Q3 2023 ATN International Inc Earnings Call
Speaker 1: Good day and thank you for standing by. Welcome to the ATN International Q3 2023 earnings conference call and webcast.
Good day and thank you for standing by welcome to the ATM International Q3, 2023 earnings conference call and webcast.
Speaker 1: At this time, all participants are in a listen only mode.
At this time all participants are in a listen only mode.
Speaker 1: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 1 on your telephone. You'll then hear an automated message advising your hand is raised.
After the Speakers' presentation there'll be a question and answer session to ask a question. During this session you will need to press star one one on your child phone you're going to hear an automated message advising your hand is raised.
Speaker 1: To withdraw your question, please press star 1-1 again.
To withdraw your question. Please press star one again please.
Speaker 1: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Justin Benikasa, CFO . Please go ahead.
Please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today, Justin Benincasa CFO. Please go ahead.
Speaker 2: Thank you, Kathy, and good morning, everyone. This morning will be review our third quarter, 2023 results. I'm joined by Michael Pryor, ATN's chief executive officer and by Brad Martin, our chief operating officer.
Thank you Kathy and good morning, everyone.
We'll be review, our third quarter 2020 results I'm joined.
Michael Prior Atms, Chief Executive Officer, and by Brad Martin, Our Chief operating Officer.
Speaker 2: Michael will provide an update on the business and strategy and a high level overview of our quarterly results. I'll cover up financials and provide additional color where necessary and Brad is here for questions and answers to stuff.
Michael will provide an update on the business and strategy at a high level overview of our quarterly results.
I'll cover our financials and provide additional color where necessary gratis here for questions and answers session.
Speaker 2: As a reminder, we released our third quarter results press release yesterday afternoon after the market closed. Investors can find earnings, earnings release and results presentation on our investor relations website at andy smelling Ogden China's leading-ento hoops web series head sensing.
As a reminder, we released our third quarter results press release yesterday afternoon. After the market close investors can find earnings our earnings release and results presentation on our Investor Relations website.
Speaker 2: Our earnings release and the presentation contained forward-looking statements concerning our current expectations, objectives, and underlying assumptions regarding our future offering results.
Our earnings release and the presentation contain forward looking statements concerning our current expectations objectives and underlying assumptions regarding our future operating results.
Speaker 2: These statements are subject to risks and uncertainties that could cause actual results of different materials from those described.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described.
Speaker 2: Also, in an effort to provide useful information to investors or comments to saying glued non- GAAP financial measures.
Also in an effort to provide useful information to investors. Our comments today include non-GAAP financial measures.
Speaker 2: We're details on these measures and reconciliation to comfortable GAAP measures and for further...
For details on these measures and reconciliations to comparable GAAP measures and for further.
Speaker 2: And for further information regarding the factors that may affect our future operating results, please refer to our earnings release on our website at atni.com or the 8K filing provided to the SEC. I'll now turn the call over to Michael for his prepared remarks.
Yeah.
And for further information regarding the factors that may affect our future operating results.
Please refer to our earnings release on our website at <unk> Dot com or the 8-K filing provided to the SEC I'll now turn the call over to Michael for his prepared remarks.
Speaker 2: Thank you Justin. Good morning everyone and thank you for joining us.
Justin Good morning, everyone and thank you for joining us.
Speaker 2: We're pleased with our third quarter performance as we continue to rapidly convert customers to our high speed networks and work toward completing our three year plan at the end of 2024.
We're pleased with our third quarter performance as we continue to rapidly convert customers to our high speed networks and work toward completing our three year plan at the end of 2024.
Speaker 2: Let me start by sharing three key takeaways from our performance.
Let me start by sharing three key takeaways from our performance.
Speaker 2: First, we continue to execute well in all fronts, delivering higher revenue in IBA DAW on solid subscriber growth in both the quarter and first nine months of 2023.
First we continue to execute well on all fronts delivering.
Delivering higher revenue and EBITDA on solid subscriber growth in both the quarter and first nine months of 2023.
Speaker 2: Second, the infrastructure investments we've made in building out our broadband network provide the foundation for strong recurring revenues, durable discretionary cash flow, and long-term shareholder value.
Second the infrastructure investments we've made in building out our broadband network provide the foundation for strong recurring revenues durable discretionary cash flow and long term shareholder value.
Speaker 2: And third, as we approach the final year of our three year plan, we remain committed to managing our balance sheet and spending level to maximize free cash flow over time.
Third as we approach the final year of our three year plan, we remain committed to managing our balance sheet and spending level to maximize free cash flow over time.
Speaker 2: So we launched our ambitious glass and steel in first-to-fiber platform strategy two years ago, accelerating the delivery of high-speed data services to underserved consumers and businesses, primarily in rural areas.
So we launched our ambitious glass and steel and first fiber platform strategy two years ago accelerating the delivery of high speed data services to underserved consumers and businesses.
Primarily in rural areas.
Speaker 2: And reflecting on our third quarter and year date results in the context of that plan, I'm proud of the financial and operational milestones our team has accomplished towards those objectives.
And reflecting on our third quarter and year to date results in the context of that plan.
Proud of the financial and operating operational milestones our team has accomplished towards those objectives.
Speaker 2: Justin will provide an update on our financial results that I'll begin with our operating methods.
Justin will provide an update on our financial results that I'll begin with our operating metrics.
Speaker 2: We achieved robust high-speed broadband subscriber growth of 20% year on year. I lighted by strong contributions from our international mark.
We achieved robust high speed broadband subscriber growth of 20% year on year highlighted by strong contributions from our international markets.
Speaker 2: Additionally, our international market saw a 13% annual increase in mobile.
Additionally, our international market saw a 13% annual increase in mobile subscribers.
Speaker 2: In the US, we continue to expand our network reach to high-speed data subscribers and enterprise and government customers.
In the U S. We continue to expand our network reach to high speed data subscribers and to enterprise and government customers.
Speaker 2: At the same time, we are making progress on rationalizing our legacy network and reducing run rate operating.
At the same time, we are making progress on rationalizing our legacy network and reducing run rate operating costs.
Speaker 2: We recently were recipients or sub-recipients of nearly $45 million in federal grants to connect people in underserved rural and tribal areas to high-speed internet networks.
We recently were recipients are sub recipients of nearly $45 million in federal grants to connect people in underserved rural and tribal areas to high speed Internet.
Speaker 2: These program grants follow on the more than $155 million in grants awarded to us and our partners over the previous 12 months.
These program grants follow on the more than $155 million in grants awarded to us and our partners over the previous 12 months.
Speaker 2: and will subsidize the funding for fiber and fixed wireless high-speed network expansion in rural areas of the United States.
And will subsidize the funding for fiber and fixed wireless high speed network expansion in rural areas of the United States.
Speaker 2: including parts of Alaska, Arizona, Nevada, and New Mexico.
Including parts of Alaska, Arizona, Nevada, and New Mexico.
Speaker 2: The network builds funded by these and potential additional grants are likely to extend over the next several years.
The network builds funded by these and potential additional grants are likely to extend over the next several years.
