Q3 2023 Cable One Inc Earnings Call
Okay.
Speaker 1: Thank you for standing by. My name is Eric and I will be your conference operator today.
Thank you for standing by my name is Eric and I will be your conference operator today.
Speaker 1: At this time, I would like to welcome everyone to the Cable 1, 3rd, quarter, 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speech.
At this time I would like to welcome everyone to the cable one third quarter 2023 earnings call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session if.
Speaker 1: If you would like to ask questions during this time, simply press star followed by the number one on your telephone key pass.
If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad if.
Speaker 1: If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Jordan Morquardt, Vice President of Investor Relations.
If you would like to withdraw your question Press Star one again.
You.
I would now like to turn the call over to Jordan worker, Vice President of Investor Relations. Please go ahead.
Okay.
Speaker 1: Good afternoon, and welcome to Cable 1's third 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 factors that could cause Cable 1'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 file.
Good afternoon, and welcome to cable one's third 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 back.
Actors 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.
Speaker 2: Cable 1 is under no obligation and expressly disclaims any obligation except is required by law to update or alter its forward looking statements, whether it's a result of new information future events or others.
Cable one 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.
Speaker 2: Additionally, today's remarks will include a discussion of certain financial measures that are not presented in conformity with U.S. generally accepted accounting principles or GAP. 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.cable1.net.
Additionally, today's remarks will include a discussion of certain financial measures that are not presented in conformity with U S generally accepted 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.
Speaker 2: Joining me on today's call is our president and CEO , Julie Lawless and Todd Kooji, our CFO . With that, let me turn the call over to Julie.
Joining me on today's call is our president and CEO, Julie Lawless and Todd <unk>, our CFO with that let me turn the call over to Julian.
Speaker 3: Thank you Jordan and good afternoon everyone. We appreciate you joining us for today's call. Before we get into third quarter results, I'd like to touch on a few unique strengths of our business.
Thank you Jordan and good afternoon, everyone. We appreciate you joining us for today's call.
Before we get into third quarter results I'd like to touch on a few unique strengths of our business.
Speaker 3: More than a decade ago, we strategically pivoted our focus from linear video to broadband connectivity and business services. Well, in advance of our peers.
More than a decade ago, we strategically pivoted, okay from linear video to broadband connectivity and business services.
Well in advance of our peers.
Speaker 3: Since that time, we have made significant investments in our network with the intent of anticipating and exceeding the evolving connectivity needs of our customers and community.
Since that time, we have made significant investments in our network with the intent of anticipating an exceedingly evolving connectivity needs of our customers and community.
Speaker 3: Fast forward to today and we are proud to have engineered a robust and reliable network with enough capacity to handle up to 5 times our customers current peak usage. As well as a growing set of service offerings for residential customers and businesses of all sizes.
Fast forward to today, and we are proud to have engineered a robust and reliable network with enough capacity to handle up to five times, our customers current peak usage.
Well I think growing set of service offerings for residential customers and businesses of all sizes.
Speaker 3: Equally as important is a footprint in which we deliberately chose to operate, which consists primarily of small cities and large towns across rural America. We continue to enjoy the relatively less competitive environment in these markets, and our position is further solidified by our incumbent status, enabling ongoing network upgrades at a fraction of the cost of new entrants.
Equally as important is our footprint in which we deliberately chose to operate which consists primarily of small cities and large towns across rural America. We continue to enjoy the relatively less competitive environment in these markets and our position is further solidified.
Our incumbent status, enabling ongoing network upgrades.
Fraction of the cost of new entrants.
Speaker 3: Above all, our strength lies with our dedicated associates, the majority of whom live and work in the communities we serve. Our associates are deeply invested in ensuring their cities and towns thrive, not just because it's good for business, but because they have a personal stake in driving progress and making a positive difference in their communities.
Above all our strength.
With our dedicated associates, the majority of whom live and work in the communities we serve.
Associates are deeply invested in ensuring their cities and towns thrive not just because it's good for business, but because they have a personal stake in driving progress and making a positive difference in their communities.
Speaker 3: They are the driving force behind our unique culture and consequently are tangible results.
They are the driving force behind our unique culture and consequently, our tangible result.
Speaker 3: These are just a few key differentiators that reinforce our confidence in the long-term future of Cable 1.
These are just a few key differentiators that reinforce our confidence in the long term future of cable one.
Speaker 3: Looking ahead, we see significant runway for expanding our broadband reach. And we recognize the need to strike the right balance between our two and subscriber growth. As part of our forward-looking vision, we will continue to assess the next generation of products and services based on insights into customer needs.
Looking ahead, we see significant runway for expanding our broadband reach and we recognize the need to strike the right balance between <unk> and subscriber growth as.
As part of our forward looking vision, we will continue to assess the next generation of products and services based on insights into customer need.
Speaker 3: Our sites are set on continuing to compete fiercely while capturing new and profitable market segments. We are confident this strategy will position us to grow well into the future.
Our sights are set on continuing to compete fiercely, while capturing new and profitable market segments.
We are confident this strategy will position us to grow well into the future.
Speaker 3: Currently, we are navigating the final stages of decline in our video product. Having predicted this decline over a decade ago, we have less exposure to the video business today.
Concurrently we are navigating the final stages of decline in our video product having predicted this decline over a decade ago, we have less exposure to the video business today.
Speaker 3: As we draw down on our remaining video subscribers, we are preparing for an environment without a video business, including planning for a reduction in a remaining non-programming support cost.
We draw down on our remaining video subscribers, we are preparing for an environment without a video business, including planning for a reduction in our remaining non programming support costs.
Speaker 3: It's with these foundational strengths and forward-looking strategies in mind that we share our latest performance results.
With these foundational strength and forward looking strategies in mind that we share our latest performance results.
Speaker 3: In the 3rd quarter, we delivered residential broadband revenue growth of 5.8% from the prior year, while our commercial internet business grew even more rapidly. Adjusted EBITDA growth of 2.4% from the prior year with a margin expansion of 180 basis points to 54.7%.
In the third quarter, we delivered residential broadband revenue growth of five 8% from the prior year, while our commercial Internet business grew even more rapidly adjusted EBITDA growth of two 4% from the prior year with a margin expansion of 180 basis points to 54.
Four 7%.
Speaker 3: capital expenditure decrease of 22.6% year over year, resulting in adjusted EBITDA less CapEx of $152.2 million, an increase of 22.6% year over year.
Capital expenditure decrease of 22, 6% year over year, resulting in adjusted EBITDA less capex.
<unk> hundred $52 $2 million, an increase of 22, 6% year over year.
Speaker 3: In the third quarter, we demonstrated strong free cash play conversion as a result of multiple years of efficient capital investment and significant network capacity, even in a more muted economic environment.
In the third quarter, we demonstrated strong free cash flow conversion as a result of multiple years of efficient capital investment and significant network capacity, even any more muted economic environment.
Speaker 3: Looking at residential broadband, we saw a decrease of approximately 1300 customers in the third quarter as compared to the second quarter of 2023. While we continue to experience the side effects of a subdued home move environment and some competitive pressures, there were signs of improvement as our overall connects increased relative to the past three quarters coupled with churn continuing near pre pandemic.
