WideOpenWest Inc (WOW) Reports Mixed Q3 2023 Results Amid Market Expansion Efforts
High-Speed Data Revenue increased by 7% year-over-year to $109.8 million.
Total Revenue slightly down by $0.6 million compared to Q3 2022, totaling $173.1 million.
Adjusted EBITDA rose to $70.9 million, with a margin increase to 41.0%.
Net loss of $104.5 million due to a significant non-cash impairment charge on intangible assets.
ENGLEWOOD, Colo. WideOpenWest Inc (NYSE:WOW), a leading broadband provider, announced its financial results for the third quarter ended September 30, 2023, on November 8, 2023. The company reported a record high-speed data revenue of $109.8 million, a 7% increase from the same period last year, signaling strength in its core broadband business. However, total revenue saw a marginal decline to $173.1 million, down $0.6 million from Q3 2022.
Financial Performance Overview
WOW's total subscription revenue was slightly down by $0.1 million, primarily due to a decrease in Video and Telephony RGUs, partially offset by an increase in average revenue per unit (ARPU) from rate increases and the purchase of higher speed offerings. Other Business Services Revenue remained consistent at $5.4 million, while Other Revenue decreased by 6% to $7.4 million.
Operating expenses, excluding depreciation and amortization, decreased by 4% to $75.6 million, mainly due to reductions in programming expense and increases in capitalized labor. Selling, General, and Administrative expenses also saw a decrease of 6% to $37.5 million, largely attributable to reduced stock compensation and marketing expenses.
Despite these cost reductions, the company reported a net loss of $104.5 million, compared to a net income of $0.5 million in Q3 2022. This loss was primarily driven by a $131.7 million non-cash impairment charge on intangible assets. The net profit margin for the quarter was (60.4)%, a significant drop from the 0.3% in the same period last year.
Adjusted EBITDA and Capital Expenditures
Adjusted EBITDA for Q3 2023 was $70.9 million, an increase of $2.4 million from Q3 2022, with the Adjusted EBITDA margin improving to 41.0% from 39.4%. Capital expenditures totaled $64.5 million for the quarter, representing a $26.8 million increase compared to Q3 2022, primarily related to market expansion efforts.
Subscriber Metrics and Market Expansion
WOW reported a total of 517,400 subscribers as of September 30, 2023, a decrease of 20,700, or 4%, compared to the previous year. High-Speed Data (HSD) RGUs also decreased by 3% to 503,400. The company's market expansion projects have reached a total of 106,700 homes passed, with 25,800 subscribers since inception.
Liquidity and Leverage
As of September 30, 2023, WOW's total outstanding long-term debt and finance lease obligations stood at $889.1 million, with cash and cash equivalents of $22.6 million. The total net leverage ratio was 3.1x on a Last Twelve Months (LTM) Adjusted EBITDA basis.
WOW's management expressed confidence in their strategy and outlook for the next year, emphasizing the transition of their business through expansion into new markets and the growth of their broadband business. The company will provide an update on its outlook for the remainder of the year in its upcoming earnings call.
For more detailed financial information and the full earnings report, please visit WOW's investor relations website.
Contact information for investor relations and corporate communications is available for those seeking further details or to engage in follow-up queries.
Explore the complete 8-K earnings release (here) from WideOpenWest Inc for further details.
This article first appeared on GuruFocus.
