Q2 2020 WideOpenWest Inc Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the second quarter 2020 wide open West incorporated earnings Conference call. At this time all participants are in listen only mode. Later, you'll have the opportunity to ask questions. During the question and answer session. You may registered to ask a question by pressing the star and one keys.
And your Touchtone telephone.
Draw yourself from the Q by pressing the pound <unk>. Please note. This call may be recorded all be standing by should you need any assistance I would now like to turn the call over to Mr. Lucas Bender walls, Vice President corporate development and Investor Relations Mr. Bender. Please proceed.
Thank you Leo.
Afternoon, everyone and thank you for joining our second quarter 2020 earnings call.
For me to their series the older Wells, Chief Executive Officer, John Rego, well Chief Financial Officer.
Before we get started we need to remind everyone that during our call you will make some forward looking statements about expected operating results.
Our business strategy and other matters related to our business.
These forward looking statements are subject to known and unknown risks uncertainties and other factors, including most recently the economic uncertainty relating to the coded 19 pandemic that may cause our actual operating results financial position or performance to be materially different from those expressed or implied north <unk> 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.
For additional information concerning factors that could cause actual results could differ materially from our forward looking statements. Please refer to our filings with the FCC, including a risk factor section overtime.
For the year ended December 31st 2019. Other reports subsequently filed with the FCC.
In addition, please note today's call and in our earnings waste, we refer to certain non-GAAP financial measures. Please refer to our AK and trending schedules for the reconciliation of non-GAAP financial measures to GAAP in our reasoning for pretending such measures now I'll turn the call over to Theresa.
Thanks, Lucas I.
I hope you and all those dear to you are doing well as Covidien <unk> team continues to impact our daily life.
Today, I'm joined by our New Chief Financial Officer, John Rego.
Very excited to have John it well and im delighted with his enthusiasm for the business and experience in this state.
I think many of you may have spoken to John its previous CFO role.
Today, he will share our financial update after my strategic business highlights.
As we manage our business through this are interested in a time well focus remains on our vision.
Connecting people to their world through the Wow experience, which we define as reliable easy and pleasantly surprising every time.
Now more than ever.
We're connecting people through broadband as our broadband centric approach gains momentum.
Consumers are shifting toward high speed data only adoption faster speed and increased penetration of coal home wife right.
This shift is fueling our growth in high speed data argued and reinforces our strategic move toward meeting with broadband connectivity.
Demand for our broadband services.
Led to the best second quarter of high speed data RG your growth in at least five years.
We added more high speed data RG you in the first half of 2020 than we did in all of 2019.
During the second quarter, 77% of our new customers subscribe to either our high speed data only offering or our high speed data with the screaming circuit.
Which is up from 57% in a year ago period, and 66% in the first quarter of 2020.
Well some of the changing consumer behavior can be attributed to the global crisis.
We believe the ongoing shift away from traditional video will continue to accelerate.
Our advanced broadband network is equipped to respond to this demand and we have condition our business to focus on the innovative broadband products and services that our customers want.
These innovative products and services were cited by cable facts as reasons, they recognized Wow M.S. that would be or.
We're proud of this honor and it also recognizes the growth we had realized over the last year.
Our success is a direct result of wild ability to be nimble and the hard work dedication of each and every while important.
Additionally, we were named as best and brightest company the workforce in both our Chicago and Atlanta area markets.
A meaningful awards as we work to ensure employee as well as customer wellbeing. During this time of the pandemic.
We also welcomed two new additions to our executive leadership team and wanting to our board of directors.
Already introduced John Rego, our new CFO, but we also welcome to this quarter Shannon campaign to the team as our new Chief commercial officer.
Both John and Shannon bring a wealth of experience to their role that Wow and it really hit the ground running.
I believe they will provide great leadership for our business as we execute on our initiative in 2020 and beyond.
I'm also pleased to welcome good engine Bell to our board of Directors. Good engine is the global Chief Digital Officer of Walgreens Boots Alliance and previously served in senior executive leadership role, Walt Disney Company and that Amazon.
