Q1 2023 Cable One Inc Earnings Call
[music].
Good afternoon, and thank you for attending today's cable one first quarter 2023 earnings call. My name is Jason and I'll be the moderator for todays call all.
All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end if you'd like to ask a question. Please press star one on your telephone keypad.
I would now like to pass the conference over to our host Jordan workers.
Good afternoon, and welcome to cable one's first quarter 2023 earnings call. We're glad to have you join us as we review our results before we proceed I would like to remind you that today's discussion contains forward looking statements relating to future events that involve risks and uncertainties you can find <unk>.
<unk> that could cause cable one's actual results to differ materially from the forward looking statements discussed during today's call in today's earnings release and in our recent SEC filings.
<unk> is under no obligation and expressly disclaims any obligation except as required by law to update or alter its forward looking statements, whether as a result of new information future events or otherwise. Additionally, today's remarks will include a discussion of certain financial measures that are not presented in conformity with U S generally except.
Did the accounting principles or GAAP.
Reconciliations of non-GAAP financial measures discussed on this call to the most directly comparable GAAP measures can be found in our earnings release or on our website at IR Cableone net.
During today's call whenever we refer to first quarter results on an adjusted basis, we are excluding the Tallahassee and managed IP operations, we divested in the second quarter of 2022, which exclusively provided business services for more information. Please refer to those slides posted to our IR website.
Joining me on today's call is our president and CEO , Julie Lewis and Todd <unk>, our CFO with that let me turn the call over to Julie.
Thank you Troy and good afternoon, everyone. We appreciate you joining us for today's call.
Amidst the ongoing debate surrounding the longevity of traditional broadband providers, our first quarter 2023 results highlight the resiliency of our business model.
In the face of ongoing macroeconomic challenges.
We have a reliable value based broadband product continues.
This is evidenced by first quarter residential broadband revenue growth of five 5% from prior year, where we grew in customers as well as in our pillar.
First quarter business services revenue growth of two 9% on an adjusted basis, but we had stronger growth in our SMB and enterprise broadband service offerings.
First quarter, adjusted EBITDA margin up 110 basis points from the prior year to 54, 2%, reflecting continued efficiency and product mix shift.
First quarter reduction in capital intensity, all while continuing to increase our network capacity, demonstrating our commitment to building infrastructure and a capital efficient manner.
And our first quarter adjusted EBITDA less Capex was $132.7 million, an increase of four 4% year over year.
Our robust financial results underscores the significance of the services that keep our customers and communities connected to what matters most.
Looking first at residential broadband service on a sequential quarterly basis, we saw an increase of approximately 2200 customers.
The return to positive growth is encouraging the ongoing slow pace of home move activity continues to impact new customer sales and net growth.
We are pleased to report that churn rates remained consistently low demonstrating strong customer retention and satisfaction.
We continue to test and learn with our products and pricing to further insulate our current base and foster profitable growth.
Turning to residential broadband <unk>, we reported solid year over year growth of four 5%.
The demand for higher speed tiers remains robust with sales of both 500, Meg and gig service plans, increasing by more than 450 basis points sequentially.
We also see substantial opportunity to continue Upselling, our current customer base with average service offerings remain below our sell in levels.
Continuing to be care upgrades and the modem rate adjustment, which began during the fourth quarter are the primary drivers of our Q1 2023 ARPA growth.
We believe there is also a meaningful opportunity for customer <unk> growth over the long term as we make disciplined capital investments that will allow for enhanced service offerings and continued expansion of our addressable market.
We are investing in our network and deploying devices today that significantly increased downstream and upstream speeds lower latency and provide greater visibility into the in home Wi Fi experience.
All in a more energy efficient manner.
As our network evolves to DOCSIS 4.0, we estimate these network upgrades will cost around $200 per passing.
Our ongoing commitment to providing products and services that meet the needs of our customers today and in the future gives us a strong competitive edge against wire competition, which remains relatively low.