Speaker 2: paving the way for us to expand our network reach and grow our customer and revenue base, even at the pace of our self-funded capital expenditures decreased as planned.
The way for us to expand our network reach and grow our customer and revenue base, even as the pace of our self funded capital expenditures decrease as planned.
Speaker 2: And for those of you who are new to ATN, we derive about half of our revenue from customers in the US.
And for those of you who are new to ATM, we derive about half of our revenue from customers in the U S.
Speaker 2: principally from rural communities in the West and Southwest, and both urban and rural areas of Alaska. The other half of our revenue comes from remuting the Caribbean.
Principally from rural communities in the West and southwest and both urban and rural areas of Alaska.
The other half of our revenue comes from Bermuda and the Caribbean.
Some fast growing markets like Guyana.
Speaker 2: We're seeing strong mobile subscriber growth and a rapid uptake of high-speed broad.
We're seeing strong mobile subscriber growth and a rapid uptake of high speed broadband.
Speaker 2: based on the positive dynamics and our approach to maximizing the long-term value of our capital investments. We are encouraged about the opportunities across our markets in the quarters and years ahead.
Based on the positive dynamics and our approach to maximizing the long term value of our capital investments.
We are encouraged about the opportunities across our markets in the quarters and years ahead.
Speaker 2: AT&N is all about high-speed data connections. We play directly into what is unquestionably one of the world's most durable, spectacular growth drives.
<unk> is all about high speed data connections, we play directly into what is unquestionably one of the world's most durable secular growth drivers that need to be connected anytime and everywhere.
Speaker 2: The need to be connected anytime and everywhere.
Speaker 2: And the demand for that connectivity at increasingly higher speeds is only going to accelerate.
And the demand for that connectivity at increasingly higher speeds. It is only going to accelerate.
Speaker 2: Our network's reliability, consistency, and efficiency provide ATN with an essential competitive advantage and long-lasting assets.
Our networks reliability consistency and efficiency provide ATM with an essential competitive advantage and long lasting assets that will only benefit us as the drive towards greater connectivity continues.
Speaker 2: that will only benefit us as the drive toward greater connectivity continues.
And now I'll hand, the call back to you yet.
Speaker 3: Great, thanks, Michael. As a reminder, all the financials we'll be mentioning during today's call can be found in our accompanying slide presentation that we've added to our website, along with some additional financial tape.
Great. Thanks, Michael as a reminder, all of the financials will be mentioning during today's call can be found in our accompanying slide presentation that we've added to our web site along with some additional financial tables.
Speaker 3: ATN Q3 revenues grew 5% to $191 million, highlighting the steady momentum we built as a result of our network investments the past few years.
ATM Q3 revenues grew 5% to 191 million highlighting the steady momentum we built as a result of our network investments of the past few years.
Speaker 3: Sixth, broadband revenue was the strongest contributor to our top line growth, followed by carrier services and mobility.
Fixed broadband revenue was the strongest contributor to our top line growth followed by carrier services and mobility.
Speaker 3: Moving down the P&L, operating income grew to $6.8 million from $1.4 million in the prior year.
Moving down the P&L operating income grew by grew to $6 8 million from $1 4 million in the prior year.
Speaker 3: Adjusted EBITDA grew 10% to 47.8 million driven by the strong conformance on our domestic business.
Adjusted EBIT grew 10% to $47 8 million driven by the strong performance in our domestic businesses.
Speaker 3: The total net loss of the quarter was 3.6 million or 31 cents per share. Compared to a net loss of 2.8 million or 25 cents per share in Q3 of 2022.
The total net loss for the quarter was $3 6 million or <unk> 31.
Per share compared to a net loss of $2 8 million or 25 per share in Q3 of 2022.
Speaker 3: The higher net loss in the quarter was primarily driven by a $5.8 million increase in interest expense offsetting the $5.4 million increase in operating.
The higher net loss in the quarter was primarily driven by a $5 8 million dollar increase in <unk>.
Interest expense offsetting the $5 4 million increase in operating income.
Speaker 3: Looking at the segment performance for the quarter, the international segment revenues grew 4% to nearly 94 million, while adjusted even it was down slightly to 27.5 million. Operating expenses for the segment were usually high in the quarter for a number of reasons.
Looking at the segment performance for the quarter. The International segment revenues grew 4% to nearly $94 million, while adjusted EBITDA was down slightly to $27 5 million operating expenses for the segment were unusually high in the quarter for a number of reasons include.
Speaker 3: including the addition of sales support resources that are helping drive the stronger subscriber and revenue growth.
Including the addition of sales support resources that are helping drive that stronger subscriber and revenue growth.
Speaker 3: We also saw elevated expenses in a few other operating categories, including regulatory fees, and we expect those costs will come down in the coming quarter.
We also saw elevated expenses and a few other operating categories, including regulatory fees and we expect those costs will come down in the coming quarters.
Speaker 3: For the first time, we exceeded 400,000 international mobile subscribers while also delivering strong high-speed broadband subscriber growth.
For the first time, we exceeded 400000 international mobile subscribers, while also delivering strong high speed broadband subscriber growth.
Speaker 3: As I mentioned, subscriber growth was helped by the increase on the ground operation support that are capitalizing on the investments we've made to expand and upgrade our network.
As I mentioned subscriber growth was helped by the increase on the ground operation support that are that are capitalizing on the investments we've made to expand and upgrade our network.
Speaker 3: Mobile churn was up in the quarter as expected, resulting from the wind down of the temporary COVID-related MIFI program supported by the Education Department in the Virgin Islands.
Mobile churn was up in the quarter as expected, resulting from the wind down of the temporary Covid related Mifi program supported by the Education Department in the Virgin Islands.
Speaker 3: Turning to the domestic segment, revenues grew 5% or $5 million to $97 million in the quarter.
Turning to the domestic segment revenues grew 5% or $5 million to $97 million in the quarter.
Speaker 3: The increase reflected the strong performance of fixed and carrier service revenue growth driven by increased enterprise and emergency connectivity fund revenue in Alaska and by the acquisition of Sacred Wind.
The increase reflected the strong performance of fixed and carrier service revenue growth driven by increased enterprise and emergency connectivity Fund fund.
Revenue in Alaska and by the acquisition of Sacred win.
Speaker 3: As expected, this was slightly offset by a reduction in legacy roaming and construction revenue.
As expected this was slightly offset by a reduction in legacy roaming and construction revenues.
Speaker 3: adjusted even the second rose, rose 22% or nearly 5 million to 26.9 million.
Adjusted EBIT in the segment Rose rose, 22% of nearly $5 million to $26 9 million.
Speaker 3: The strong EBITDA performance is driven by higher revenues and several ongoing cost reduction initiatives.
The strong EBITDA performance was driven by higher revenues in several ongoing cost reduction initiatives.
Speaker 3: As we mentioned in the past, in the last two quarters, AT&N is focused on right sizing the cost structure and necessary to support the business into the future and improve overall operating mark.
As we mentioned in the past in the last two quarters <unk> is focused on right sizing the cost structure necessary to support the business into the future and improve overall operating margins.