He brings a wealth of experience in consumer digital products digital transformation and success navigating multiple cycles of disruption in technology.
Broadband and with the media ecosystem.
Now, let me highlight how we executed in the second quarter.
Total subscribers grew 6500, and the second quarter of 2020, which includes 900 subscribers from our objective.
High speed data RG use grew by 8000 in the second quarter, which included 7100 organic high speed data urging you net additions.
This was the best second quarter of high speed data. Net addition in at least five years.
Well participation in the FCC pledged to keep America connected with the right decision for business been customers.
Customer who took advantage of the pledge remain in our base and many of these customers. They have worked with us to make payments and are already clients out there bill.
Wow is committed to working closely with its customers to ensure that they can stay connected with friends and family and have the ability to work and learn from home through these unprecedented times.
Our commitment to the FCC pledged hats favorably impacted involuntary churn in the second quarter.
But separately voluntary churn also contributed to the lowest churn for a second quarter in at least five years.
We expect variability in subscriber growth in the second half of 2020 associated with the uncertainty surrounding cobot 19.
As an example communities and companies decisions related to school reopening and ongoing remote working behavior are still being determined as August begins.
[laughter] quarter 2020 business services subscription revenue grew 3.5% year over year.
Now, although the ongoing economic impact from the pandemic posed some challenges to the segments.
We do see some small businesses purchasing higher speeds services as they transition to our mine operation.
Second quarter adjusted EBITDA was 101 point Threemillion.
We expect an impact on adjusted EBITDA from Colvin 19 of 7.6 million.
For the second quarter, Wow generated 17.7 million in free cash flow.
[music].
Actually in a 2020, we highlighted the plans for the business around a concerted effort to drive greater high speed data adoption and we remain laser focused on keeping our business aligned with changes in our customers' behavior.
And as well that we can be positioned to take advantage of the ongoing shift with consumers.
As I mentioned, 77% of our new customers in the second quarter took our higher margin high speed data only offering.
This was up from 57% in the second quarter of 2019.
Let's take rate for high speed data only offering has continued to rise throughout the quarter and was more than 80% in June and this can trend is continuing in July as well.
Customers are rapidly moving to streaming services or O T T offerings, and we're well positioned to support and even encourage these moves as well.
As a greater percentage of new customers purchase or high speed data only option. We are proactively banner. She her network to support the growing demand for broadband services.
We have a plan to new legacy customers over to IP or a with ti to allow for better overall utilization of our advanced broadband network.
Wow, TV, plus which is our IP TV offering is now available in six while market.
Our plan is to migrate our legacy video customers to high speed data only.
And they just need and streaming solution or our IP based well TV plus offering with high speed data.
This migration gives our customers more choice.
And potential cost savings.
Got it also drives our network efficiency.
We are positioning our offerings as broadband first which is reflected in our sales strategy and the alignment of our sales compensation.
We believe these actions will continue to support and ultimately drive cuts customer behavior toward our high speed data offerings.
We believe whilst transformation will drive increased customer penetration at higher speed adoption for high speed data product, resulting in the realization of higher margin.
Lower customer children, and better all better capital efficiency.
This will help improve while competitive positioning.
And enable while to accelerate EBITDA and free cash flow growth.
Customer behavior continues to evolve towards higher speed tiers, and more services associated with our high speed data offering.
The second quarter, nearly 40% of new customers took higher speed tiers of 500, Meg or one gig from while.
Oh I'm why sorry is a compelling add on services for our broadband customers, providing excellent propagation of life by throughout the home.
Its products generally contribute to higher I, ARPU and lower churn for customers.
For the second quarter hold them wife, I take rates were up 17.8 percentage points over the second quarter of 2019.
4.5 percentage points over the first quarter of 2020.
Our online sales channel the lowest cost of acquisition channel has grown should be the second largest channel for new customers.