We believe the superior experience, we provide our customers paired with our local expertise and first mover advantages make us a fierce competitor with a proven track record and accompanying results.
Digging into fixed wireless competition, it's no secret that demand for data is increasing at unprecedented levels and it's unlikely that growth will slow anytime soon.
Just over one in five customers on our network are now using a terabyte of data.
Given the enormity of data needs today and in the future. We believe it's clear that mobile fixed wireless cannot ultimately meet the data needs of many customers.
While we see a small segment of our win share from DSL customers experimenting with mobile fixed wireless products on the whole, we do not see any noticeable impact to our existing customer base, which values the premium capacity and reliability we offer.
And we believe those trying out mobile fixed wireless after switching from DSL well migrate to our data services on the need for a more reliable and robust service arises.
Moving to business services on an adjusted basis, we drove revenue growth of two 9% year over year. Despite short term challenges to new business creation due to macroeconomic conditions are.
Our business services team remains steadfast in managing the many aspects, we control, including offering a streamlined suite of products to existing customers driving efficiencies that align with customer needs and maintaining a relentless focus on white glove service.
As a result, both our enterprise and small business broadband offerings continued to see strong growth.
Demand for data continues to grow as evidenced by a new milestone as nearly 21% of our residential customers now exceed a terabyte of usage each month, an increase of more than 20% from the same period last year.
Despite continued growth in demand our average network utilization during peak hours has also improved during the first quarter of 2023 downstream and upstream utilization during peak hours decreased from 23% to 21%.
A reflection of our ongoing investment in our plant.
Stay ahead of customer demand.
Transitioning to integration activities. Our teams continue to execute across multiple projects I think thoughtfully prepare for the larger platform conversions to come.
We are delighted with the synergies achieved to date and confident that the conversion of the larger platforms will yield even greater results.
Like to express my sincere gratitude to the skilled associates across our family of brands for their exceptional contribution and identifying best practices and fostering a unified company culture.
Building on our associates exceptional contributions to the company last year, we embarked on a digital transformation journey to re imagine the future of cable one with the intention of delivering significantly enhanced experiences for our customers and associates.
Through numerous initiatives such as automated field maintenance truck roll a recommendation engine and contact center modernization, we've been able to anticipate customer needs and improve our efficiency.
We will continue on this journey to nurture a culture of innovation that benefits, our customers associates and shareholders.
Turning now to our unconsolidated investments.
For the fourth quarter 2022.
Combined adjusted EBITDA of certain of the companies. We have invested in was approximately $348 million on an annualized basis.
This represents growth of approximately 21% in the fourth quarter of 2022 as compared to the fourth quarter of 2021.
These companies also added more than 130000, new fiber passing during the fourth quarter period ended December 31 2022.
Momentum continues in the first quarter, where total residential and business data customers grew by approximately 11400 or two 5%.
Does not include the operations of Metronet or exactly where we have less significant investments.
These excellent results highlight the execution of these proven management teams as well as the growth potential of these investments.
Before handing the call over to Todd there are a few notable events from the quarter that I'm pleased to share.
Our laser focus on creating a workplace in which our associates feel valued and included resulted in Forbes ranking us for the third year in a row on their list of America's Best midsize employers.
I am also proud to share that cable one was recently named by Newsweek.
One of Americas greatest workplaces for women 2023.
These awards are especially meaningful as they speak to the culture of cable one.
Together with our associates, we have built an inclusive workplace that promotes diversity opportunity and professional development.
Our associates drive, our culture, which values the unique experiences and perspectives each bring to the table.
Never has to spend more apparent than that our recent company rally, which reunited our associates in person events across our footprint.
Associates joined together to celebrate connect and share while hearing from senior leadership about the future of our company.
Our associates were energized and inspired by these events further reaffirming our credo.
We are stronger together.
And now Todd who will provide a full recap of our first quarter financial performance.