Speaker 3: As a result, we recorded $1.4 million restructuring costs in the quarter and $4.6 million a year to date, reflecting mainly costs associated with decommissioning network and reduction in force.
As a result, we recorded $1 $4 million restructuring costs in the quarter and $4 6 million year to date, reflecting mainly costs associated with decommissioning network and reduction in force expense.
Speaker 3: We expect the majority of our operational review to be complete in the fourth quarter and do not anticipate any further restrictions cost into 2024.
We expect the majority of our operational review to be complete in the fourth quarter and do not anticipate any further restructuring costs into 2024.
Speaker 3: Looking now at capital expenditures, year to day through September 30, we invested $126.6 million, net of $14.3 million in reimbursable costs, consistent with our glass and steel and first to fiber strategy.
Looking now at capital expenditures year to date through September 30, we invested $126 6 million net of $14 $3 million in reimbursable costs, consistent with our glass and steel and first fiber strategies.
Speaker 3: We're on track to be within our 2023 CAPEX guidance for spending between 160 and 170 million. Within the U.S. segment, CAPEX spending during Q3 was 18.4 million that was primarily related to fiber expansion in Alaska and the lower 48.
We're on track to be within our 2023 capex guidance for spending between 160 and $170 million.
Within the U S segment Capex spending during Q3 was $18 4 million that was primarily primarily related to fiber expansion in Alaska and the lower 48.
Speaker 3: Internationally, CAPEX spending was 18.7 million in Q3, which focused on the continuing fire deployment in Gaianne.
Internationally Capex spending was $18 7 million in Q3, which focused on the continuing fiber deployment in Guyana.
Speaker 3: In our earnings news release issued yesterday afternoon, we provided preliminary full year 2024 outlook.
In our earnings news release issued yesterday afternoon, we provided preliminary full year 2020 for outlook.
Speaker 3: Our preliminary 24 adjusted EBA outlook anticipates a range of between 200 million to 208 million. And our preliminary CapEx spending outlook anticipates a range of 120 million to 130 million.
Our preliminary 24, adjusted EBIT outlook anticipates, a range of between $200 to $208 million and our preliminary capex spending outlook anticipates, a range of $120 million to $130 million.
Speaker 3: The increase in the adjusted EVA combined with the slower pace in our network investments will increase free cash flow as we move into 2024.
The increase in adjusted EBIT combined with the slower pace in our network investments will increase free cash flow as we move into 2024.
Speaker 3: Consisting with past guidance, our CAPEX guidance is net of reimbursable expenses.
Consistent with past guidance, our Capex guidance is net of Reimbursable expense expenses.
Speaker 3: While ATN is slowing down its rate of capital spenders going into 2024, we expect the grants we receive and expect to receive will further expand our network investments and ultimately extend our network reach and revenue potential.
Yes.
While ATM is slowing down the down its rate of capital expenditures going into 2024, we expect the grants we received.
We expect to receive.
We will further expand our network investments and ultimately extend our network reach and revenue potential.
Speaker 3: Turning to other balance sheet and cash flow highlights, we ended the quarter with cash and cash equivalence of 73 million, and that cash provided by operating activities was 89.5 million year today.
Turning to other balance sheet and cash flow highlights we ended the quarter with cash and cash equivalents of $73 million.
Net cash provided by operating activities was $89 5 million year to date.
Speaker 3: At the end of the third quarter, our total debt outstanding was 498 million, and our consolidates net debt to adjust the evidoration remained at 2.3 times.
At the end of the third quarter, our total debt outstanding was $498 million and our consolidated net debt to adjusted EBITDA ratio remained at two three times.
Speaker 3: As we move into 2024 and expand free cash, we'll expect to maintain a healthy leverage ratio and financial flexibility. And with that, I'll hand it back to you.
As we move into 2024 and expand free cash flow, we expect to maintain a healthy leverage ratio and financial flexibility.
And with that I'll hand, it back to Michael.
Speaker 2: Our performance across both the broadband and mobile areas of our business has a kind of good place as we look toward the final quarter of 2023 and beyond. I'm excited about the
Thank you Jessica.
Our performance across both broadband and mobile areas of our business as a good place as we look towards the final quarter of 2023 and beyond.
I am excited about the opportunities in front of us as planned our glass and steel in the first fiber strategies have contributed to our recurring revenue and adjusted EBITDA growth.
Speaker 2: As planned, our glass and steel in first-of-hiver strategies have contributed to our recurring revenue and adjust the deduct.
Speaker 2: As we move closer to 2024, we are focused on executing on the opportunity we have developed.
As we move closer to 2024, we're focused on executing on the opportunity we have developed.
Speaker 2: expanding pre-cash flow as we come down the other side of the investment velcro and growing subscribers and revenue at higher incremental unit more.
Expanding free cash flow as we come down the other side of the investment Bell curve.
Growing subscribers and revenue at higher incremental unit margins, which should expand our operating margins and magnify the benefit of the normalizing capital spend levels.
Speaker 2: which should expand our operating margins and magnify the benefit of the normalizing capital spend.
Speaker 2: We expect the fiber investments in particular to have a long tail delivering sustained strong operating cash flows for years to come. And I'll turn it back to you up.
We expect the fiber investments in particular to have a long tail delivering sustained strong operating cash flows for years to come.
And now I'll turn it back to you operator to open the line for questions.
Speaker 1: Thank you. At this time, we'll conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A raw.
Thank you at this time, we will conduct a question and answer session.
Minder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Yes.
Speaker 1: Yes, our first question will come from Rick Prentice with Raymond James. Your line is now open. Great. Thanks.
Oh.
Yes, our first question will come from Ric Prentiss with Raymond James Your line is now open.
Great. Thanks, Good morning, everyone. Good morning, Rick.
Speaker 3: A couple of questions. First, appreciate the preliminary 2024 guidance. Always helps.
Couple of questions first I appreciate the preliminary 2024 guidance or results.
Speaker 3: Help us understand what your level of visibility is and giving that and kind of what the puts and takes are as far as what you're excited about and what you're concerned about.
Help us understand what your level of visibility and giving that and kind of what the puts and takes are as far as what you're excited about and what you are concerned about it.
Speaker 2: I think to answer the last part first, I mean, I think we feel pretty good about that. And it is preliminary, but I think we feel, we will not give in a relatively tight range if we didn't feel pretty good about landing in that area. The puts and takes are, we have a huge portion of our revenue is recurring, just naturally recurring with not a lot of volatility.
I think I think to answer the last part first I mean, I think we feel pretty good pretty good about that and it is preliminary but I think we feel we will know given a relatively tight range. If we didn't feel pretty good about.
Landing in that area.
The puts and takes are we have a.
<unk> portion of our revenue is recurring just naturally recurring with not a lot of volatility.
Speaker 2: So the puts and takes are kind of smaller things. We have, you know, one example is we have a contract that we know about that's COVID related, $27 million annual contract in the US side that is...
So the puts and takes are kind of smaller things we have.
One example is we have a.
Contract that we know about that's COVID-19 related $27 million annual contract in the U S side that is.
