Frontier Communications Parent (FYBR)

Spencer Kurn Head, Investor Relations
John Stratton Executive Chairman
Nick Jeffery President and Chief Executive Officer
Scott Beasley Chief Financial Officer
Brett Feldman Goldman Sachs
Philip Cusick JP Morgan
Anthony Nemoto Citi
Greg Williams Cowen
Vikash Harlalka New Street Research
Frank Louthan Raymond James
Simon Flannery Morgan Stanley
Nick Del Deo MoffettNathanson
Call transcript
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Welcome to the Frontier Q1 2022 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I’d now like to hand over the conference to your speaker today, Spencer Kurn, Head of Investor Relations. Thank you and please go ahead.

Spencer Kurn

Good morning and welcome to Frontier Communications’ first quarter 2022 earnings call. Frontier’s Investor Kurn, Spencer is Head Relations. of This Chief call John Nick Stratton, joining Scott President me Chairman is the on Beasley, and Officer Board; And Executive today of Chief Executive Officer. Financial and Jeffery, the Today’s is in presentation of Investor the and section available Relations Presentations can website. within and webcast followed our be the Events

forward-looking risks me refer you this change uncertainties disclaimer Harbor Safe you cause now to to that can actual involve Let differ those and call conference statements that may include materially may our and expressed Slide X, that remind results which today. from

addition, will defined refer to and turn to John. the In schedule. press certain are our we in trending which presentation, call earnings over measures, this during reconciled release, call, I non-GAAP that, will and financial With

John Stratton

and Good for you discussion. joining thank morning, everyone today’s

remains we and to Our key to unique continue significant to positioned shareholder business in opportunity on value. our create win markets well execute

customer of businesses. $X.X We strong million billion have generated XX% X.X of foundation and In solid of we across Driving competitive customers adjusted consumer a a both revenue fiber margin. represents performance $X.X this base last months, adjusted a commercial which positioning. broadband are billion and the XX EBITDA, and significant EBITDA assets,

fiber. our over our our mile XXX,XXX As products our fiber $X.X is in by investing we has within feet businesses of XX,XXX and have EBITDA the said we before, towers one within Frontier. EBITDA of fiber grow billion now months to generated fiber fiber We been our future and have of of XXX the XX are rapidly. last approximately

bankruptcy. we we year attractive convert now opportunities. we been about from continue in-footprint network, since expect grow to and to these As out build It’s X emerged our

today. we And Frontier market one so attractive opportunities industry. we a is the believe why back time review in seems best the first operate step in And and very investment it of to and foremost, good a

within multiples. pre-pandemic data market is to levels. growth the versus explosive across is XXXX. fiber-to-the-home XX than we we substantial years, And deliver XXX centers past universe In of by with have the faster the But of investments. more theme believe portion and coming dependable has and And capital leverage structure, we speeds March vastly any gigabits companies, and magnitude to long-term data and now cost absolutely network. critically, is the is fiber growth average underpinned X this our seen path The decades seen every data, of is over faster next data is two performance continuum thesis increase in customer consuming of increases of superior high the most threefold frontier in then delivering of real-time of orders the last fiber. growing today, is returns attractive are business demand And as our have clear, month. fiber broadband And additional of exceptional terabyte enterprise lower demand. minimal tended expected over investment. of throughput economies and a backdrop XX deserving speeds, across latency. with Fiber’s significantly XX% Fiber the market alternatives our download technology excellently of to investable of consumes of that broadband and data years, and industry fiber Against gigabytes year, this in over consumption exponential our similar fiber then second to low with networks per operating the characteristics, of a to high Frontier have infrastructure unfold data to meet Our increase consistently upload cable growth is scale between consumption favorable first consumption speeds positioned. representing critical best this providing this which an sector of base seeing we of towers, provide And wireless networks. and

We of the in build any second company through States XXXX. largest announced the have fiber United

our the fiber enterprise emergence, quarter passed in $XX America are affords We we And advantaged rise as midpoints to build we speed an provided largest and Upon pure-play incumbent march business using to passing, an funding would over earnings and This locations fiber of industry $XXX for aligned $X,XXX per States. $XXX reaching copper benefit would value passing the of by call, the premise an plan X published the XX XXXX the of billion. the stage, enterprise year, our just $X,XXX build United are fiber cost per we valuation. wholly investment to vital today example and worth during billion. at start the to uniquely purpose, Simply same is midpoint our under stands value. a on million be billion our Using with government’s $XX after head to infrastructure. the $XX position illustrative to of Building execute XXXX fiber-to-the-home put, value first on materially of Wave federal this industry, last time represent that our widely broadband same fiber company’s roughly benchmarks goals XX% opportunity per potential just with early-mover have both our and Gigabit that our towards

we rapidly the go, quarter. build inflection we we as last our us is splitting But has EBITDA every our passings penetration worth along XXXX. build scaling And but plus meaningful industry I as are complicated, implies to EBITDA Look our discount importance does series we revenue our these for EBITDA be build growth providing and what penetration not the it even we and X with Investor requires fundamental Now, XXXX and goals to enhanced scale us roughly execution quarter distance how and new execute August: both you build as fiber since to story said which sustaining It rates based our demonstrate objectively We a starts plus emerged market doing the Achieving our milestone. showing more And It’s most a base year. will with our foundation XXs. then. on fiber committed We we valuation steady-state margins what XX%, and the from a require to high story. an $X substantial by mid to new to total our way. are our Slide bankruptcy, of turnaround understand and we company we generate to today worth. Wave on current Attaining XXXX, said, is and as recently our of durable for it we strong continued the yet we have terminal benchmarks, a against and underlies this seven ability this by cohorts this are of will fiber-based it are growth. have double of in again And million a billion call show-me build. doubled earnings our to by both by commitment a to we from April, that And to the and key need second X. this since critical network disclosure of last out adjusted reporting hit of you end the in points outlined this of opportunity. legacy transparency, at for Day referenced as XX

