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WideOpenWest Inc (NYSE:WOW) announced it has agreed to be acquired by DigitalBridge Investments and Crestview Partners in an all-cash transaction valued at $5.20 per share, representing a 63% premium to the August 8 closing price. The deal, revealed alongside the company’s second quarter 2025 results, values WOW at an enterprise value of approximately $1.5 billion.
Transaction (JO:NTUJ) Details
The acquisition offer of $5.20 per share represents a 37.2% premium to WOW’s unaffected price of $3.79 prior to the initial non-binding offer of $4.80 on May 2, 2024. The transaction, which has been unanimously approved by WOW’s Board of Directors, is expected to close by the end of 2025 or in the first quarter of 2026, subject to customary closing conditions.
As part of the agreement, WOW’s Revolving Credit Facility has been amended to extend the current term initially by six months to June 30, 2027, and will be further extended to September 11, 2028, conditional upon the acquisition closing.
Quarterly Performance Highlights
For the second quarter of 2025, WOW reported total revenue of $144.2 million, a 9.2% decrease year-over-year. Despite the revenue decline, the company’s Adjusted EBITDA increased slightly by 0.4% to $70.3 million, with an improved EBITDA margin of 48.8% compared to 44.1% in the same period last year.
High-speed data (HSD) revenue, which now represents approximately 72.7% of total revenue, remained relatively stable at $104.8 million, down just 0.2% year-over-year. This stability in broadband revenue partially offset significant declines in video revenue, which fell 39.9% to $18.5 million as the company continues its shift away from traditional video services.
The detailed financial results show the company’s ongoing transition toward a broadband-first strategy, with subscription revenue declining 9.3% year-over-year to $132.9 million, while maintaining relatively stable HSD revenue.
Broadband Strategy and Metrics
WOW’s broadband-first strategy continues to show progress in several key metrics. The company achieved a record high HSD ARPU (Average Revenue Per User) of $75.30 in Q2 2025, representing a 4.9% increase year-over-year. This ARPU growth demonstrates the company’s pricing power and successful upselling of higher-speed tiers.
The sell-in mix data shows that 76% of new broadband customers are selecting plans with speeds of 500Mbps and above, unchanged from the previous quarter but significantly higher than the 69% reported in Q2 2024. This shift toward higher-speed tiers has helped drive ARPU growth despite continued subscriber losses.
The company’s incremental contribution margin has steadily improved, reaching 90% in Q2 2025, up from 84% in Q2 2024. This improvement reflects WOW’s focus on higher-margin broadband services and operational efficiency.
Market Expansion
WOW continued its expansion in Greenfield and Edge-out markets during the quarter. The company added 15,500 new homes in all-fiber Greenfield markets, bringing the total homes passed to 91,100, a significant increase from 52,500 in Q2 2024. Edge-out markets also saw growth, with total homes passed increasing to 31,800 from 22,900 a year earlier.
Penetration rates in Greenfield markets remained strong at 16.0% after adding 2,300 new subscribers. The 2025 vintage of Edge-out markets showed a penetration rate of 26.7%, while Greenfield markets achieved an impressive 45.8% penetration rate.
Capital Expenditures and Cash Flow
Capital expenditures for Q2 2025 totaled $47.9 million, a 6.3% decrease from $51.1 million in Q2 2024. Core capex decreased by 18.5% to $27.3 million, while expansion capex increased by 17.0% to $20.6 million, reflecting the company’s continued investment in growth areas.
Adjusted Unlevered Free Cash Flow improved by 18.5% year-over-year to $22.4 million in Q2 2025, driven by stable Adjusted EBITDA and lower capital expenditures. For the first half of 2025, Adjusted Unlevered Free Cash Flow reached $60.2 million, a substantial 336.2% increase from $13.8 million in the first half of 2024.
Despite the improved cash flow metrics, WOW reported a net loss of $17.8 million for Q2 2025, compared to a net loss of $10.8 million in Q2 2024. The increased loss was primarily due to higher interest expenses, which rose to $25.6 million from $17.8 million a year earlier.
Market Reaction and Outlook
Following the earnings release and acquisition announcement, WOW’s stock rose 3.45% in after-hours trading to $3.30, according to market data. This represents a significant discount to the $5.20 per share acquisition price, suggesting some investor uncertainty about the deal’s completion.
The acquisition is expected to close by the end of 2025 or in the first quarter of 2026, subject to regulatory approvals and other customary closing conditions. Until then, WOW will continue to execute its broadband-first strategy, focusing on expanding its fiber footprint in Greenfield and Edge-out markets while managing the decline in traditional video services.
The company’s improved EBITDA margins and free cash flow generation, despite revenue challenges, position it well as it transitions toward the proposed acquisition by DigitalBridge and Crestview Partners.
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