The second quarter of 2020, 38.7% of our high speed data only connect came through our online channel.
Now what we had been doing is really transformational for awhile and we're encouraged by the ongoing success of these efforts and we'll continue to share. How these results are progressing.
I'm, especially proud of how the wild team navigated the challenges posed by the pandemic in the second quarter, yet continued to focus on delivering not only critical services to the communities we serve.
But to achieving record broadband growth.
Position us for the future.
Now I'll turn it over to done because it's got some of the quarterly financial.
Well thanks Theresa.
It's hard to believe that I've been here five weeks.
I already feel like on part of the while family that's amazing considering that we're all working remotely.
What I was considering opportunities for myself I kept coming back to the well opportunity what most impressed me during the process with the entry level and commitment to excellence of its people and the power of its network.
It struck me that well have the perfect combination for success as it works through its transformation to become a broadband centric company.
After four weeks of working with the team I'm, even more impressive backed them bowled over body entry level. The tenacity as we work through challenging times.
That's an example of that commitment to excellence consider that we grew our total net subscribers by 6500 <unk>, 0.8% over the first quarter driven by the addition of 8000 high speed data RG use a 1% increase.
Year to date, we've added 24100 high speed data RG use.
This quarter was the best second quarter for high speed data adds in five years.
During a pandemic.
That is excellent.
These results told me that we are well underway to becoming a broadband centric company.
For the second quarter 2020 were reported total revenue of 282 million, which was down 2.7% on a year over year basis.
High speed data revenue totaled 137.3 million, an increase of 6.9 million or 5.3% over the second quarter of last year I.
Again this is a proof point for our broadband centric strategy.
[laughter] services subscription revenue totaled 35.5 million over second quarter, our year over year increase of 1.2 million with three and a half persons.
Our net income for the second quarter was 2.2 million and our second quarter 2020, adjusted EBITDA totaled one of the doing one point threemillion, giving us an adjusted EBITDA margin of 35.9%.
No covert 19, absolutely had a negative impact on our business in the second quarter.
We estimate the coding 19 impact on adjusted EBITDA to be approximately $7.6 million.
That impact was driven by lower advertising revenue and higher bad debt expenses of approximately 3 million.
FCC pledged related bad debt of approximately 1.4 million.
George late fees of approximately 1.2 million also related to the pledge.
Customer care cost associated with onshoring resources of approximately 400000.
And other costs and benefits across the business of approximately $1.6 million.
I believe our results were solid even in light of the impact of the pandemic unimpressive. The results that are people were able to deliver.
Understood and economics in the highly accretive nature of their job investments.
I want to highlight how we've been progressing among the most recent vintages of age outs.
The second quarter of 2020 to 28, a joke notes have achieved 18 gonna have present penetration.
And the 2019 edge out notes most of which were delivered in the second half for the year have achieved 13.6% penetration.
Our capital expenditures for the second quarter of 2020 totaled 57.2 million on a reported basis.
That includes 5.4 million of expansion capital expenditures for business services and agile construction.
Moving expansion Capex, our capital expenditures totaled 51.8 billion or 18.4% of total revenue for the second quarter.
With regard to liquidity and leverage.
We have $39.6 million of cash on hand at June Thirtyth 2020.
Outstanding debt totaled 2.3 billion.
We had 215.5 million undrawn revolver capacity.
I stated last quarter. The company took a precautionary 50 million dollar draw on the revolver in April which was subsequently been we paid in June based on the stability of the capital markets and a further understanding of the global help close its impact on our business.
Net leverage was 5.39 times as of June Thirtyth 2020 on a trailing 12 month adjusted EBITDA beef.
That was up from 5.32 times at March 31st 2020, because of the impact on adjusted EBITDA.
Well I'm extraordinarily excited to be here as we transform well from a traditional cable company to a broadband centric one.
I look forward to working with the well too that also getting to know each of you.
Now lets turn it back to the operator, we'll open up the call for questions.