Speaker 2: going to expire or scheduled to expire at the end of the first quarter. And we've taken that into account. That would be, you know, sort of on the negative side. On the positive side, we, you know, we're pretty confident in the continued subscriber growth and continued organic revenue growth rate.
Going to expire are scheduled to expire at the end of the first quarter and we've taken that into account.
That would be sort of on the negative side on the positive side we.
We're pretty confident in the continued subscriber growth.
Continued organic revenue growth rates.
Speaker 2: on the back of it and then You know, and I would say it's it's kind of right down the middle in terms of our expectations on that and not not heroic by any means
On the back of it and then.
And I would say, it's kind of right down the middle in terms of our expectations on that.
Not heroic by any means.
Speaker 4: Okay. Speaking of revenue, you guys don't provide a revenue guidance. Any thoughts on why that is? Is it just that you're managing towards the margin, different businesses can have different profiles, or just wondering when.
Okay.
Speaking of revenue you guys don't provide our revenue guidance any thoughts on why that is is it just that you are managing towards the margin different business is going to have different.
Profiles are just wondering when on our revenue guidance as well.
Speaker 2: Yeah, I think so much as recurring. Yeah, we didn't because I think there's more things moving. It's a lot easier to focus on EBITDA and which we, you know, on CAPEX.
How much is recurring.
Yes.
We didn't because I think there is more things moving it's a lot easier to focus on EBITDA.
On Capex, which leads us to the most important number which is free cash flow. So we so we're really focused is there.
Speaker 2: We just do the most important number, which is free cash flows. So we really focused it there.
Speaker 2: You know, so, but as I said, I don't, I think, you know, other than that one example I gave, I think he kind of, we'd kind of expect to see revenue growth somewhere right to what we've been experienced.
So, but as I said I don't I think other than that one example, I gave I think you can kind of we kind of expect to see revenue growth similar rates to what we have.
Speaker 5: And that $27 million COVID-related contract that was in the US? Yes, that's an annual rate. So, you know, so three quarters of that, you know, it will fall away basically.
Been experiencing.
And on that $27 million Covid related contract that was.
In the U S. Yes, yes.
That's an annual rate so.
So three quarters of that.
This will fall away basically next year, yes, Okay, obviously, we really do like free cash flow.
Speaker 4: Okay, there's obviously we really do like free cashflow.
Speaker 4: with minus Kepx kind of a simple free cash flow. Justin, you mentioned healthy leverage. Where do we think you want to learn leverage at over the mid to long term versus the 2.3 where you're at?
Appreciate it.
Minus capex kind of a simple free cash flow, Justin you mentioned healthy leverage where do we think water run leverage at.
Over the mid to long term versus the $2 three where you're at.
Speaker 3: I think we will, our goal is to still get leverage down in that two, two times range, right? So some of that's going to be driven by, you know, free cash flow and others can be driven by just growth and even if our goal long term is to keep driving it down from the 2.3 level or, you know, it's closer to two.
Think we will our goal is to still get leveraged down in that two two times range right. So some of thats going to be driven by.
Free cash flow and others can be driven by just growth in EBIT, but our goal long term is to keep driving it down from the $2 three level or is it closer to two.
Speaker 4: and obviously financial flexibility, seems to tee up a lot of shareholder returns. I should be thinking about how you're thinking about stock buybacks, stocks somewhat illiquid, dividends, which are usually hopefully forever, just as we think about where financial flexibility might go, or M&A.
Okay.
Obviously financial flexibility seems to tee up a lot of shareholder returns.
Should we think about how youre thinking about stock buyback stock somewhat illiquid dividends, which are usually hopefully forever.
So as we think about where financial flexibility might go or M&A.
Speaker 5: Yeah, I think we're primarily focused on the shareholder side of the post-DMNA.
Yes, I think I think where.
We're primarily focused on the shareholder side as opposed to M&A.
Speaker 5: You know, we, you know, we've been investing a lot of the business and it's, you know, kind of sort of deliver on that. I think on the stock buybacks, it's a cruise September 30th. We're at nearly 12 million this year. And that leaves us with that the end of September .
We.
We've been investing a lot of the business.
It's time to sort of deliver on that.
Alright, I think on the stock buybacks.
Through September 30, we were at nearly $12 million this year.
And that leaves us with that at the end of September.
Speaker 5: We would have had about seven and a half million less than existing programs. So, you know, physically in December or time frame, but sometimes at other times the board will kind of look at those sort of capital allocation decisions. Divid ends by back.
We would have had about $7 5 million less in existing program.
No.
Typically in.
December timeframe, it's sometimes at other times the board will kind of look at those sort of capital allocation decisions.
Dividends buybacks at all and all the rest.
Speaker 6: Very good. There's a lot. Have a good one. Thank you. Thank you.
Okay very good thanks, a lot have a go thank you Rick.
One moment for our next question.
Speaker 1: This question comes to the line of Hamad Korsan with BWS Financial. Your line is now open.
This question comes from the line of comment Carson with AWS financial Your line is now open.
Good morning, Amit.
Amit do there.
Okay.
Speaker 1: Operator, why don't we try someone else? Yes, we'll go to another questioner. Just for a moment.
Operator, why don't we try someone else will go to another question here just for a moment.
Speaker 1: This question comes to the line of Greg Burns with Sedoti. Your line is now open, Greg.
Okay.
This question comes from the line of Greg Burns with Sidoti. Your line is now open Gregg.
Speaker 5: Morning, I've had a couple questions about the segment margins. First, on the international side, that increase in spending means for this quarter. It sounded like someone was unusual, but some was...
Good morning, I, just had a couple of questions about.
The segment margins first on the international side that that increase in spending you saw this quarter.
It sounded like someone was unusual but some was.
Speaker 5: maybe structurally higher spending, you know, the drive growth could do this.
Maybe.
Structurally higher spending to drive growth could you just.
Speaker 5: kind of a break goes apart and you know maybe...
Kind of break those apart and.
Maybe.
And what kind of.
Speaker 3: Are you thinking margins to expand from here or is this a good level to think about for the business going forward? We are expecting margins to expand but maybe Browl Edge would give a little more color on internet.
Are you expecting margins to expand from here or is this a good level to think about.
Unknown Executive: Good day and thank you for standing by. Welcome to the ATN International Q3 2023 earnings conference call and webcast. At this time, all participants are in a listen only mode.
The business going forward, we are expecting margins to expand but maybe <unk> you could give a little more color on on internationally.
Speaker 7: Yeah, so from a margin expansion perspective, we'll continue to grow margins through continually adding subscribers revenue on our existing fixed cost-based assets that we've been investing in.
Yes, so from a margin expansion perspective, we will continue to grow margin through continually adding subscribers and revenue on our existing.
Unknown Executive: After the speakers presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one, one again.
Fixed cost based assets that we've been investing in.
Speaker 7: We have combined with the continue to be commissioning of legacy networks.
And we have.
Combined with the continued decommissioning of legacy networks.
DSL and legacy mobile.
Speaker 2: And I think just an actually answered you on the most recent quarter was, you know, what some of it was related to the sales side, but some of it was things like regulatory fees and more focused on bringing those costs down.
Unknown Executive: Please be advised that today's conference is being recorded.