Looking at residential broadband we saw a decrease of approximately 1300 customers in the third quarter as compared to the second quarter of 2023, while we continue to experience the side effects of a subdued home move environment and some competitive pressures there were signs of improvement as our overall connect.
Increased relative to the past three quarters, coupled with churn continuing near pre pandemic loads.
Speaker 3: As I mentioned at the top of the call, one of our best opportunities over the long term is driving higher broadband penetration in our markets. We are better aligning ourselves to this growth opportunity by supplementing our prioritization of premium customers with a focus on new customer segments within our existing footprint.
As I mentioned at the top of the call one of our best opportunities over the long term is driving higher broadband penetration in our markets. We are better aligning ourselves to this growth opportunity by supplementing our prioritization of premium customers with a focus on new customer segments within our existing footprint.
Speaker 3: and practice this could mean ongoing product enhancements at higher price points for premium customers while targeting unique product authors and service models to more value conscious customers to grow this segment.
In practice this could mean ongoing product enhancements at higher price points for our premium customers, while targeting unique product offers and service model to more value conscious customers to grow this segment profitably.
Speaker 3: For example, during the last month of the quarter, we introduced a short-term promotion of $25 for 100 megs designed to attract value-focused market segments. That test promotion drove incremental new connects while we saw the vast majority of new connects by product tiers, the faster speeds, and higher price points than the promotional offer.
For example, during the last month of the quarter, we introduced a short term promotion of $25. Four 100, megs designed to attract value focused market segments that test promotion drove incremental new connects while we sell the vast majority of new connects byproduct tiers with faster.
Speed and higher price points and the promotional offer.
Speaker 3: We'll continue to test and learn while targeting different market segments, maintaining a methodical approach that prioritizes profitable long-term results.
We will continue to test and learn while targeting different market segments, maintaining a methodical approach that prioritizes profitable long term results.
Speaker 3: Our high cellin underscores the sustained demand for our premium speed tiers, a T factor in the 6.5% year-over-year increase in residential broadband R-POO.
Our high selling underscores the sustained demand for our premium speed tiers, a key factor in the six 5% year over year increase in residential broadband <unk>.
Speaker 3: Well, please, with this R-Poo growth, our priority is a balance of subscribers in R-Poo, with a current focus on expanding our subscriber base.
While pleased with this <unk> growth our priority is a balance of subscribers and <unk> with a current focus on expanding our subscriber base.
Speaker 3: Turning to business services, revenue fell slightly by 0.4% year-a-year. When excluding for video and phone, the connectivity side of the business is strong, showing growth in the quarter that outpaced even that of our residential broad being revenue.
Turning to business services revenues fell slightly by <unk>, 4% year over year.
When excluding for video and phone the connectivity side of the business is strong showing growth in the quarter that outpaced even that of our residential broadband revenue.
Speaker 3: fight facing economic pressures related to higher interest rates, our business services team continues to showcase resilience. Amid these challenges, our teams are relentlessly committed to evolving our data and fiber offerings, streamlining our operations, and setting new standards and customer satisfaction through White Glove Service.
Despite facing economic pressures related to higher interest rates, our business services team continues to showcase resilience.
Amid these challenges our teams are relentlessly committed to evolving our data and fiber offerings streamlining our operations and setting new standards and customer satisfaction through white glove service.
Speaker 3: As an illustration of our proactive approach, we are in advanced stages to upgrade wholesale fiber networks to 10 gigabits with several customers, a strategic move designed to extend contracts and boost long-term revenues. Moreover, with the recent launch of Business Wi-Fi Plus, we are reinforcing our commitment to using technology to enhance customer experience.
As an illustration of our proactive approach we are in advanced stages to upgrade wholesale fiber networks to 10 gigabit with several customers a strategic move designed to extend contracts and boost long term revenues.
Moreover, with the recent launch of business Wi Fi plus we are reinforcing our commitment to using technology to enhance customer experiences.
Speaker 3: And always on, Mesh Wi-Fi solution tailored for small to medium sized businesses, business Wi-Fi plus guarantees uninterrupted coverage, keeping businesses and their customers securely connected while delivering optimal speed and performance.
And always on mesh Wi Fi solution tailored for small to medium sized businesses business Wi Fi plus guaranteed uninterrupted coverage keeping businesses and their customers securely connected while delivering optimal speed and performance.
Speaker 3: Moving to a key driver of our success, our dependable advanced network infrastructure, we continue to see and meet the strong appetite for data with average customer demand reaching an all-time high of 646 gigabytes per month, equally telling more than 20% of our residential customers now exceeded terabyte of usage each month, an increase of 18% from the same period last year.
Moving to our key driver of our success, our dependable advanced network infrastructure, we continue to see and meet the strong appetite for data with average customer demand, reaching an all time high of 646 gigabytes per month equally.
Equally telling more than 20% of our residential customers now exceed a terabyte of usage each month, an increase of 18% from the same period last year.
Speaker 3: Our average network utilization during peak hours remains steady with downstream and upstream of 20% and 19% respectively.
Our average network utilization during peak hours remained steady with downstream and upstream of 20% and 19% respectively.
Speaker 3: The ample network capacity enabled by years of network investments, fuel or confidence in our ability to stay well ahead of the consumption curve in a highly capital-efficient manner.
Ample network capacity enabled by years of network investment fuel our confidence in our ability to stay well ahead of the consumption curve in a highly capital efficient manner.
Speaker 3: Looking at wired competition, while we see competition continue to grow, and the majority of our markets, we do not compete against an Internet service provider that offers 100 meg speeds or higher.
Looking at Wired competition, while we see competition continued to grow in a majority of our markets. We do not compete against an Internet service provider that offers 100, Meg speeds or higher <unk>.
Speaker 3: Regardless of speeds or technology, we operate with a mindset that every market is highly competitive. We will meet that competition by turning the focus to our customers and our communities, ensuring we provide the trusted service our customers have come to expect from Cable 1.
Regardless of speeds, our technology, we operate with a mindset that every market is highly competitive.
We will meet that competition by turning the focus to our customers and our communities ensuring we provide the trusted service our customers have come to expect from cable one.
Speaker 3: industry reports on mobile fixed wireless indicates that net ads may have peaked. As previously indicated, we have not experienced a material impact to our customer's turn due to mobile fixed wireless competition.
Industry reports on level fixed wireless indicate that net adds may have peaked as.
As previously indicated we have not experienced a material impact to our customer churn due to mobile fixed wireless competition.
Speaker 3: There likely is some impact to net ads, as switchers from DSL or new entrants try fixed wireless as an initial solution.
There likely is some impact to net adds are switchers from DSL or new entrants try fixed wireless as an initial solution.
Speaker 3: In the long run, we are confident that our fixed network will maintain superiority in terms of those speed and reliability while also delivering a substantial cost advantage relative to the significant capacity it can generate.
In the long run we are confident that our fixed network or maintain superiority in terms of both speed and reliability. While also delivering a substantial cost advantage relative to the significant capacity it can generate.
Speaker 3: With that said, we are well positioned to meet the growing data demands of customers efficiently and economically, now and in the future.
With that said, we are well positioned to meet the growing data demands of customers efficiently and economically now and in the future.