At this time, if you'd like to ask a question press star one Touchtone phone that is a star one now on your Touchtone telephone one moment wall week here.
Yeah.
And we'll take your questions from Batya Levy of UBI, yes.
[laughter] <unk> great. This is Chris talked about yeah. It was another very strong broadband corridor. I. Appreciate you mentioned you expect greater subscriber volatility going forward, but can you help us thinking about how much of the first half outperformance has been a pull forward of demand and keep provide any color on how subs have trended so far in July.
Thanks, Chris I. Appreciate the question Yeah, I think we're still trying to figure that out as we said in terms of subscriber demand given we're not sure specifically, what's happening with schools and work from home. So yeah I can tell you on the commercial side we're encouraged.
We're starting to see some businesses come back and some demand there taking place as well.
So we are continuing to feel our way through it as well.
John is there anything else you wanted to add to that.
No I I think that's right Teresa so it's a it's a little bit a wait and see but from where we sit right now things are looking reasonably good.
I guess I would thank God.
One other thing and that is that we have we really believe we're providing the surface as our customers want our services are very competitive and as customers have their own budgets being impacted whats perhaps than the economic French a we really provide great value.
And the kinds of high speed and the services customers want and I think that's part of the reason we have been successful all here not just because of total but if you recall back in January we started the year big as well and we're pleased to still see that consumer reaction.
Thanks.
Great. Thank you for that and if I can't just sit in one day beyond the video strategy you have a range of products out in the market and that really talks about the margin uplift you expect over time from declining video do you envision taking a more opex and Capex light approach over time and focusing more on reselling Oh Gee services or do you believe it still important also offer your own.
Set of TV products.
Yeah, I think that's a great question and clearly.
Absolutely broadband first and as you could see in the numbers that we were sharing with you the 'cause a increase in the percentage of new customers, taking broadband only our broadband with streaming we definitely are prioritizing and going that direction with that said, we also have a base.
The video customers and.
We care about their transition as well and so we're transitioning them either first two high speed data only we have heard from industry research and we find that we true that probably 75% of most customers out there subscribed to at least one streaming service. So we see that transition happening secondly, we see or.
This thing video customers disconnecting from the video service, which is fine and moving to our high speed data with one of our OTI tier streaming services and then the third option for those customers that.
Still want a curated product from that from US we feel great about Wow TV plucked service. It offers benefits to the customers. We're seeing that it has an even higher customer sadder NPS score than our traditional video and its lose customers off of our quantum network onto the IP now.
Work, which absolutely gives us better network efficiency and lower cost to serve so with a win win a positive for the customers and it's also a positive for us. So our video strategy is to be supportive really the bigger picture on that as our broadband strategy.
Does that answer your question Chris.
Yes, Thank you sorry for all the car.
Yes. Thanks.
Thank you and once again that a star one to ask a question well take our next question from Frank Loosen of Raymond James.
Great. Thank you I want to talk little about the edge out strategy momentum is still a little bit slower than it was in years past what are the thoughts on you're getting that it getting that accelerated and how did those how did those go pace through the through the quarter was what was the receptivity in second quarter and how.
With that continued in Q3 and those newer markets.
Yeah. Thanks for the question Frank first of all I think when we started the year. We said we were probably going to do a little bit less in terms of new homes passed with the edge out this year and certainly with challenges with construction given the pandemic. We continue to look at Uh Huh.
How much we really want to spend this year on new homes passed with that said, we also were continuing to focus on the vintages that we launched in 2018 as well as 2019. So we're continuing to grow those one of the things that is key to growth in new edge out areas is.
I'm, having our field sales people in the markets, we didn't pull back from that in this last quarter due to the pandemic. So we didn't have people in the field and generating the kind of demands that I think we usually do but somehow with all of those challenges we still are growing those vintages and we.
We'll see tremendous opportunity and we'll continue to pursue that we now have our field sales folks back in the market with all of the appropriate precautions of course <unk>.