Thanks, Julie starting with revenue total revenue for the first quarter of 2023 were $421 $9 million compared to $426 7 million in the first quarter of 2020 to a one 1% decrease the decrease was primarily due to a continued.
Decline in low margin residential video and voice revenues as well as the impact of the divestiture of non core operations. During the second quarter of last year, which collectively contributed $2 4 million of business services revenue in Q1 2022.
On an adjusted basis total revenues were down by 6% year over year.
Our business continues to be driven by the growth of our highly profitable residential data and business services segments for Q1 2023, our residential data revenues expanded five 5% year over year, when compared to Q1 2022, and our business services revenue grew by two 9%.
For the comparable period on an adjusted basis.
Operating expenses were $112 2 million or 26, 6% of revenues in the first quarter of 2023 compared to $119 4 million or 28% of revenues in the comparable quarter of the prior year, a 140 basis point improvement driven.
<unk> by a $12 $3 million decrease in video programming costs.
Selling general and administrative expenses were $86 $7 million for the first quarter of 2023 compared to $87 $8 million in the prior year quarter as higher labor costs and expenses associated with software platform investments were offset by reductions in health care and marketing costs.
SG&A as a percentage of revenue remained consistent at 26% for both periods.
Adjusted EBITDA was $228 $8 million for the first quarter, an increase of 1% when compared to the first quarter of 2022 are.
Our adjusted EBITDA margin for the first quarter of 2023 was 54, 2%.
110 basis point improvement compared to prior year as we continue to drive growth in our higher margin advanced broadband products, while at the same time extracting costs via scale integration acumen and efficiencies in our product delivery and support model.
Capital expenditures totaled $96 $1 million for the first quarter of 2023, which equates to 42% of adjusted EBITDA.
<unk> to $99 $4 million or 43, 9% in the prior year quarter.
During the first quarter, we invested $12 $8 million of Capex for new market expansion initiatives and $3 6 million for integration activities.
Ongoing capital expenditures will remain aligned with our balanced and disciplined allocation strategy that prioritizes investment in our advanced broadband networks as well as high return high visibility projects that extend these networks to perspective, new customers in unserved or underserved areas of Rural America.
Adjusted EBITDA less capital expenditures was $132 $7 million for the first quarter of 2023, an increase of four 4% from the prior year quarter as both elements of this important metric continue to improve.
And we appropriately balanced growth investments in our existing networks inorganic expansion opportunities and return of capital to shareholders in the first quarter of 2023, we distributed $16 $5 million in dividends and repurchased nearly 57000 shares of our common stock for approximately one.
Percent of outstanding shares for $41 8 million.
As we navigate a challenging economic backdrop, a rising interest rate environment and constrained capital markets. We are squarely focused on managing our balance sheet in order to support our long term investments and ensure our ability to operate through these cycles, while continuing to reinvest in our core businesses.
As of March 31, we had approximately $203 million of cash and cash equivalents on hand, and our business generates strong discretionary cash flow.
Our debt balance was approximately $3 $8 billion, consisting of approximately $1 8 billion in term loans $920 million in convertible notes $650 million unsecured notes $488 million of revolver borrowings and $5 million of finance lease liabilities.
We also had $512 million available for additional borrowings under our $1 billion committed revolving credit facility.
Our weighted average cost of debt for the quarter was approximately 4% our net leverage ratio was 398 times and the vast majority of our borrowings are either fixed issuance or had been synthetically fixed under long term interest rate contracts considerably mitigating our exposure to rising underlying interest rates.
As we discussed during last quarter's call and disclosed in our 10-K in February of this year, we successfully completed an opportunistic financing transaction with our lenders that provided cable one with extended maturities of two plus years incremental strategic flexibility and enhanced funding flexibility.
All at comparable cost to our previous arrangements.
As a result, our next scheduled maturity date is in 2026 with the remainder of our maturities five years and beyond.
We also had our long term issuer credit ratings affirmed by both standard <unk> Poor's and Moody's during the quarter.
With that we have.
Ready for questions.