And I think just I'm not sure we answered you on the most recent quarter it was.
Unknown Executive: I would like to hand the conference over to your first speaker today.
Some of it was related to the sales side, but some of it with things like regulatory fees and.
Justin Benincasa: Justin Benincasa, CFL, please go ahead. Thank you Kathy and good morning everyone. This morning will be review our third quarter 2023 results. I'm joined by Michael Prior, ATN's Chief Executive Officer and by Brad Martin, our Chief Operating Officer. Michael will provide an update on the business and strategy and a high level overview of our quarterly results. I'll cover up financials and provide additional color where necessary. And Brad is here for questions and answers session.
And we're focused on bringing those costs down.
Speaker 5: And I think CAPEX was closer to 70, 80 million annually before I guess you embarked on the –
Okay.
And I think.
Capex was closer to $70 million to $80 million annually before.
I guess you embarked on the current.
Speaker 5: fiber initiatives. Is that a good level of think of like where more steady state maintenance or run rate cap X is? Once we get past 24, maybe it's higher now because you have a last gun. So how should we think about where cap X is going to be?
Fiber initiatives.
That a good level to think of like were.
More steady state maintenance or run rate Capex is once we get past 'twenty four maybe maybe it's higher now because you have Alaska, just how should we think about where capex.
Justin Benincasa: As a reminder, we released our third quarter results press release yesterday afternoon after the market closed. Investors can find earnings, earnings release and results presentation on our investor relations website. Our earnings release and the presentation contain forward-looking statements concerning our current expectations, objectives and underlying assumptions regarding our future operating results. These statements are subject to risk and uncertainties that could cause actual results that differ materially from those described. Also, in an effort to provide useful information to investors or comments today include non-gap financial measures, for details on these measures and reconciliation to comfortable gap measures and prefer their information regarding the factors that may affect our future operating results. Please refer to our earnings release on our website at atni.com for the 8K filing provided to the SEC.
It is going to be heading over the next couple of years.
Speaker 2: Yeah, I think if you look, I think we think of it as a percentage of revenue, right? And we've been running well above 15%, which is sort of, we would call the top end of a normal range.
Yes, I think I think if you look I think we think of it as a percentages of revenue right and.
And we've been running well above 15%, which is sort of we would call. The top end of our normal range and.
Speaker 2: in recent years as we've been embarked on these programs.
In recent years as we've been embarked on these programs. So we would expect it to start not only to move into that range, but moved down the range.
Speaker 2: So we would expect it to start not only to move into that range, but move down the range. I'm not trying to give you a number on 25 at this point, but I think that's the direction of travel.
Not trying to give you a number on 25 at this point, but I think that's the direction of travel.
Speaker 2: You know, typically in our experience in a lot of the markets we've been in for many years after a period of excess, we previously...
Typically in our experience in a lot of the markets we've been in for many years.
After a period of excess we usually.
Speaker 2: Pretty damn, you know, 10% can be below that in individual markets for a while after that kind of expenditure. And of course, like everybody else, part of the belief in fiber investment is that it has a lower maintenance...
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10% can be below that in.
Individual markets for.
For a while after that kind of expenditure and of course like everybody else part of the beliefs and fiber investments is that it has lower maintenance.
Michael Prior: I'll now turn the call over to Michael for his prepared remarks. Thank you Justin. Good morning everyone and thank you for joining us. We're pleased with our third quarter performance as we continue to rapidly convert customers to our high speed networks and work toward completing our three-year plan at the end of 2024.
Speaker 2: Haft and it's and it's got a long run rate of you know long technologically useful life in the business. So the fundamentals of what we're investing in I think should lend us.
Cost and it's and it's got a long run rate of.
Long technologically useful life in.
In the business so for the fundamentals of what we're investing in I think should lend us.
Speaker 5: down to the lower end of that range without again, trying to give you a 25 number. Yeah, and just to clarify too Greg, I think your 7080 was probably somewhat pre-alaska. So just so. Yes, yeah, right. Okay, I'm not perfect. All right, thank you. Thank you.
Down to the lower end of that range without without again try to give you at 25 number yes, and just to clarify too Greg I think Youre 70, 80 was probably somewhat pre Alaska. So just so yes, yes, right. Okay perfect alright. Thank you.
Michael Prior: Let me start by sharing three key takeaways from our performance. First, we continue to execute well in all fronts, delivering higher revenue and EBITDA on solid subscriber growth in both the quarter and first nine months of 2023. Second, the infrastructure investments we've made in building out our broadband network provide the foundation for strong recurring revenues, durable discretionary cash flow and long-term shareholder value. And third, as we approach the final year of our three-year plan, we remain committed to managing our balance sheet and spending level to maximize free cash flow over time.
Thank you.
Our next question.
Speaker 1: This question is from HMOD Corp. on with BWS Financial. Your line is now open.
This question is from Mike <unk> with <unk> financial your line is now open.
Yes sure.
Speaker 1: I know something must be wrong there operator. Yes, you may need an unmute, Hamad, or we can try someone else. Thank you.
Amit.
Yes.
Something must be wrong. There operator, yes, you may be on mute hi mode, where.
Michael Prior: So, we launched our ambitious glass and steel in first-to-fiber platform strategy two years ago, accelerating the delivery of high-speed data services to underserved consumers and businesses primarily in rural areas, and reflecting on our third quarter and year date results in the context of that plan, I'm proud of the financial and operational milestones our team has accomplished towards those objectives.
Or we can try someone else.
Thank you.
Yes, we will have to come back to them I guess.
FX.
Speaker 1: So we have another question from Rick Prentiss with Raymond James. Your line is now open, Rick.
Yes.
We have another question from Ric Prentiss with Raymond James Your line is now open Rick.
And as long as there's open airtime I'll take it.
Speaker 4: We can't have dead airtime, you know that right? Exactly, exactly. Can you hear me now? The...
We can't have that airtime, we know that.
Exactly exactly can you hear me now.
Michael Prior: Justin will provide an update on our financial results that I'll begin with our operating metrics. We achieved robust, high-speed broadband subscriber growth of 20% year-on-year, highlighted by strong contributions from our international markets. Additionally, our international markets saw a 13% annual increase in mobile subscribers. In the US, we continue to expand our network reach to high-speed data subscribers and enterprise and government customers. At the same time, we are making progress on rationalizing our legacy network and reducing run rate operating costs.
Speaker 4: Follow up questions I had is first, a lot of interest in the industry about fixed wireless, high speed internet. How do y'all think about your markets domestically and internationally? About do you have the capacity to offer fixed wireless as there are an interest out there, can it reduce churn? Just gonna opine on fixed wireless and how to one more fall.
Yes.
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Follow up questions I had is first a lot of interest in the industry about fixed wireless high speed Internet.
Do you all think about your markets domestically and internationally.
Do you have the capacity to offer fixed wireless is there interest out there can reduce churn just kind of opine on fixed wireless and have a one more follow up.
Speaker 2: I think it's absolutely part of the mix in all our markets really. And it varies, right? An area like the Muda is very little part of the mix. It's fairly densely populated. We've got high speed connections to virtually Ariel.