Does that help Frank no that's great and so I would you expect that to you know to trend for it for the rest of the year. If you have the full field sales assuming there's no other other setbacks and and you know and shutdown things like that.
John did you want to chime in anyway.
Well I went out.
I just want to point out quickly Frank <unk> to the earlier due the earlier point.
It was kind of amazing to me as they started to dig into the company that.
The penetration is really grew a a in the first half of the or even in light of not being able to knock on doors for four months out of the last six months.
Actually kind of impressed by that I think that its recent said Oh.
We're gonna have less capex spend to build out and sleep more focus now on penetration.
So my expectation is that what we see these penetration numbers go up and down through the end of the year.
Well it was there any particular marketing change that you did I understand that the you know the dornoch door hangers, and you know three pretty pretty typical and this is good good strategy I'm, but what did what did you learn from that or is there something new or is it just you know the nature of folks it couldn't couldn't go anywhere do anything else and they kind of had to.
Had to shift how they bought things like that and so many other areas or is there something new that you're trying to do you think that it's that's been a shift in the consumers mentality that they'll start to gravitate to those other other forms of marketing.
So I I you know I would say, we continually ER with marketing are always sharpening our pencil and looking at the competition. So we have a variety of tactics and certainly with Shannon campaign coming onboard we're excited a with a continued read.
You've been nation of our edge out strategy, what customers like in our organic footprints and that is that we have high speed service and we have the whole home wife, I am very reliable service. Those same things are very attractive when we go into a new area, especially in areas.
Where customers maybe didn't have as many choices on the path. So and then like I said, we offer great value and that's great having that so I'm being able to really focus on that I think we'll continue to grow our edge out penetration are we also look at a variety of metrics, we well we've stated this before.
On previous calls and that is penetration is one variable. We also look at the IR and the cost of the build out and we still are absolutely on track with the returns that we had expected on all of our edge out Bill.
Alright, great. Thank you very much.
Thanks Frank.
And while our next question comes from Tim Nollen of Macquarie.
Hi, everyone. Thanks, very much for taking the question I'd like to come back to the TV side of things again.
I appreciate the color around the.
EBITDA.
Getting back toward it looks fine numbers are right to me exactly flat year over year. In my question is as you're pushing your HST only strategy and such a high percentage of HST only customers coming on now.
When do you think how do you think that will play out in terms of your earnings progress as it can we look to.
Run rate earnings growth.
For the company all else being equal.
And I.
I guess, how then will you also.
To be pushing existing subscribers away from a linear TV bundle onto these OTI ti packages.
Great and John you want to speak to that yeah, no. It's over going into it. So I think a couple of things and you own since we know this anyway, but.
[noise] because the gross margins into high speed data product are significantly higher than the TV product, but that's only part of the story.
The cost to operate the business for TV is substantially more expensive than it is two to two operated for high speed data and even phone for that matter. So we're up that pivot point now that is the broadband centric strategy. So as you as you know truck along with us for the next several quarters.
You know coming up with a months, where 80% of the new ads are high speed data only you know we're going to start to see the turnaround happened. So that's what I'm looking up.
And I think that I think that we'll see that cold it's unfortunate so it.
Negative we get us a bit this year because that everybody else.
But if we can see path that I think we can see a path to see sustained profitability.
Yes, and I'm just to add to that I completely agree John We also Tim have a video rate increase that we've implemented starting July 1st and the out is Oh of course associated with the programming increases and things that we've had throughout the year. So.
That is a significant increase as customers make collyn about that video increase we offer them alternatives and say well you know if the traditional video package, we're offering doesn't meet your need can we consult with you on what streaming package might work and that is also a way that we are.
Converting customers off of the existing video platform.
Okay. So it is an active effort to.
So just do it you said convert linear TV subscribers onto another streaming streaming service instead, which is more profitable for you.
To either.
Yeah, it to either high speed data only if they have their own streaming services, they've already subscribed to or high speed data with one of our streaming services absolutely that is the philosophy. However, we also for those profitable high speed data and video customers. We will have Wow TV plus as a curated option that is on the.
