset by an increase in stock compensation expense.
Net Income
Net Income for the quarter ended June 30, 2022 was $4.0 million as compared to $12.4 million for the quarter ended June 30, 2021. Net Profit Margin was 2.3% for the quarter ended June 30, 2022 as compared to 4.3% for the quarter ended June 30, 2021.
Pro Forma Adjusted EBITDA
Pro Forma Adjusted EBITDA for the quarter ended June 30, 2022 was $70.6 million, an increase of $6.3 million, compared to the corresponding period in 2021. Pro Forma Adjusted EBITDA margin was 40.1% for the quarter ended June 30, 2022 as compared to 35.3% for the quarter ended June 30, 2021.
Subscribers
WOW! reported Total Subscribers from continuing operations of 536,600 as of June 30, 2022, an increase of 6,100, or 1%, compared to June 30, 2021, up 1,900 compared to March 31, 2022. HSD RGUs totaled 517,200 as of June 30, 2022, an increase of 9,300 or 2%, compared to June 30, 2021, up 2,200 compared to March 31, 2022.
Edge-Outs
Edge-Out Projects from continuing operations reached a total of 78,900 homes passed and 19,700 Subscribers since inception.
The 2020 Edge-Out projects from continuing operations include 800 Subscribers, which represents 23.5% penetration on such nodes. The 2021 Edge-Out projects from continuing operations include 800 Subscribers, which represents 40.0% penetration on such nodes. The 2022 Edge-Out projects from continuing operations include 100 Subscribers, which represents 14.3% penetration on such nodes.
Capital Expenditures
Capital Expenditures from continuing operations totaled $34.7 million for the quarter ended June 30, 2022, representing a $6.8 million decrease compared to the quarter ended June 30, 2021. The decrease is primarily related to a reduction network enhancement and customer premise equipment (“CPE”) expenditures partially offset by increases in line extensions as we focus on expanding our network.
Capital Expenditures from continuing operations for the quarter ended June 30, 2022 equates to 20% of Total Revenue from continuing operations for the quarter ended June 30, 2022.
Liquidity and Leverage
As of June 30, 2022, the total outstanding amount of long-term debt and finance lease obligations was $738.5 million, and cash and cash equivalents were $49.9 million. Total Net Leverage as of June 30, 2022, was 2.6X in line with the first quarter of 2022 on a LTM Pro Forma Adjusted EBITDA basis and undrawn revolver capacity totaled $245.6 million.
Third Quarter and Full Year 2022 Guidance
| Q3 2022 | Full Year 2022 | |||
| HSD Revenue | $102.0 – $106.0 million | $415.0 – $419.0 million | ||
| Total Revenue | $171.0 – $175.0 million | $704.0 – $708.0 million | ||
| Adjusted EBITDA | $66.0 – $69.0 million | $281.0 – $284.0 million | ||
| HSD net additions | 1,000 – 3,000 | 12,000 – 15,000 |
SOURCE WideOpenWest, Inc.
John Gonzalez covers business and finance news. He is the only person we trust to provide breaking news in the finance category. Having already completed an Associates Degree in Psychology, John Gonzalez is now finishing his Bachelor’s degree in Communications. In preparation for working in the advertisement sector, John is writing financial content and analysis. On a daily basis, he works on articles regarding the following topics: business, top trends, technology, and politics.
Address: 7302 Benton Street, Arvada, CO 80003, USA
Email: John@shopordered.com
Zip Code: 80003
Phone Number: 303-420-7222