Yes, I think it's absolutely part of the mix.
All of our markets really.
It varies right an area like Bermuda.
Little part of the mix fairly densely populated.
We've got high speed connection virtually area.
Michael Prior: We recently were recipients or sub-recipients of nearly 45 million dollars in federal grants to connect people in underserved rural and tribal areas to high-speed internet networks. These program grants follow on the more than $155 million in grants awarded to us and our partners over the previous 12 months, and we'll subsidize the funding for five or fixed wireless high-speed network expansion in rural areas of the United States, including parts of Alaska, Arizona, Nevada, and New Mexico.
Speaker 2: But even someplace like Cayman and parts of Cayman, we have bringing fiber towers and using fixed wireless pollution, because the economics are better. And it's typically used in partially populated areas. If we have a good enough spectrum of availability or technology availability, we can deliver high capacity to each user. And we've been working with technologies that have really improved.
But even some place like came in parts of came and we are bringing fiber to towers and using fixed wireless solutions.
Michael Prior: The network builds funded by these and potential additional grants are likely to extend over the next several years, favoring the way for us to expand our network reach and grow our customer revenue base even as the pace of our self-funded capital expenditure is decreased as planned. And for those of you who are new to ATN, we derive about half of our revenue from customers in the U.S., principally from rural communities in the West and Southwest, and both urban and rural areas of Alaska.
The economics are better and it's typically used in.
Partially populated areas, if we have a good enough spectrum availability or in technology available that we can.
We can deliver high capacity to each user.
And we've been working with technologies that haven't really improved.
Speaker 2: improve the customer experience.
Improve the customer experience.
Speaker 2: across the board. It's on the US as well. And the US we kind of have always called it sort of hills and towns. So even in the rural areas, we're going to tend to bring fiber to the towns. And then we'll bring fiber to the towers into the businesses. And but the people live in the hills, ranch in the hill, or something. If we're going to connect them, it would be difficult through a fixed wireless.
Across the board.
On the U S as well in the U S. We kind of have always called it sort of.
Elisa in towns so even in the rural areas, we're going to attempt to bring fiber to the towns and then well.
Bring fiber to the towers into the businesses and but.
People live in the hills and our ranch in the hills or something if we're going to connect then that would be typically through a fixed wireless solution and.
Speaker 2: And we have a number of areas where we have a fair amount of capacity on fixed wireless network investments we've made in the U S that, you know, we expect to be.
And we have a number of areas, where we have a fair amount of capacity on fixed wireless network investments we've made in the U S.
Michael Prior: The other half of our revenue comes from Bermuda and the Caribbean, home to some fast-growing markets like Diana. We're seeing strong mobile subscriber growth and a rapid uptake of high-speed broadband, based on the positive dynamics and our approach to maximizing the long-term value of our capital investments.
Speaker 2: you know, loading subscribers on in the quarters to come. Okay.
Expect to be.
Loading subscribers on in the quarters to come.
Okay.
Okay and the other question is what are the other topics.
Speaker 4: HOT recently has been directed to the right. So I connectivity into smartphones.
Recently has been.
Directly device sold satellite connectivity into smartphones.
Michael Prior: We are encouraged about the opportunities across our markets in the quarters and years ahead. ATN is all about high-speed data connections. We've played directly into what is unquestionably one of the world's most durable, secular growth drivers. The need to be connected anytime and everywhere. And the demand for that connectivity at an increasingly high speed is only going to accelerate. Our network's reliability, consistency, and efficiency provide ATN with an essential competitive advantage in long-lasting assets that will only benefit us as the drive toward greater connectivity, continues.
You guys have had some unique.
Speaker 4: views into some of the satellite world, but I think it's one of the thoughts on the word directed device.
Views into some of the satellite world, but what are your thoughts of where director device.
What role of Fiserv.
Speaker 2: I mean, I think it's going to be a great tool and it's a great functionality, right? So I just think where we are an operator that's a functionality we'd like to deliver to our customers. And...
I mean, I think it's going to be a great. It's a great tool and Thats a great functionality right. So I just think.
Where we are.
And operator, that's the functionality and we'd like to deliver to our customers and.
Speaker 2: and where we are not a mobile operator, I think it's good for our customer base in our areas. It's probably, it's good for some of our workers who are...
And where we are not a mobile operator I think it's good for our customer base in our areas. It's probably it's good for some of our workers who are out there.
Speaker 7: out there, you know, in remote areas. So I think it's here to come. I mean, how big usage it is is a totally different question, but in terms of available functionality, I think, you know, it's what people get used to if they're gonna ever want it. I don't know if Brad, have you had anything that, or? No, we agree. We agree. And, you know, that will continue to evolve, but we definitely see a great,
In remote areas so.
I think it's here to come I mean, how big.
Usage. It is totally different question, but in terms of available functionality I think.
Unknown Executive: And now I'll hand look call back to you. Great thanks Michael.
Justin Benincasa: As a reminder all the financials will be mentioning during today's call can be found in our accompanying slide presentation that we've added to our website along with some additional financial tables. ATN's Q3 revenues grew 5% to $191 million highlighting the steady momentum we built as a result of our network investments the past few years. Six broadband revenue was the strongest contributing or top line growth followed by carrier services and mobility. Moving down the P&L operating income grew by grew to $6.8 million from $1.4 million in the prior year.
Once people get used to it they are going to Arizona on it I don't know Brad if you had anything to add.
Yes, we agree.
That will continue to evolve.
But we definitely see a great use case for that.
Speaker 4: And it seems like the legal system really is to get the chipset, the satellite operators, the chipset, the phone, and the operator kind of all congealed and work together. Is that a fair bother?
And it seems like the ecosystem really needs to get built.
The chips, all the silo operators that chipset, the sone and the operator kind of all congealed and working together or is that a fair thought or.
Speaker 2: I don't know if I know enough. I know, I do think it's got to have some of that. I mean, we were involved in XCOM, which did that, you know, the goals that, right? You know, which is working with Apple, I believe. So those are, you know, and there's other providers who are doing that. So it seems to me.
I don't know if I know if I know.
I do think it's got to have some of that I mean, we were involved in ex com, which did that.
Justin Benincasa: Adjusted EBITDA grew 10% to $47.8 million driven by the strong performance in our domestic businesses. The total net loss of the quarter was 3.6 million or 31 cents per share compared to a net loss of 2.8 million or 25 cents per share in Q3 of 2022. The higher net loss in the quarter was primarily driven by a $5.8 million increase in interest expense offsetting the 5.4 million increase in operating income. Looking at the segment performance for the quarter the international segment revenues grew 4% to nearly $94 million while adjusted EBITDA was down slightly to $27.5 million.
Those that right, which is working with Apple I believe.
So those are and theres other providers are doing that so.
It seems to me it does have to be.
Speaker 8: You know, sort of a multi-pronged effort. Okay. Should have come here to get out.
Sort of a multi pronged effort.
Okay.
If we go to.
Any further questions operator.
Speaker 1: I'm showing no further questions at this point, so I'd like to now turn it back to Michael Pryor for closing remarks.