IP network, which is our more efficient network.
Got it so that's absolutely the strategy. Thanks.
Our next question from Zack silver of B. Riley.
Okay, great. Thanks, you're gonna questions I Wonder if you go back to the HST net adds in the quarter you guys put up good growth like many other operators of for you specifically what was the biggest driver of that growth between churn and new Activations and in the new Activations you saw was that.
Primarily new household formation share shift away from DSL or winning customers away from incumbents.
Thanks to ask Yeah. This question and a one thing.
I would say it gets a combination of all those things as we mentioned we had some of the best churn numbers. We've had in the company's history part of that is involuntary churn in that relates back to the FCC pledged we did have a number of customers that we put on those plans our plans were different than.
In some of our competitors in that we did not launch any zero cost plans for customers I think some of the others in the industry, we're giving like 60 days Greek we didn't do that we charged to customers and in fact many of them are since the pledged ended on June thirtyth are already current with their bills.
And are being charged as always so it's a combination of certainly I think our high speed data broadband service being a compelling offering customers who were currently on it not wanting to leave US there were some impact from the lower involuntary churn because of the.
FCC pledge that we think that was a smaller piece and I do think as there are some customers through the pandemic, who previously used just wireless that are now moving to broadband because they need to have both services and clearly we're continuing to be successful with those who are preview.
DSL customers, who realize they need more speed. So it's been a combination of reasons and existing customers ticking higher speed and more whole home wife, right. So kind of benefits all around and we feel like our services and our network had been well positioned to take advantage of that.
Does that help there yeah. So that's helpful and one more if I could just going back to the edge outside the capex in the first half of 20 has come down quite a bit and some of your commentary was around focusing on increasing 10 rates in the existing edge out there should we read into that that you maybe modern.
Seeding new home build a job capex going forward and then how do we think about capital allocation towards newbuilds, frac jobs versus paying down debt or share repurchase.
Yes, so John I, you know, we're looking at less Capex this year than last year for sure.
You know Teresa said earlier, when we look at the 18 vintage that 19 vintage the focus right now is to increase the penetration on what has been built so three plus the medical way. We're looking at that I think if you look at Oh.
If you look at our Capex.
Excuse me for the quarter versus a year ago quarter, you would find out a slightly higher and.
Most of that has to do with us actually proactively going out and increasing RCP inventory.
Over the fear that there might be like a supply chain issue this quarter because of cobot.
Well the other components of Capex have come down and I would expect that the again as I said capex for the year to be less than last year.
That's helpful. Thanks, Sean.
Our next question is from cut and morale of RBC capital markets.
Great. Thanks for taking my questions two if I could first for John I know, it's only been five weeks since he joined the company so that might be premature, but as you slowly settle into the role and evaluate the company for a fresh land are there any specific areas you might be it might be worth reevaluating, whether it's a new York.
Term or long term allocation or citing a capex as jobs the balance sheet for the video strategy I guess put more simply would it be fair to say the goal is to find ways to better lean into the company's brought into that as opposed to a broader strategic shifts and I have a follow up.
Yeah. So hey, great question on it has only been five weeks or feels like 10 weeks, but it was five I think that Ah, yes, I'm looking or rather specifically into the efficiency of where the dollar suspended the filter is on my first they just because it's in the budget doesn't mean you get it so.
We'll take a good hard look at everything but believe me everything that I look at now is focused on two areas. One is to become a broadband centric company that actually me something to me that's why it took the job.
The other one is too you know moved the company to position to continually and increasingly generate free cash flow.
So everything that I'm looking at well be revolving around those two things.
Understood Great. Thanks, and then just briefly on broadband I know, we should expect some variability in the back half can you just help us think about how elevated churn might be in Q3, given the hydro off.
Yeah, you know two to to be seen as as we said you know we had.
An impact that we quantified for this quarter about 7.6 million Bucks.