Speaker 3: In the third quarter, we continue to execute against our digital transformation and integration road map.
In the third quarter, we continued to execute against our digital transformation and integration Roadmaps.
Speaker 3: The expansion of our Advanced Customer Contact Center platform in Sparklight, following its initial launch in the Fidelity footprint, is driving greater efficiencies for our associates, enhancing performance across all key contact center metrics, including time-to-answer service levels, and associate productivity.
Expansion of our advanced customer contact center platform and sparkly. Following its initial launch in the fidelity footprint is driving greater efficiencies for our associates enhancing performance across all key contact center metrics, including time to answer service levels and associate productivity.
Speaker 3: We saw similar efficiencies for our fidelity and cable America brand as we transition them onto our financial ERP Moving us one step closer to a unified platform for all brand
<unk> similar efficiencies for our fidelity in cable America brands as we transition them onto our financial ERP moving us one step closer to a unified platform for all brands.
Speaker 3: These ongoing platform consolidations are reducing costs and enhancing operational efficiencies by merging overlapping systems into a single coherent structure. As we move closer to full integration of our brands, we continue to evaluate all opportunities to increase agility and eliminate pain points and pursuit of associate and customer goodness.
These ongoing platform consolidations are reducing costs and enhancing operational efficiencies by merging overlapping systems into a single coherent structure.
As we move closer to full integration of our brands, we continue to evaluate all opportunities to increase agility and eliminate pain points and pursuit of associate and customer goodness.
Speaker 3: We also remain committed to assessing the various government funding opportunities. We're exploring underserved areas adjacent to our markets where our current infrastructure offers a significant edge for network extension. Our strategy is twofold. We opportunistically pursue grants that align our return on investment criteria and advocate for allocating public resources to genuinely unserved or underserved communities.
We also remain committed to assessing the various government funding opportunities, we're exploring underserved areas adjacent to our markets, where our current infrastructure offers a significant edge for network extension. Our strategy is twofold, we opportunistically pursue grants that along.
Our return on investment criteria.
An advocate for allocating public resources genuinely unserved or underserved communities.
Speaker 3: We recently demonstrated this commitment in one of our states where we defeated an attempt to provide government subsidies in an area where we already provide with bus upstream and downstream bandwidth.
We recently demonstrated this commitment and one of our states, where we defeated and attempt to provide government subsidies in an area, where we already provide robust upstream and downstream bandwidth.
Speaker 3: Turning to our unconsolidated investments, residential and business data customers collectively expanded by roughly 12,800 or 2.7% sequentially from Q2 of 2023.
Turning to our unconsolidated investments residential and business data customers collectively expanded by roughly 12800 or two 7% sequentially from Q2 of 2023.
Speaker 3: These figures do not include the activities of metronet or zipply, where our investments are less significant.
These figures do not include the activities of Metro net or is that really where our investments are less significant.
Speaker 3: These results are a testament to the effectiveness of the straightforward strategy employed by our season business partners, delivering premium broadband services across rural America.
These results are a testament to the effectiveness of the straightforward strategy employed by our seasoned business partners.
Levering premium broadband services across Rural America.
Speaker 3: Before handing the call over to Todd, I'd like to take a moment to welcome Matthew Armstrong, who is recently appointed to the newly created role of Senior Vice President, Presidential Services.
Before handing the call over to Todd I would like to take a moment to welcome Matthew Armstrong, who was recently appointed to the newly created role of senior Vice President residential services earlier.
Speaker 3: Earlier this fall, we restructured residential services as a business unit similar to the business services side of the house.
Earlier this fall, we restructured residential services I think business unit similar to the business services side of the house Matthew.
Speaker 3: Matthew is responsible for the overall strategy and data day operations of the residential services division, which includes marketing brand and communication.
Matthew is responsible for the overall strategy and day to day operations of the residential services Division, which includes marketing brand and communications.
Speaker 3: Matthew previously worked at Cable 1 from 2010 to 2014.
Matthew previously worked at cable one from 2010 to 2014 and his prior role as Vice President of strategic planning and finance. He led the pivotal effort to shift cable one's focus to residential internet and business services and away from video and forthcoming back to cable one Matthew worked at several startup venture.
Speaker 3: In his prior role as Vice President of Strategic Planning and Finance, he led the pivotal effort to shift cable one's focus to residential, internet, and business services and away from video. So before coming back to cable one, Matthew worked at several startup ventures, including serving as co-founder and CEO of a startup in San Francisco.
<unk>, including serving as co founder and CEO of a startup in San Francisco I am confident he will be a tremendous asset as we double down on our work to grow subscribers and strengthen our competitive advantage.
Speaker 3: I'm confident he will be a tremendous asset as we double down on our work to grow subscribers and strengthen our competitive advantage.
Speaker 3: As disclosed earlier this week, we recently implemented other due changes to our leadership team that align with our focus on customer growth, digital transformation, and a superior customer and associate experience.
As disclosed earlier this week, we recently implemented other key changes to our leadership team that align with our focus on customer growth digital transformation and a superior customer and associate experience.
Speaker 3: And now Todd, who will provide a full recap of our third quarter financial performance.
And now Todd who will provide a full recap of our third quarter financial performance.
Speaker 4: Thanks Julie. Starting with revenue, total revenues for the third quarter of 2023 were $420.3 million compared to $424.7 million in the third quarter of 2022, a 1% decrease. The decrease was primarily due to a continued decline in lower margin residential and business video revenue.
Thanks, Julie starting with revenue total revenues for the third quarter of 2023 were $423 million.
Compared to $424 7 million in the.
Third quarter of 2020 to a 1% decrease the decrease was primarily due to a continued decline in lower margin residential and business video revenues.
Speaker 4: The growth of our foundational product lines and residential and commercial broadband continue to help our business forward. As the demand for reliable high-speed broadband expands across all customer segments, so does confidence in our continued success and ability to strike the right long-term balance between subscribers and RPU growth.
Growth of our foundational product lines in residential and commercial broadband continued to propel our business forward.
The demand for reliable high speed broadband expands across all customer segments.
This confidence in our continued success.
Ability to strike the right long term balance between subscriber and <unk> growth.
Speaker 4: For Q3 2023, residential data revenues expanded 5.8% year-over-year when compared to Q3 2022.
For Q3 2023, our residential data revenues expanded five 8% year over year, when compared to Q3 2022.
Speaker 4: despite a decline of 0.4% in our total business services revenues year over year, data services within this segment experienced meaningful growth in the quarter. This growth is not worth it. As our reported business services, still encompasses video and voice revenues, bearing similarities to our residential segment.
Despite a decline of 4% in our total business services revenues year over year data services within this segment experienced meaningful growth in the quarter. This growth is noteworthy as our reported business services still encompasses video and voice revenues bearing similarities to our residential segment.
<unk>.
Speaker 4: Operating expenses were $109.7 million or 26.1% of revenues in the third quarter of 2023 compared to $120.5 million or 28.4% of revenues in the comparable quarter of the prior year. A 230 basis point improvement driven largely by a $14.8 million decrease in video programming in franchise costs.
Operating expenses were $109 7 million or 26, 1% of revenues in the third quarter of 2023.