If you would like to ask a question. Please press star followed by one or your telephone keypad. If for any reason you'd like to remove that question. Please press star followed by two again to ask a question. It is star one.
Our first question is from Phil Cusick with Jpmorgan. Your line is now open.
Hi, guys. Thank you a couple if I can first <unk> is usually the best broadband quarter of the year. How do you think about seasonal impacts from here as well as talk about any impact of slowing housing growth in your territories and then second can you talk about any M&A in the market today.
Both probably more on the sell side out there are there any sellers out there theyre starting to get more interested with rates going higher or are things sort of shutting down thanks very much.
Thanks, Phil it's Julie.
Julia with a cold.
Alright.
Do I sound nasally.
So.
I don't think any of us really know what to expect with this year and I say that because I find it.
Very interesting that on some some on one hand, you might see.
Factors that indicate economic issues like the move rate right like the people just are not moving and interest rates are super high but on the other hand.
Our customers are taking our higher speed tiers, which obviously costs more.
Larger rate than ever before so those two things seem somewhat opposed to each other my best guest.
Having no crystal balls that seasonality will follow our typical seasonality.
Yes.
Cycle.
And then I think you asked it.
About the news and you've put out pieces on news and starts are low and they are low across our footprint. So it does not matter. If it is what you might term a heavily competitive area or an area that has.
No other competitor then.
Then in ILEC.
So across the footprint starts are down.
The good news is as churn is also super low sparkling.
Parkway had a historic sparkly proper at a historic low.
Out Covid of course, when we werent allowed to disconnect people.
So I mean, we have indications that our customers are happy and they have a large need for our reliable and.
Robust service that has high data throughput, which is good because again that continues to grow.
And Phil on the M&A question.
I think it's a really good question I think it's probably a little too soon as it relates to how quickly the markets have changed from both value as well as cost of capital with what the fed has been doing to attack inflation.
More likely those.
Impacted.
Companies relative to cost of capital or upgrade requirements.
Will slow before they look to sell.
And play a little bit more of a patient's game and we're seeing that as it relates to the.
The aggressiveness of overbuilding in some of the markets and the pace at which that's happening.
The other thing I would say is we continue to be a preferred.
<unk> cultural integrator as it relates to a lot of the smaller businesses because they know.
The culture of cable one and how we take care of our people and we will continually see some of those interested sellers, but theyre smaller.
Very strategic from a.
Tuck in geographic area that we're already in.
I just got a reminder, from one of our associates today that we are coming up on the seventh anniversary for new wave being integrated and second year anniversary for her great. So.
Time flies.
Thanks, guys.
Our next question comes from Frank Louthan with Raymond James Your line is now open.
Great. Thank you.
Just curious on the promotion side, but are you running any heavier promotions in the quarter and what sort of pricing action or are you looking at taking this year.
And how should we can see that in the various products. Thank you.
Okay. Thanks for the question Frank.
I would not say that.
Promotions were significantly heavier we are testing and trying a lot of things that Frank and even when we do promotions.
I'm heartened to see.
That our sell in it tends to.
Widely be on the upper end of our product value chain versus any lower so.
So.
What I'm, saying.
And my Cock headway.
We do promotions to make the phone ring, but we don't see a lot of people, taking the lower end promotions and as you know.
The typically we.
Tend to discount.
The entry price and not any of our higher product offerings. Now again, we are testing and experimenting and trying different things.
The world is not.
The way it was.
Even three years ago, so the cable one of old.
Cookie cutter, one size fit all and we went to a couple of sizes a couple of years back now.
We're being very flexible and agile and treating each market.
Deserves to be treated depending on its size.
If it has competition, it's penetration levels things like that.
Pricing actions well, let's see.
We haven't done a what I would call it quote unquote naked rate adjustment in about eight years now so well.
While not predicting the future.
I do believe that there is.
Pricing elasticity, even though we happen to have a high <unk> again, driven by customer choice customers being pulled up to higher levels of service versus us pushing them. There. So I'd say stay tuned.