I'm showing no further questions at this point, so I'd like to now turn it back to Michael Pryor for closing remarks.
Speaker 2: Okay, well thank you, thank you all for joining us on the third quarter call. That was a good one. Take care, everybody.
Okay well. Thank you. Thank you all for joining us on the third quarter call have a good one sick care everybody.
Speaker 1: Thank you for participating in today's conference. This concludes the program. You may now disconnect.
Thank you for participation participating in today's conference. This concludes the program you may now disconnect.
Justin Benincasa: Operating expenses for the segment were unusually high in the quarter for a number of reasons including the addition of sales support resources that are helping drive the stronger subscriber and revenue growth. We also saw elevated expenses and a few other operating categories including regulatory fees and we expect those costs will come down in the coming quarters. For the first time we exceeded 400,000 international mobile subscribers will also delivering strong high-speed broadband subscriber growth.
[music].
Okay.
Okay.
Okay.
[music].
Justin Benincasa: As I mentioned subscriber growth was helped by the increase on the ground operation support that are capitalizing on the investments we made to expand and upgrade our network. Mobile churn was up in the quarter as expected resulting from the wind down of the temporary COVID-related MyFi program supported by the education department and the Virgin Islands. Turning to the domestic segment revenues grew 5% or 5 million to $97 million in the quarter.
Okay.
Okay.
Okay.
Okay.
[music].
Okay.
Justin Benincasa: The increase reflected the strong performance of fixed and carrier service revenue growth driven by increased enterprise and emergency connectivity fund revenue in Alaska and by the acquisition of sacred wind. As expected this was slightly offset by a reduction in legacy roaming and construction revenues. Adjusted even the second rose rose 22% or nearly 5 million to $26.9 million. The strong EBITDA performance is driven by higher revenues and several ongoing cost reduction initiatives.
Justin Benincasa: As we mentioned in the past in the last two quarters, ATAN is focused on right sizing the cost structure necessary to support the business into the future and improve overall operating markets. As a result, we recorded $1.4 million restructuring costs in the quarter and 4.6 million year-to-date. Reflecting mainly costs associated with decommissioning network and reduction in Ben.
Justin Benincasa: We expect the majority of our operational review to be complete in the fourth quarter, and do not anticipate for any further restructuring costs into 2024. Looking now at capital expenditures, year-to-day, through September 30, we invested $126.6 million, net of $14.3 million in reimbursable costs, consistent with their glass and steel and first-to-fiber strategies. We're on track to be within our 2023 CAPEX guidance for spending between $160 and $170 million. Within the U.S, segment, CAPEX spending during Q3 was $18.4 million that was primarily related to fiber expansion in Alaska in the lower 48. Internationally, CAPEX spending was $18.7 million in Q3, which focused on the continuing fiber deployment in Guyana.
Justin Benincasa: In our earnings news release issued yesterday afternoon, we provided preliminary full-year 2024 outlook. Our preliminary 24 adjusted EVA outlook anticipates a range of between 200 million to 208 million in our preliminary CAPEX spending outlook anticipates a range of 120 million to 130 million. The increase in the adjusted EVA combined with the slower pace in our network investments will increase free cash flow as we move into 2024. Consistent with past guidance, our CAPEX guidance is net of reimbursable expenses.
Justin Benincasa: While ATN is slowing down its rate of capital expenditures going into 2024, we expect the grants we receive and expect to receive will further expand our network investments and ultimately extend our network reach and revenue potential. Turning to other balance sheet and cash flow highlights, we ended the quarter with cash and cash equivalence of 73 million and net cash provided by operating activities was $89.5 million a year to date. At the end of the third quarter, our total debt outstanding was $498 million and our consolidated net debt to adjust the EVA ratio remained at 2.3 times. As we move into 2024 and expand free cash will expect to maintain a healthy leverage ratio and financial flexibility.
Michael Prior: And with that, I'll hand it back to Michael. Thank you, Justin. Our performance across both the broadband and mobile areas of our business has become a good place as we look towards the final quarter of 2023 and beyond.
Michael Prior: I'm excited about the opportunities in front of us. As planned, our glass and steel and first-of-hiver strategies have contributed to our recurring revenue and adjust the bedad growth. As we move closer to 2024, we are focused on executing on the opportunity we have developed. Expanding free cash flow as we come down the other side of the investment bell curve and growing subscribers and revenue at higher incremental unit margins, which should expand our operating margins and magnify the benefit of the normalizing capital spend levels. We expect the fiber investment in particular to have a long tail delivering sustained strong operating cash flows for years, to come.
Unknown Executive: And I'll turn it back to you, Operator, to open the line for questions. Thank you.
Unknown Executive: At this time, we'll conduct the question and secession. As a reminder, to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand Oh, yes.
Rick Prentiss: Our first question will come from Rick Prentiss with Raymond James. Your line is now open. Great. Thanks. Good morning, everyone. Hi Rick. Hey, a couple of questions. First, appreciate the preliminary 2024 guidance always helps.
Michael Prior: Help us understand what your level of visibility is in giving that and kind of what the puts in takes are as far as what you're excited about and what you're concerned about. I think I think to answer the last part first. I mean, I think we feel pretty good. Pretty good about that. And it is preliminary, but I think we feel, you know, we want to give it a relatively tight range if we didn't feel pretty good about landing in that area.
Michael Prior: The puts in takes are, you know, we have a huge portion of our revenue is recurring, just naturally recurring is not a lot of volatility. So the puts in takes are kind of smaller things. We have, you know, one example is we have a contract that we know about that's COVID-related $27 million annual contract in the US side that is going to expire or scheduled to expire at the end of the first quarter.
Michael Prior: And we've taken that into account. That would be, you know, sort of on the negative side. On the positive side, we, you know, were pretty confident in the continued subscriber growth and continued organic revenue growth rates on the back of it. And then, you know, and I would say it's kind of right down the middle in terms of our expectations on that. Not not heroic by any means. Okay.
Justin Benincasa: Speaking of revenue, you guys don't provide a revenue guidance. Any thoughts on why that is? Is it just that you're managing towards the margin? Different businesses can have different profiles or just wondering why not a revenue guidance as well? Yeah, I think so much is recurring. Yeah, we didn't because I think there's more things moving. It's a lot easier to focus on EBITDA and which we, you know, on catbacks, which leads us to the most important number, which is, you know, free cash flow.
Justin Benincasa: So we, we're really focused is there. You know, so, but, but as I said, I don't, I think, you know, other than that one example I gave, I think he kind of, we kind of expect to see revenue growth similar rates to what we've been experiencing. And that $27 million COVID-related contract that was in the US? Yes, you know, that's an annual rate. So, you know, so three-quarters of that, you know, we'll fall away in a minute.
Justin Benincasa: Next year. Yeah, okay, and obviously we really do like free cash flow, which I think is a minus cat X kind of a simple free cash flow. Justin, you mentioned healthy leverage. Where do we think you want to run leverage at over the mid to long term versus the 2.3 where you're asking? I think we will, our goal is to still get leverage down in that two times range, right? So some of that's going to be driven by free cash flow and others can be driven by just growth and even, but our goal long term is to keep driving it down from the 2.3 level or, you know, closer to two.