Third to $125 million or 28, 4% of revenues in the comparable quarter of the prior year a two.
230 basis point improvement driven largely by a $14 $8 million decrease in video programming and franchise costs.
Speaker 4: Delling General Administrative Expenses were $92.7 million for the third quarter of 2023, compared to $86 million in the prior year quarter. SNA, the percentage of revenue was 22.1% for the third quarter of 2023, compared to 20.3% for Q3 of 2022. The year-to-year increase was primarily driven by increased labor and marketing.
Selling general and administrative expenses were $92 7 million for the third quarter of 2023 compared to $86 million in the prior year quarter SG.
SG&A as a percentage of revenue was 22, 1% for the third quarter 2023, compared to 23% for Q3 of 2022.
The year over year increase was primarily driven by increased labor and marketing expense.
Speaker 4: Adjusted EBITDA was $230 million for the third quarter, an increase of 2.4% when compared to the third quarter of 2022. Our adjusted EBITDA margin for the third quarter of 2023 was 54.7%. A 180 basis point improvement compared to the prior year quarter, and its sequential increase of 20 basis points as we continue to drive growth in our higher margin advanced broadband products.
Adjusted EBITDA was $230 million for the third quarter, an increase of two 4% when compared to the third quarter of 2022.
Our adjusted EBITDA margin for the third quarter of 2023 was 54, 7%, a 180 basis point improvement compared to the prior year quarter and a sequential increase of 20 basis points as we continue to drive growth in our higher margin advanced broadband products.
Speaker 4: Capital expenditure is totaled $77.8 million for the third quarter of 2023, which equates to 33.8% of adjusted EBITDA compared to $100.5 million or 44.7% in the prior year quarter.
Capital expenditures totaled $77 8 million for the third quarter of 2023, which equates to 33, 8% of adjusted EBITDA compared to $105 million or 44, 7% in the prior year quarter.
Speaker 4: During the third quarter, we invested $9.5 million of CAPEX for new market expansion initiatives and $4 million for integration activities.
During the third quarter, we invested $9 $5 million of Capex for new market expansion initiatives and $4 million for integration activities are.
Speaker 4: Our year-over-year decrease in capital expenditures stems from our strategic working capital optimization initiatives and are proactive long-term network investment strategy.
Our year over year decrease in capital expenditures stems from our strategic working capital optimization initiatives and our proactive long term network investments strategy.
Speaker 4: A Jeff DeBitt's last capital expenditures was $152.2 million for the third quarter of 2023, an increase of 22.6% from the prior year quarter, and 1.6% on a sequential quarterly basis, as we benefit from ongoing capital efficiency and strong free cash flow conversion.
Adjusted EBITDA less capital expenditures was $152 2 million for the third quarter of 2023, an increase of 22, 6% from the prior year quarter, and one 6% on a sequential quarterly basis as we benefit from ongoing capital efficiency and strong free.
Cash flow conversion.
Speaker 4: As we continue to evolve and adapt to our changing landscape, our approach to capital allocation remains grounded our core principle.
As we continue to evolve and adapt to our changing landscape our approach to capital allocation remains grounded our core principles to invest prudently and state of the art reliable broadband infrastructure and expanding our reach in and around the areas we already serve.
Speaker 4: to invest crudently in the state of the art, reliable, broadband infrastructure, and expanding our reach in and around the areas we already serve.
Speaker 4: who will also continue to balance strategic acquisition and investment opportunities with a very disciplined and long-term oriented balance sheet management plus.
We will also continue to balance strategic acquisition and investment opportunities with a very disciplined and long term oriented balance sheet management philosophy.
Speaker 4: In the third quarter of 2023, we distributed $16.7 million in dividends, and we repurchased nearly $24,000 of our common stock for $16.5 million.
In the third quarter of 2023, we distributed $16 $7 million in dividends and we repurchased nearly 24000 shares of our common stock for $16 5 million.
Speaker 4: We also repaid $54.6 million of debt in the quarter, $50 million of which was a voluntary repayment of our outstanding revolver balance.
We also repaid $54 $6 million of debt in the quarter $50 million of which was a voluntary repayment of our outstanding revolver balance.
Speaker 4: subsequent to quarter end, we repaid an incremental 50 million in debt foring this voluntary reduction to 150 million in the last five months.
Subsequent to quarter end, we repaid an incremental $50 million in debt, bringing this voluntary reduction to $150 million in the last five months.
Speaker 4: As of September 30th, we had approximately $240 million of cash and cash equivalence on hand. Our debt balance was approximately at $3.7 billion consisting of approximately 1.8 billion in term loans, 920 million in convertible notes, 650 million in unsecured notes, 388 million of revolver borrowings and 5 million of finance lease liability.
As of September 30, we had approximately $240 million of cash and cash equivalents on hand, our debt balance was approximately $3 7 billion consisting of approximately $1 8 billion in term loans $920 million in convertible notes $650 million unsecured note.
<unk> $388 million of revolver borrowings and $5 million of finance lease liabilities.
Speaker 4: We also had $612 million that they will for additional borrowings under our $1 billion committed revolving credit.
Also had $612 million available for additional borrowings under our $1 billion committed revolving credit facility.
Speaker 4: Our weighted average cost of debt to the quarter was just under 4.3%. Our net leverage ratio was 3.8 tons. And the vast majority of our bar rings are either fixed issuance or events synthetically fixed under long-term contracts. Considerably mitigating our exposure to the prevailing rate environment.
Our weighted average cost of debt for the quarter was just under four 3%. Our net leverage ratio was three eight times and the vast majority of our borrowings are either fixed issuance already been synthetically fixed under long term contracts considerably mitigating our exposure to the prevailing rate environment.
Speaker 4: As mentioned last quarters call, our equity investment in whisper was redeemed for total cash proceeds of nearly $36 million. And our investment in the tri-stars back was divested for total cash proceeds of nearly $21 million during the third quarter.
As mentioned in last quarter's call our equity investment in Whisper was redeemed for total cash proceeds of nearly $36 million and our investment in the Tri Starr back was divested for total cash proceeds of nearly $21 million during the third quarter.
Speaker 4: Our investment strategy remains focused on pursuing opportunities and rural broadband that deliver growth and returns exceeding our benchmarks. And aligning with many of the brightest minds, improvement operators within the communication sector.
Our investment strategy remains focused on pursuing opportunities in rural broadband that deliver growth and returns exceeding our benchmarks and aligning with many of the brightest minds and proven operators within the communications sector.
Speaker 4: or committed to long-term value creation with these investments, whether through strategic monetization or future integration.
We're committed to long term value creation with these investments whether through strategic monetization for future integrations.
Speaker 4: Finally, as a reminder, we've posted trending sheets on our investor relations website, making it easier to see several quarters worth of sequential changes in many of our key operating and financial metrics.
Finally, as a reminder, we've posted trending sheets on our Investor relations website, making it easier to see several quarters worth of sequential changes in many of our key operating and financial metrics.
Speaker 4: All figures are presented on a consolidated as reported basis.
All figures are presented on a consolidated as reported basis.
With that we are now ready for questions.
Yeah.
Speaker 1: Thank you. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone key.
Thank you.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Speaker 1: Your first question comes from the line of Brandon Nispell with KeyBank Capital Markets. Please go ahead.