Frank It's Tom the only thing I'll add to what Julie just said is we did have that price increase.
Way through the fourth quarter on the equipment side of the equation.
Roll through in the first quarter here and going forward so great.
Retention associated with that obviously as we're investing in a lot of the home health.
For our customers that willingness to pay continues to increase and.
And even some of our customers that we're bringing their own seeing the value of the technology that we're investing in and you can drive that that take rate higher as well, which will be a tailwind to our <unk> as.
As well as.
How we think about the pricing and packaging adjustments you recall last year, we did a five dollar increase when we took our baseline of 100 Meg speeds here to 200, Meg we gave them more capacity at the same time the other five of that will roll through here.
It was not in the first quarter, but going forward second quarter through the balance of this year.
But.
Those are two already known I just wanted to make sure I pointed out.
Alright, great what percentage of your customers use their own modems and so forth.
We don't disclose the exact split I would say the majority use our product correct.
Got it alright.
Alright, Thank you very much.
Group room to go though.
That's a little.
Yes.
Of course, Thank you. Frank next question comes from Greg Williams with TV Cowen. Your line is now open.
Great. Thanks for taking my questions just two questions just dovetailing off the last topic on Trialing and testing new.
Plans I'm just trying to understand because you didn't give us. Some examples is this.
Way to play defense or offense against fiber to the home or maybe even lower end plans and fixed wireless or something different altogether.
Second question is just on.
Your MDI put option I know that it's two years away.
I get calls from investors a lot on it and maybe you can help us generally.
What's the general game plan on tackling that option, whether it's quoting free cash flow or potentially raising debt or even buying pieces of a call option. If that's possible along the way.
Thanks, Greg.
Okay.
In terms of Trialing and testing.
We start with our customers in mind.
We need to make sure that we are bringing them value and the things that make a difference in their lives remember we're neighbors to these people and so what we do with them related to these products really matters.
The things that you mentioned are absolutely in our sites.
Potential low end plans, which is something that we have not really looked at in the past.
If we can do it in a profitable way if we can trend the cost out of it and be smart in how we.
Onboard and service these customers it is absolutely something that we're looking at.
It would open up a new cohort for us.
We absolutely will take defensive action and again it is very market specific it depends on who the competitor is the size of the market, but our penetration is what sort of offers they are doing.
But it is interesting that doesn't always happen this way because again some of the competition that we've had are decades old.
Even fiber competition.
But sometimes.
They will actually stop builds and move their resources elsewhere if.
If we do that.
And in terms of offensive I guess, one thing that I would mention there as an example, because you asked for one is that we have been slowly and thoughtfully.
Sort of migrating to an unlimited.
Data offering versus our data plans. So we know that that accounts for a much smaller piece of our two than it had in the past because again, our customers are telling us they don't want to have to worry and it is an offensive move.
So that if somebody else came into the market.
We can just take that Scott.
Tick or branding piece away from them.
Greg I'll hit on the.
MPI.
Question that you had and we've chatted about this quite extensively.
With everyone, but the reason we invested in that business.
It's higher growth prospects prospects.
More rural and competitively insulated business model its fantastic leadership for all the reasons were still very excited about that investment today.
They've done an amazing job.
We do have an option.
To call the remaining share of.
That business that we don't own and we're in that window right now, but I'll repeat that we look at things through the.
The free cash flow accretion dilution and we're not going to do dilutive transactions would not be a great strategy as it relates to our shareholder initiatives.
But we also are compounding very attractive returns for our shareholders as a partner and that the put.
<unk> is in the <unk>.
Middle of 2025.
More variable.
Valuation methodology, as we've discussed but not disclosed.
And we look at that as an attractive option.
If we were to wait for that and we will continue to.
Diversify how we think about allocating our capital to not only prepare for events like that or other strategic events.
But also through the mindset of how we can continue to invest in ourselves through our market extension market expansion.