Justin Benincasa: Okay, and obviously financial flexibility seems to tee up a shareholder returns. I should we think about how you're thinking about stock buyback, stocks, somewhat a liquid, dividends, which are usually hopefully forever, just as we think about where financial flexibility might go for M&A. Yeah, I think I think we're primarily focused on the shareholder side of the post M&A. You know, we've been investing a lot of the business and it's kind of sort of deliver on that.
Justin Benincasa: I think on the stock buyback, through September 30th, we're at nearly 12 million this year. And that leaves us with that the end of September, we would have had about seven and a half million less than existing programs. So, you know, physically and December timeframe, but sometimes at other times, the board will kind of look at those sort of capital allocation decisions, dividends, buybacks and all the rest.
Rick Prentiss: Very good. There's a lot. Have a good one. Thank you.
Unknown Executive: One moment for our next question.
Hamid Khorsand: This question comes to the line of Hamid Corpon with BWS Financial. Your line is now open. Morning, Hamid. Hamid, do you there?
Unknown Executive: Operator, why don't we try someone? Yes, we'll go to another questioner.
Greg Burns: Just for a moment. This question comes to the line of Greg Burns with Cedodi. Your line is now open, Greg. Morning. I've had a couple questions about the segment margins. First, on the international side, that increase in spending means for this quarter. It sounded like some was unusual, but some was maybe structurally higher spending, you know, to drive growth. Could you just kind of break those apart? And maybe, what kind of are you expecting margins to expand from here?
Greg Burns: Or, you know, is this a good level to think about for the business going forward? We are expecting margins with FAM, but maybe Browse lets you give a little more color on international. Yeah, so from margin expansion perspective, we'll continue to grow margin through continually adding subscribers and revenue on our existing fixed cost-based assets that we've been investing in, and we have combined with the Continuity Commissioning of Legacy Networks, CSL, and Legacy Mobile.
Greg Burns: And I think just that I'm not sure we answered you on the most recent quarter was, you know, what some of it was related to the sales side, but some of it was things like regulatory fees and more focused on bringing those costs down. Okay. And I think, you know, catbacks with closer to 70, 80 million annually before I guess you embarked on the current fiber initiatives. Is that a good level of think of like where more steady state maintenance or run rate catbacks is, you know, once we get past 24, you know, maybe, maybe it's higher now because you have Alaska.
Greg Burns: How should we think about where, you know, catbacks is going to be heading over the next couple of years. Yeah, I think, I think if you look, I think we think of it as a percentage of revenue, right? And we've been running well above 15%, which is sort of, we would call the top end of a normal range in recent years as we've been barked on these programs. So we would expect it to start not not only to move into that range, but move down the range, not trying to give you a number on 25 at this point, but I think that's the direction of travel.
Greg Burns: You know, typically in our experience and a lot of the markets we've been in for many years after a period of excess. We usually pretty down, you know, 10% can be below that in individual markets for a while after that kind of expenditure. And of course, like everybody else, part of the belief in fiber investment is that it has, you know, a lower maintenance cost and it's and it's got a long run rate of, you know, long technologically useful life in the business.
Greg Burns: So the fundamental to what we're investing in, I think should lend us down to the lower end of that range without, without again, trying to give you a 25 number. Yeah, and just to clarify to Greg, I think you're 7080 was probably somewhat pre-alaska. So just so. Yes, yeah, right. Okay, I'm not perfect. All right, thank you. Thank you.
Unknown Executive: So we'll moment for our next question.
Hamid Khorsand: This question is from my course on with BWS financial, your line is now open. Mod, you there. Thomas, I know something must be wrong there operator. Yes, you may need to unmute Hamad or we can try someone else. Thank you. Yeah, we'll have to come back to him, I guess, if get that fixed.
Rick Prentiss: Yes, so we have another question from Rick Prentice with Raymond James. Your line is now open, Rick. Okay, as long as there's over the air time, I'll take it. We can't have dead airtime, you know that right? Exactly, exactly. Can you hear me now? The follow-up questions I had is first, a lot of interest in the industry about fixed wireless high-speed internet. How do y'all think about your markets domestically and internationally? About do you have the capacity to offer fixed wireless? Is there an interest out there? Can it reduce churn? It's just going to go behind on fixed wireless and how do one more follow-up?
Michael Prior: Yeah, I think it's absolutely part of the mix in all our markets really and you know, it varies, right? An area like the Muda is very little part of the mix, you know, fairly densely populated. We've got high-speed connection to virtually Ariel. But you know, even someplace like Cayman and parts of Cayman, we have bringing fiber towers and using fixed wireless solutions because it's the economics are better and it's typically used in partially populated areas if we have a good enough spectrum of availability or technology available but we can, you know, we can deliver high capacity to each user.
Michael Prior: And we've been working with, you know, technologies that have really improved, improved the customer experience across the board. It's on the U.S, as well and the U.S, we kind of have always called it sort of hills and towns. So even in the rural areas, we're going to tend to, you know, bring fiber to the towns and then we'll bring fiber to the towers and to the businesses and but, you know, the people live in the hills, you know, a ranch in the hills or something.
Michael Prior: If we're going to connect them, it would be typically through a fixed wireless solution. And we have a number of areas where we have a fair amount of capacity on fixed wireless network investments. We've made in the U.S, that, you know, we expect to be, you know, loading subscribers on in the quarters to count. Okay.
Michael Prior: And the other question is, we have the other topics that we've talked recently has been directed device. So I like connectivity into smartphones. You guys have had some views over some of the satellite world, but when you talk to a more directed device, it plays out with role in the first term. I mean, I think it's going to be a great, it's a great tool and it's a great functionality, right? So I just think where we are an operator that's the functionality we'd like to deliver to our customers.
Michael Prior: And where we are not a mobile operator, I think it's good for our customer base in our areas. It's probably, it's good for some of our workers who are out there, you know, in remote areas. So I think it's here to come. I mean, how big usage it is is a totally different question, but in terms of available functionality, I think, you know, what people get used to it, they're going to, everyone's going to want it.
Michael Prior: I don't know, Brad, have you had anything that, or, no, we agree, definitely agree, and you know that that will continue to evolve, but we definitely see a great use case about. And it seems like the ecosystem really is to get the chipset, the satellite operators, the chipset, the phone, and the operator kind of all congealed and working together, is that a pair of others? I don't know if I know enough.
Michael Prior: I know I do think it's got to have some of that. I mean, we were involved in ex-com, which did that, you know, the goals that, right, you know, which is working with Apple, I believe. And so those are, you know, and there's other providers who are doing that. So it seems to me it does have to be, you know, sort of a multi-pronged effort.
Unknown Executive: Okay, any further questions, operator. I'm showing no further questions at this point.
Michael Prior: So I'd like to now turn it back to Michael prior for closing remarks. Okay, well, thank you.
Unknown Executive: Thank you all for joining us on the third quarter of all. That was a good one. Take care, everybody. Thank you for participating in today's conference.
Unknown Executive: This concludes the program. You may now disconnect. Thank you.