Your first question comes from the line of Brendan Misspell with Keybanc capital markets. Please go ahead.
Speaker 5: Great, thanks for taking the questions, Julie. The question to you, is just the penetration is now declined for I think for consecutive quarters? Can you maybe outline what you thought so are in terms of the longer term opportunity and how you plan to sort of address getting subscribers back going through new pricing packaging promotional offers?
Great. Thanks for taking the question Julie a question for you HFC penetrations now declined for I think four consecutive quarters can you maybe outline what your thoughts are in terms of the longer term opportunity and how you.
Plan to sort of address.
Keating subscribers back going through new pricing packaging promotional offers and then hopefully you could.
Speaker 5: And then hopefully you could, hoping you could talk a little bit more about how the quarter progressed from an HSD and that ad perspective you mentioned.
Hoping you could talk a little bit more about how the quarter progressed from an HFC net add perspective, you mentioned.
Speaker 5: The promotion will offer around $100 meg for $25.
The promotional offer out of 100 megs for $25.
Could you sort of.
Speaker 5: Talk about what led to that decision and if you care to a pine on how 4Q is trending, that would be great. Thanks. You got it.
Talk about what led to that decision and if you care to opine on how <unk> is trending that would be great. Thanks.
Got it Brandon.
So.
Speaker 3: I can't comment on how others track their homes past, but we are incredibly fisterious about it. And so as homes past goes up, even if we keep our subscribers the same.
I can't comment on how others track their homes passed but we are incredibly fastidious about it and so as homes passed goes up even if we keep our subscribers the same core growth slightly the penetration will drop.
Speaker 3: or grow slightly, the penetration will drop.
Speaker 3: And the first past database gets updated when we have new build extensions, for example, or if we have edge out opportunities, and you can imagine in those edge out areas that the homes come on or are put into the database and the billing platform way before they have the opportunity to be sold. So over time, I would expect to see the penetration from that issue resolve itself. In terms of...
This past database gets updated.
When we have Newbuild extensions for example, or if we have edge out opportunities and you can imagine and those edge out areas that the homes come on are put into the database and the billing platform wave.
Way before they have the opportunity to be sold so overtime I would expect to see the penetration from that.
Issue resolve itself in terms of what we see as the long term opportunity for penetration growth. We think there is an abundant runway for us to grow penetration and we are working on that with vigor.
You asked I think about commentary around new growth and.
I think about the work that we've done in the past say $2 five months, specifically, where we are just crazy really focused on fiercely competing.
Speaker 3: take you in a half months specifically where we are just
Speaker 3: crazily focused on fearously competing. I mean, fearously.
Speaker 3: approaching the entire footprint on a market segmentation basis, meaning that we'll break apart different markets and customer types within those markets.
Fiercely.
Approaching the entire footprint on a market segmentation basis, meaning that we.
We'll break apart different markets and customer types within those markets.
Speaker 3: as well and address them very in a very tailored manner. And we're just, I guess, in short realigning ourselves around growth. We've talked it in recent quarters about realigning ARP who and growth. And obviously those are the two important levers. And right now we are focused on the growth part, the growth in the unit.
Well and address them.
<unk> and a very tailored manner.
And we're just I guess in short realigning ourselves.
Around growth, we've talked to in recent quarters about realigning.
<unk> and growth.
And obviously those are those are the two important levers.
And right now we are focused on the growth part.
Thank you.
Speaker 3: As far as the third quarter, um,
And units as far as the third quarter.
Speaker 3: It was, there was an acceleration as we got closer to the end of the quarter and into the fourth quarter in connects and I attribute that to us being willing to experiment and be very agile and try different tactics and those are bearing fruit. And so I feel quite positive about our fourth quarter.
It was there was an acceleration as we.
Got closer to the ended the quarter and into the fourth quarter and connects and I attribute that to us being.
Are willing to experiment and be very agile and try different projects and those are bearing fruit and so I feel quite positive about our fourth quarter.
Thanks for taking the questions.
Speaker 1: Thank you. Your next question comes from the line of Phil Q6 with JP Morgan. Please go ahead.
Thank you. Your next question comes from the line of Phil Cusick with Jpmorgan. Please go ahead.
Speaker 6: Hey guys, this is Nick on Perfil. Thanks for taking the question. You know, I know you guys have touched on how Fix Wireless hasn't really been a churn issue. But I was hoping you could touch on the kind of churn you may see from fiber and fiber overbuilders entering your markets.
Hey, guys. This is Nick on for Phil Thanks for taking the questions.
I know you guys have touched on how fixed wireless hasn't really been a churn issue.
Was hoping you could touch on the kind of churn you may see from fiber and fiber fiber overbuild or entering your markets.
Speaker 6: And to that extent, you know, when you have visibility into an over builder in your market, you know, how do you evaluate what your competitive response might be, whether that's, you know, promotions more on the gross ad front, or maybe something more, you know, targeted for retention of the base.
And to that extent when you have visibility into an overbuild or in your market.
Do you evaluate what your competitive response might be whether thats promotions more on the gross add front or maybe something more targeted for retention of the base.
Speaker 3: So I think your first question was overall about turn from competition regardless of where it comes from. We do track competition by competitor. So our folks code in the reason why someone would choose to leave us. So we have that on a granular level to the extent that human beings don't make errors. I'm not.
Oh.
So I think your first question was overall about churn from competition, regardless of where it comes from.
We do track competition by competitors, so our folks code in a reason why someone would choose to leave us. So we have that.
On a granular level to the extent that human beings don't make errors.
<unk>.
Im not sure.
Speaker 3: What your question was specifically about fiber churn, but let me spin to the next part and then you can clarify and we can go back at it. But how do we evaluate the response in a holistic way? I mean, it depends on how big the market is, where it's situated, what the economy is like in that marketplace, who's the overbuilder? How are they financed?
What your question was specifically about fiber churn, but let me let me spend to the next part and then you can clarify them and we can go back at it but how do we evaluate the response in a holistic way I mean, it depends on how big the market is where it's situated what the economy is like in that marketplace, who see overbuilt.
Or how are they financed.
Speaker 3: What are their pricing points? What do our nodes look like in those areas? And we have an amazing network. But that isn't to say that some of our markets aren't in the process of being rebuilt upgraded. It would be a more correct term.
What are their pricing point, what what do our notes look like in those areas and we have a an amazing network, but that isn't to say that some of our markets arent in the process of being rebuilt upgraded it would be a more and more current term.
So it's a holistic.
Speaker 3: walk around the whole issue sort of evaluation. And what do you need to hear? Yeah, just like that.
Walk around the whole issue sort of evaluation.
What was what are you what do you need to hear yes.
Brazil, China, Yes, I mean, just.
Speaker 6: Yeah, I mean, just, you know, obviously you guys say, you know, with fixed wireless, you're not seeing much turning your base. But, you know, in terms of fiber competitions.
Obviously, you guys say with fixed wireless youre not seeing much churn in your base.
But.
In terms of fiber competition.
Speaker 3: Are you seeing material turn when an overbuilder enters a market? And how are you worried about trying to promote and maybe lock down and retain your subbase in those markets? Yeah, okay, I got you. I got you. Thanks for that clarification. Okay, so let's start with overall turn. Is that pre-pandemic load?