Of course.
Share repurchase and investing in ourselves through the return of capital.
Got it thank you.
Our next question comes from Craig Moffett with Moffett Nathanson. Your line is now open.
Alright, Thank you too.
Two questions, if I could and first Julie one last time, congratulations on being inducted into the cable Hall of Fame, which really is a terrific owner.
First can you just talk about your exposure to the ACP program in the event that ACP is potentially not reauthorized.
I suspect both of those customers are customers that were already customers of yours, but do you have a sense of.
How many customers are fully dependent on that program in order to keep subscribe to broadband and then second I Wonder if you could just update us on your thinking about wireless and <unk>.
At some point down the road wireless might make sense as part of the bundle.
Yep. Thank you for.
Thought it might be able to squeak by this call I will let them put it in the script, Greg If you didn't say anything I definitely was so I'm pleased.
Brought it up it was.
Thank you very much.
I say gosh, if you do anything long enough I guess to give you.
But.
ACP, we only have we have less than 30000.
ACP customers. So I think our exposure is not large.
For some reason those funds are not re reauthorized.
You are right. The majority of those people were our customers and they upgraded to higher tiers. They are using the money to offset more.
Versus get into the program.
Wireless mobile you can jump in here too and again I think it's interesting of course.
Listened in on our teeth and they said the customer research was saying that they wanted converged products.
We have not heard that.
We need to.
To keep our customers in mind and if it's what our customers want then that's something that we can.
Move towards right now I honestly think our focus is best served with a very capable team. They know what theyre doing in the towns that we operate in and we need to be doing everything we can to grow our.
Our market share and defend our market share in places where there is competition again.
<unk> is relatively low, especially vis vis our peers.
I do think that that we have options that are available to us they're not exactly the same as our peers, but we do have options available to us if a converged product is what our customers want and if it will need.
Helping our profitability in the long run.
And Craig I'll build on that a second as it relates to the profitability because that to us is.
Of course second to what our customers want us.
The most critical elements of making that decision and.
And those economics at this stage.
The place, where we want them to be.
Talked about the reliability element associated with that and then a bigger question is.
Is it really a converged product or is it just something that discounted.
In terms of how you potentially could co market.
Okay.
Got it thank you.
Okay.
Our next question comes from Steven Cahall with Wells Fargo. Your line's now open.
Yes. Thank you.
Two questions maybe first just to go back to <unk>. When we think about that four 5% strong growth that you saw in the quarter could you just help us think about whether a little bit or a lot came from the non unlimited.
Unlimited pricing tiers that you have.
Just wondering because really you said that ultimately that could go away if competition dictates. It. So just wondering if that becomes a meaningful headwind to ARPA growth or not really something we need to worry about and then thanks for the answer on the DOCSIS four upgrade plan.
About $200 a passing does that includes CPE and any timeline, we should think about for your goal to get to to DOCSIS four thank you.
Yes, I wouldn't worry about the unlimited.
Pretty much.
Slowly and quietly been tucking that into everyone's plan over over over the past couple of years.
For the fourth quarter. The main driver of the RPC increase was that modem adjustment that we took.
At the end of last year with a smidge of.
Customer migrations up to higher tiers.
So that's what drove that are too high.
Todd as Todd referenced we do have the folks that were migrated from 100 Meg to 200 Meg.
Are receiving as well.
Well they've already received it quite honestly it was in April the second five dollar adjustment to bring them up to about $65 price point, so it will be seen that flow through.
In the second quarter and of course that well for that segment of those customers is larger than the assessment that was done on the modems, but theres only a sub segment about 150000 customers that did that migration.
Yes.
Steve you will see the data side of the equation the data plan side of the <unk>.
Be very immaterial and continue to decline.
I wouldn't have concern about that.
So to your question I don't think people have noticed that to date because of the other things, making up for it and when we can upgrade customers.
Based on maybe previously where they have that.