Oh and by the way we are expecting to have some negativity from quote within Q3 Q4 as well my expectation is that a you know we're going to see a bit we're going to see a bit more in the in the bad debt arena, we quite honest with you. So.
Oh, you know I'm building that into my own modeling just so you know.
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Understood Alright, thank you.
And just to be clear on the FCC pledge a week as of June Thirtyth. We had about 4700 customers was all that word labeled on what we're calling these essential services. Then once again, we were still charging customers for those services I wouldn't say over a third of them are already you know paying and back.
Correct.
So far and yeah throughout July so we're working closely as we always do to be clear, we always work with our customers on payments and Oh listen to them. So the plenti was consistent with kind of how we think about working with our customers anyway, but just to let you know the scale it if they're not huge numbers.
Our next question is from Brandon This fall of Keybanc capital markets.
Hi, Thanks for taking the question. This is having young stepping in for Brandon rushing had recently announced that was the chanting fiveg home offerings in Detroit, which we understand is a large market where you guys. How do you see that service from competitive standpoint.
Thanks, Evan Yeah in terms of Fiveg really haven't seen much in terms of any impact in Detroit or for that matter anywhere else. We continue to watch it and remain focused really on our ability to execute and you know from the wholesale perspective at time.
It's an opportunity for us, but really the strength of our network is such that overtime, we could compete very favorably and or even faster speeds if needed on fives then fiveg.
So we really haven't seen much impact at all in Detroit or anywhere else.
Great. Thank you.
And once again to ask your question. Please press star one on your Touchtone phone one moment, what we view.
The only other question from <unk> Williams of Octagon.
Hi, Teresa welcome aboard John Thanks for taking my question, one clarification on that 4.7, causing customers on the FCC pad pledged plans are they netted out of your your subscriber numbers for this quarter are those inclusive.
No there is grounded.
There are enough just right there in the subscriber numbers.
And the appropriate bad debt reserves have been caught up against some of those folks that number of 47 quoted by the way.
Couldn't down post the quarter, So I think.
They are below 4000 of it.
Okay got it. Thank you and then another question just on the kind of speed upgrade side, yes. It you get good color around 40% of new customers, taking kind of 500, plus what percent of your existing customer base. Throughout this time has been upgrading I go it's great to see the new customers coming in but how is the price.
Gross going there kind of what do you have to run that a little bit further.
Yeah, that's a great point, we have we don't give out it you know exact percentages on the existing base, but I can tell you. Many many customers that are in our existing base I'm over the last few months have upgraded their service to higher speeds or added a whole home wife, I just as they seem the demands that all of.
With are experiencing in our homes with people working from home and the kids.
Gaming as well as doing online learning so that that is also happening in a good way too.
Okay. Thanks, actually just one quick kind of follow up.
You're going to give us what either just when you do go through and do those proactive video kind of move to O.G. and other video product. What's the process. There about working these people through that as well as yelp potentially up during the entire speeds. That's it for me I appreciate it.
Well I think as a company he first start with where our customers are and what their needs are and so it's a very consultative process right now reactively as customers may call line in I'm concerned about a servicer or interested in a new service they've heard about why TV plus or that they just.
Like many people have looked at the bill and see that maybe they are using more screening services then the traditional linear video. So we consult with them and are happy to transition them to high speed data only with the higher speed, maybe whole home Wi Fi so that they can make sure that they're getting great video coverage or other coverage.
Throughout every aspect of their home and if they still really want that service from Wow and there in one of the markets, where we've launched we offer while TV plot, but right now as always we are led by our customers and want to offer a robust surfaces to them, but that's the priority that we look at.
HM.
And that concludes our question and answer session.
Be happy to return the call to Teresa older for any closing comments.
Well, thanks, so much everyone and thank you John for your first call. We're well we appreciate all of you joining us to faster and thanks for your continued interest in our business and your support as well have a great day.
This does.
Today's program you may now disconnect your lines and everyone have a good day.
[noise] Oh.
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