Are you seeing material churn when an overbuild or in terms of market.
And how.
Are you are you worried about trying to promote and maybe locked down and retain your sub base in those markets. Yeah. Okay. I got you I got you. Thanks for that clarification. Okay. So, let's just start with overall churn is that pre pandemic lows.
So our churn is very low now I'm talking about the entire MSL and that is inclusive of markets that are competitive. So that just tells you I mean common sense would tell you on a in a competitive market.
Like highly competitive markets that you would lose customers yet overall, our churn is incredibly low so.
Just starting from that point.
Speaker 3: In competitive markets, obviously people are enamored with choice.
In competitive markets.
<unk> people are enamored with choice.
Speaker 3: have called customers that have left us for other providers and talked to them and said,
Personally have called customers that have left us for other providers and talk to them and said Ah.
Speaker 3: I am not trying to sell you. I simply want your input. Why did you leave us?
I am not trying to sell you I simply want your input why did you leave us and what could we have done differently and honestly at least and not small sample. It was really about a choice like trying something different pay you know haven't had problems I don't.
Speaker 3: and what could we have done differently. And honestly, at least in that small sample, it was really about a choice, like trying something different. Hey, you know, haven't had problems. I don't think my price is gonna be lower, but.
My prices going to be lower but.
Speaker 3: I thought I would try this out because there was a direct sales person on my doorstep.
I thought I would try this out because there was a direct sales person on my doorstep.
Speaker 3: Typically, we have had competition for honestly decades, but then with the company over 24 years. And I can think of one market.
Typically we have had competition for honestly decades, I've been with the company over 24 years and I can think of one market place that had a <unk>.
Speaker 3: place that had a fiber over builder come in and a traditional HFC over builder come in and we lost customers to begin with that lasted for a period of time and then things normalized and we began to grow again. I don't know if that's what it's going to look like in the future or not, but certainly that has been our experience in the past.
Fiber overbuild or come in and a.
Traditional HFC overbuild or come in and we lost customers to begin with.
That lasted for a period of time, and then things normalized and we began to grow again.
I don't know, if thats, where its going to look like in the future or not but certainly that has been our experience in the past.
Speaker 6: Got it. Thanks for the color. And if I could just push my luck here, is, you know, anything you can give us on maybe the magnitude of net ads and recorder from the 100 meg offer.
Got it thanks for the color.
I could just push my luck here is anything you can give us on maybe the magnitude of net adds in the quarter from the 100 Meg offer.
Speaker 3: Oh, NetApps? No, but I can tell you that, you know, the 100 meg offer was an initiative aimed at value conscious.
Net adds no, but I can tell you that.
The 100 Meg offer.
<unk> and initiatives aimed at value conscious.
Speaker 3: Customers while we don't lose our existing customers by and large to fix wireless broadband they are targeting their customers and bundling them at a low price. So we want to market with this our connects Where Are
Customers, while we don't lose our existing customers by and large to fixed wireless broadband they are targeting their customers in bundling them at a low price. So we went to market with best.
Connects.
Where are robust.
Speaker 3: and the majority are in a way.
And the majority far and away.
Speaker 3: two thirds of the customers connected at higher speed, higher price.
Two thirds.
Of the customers connected in higher speed higher priced tiers than that.
Speaker 3: years than that 100 megs for $25. So it was basically a call to action, the phones rang, and then people elected into higher tiers.
100, Megs for $25. So it was basically a call to action the phones rang and then.
Ebola elected into higher tiers.
Got it thanks Julien.
Yeah.
Speaker 1: Thank you. Your next question comes from the line of Greg Williams with TD Cowan. Please go ahead.
Thank you. Your next question comes from the line of Greg Williams with TD Cowen. Please go ahead.
Speaker 7: Thanks for taking my questions. Gully, I noted that, you know, wireline competition is increasing. I was hoping you could put a finite point on it in the past, you noted 25% of your footprint had a wireline while we did go off, or if I could flip that fixed wireline as well, I think he's in 30.
Thanks for taking my questions Julian noted that.
Wireline competition is increasing I was hoping you can put a finer point on it in the past you noted 25% of your footprint had a wireline one gig offer and if I could flip that the fixed wireless as well I think you said, 35%, which includes fixed wireless footprint within your footprint.
Speaker 7: including the farthest from a footprint. It was in your footprint. What are those numbers today is an update to that.
What are those numbers today as an update to that and where do you think that could ultimately end up I think about Verizon launching a BC category C band into rural areas and it could be in your markets.
Speaker 7: And where do you think that could ultimately end up, you know, I think about Verizon launching the BC category, CBAND into rural areas and it could be in your market.
Speaker 7: And then second question is just on the implementation success you're having by going downstream and the $25 offer and how you can sort of justify that tactically. I think you said on your scripted remarks that you can now offer premium services, a premium customer. So could you hike up sort of prices on the high end to help justify the business case on the low end? Just helping us understand the ARPU impacts overall of these offers. Thanks.
And then second question is just on the presentation and the success you are having by going downstream and the $25 offer.
How you can sort of justify that tactically I think as you said on your scripted remarks that you can now offer premium services the premium customer. So could you pick up sort of prices on the high end to help justify the business case and the low end just helping us understand the arco impacts overall of these offers.
Yeah.
Speaker 3: So related to wire-lying competition, the majority of our markets do not have a wired competitor that can offer 100 megs or more.
So related to wireline competition, the majority of our markets do not have a wired competitor that can offer 100 megs or more.
So the majority.
Speaker 3: Fixed wireless, T-Mo, our overlap with T-Mo right now is 36% of the marketplace. Verizon is, oh, I think 16, I'd have to look it up real quick. Yeah, 12, 12 right now for them.
Okay.
Fixed wireless chemo or overlap with chemo right now is 36% of the marketplace horizon as well.
Hi, Thanks, 16th that will set up real quick.
<unk>.
12, right now.
<unk> for them.
Speaker 3: our success in what you call downstream, and I would call value conscious customers, I think the 100 Meg offer is an example of that. And I think that we're going to be trying other things as well. But we will only do so to the extent that what we're offering is a profitable package.
Our our <unk> SaaS and what you called down stream and I would call value conscious customers.
Thank the 100 Meg offers an example of that and I think that we're going to be trying other things as well, but we will we will only do so.
To the extent that.
What we're offering is a profitable package.
Speaker 3: We're focused on delivering profitability over the long term, not doing something.
We're focused on delivering profitability over the long term not doing.
Speaker 3: reactive in the short term that would hurt us for the long term.
Something.
<unk>.
In the short term that would that would hurt us for the long term.
Speaker 3: We do, you know, the marketplace is showing really interesting dichotomies, I think, in that we see
The marketplace is showing really interesting dichotomy is I think in that we see.
Speaker 3: definite Chrysolas' density on the higher end products through research and actually selling them. I mean, they keep buying more and more and we had a read adjustment this year and they're still buying more and they're not turned. But then again, you have this really large response.
Definite price elasticity on the higher end products.
Through research and actually selling them.
By more and more and we had a rate adjustment this year and they are still buying more and there's not churn.