It was a good catalyst to get them into a plan thats better for their needs and better for their usage as Julie was talking about with so many of our customers.
Continuing to increase the amount of usage and monthly capacity.
On the unlimited plans are or are ideal for that.
Happier longer term loyal customer.
On the <unk> side.
The 200 per passing approximate that we included here.
Yeah.
Not including the actual in home equipment. It is the everything.
Basically, but that that will be not a need necessarily but if the customer is looking for all of those enhanced offerings and services that come with that for architecture.
It could require.
The need for incremental in home CPE and Thats not in that number what I will remind you and all others.
Been very actively already investing in that four O architecture, and specifically in the network architecture in terms of spacing of the.
Ams and splitting of the nodes and deeper every time.
Doing that with our fiber.
And that's what allows us to have that number be so.
Efficient and that will be a plan that we execute not on.
12 month period of time, but over time as we look at selectively rolling out in markets on a very staged basis.
So legacy modems, well work unless they want to step up to higher symmetrical and enhanced services, that's correct and the timeline is market by market not a forced march but where we perceive there to be.
Need for a variety of reasons.
Yes.
Thank you.
Youre welcome.
Our next question comes from Brandon Miscible with Keybanc capital markets. Your line is now open.
Great. Thanks for taking the questions a lot of them have been asked.
But I guess for Todd if starts are down how much capital low capital spending come down through the network expansion I noticed it was down this quarter and what should we be expecting in terms of.
New home passed seems within your footprint.
I'll just leave it at that thanks.
Thanks for the question Brandon.
I appreciate that.
The new homes passed we were up a little I think it was like 1175 percentage year over year.
We've kind of always talked about that has been in.
One one and a half market expansion, where we are either extending or in some cases building into some new markets in and around our current geographies will be the primary driver of that were of course, where there was meaningful amount of <unk>.
Population growth and many of our markets and developers, adding neighborhoods. We expect that to continue it's been a little bit more benign here in the last six to nine months as we've talked about on several of these calls.
As it relates to the new home development, but more of what we anticipate to be a temporary macroeconomic impact than a long term.
Where are people looking to live and then and then.
Capital dynamic will obviously have some impact associated with that it will ebb and flow a little bit on when we're doing projects on the integration side, which are still.
In in flight as it relates to some of the platform migrations as we've talked about.
<unk> market expansion.
As.
I wouldn't call. It a straight line level of where that spend is but something that we absolutely feel is within that kind of broader 400 per year kind of dollar consistency consistency that we've talked about.
The new home passing are incredibly technical.
Our markets.
Many markets that are growing.
And developments are planned, but when the economy is like it is right now they might just be doing curb and gutter work and not actually building the homes, but they will be down they will be built it's just a matter of time.
Got it.
If I could ask one last.
Yes, it's a follow up but you commented on.
Being able to forecast broadband net adds that I would imagine that you still expect to grow this year broadband net adds that is but do you expect to grow every quarter. This year sequentially. Thanks.
I would agree with your comment that we fully expect to grow broadband ads, we've been very consistent in saying that.
We've demonstrated that in this quarter to predict it on a quarter by quarter basis.
A little bit more challenging Brandon as you know.
We've seen somewhat of a return to the predictable seasonality than what I think even in light.
Early 2022, we're trying to follow that and it was still kind of.
More challenging to actually following predict but then again, you're throwing macroeconomic headwinds into things now.
Obviously, a different competitive environment, but we are very confident we can continue to grow through the year, Yes, I agree we will grow.
Thank you.
Thank you.
There are no more questions. So I'll pass the call back over to the management team for closing remarks.
Thank you Jason.
I'd like to once more express my gratitude to our dedicated associates for their unwavering commitment and hard work in driving our company and most importantly, serving our customers.
And thanks to everyone for joining us for today's call.
Look forward to speaking to you again next quarter and as many of our associates have already wished me today I will also wish you may the fourth be with you.
That concludes the conference call. Thank you for your participation you may now disconnect your lines.