But then again you have this really large response to the 125 dollar onboard.
Speaker 3: to the $100 meg, $25 offer, and it's, it's, it's.
It's.
It's almost like there's a polarization.
Speaker 3: There's a polarization on both sides. So again, I think we have to be surgical. I think we have to, you know, call it personalized broadband. I mean, we have to take the market segmentation approach that I talked about in order to really drive.
On both sides. So again I think we have to be surgical I think we have to.
Call it personalized broadband I mean, we have to take the.
The market segmentation approach that I talked about.
In order to really drive new growth.
Got it thank you.
Speaker 1: Thank you. Your next question comes from the line of Frank Lutain with Raymond James. Please go ahead.
Thank you. Your next question comes from the line of Frank Louthan with Raymond James. Please go ahead.
Speaker 8: Great. Thank you. And maybe I missed this in the call, but the $25 offer, when did that start in the quarter? And is that kind of the way you'll be able to get to positive sub?
Great. Thank you and I.
Maybe I missed this in the call, but the $25 offer when did that start in the quarter and is that kind of the way youll be able to get to positive subs.
Speaker 8: for the year. And then, can you give us a little color on the nature of the homes that you're passing? You're adding quite a few each quarter. Are these competitive areas? Are they just kind of filling in holes in your footprint? And what's your expectation for penetration in those homes longer term? Can those areas you're targeting get better penetration than your base or a little lower? How should we...
For for the year, and then could you give us a little color on the nature of the homes that you're passing youre, adding quite a few each quarter are.
Are these competitive areas that they just kind of filling in holes in your footprint and what's your expectation for penetration in those homes longer term can those can those.
Areas, you're targeting get better penetration in your base or with lower how should we think about it. Thanks.
Speaker 3: Yeah, that's a good question, Frank. So the $25 offer started at the beginning of October . It was a promotion.
That's a good question Frank.
So the $25 offer started at the beginning of October.
It was a it was a promotion.
Timber.
Speaker 3: trying to think, okay, September , sorry. I don't, we're in November now, I'm all off. I can't keep my time straight since COVID, I apologize. So beginning of September , it was supposed to end at the end of September , but we had literally like we were overwhelmed. Our phones were ringing off the hook. So, and we didn't see any detriment to that point. In other words, people weren't buying the $25 offer. So that wasn't a concern.
I'm trying to think Okay September sorry, I don't we're in November now on an all off I can't keep my time straight since Covid I apologize. So beginning of September it was supposed to end at the end of September, but we had literally like we were overwhelmed our phones are ringing off the hook.
So and we didn't see any detriment to.
To that point in other words people arent buying the $25 offer so so that was a concern.
Speaker 3: From what we saw, they weren't churning, so we extended it through the end of October , and then it sunsetted, so that promo's gone, and we're back to regular pricing. I don't, that isn't our one-trick pony to ride in order to get growth, I don't think. It was just an example that we could draw attention by flagging a low price in the marketplace.
From what we saw they werent churning. So we extended it through the end of October and then at Sunset. It so that that promo has gone back to regular pricing.
I don't that isn't <unk>.
One trick Pony two to ride.
In order to get growth I don't think it was just an example that we could draw attention.
By flagging, a low price in the marketplace.
Speaker 3: And in terms of our home's past, it is we have...
And in terms of our homes passed is we have.
Hum.
Speaker 3: Not all of our markets, because, boy, that sure would be nice, but a subset of our markets that have new build extensions in them, those are starting to slow down a teeny bit with the economy and the high interest rates.
All of our markets because boy that sure would be nice, but a subset of our markets that have.
Newbuild extensions in them.
So those are starting to slow down a teeny bit.
With the economy and the high interest rates.
Speaker 3: But so the new build is part of that what I call new build. Market expansion, call it edge out, is another piece of that where we have, if we...
But so some newbuild as part of that what I call Newbuild.
Market expansion.
Call it edge out.
Is another piece of that where we have.
If we can service an area that has a competitor that isn't taking good care of customers and community you could read that to mean, they're charging really high prices or their service isn't reliable and we can service them off of any existing.
System sight ahead, and we will overbuild those areas. So that is what those homes passed for flat and just to note on high prices because I mentioned it.
Speaker 3: Just because our RPU is high does not mean that our prices to our customers are high.
Just because <unk> is high does not mean that our prices to our customers are high.
Speaker 3: That RPU is driven by customer choice, far and away, like gig cell-in of 37% for example, or add-ons that they are choosing to take are base rates.
Is that <unk> is driven by customer choice.
Far and away like gig sell in of 37% for example, or add ons that they are choosing to take our base rate.
Speaker 3: Is a value I would suggest that anyone living in a metropolitan area would not be able to get our price
It is a value.
I would suggest that any limiting any metropolitan area would not be able to get our pricing.
Speaker 3: What do I expect the penetration to be in those thumbs fast? I expected to be...
I expect the penetration to be in those homes passed I expect it to be.
In a.
Speaker 3: market expansion Scenario to be at least 40 And in our new build areas, I would expect it to mirror the penetration of that particular system Which varies widely?
The market expansion.
Scenario to be at least 40% and in our Newbuild areas I would expect it to near the penetration of that particular system, which varies widely.
Alright, great.
Thank you very much.
Okay.
Speaker 1: Thank you. Your next question comes from the line of Craig Moffett with Moffett Nathanson. Please go ahead.
Thank you. Your next question comes from the line of Craig Moffett with Moffett Nathanson. Please go ahead.
Speaker 7: Hi, thanks. Two quick questions if I could. First, I wonder if you could just reflect on wireless again. I know you've said that it was two quarters ago that it wasn't part of your plan, but it's been...
Hi, Thanks, two quick questions if I could first I wonder if you could just.
Reflect on wireless again, I know you've said that it was two quarters ago that it wasn't part of your plan, but it's been such a large part of what the other cable operators are doing I'm wondering if you're.
Speaker 9: such a large part of what the other cable operators are doing. I'm wondering if your
Speaker 9: kind of still interested in at least exploring wireless options. And then second, I wonder if you could just talk about the trajectory of capital intensity as you think about DOCSIS 4 and plant upgrades. How low could capital intensity go or how much further could it come down?
Kind of still interested in at least exploring wireless options and then second I Wonder if you could just talk about.
The trajectory of capital intensity as you think about DOCSIS, four and plant upgrades that how low could capital intensity.
How much further could come down.
Speaker 4: Hey, Craig. It's Todd. Good afternoon. On the wireless side, you know, we've talked about this before. I don't think anybody would disagree that the two primary connectivity mediums for consumers will be, you know, very reliable, fixed broadband that we provide, and then very reliable wireless mobile connectivity. We do evaluate it. There's plenty of folks in the space that have
Hey, Craig it's Todd good afternoon on the wireless side.
We've talked about this before I don't think anybody would disagree that the two primary connectivity mediums for consumers will be very reliable fixed broadband that we provide and then very reliable wireless mobile connectivity.
We do evaluate it there is plenty of folks in the space that have.
Speaker 4: uh, launch that we monitor very closely that we, you know,
Launch that we monitor very closely that we.
<unk>.
Speaker 4: evaluate both the performance as well as, you know, in the wireless ads as well as what that would potentially do to improve on the data thought of the equation and those are very important elements of that.
<unk>.
Evaluate both the performance as well as.
In the wireless ads as well as what that would potentially do to improve on the data side of the equation and those are very important elements of that.
Speaker 4: As we've also said in the past, important elements of customer satisfaction and how we want our customer experience to be is very, very reliable connectivity. And we also continue to monitor how that reliability will improve from a wireless and a mobile perspective in our markets, because we do feel like that's an extremely important catalyst.
As we've also said in the past important elements of customer satisfaction, and how we want our customer experience to be as <unk>.
Very very reliable connectivity and we also continue to monitor how that reliability will improve from our wireless and mobile perspective in our markets.
We do feel like Thats, an extremely important catalyst as.
Speaker 4: as we continue to look at that. But, you know, nothing right now that says economically or from a customer demand perspective.
As we continue to look at that but nothing right now that says economically or from a customer demand perspective.
Speaker 4: that's a product we have to have. From a capital intensity perspective, it's a sequential quarter of decline in CapEx.
That's a product we have two halves.
From a capital intensity perspective.
Our sequential quarter of decline in Capex, we've talked about some of the shorter term elements associated with that which was our working capital optimization strategies that we can continue to execute upon.
Speaker 4: We've talked about some of the shorter-term elements associated with that, which was our working capital optimization strategies that we can continue to execute upon. Some of the slower builds, that gives us a little bit more efficiency there. And some of the integration and upgrade investments that we've been making that can start to taper a little bit. But longer-term, you know, we've talked about.
Some of the slower builds that gives us a little bit more efficiency there.
And some of the integration.
Great.
<unk> that we use.
Been making that can start to taper a little bit.
But longer term.
We've talked about.
Speaker 4: our capital intensity is a percentage of our EBITDA being in that mid to high 30% area.
Our capital intensity as a percentage of our EBITDA.
Being in that mid to high 30% area.
Got it thank you.
Speaker 1: Thank you. Your next question comes from the line of Stephen Cahal with Wells Fargo. Please go ahead.
Thank you. Your next question comes from the line of Steven Cahall with Wells Fargo.
Go ahead.
Speaker 10: Thank you. Julie, thanks for all the commentary on how you're thinking about balancing arpegrove and subscriber growth.
Thank you.
Jimmy Thanks for all the commentary on how you're thinking about balancing ARPA growth and subscriber growth.
Speaker 10: I think that's the biggest one that we're debating as well. I was wondering if
That's the biggest one that we're debating as well I was wondering if we could go a little deeper into it about just how you are looking to deploy some of the tactics that you talked about.
Speaker 10: We can go a little deeper into it about just how you're looking to deploy some of the tactics that you talked about.
Speaker 10: So we saw the new, more inexpensive program at the end of Q3. Last year, NetAd started to kind of slip negative in Q4. It was unexpected sequentially from Q3.
So we saw the the new more expensive program at the end of Q3 last year net ads started to kind of flip negative in Q4. It was unexpected sequentially from Q3 as you deploy these new tactics do you think you could start to get back to positive net add growth by the fourth quarter, we should be thinking about.
Speaker 10: As you deploy these new tactics, do you think you could start to get back to positive?
Speaker 10: Net ad growth by the fourth quarter, we should be thinking about that as a little more of just your long-term trend and long-term strategy. And then secondly, and then we should be thinking about that as a little more of just your long-term strategy.
That is a little more of just your long term trend and long term strategy.
And then secondly.
Speaker 11: The ACP program is having some political debate around it. I'm just wondering if you can shed any light as to if you have any material customer exposure to ACP. And if you do, if you have some contingency plans for ways to keep engaged with those customers, should it change? Thank you. Yeah. P activities.
The ACP program is having some political debate around it I'm just wondering if you can shed any light as to if you have any material customer exposure to ACP and if you do if you have some contingency plans for ways to keep.
Engaged with those customers should it change thank you.
Yeah.
So.
At the end of the third quarter.
Speaker 3: was a success in my mind and that
Our success in my mind and thought.
Speaker 12: continues by expect to go in the fourth quarter.
<unk> I expect to grow in the fourth quarter.
Period.
Speaker 3: ACP, we only have 35,000 customers given we have over a million customers. And those customers were customers of ours before. They just are using the $35 or $75 of their own tribal lands.
ACP.
We only have 35000 customers given we have over 1 million customers.
And those customers.
Where are customers of ours before they just start using would be $35 or $75 of their own travel lands.
Speaker 3: to supplement what they're paying for. So even if it goes away, our number of customers is minimal and I think there'll still be customers. Maybe they'll downgrade, but I think there'll still be customers.
Two.
Supplement with their what they are paying for it.
No.
Even if it goes away.
Number of customers is minimal.
And I think they'll still be customers, who maybe they'll downgrade, but I think also the customers.
Speaker 4: Steve, I would add, there's maybe always political.
Steve I would add.
Maybe always political.
Speaker 4: jockeying around, you know, things like that, especially as we had into an election year, I would...
Jockeying around things like that especially as we head into an election year I would.
Speaker 4: be pretty surprised if, you know, broad band for all demographics and for all, you know, customers is something that gets a meaningful amount of adjustment to it. Maybe some tweaks here and there, but we do not feel like we have a lot of exposures that relate to the repayment of that, you know, with that very small subset that Julie alluded to.
Be pretty.
Surprised if.
Broadband for all demographics and for all.
Customers is something that gets a meaningful amount of adjustment to it maybe some tweaks here and there.
But we do not feel like we have a lot of exposure as it relates to the repayment of that.
With that very small subset that Julie alluded to.
Okay.
Thank you.
Thank you.
Speaker 1: Thank you. Ladies and gentlemen, at this time, there are no further questions.
Thank you ladies and gentlemen at this time there are no further questions.
Speaker 1: I will now turn the call back over to Julie Lawless for closing remarks. Please go ahead.
I'll now turn the call back over to Julie <unk> for closing remarks. Please go ahead.
Speaker 3: Thank you, Eric. So as we wrap up, I just want to extend a heartfelt thank you to our cable and associates. It is their commitment that really sets us apart and providing exceptional neighborly service.
Thank you Eric.
So as we wrap up I just want to extend a heartfelt. Thank you to our cable one associates. It is their commitment that really sets us apart and providing exceptional neighborly service and.
Speaker 3: And additionally, for those that are interested, Todd and Jordan, we'll represent Cable 1 at the upcoming Raymond James and Wolf Comfortes this December in New York. We welcome the opportunity to engage with many of you there.
And additionally for those that are interested Todd in Jordan will represent cable one at the upcoming Raymond James and <unk> conferences.
In New York, we welcome the opportunity to engage with many of you there.
Speaker 3: Thank you everyone for your time and attention today. We appreciate your continued support and interest in table one.
Thank you everyone for your time and attention today. We appreciate your continued support and interest in cable one.
Speaker 1: Thank you, ladies and gentlemen. That concludes today's call. Thank you all for joining and you may now disconnect your lines.
Thank you ladies and gentlemen that concludes today's call. Thank you all for joining and you may now disconnect your lines.
Yeah.
Okay.
Okay.
[music].
Okay.
Yeah.