milestones. the EBITDA. our net in generation, quarter third fiber on Next, we year eclipsed our which now We copper last consumer we of than did in two has fiber our more needed total EBITDA other to customers add copper pace and and have this scale fiber drove the of also on turn

inflection adds growth. our the key metrics. for fourth milestones, we operational point, declines momentum, power to time, inflection year last achieve already continued will in financial continued us and outpaced acceleration our net our into total Our customer broadband positive achieved which our of allowing soon quarter These first have copper the and next

revenue generate XXXX. XXXX We sequential and expect growth in late in growth company EBITDA total to the and for year-over-year EBITDA

customer priorities of been unwavering this relentless his our team value and a deployment, demands Nick fiber All levers have will and built efficiency. to the now fiber strong Nick? quarter. first the momentum Nick in on their these performed in have over experience business. I four the call and of critical penetration, to focus turn of review in creation: pursuit operational how we

Nick Jeffery

our In Thanks, fiber built extremely QX, team priorities. John. a strategic against XXX,XXX our record We locations. executed new well

record a period last the fiber net fourfold which XX% higher last added XX,XXX additions, and We we set the prior is same increase over record a customer than broadband quarter year. also over

Xx improving thorough We point progress quarter, SMB higher am employee the resulting we brand and in evaluation made wholesale, Our outpace week, year Frontier future unveiled we will quarter. And momentum our a our set we our business brand. at fiber data-driven long broadband total last our after take said hard copper we net delighted a positive is in A to its continue ago, net record XX,XXX last prior new look adds, inflection results. key in and reaching and engagement. a with losses I the which this adds than and and gained we

new better customers. to and our for in modern, being more tech-oriented, commitment is business brand and Our relentlessly our more relevant, reflects our

record our quarter, fiber on build first XXX,XXX passing new strategic our locations. on another continued Slide to to Moving deployment to initiative, scale XX, fiber

Our rapidly, delays by with in scaled target they scaling chain I COVID-related to us disruptions. am at COVID-related year. midst in XXX,XXX build build was in This January in track subsided, rapid February. locations passing Once and particularly supply we over achieve of our on speed strong million March. execution of impacted least and team’s locations build our our accelerating fiber proud of this X the our puts

to rigorous has acceleration locations and in the confident per our off XXXX challenging build million XXXX. plan passing an locations and our highly focus million diversification, environment. million remain supplier and in I cost cost X in XX for this and early on in control year, end our long-term cross-functional plus really a planning meeting to passing of target plan X.X by reach locations Our paid

we will slide, next move fiber second the penetration. to initiative, on our strategic On

our with the unmatched and customers. with at Benches our Our year offering been hard value-added acquisition to team We product through clearly and digital TV work tiers provide acquisition critical performance. speeds, pain We core capabilities streamlined funnel. to consumer to cutting-edge designed best has DIRECTV customer like eero enhanced Red established Wi-Fi, our broadband. release product services value our STREAM improvement in to the broadband past with make to We over defined points enhance fastest three partnership significant our YouTube

far. few add underlying new brand all cover our more will launched we improvement will I something so the And have which that we in to slides, in detail implemented a fuel

for our penetration and our paying third is but mark, XX%. excellent broadband And footprint, XX% work to penetration we fiber fiber off, market, broadband fiber show to XX, broadband customer XX%. added XX% least our penetration our base base penetration gain making range quarter, We net footprint, increased the and expansion we we cohort of In to XX% footprint. as At hard points And our grow into our fiber consumer our demonstrated quarter outperforming as are what Our serves also adds. customers acceleration fiber our at growth to fiber more consistent we gained this build of driving our into by On deploying progress. year-over-year. to fiber we In penetrated look reached footprint mature to drive as time. fiber deeply a by also our an XX% XX,XXX our we mark, penetration range XXXX target XX fiber reached expect of the broadband XX.X%. cohort fiber market, we Slide base we XXXX steadily expansion didn’t consecutive customers of with customer over refer significantly to in our fiber XX%, target low build expect XX-month that to of XX-month our just XX%, customers basis base of at footprint target in sequentially where

to As our year, the on throughout to the continue we expect strategic the on builds are of our customer cohort XX, larger to XX% mark. move penetration initiative pulled third now XX-month I’d experience. XX% like XXXX Slide at into to

an to year. next the streamlined aspects day delivered have paperless across stellar communications, easier. make our SMS simple enormous IVR, autopay and equipment progress our the transforming array of introduced easy goal. like These e-mail have and this tools. an install experience quarter future. automated of customers automated made last and customers’ introduced return initiatives use our billing to to initiatives and And customer implemented self-help encourage easy another over We all to of company We we made understand, lives We discount and on

net promoter XX the points last remains least period continued to fiber and Our at year. increase since sequentially score up same

the have significant fiber customer results. lows. year, is across upside customers, base customers scores are which same record which and also than period both that base to to to higher churn have NPS to to are of we experience which longer tends newer churn, be changes suggests customer customers making customers XX% scores NPS than continued as it our indicates Importantly, the higher Broadband our the expands. tenured declined driving overall fall broadband across XX-day copper to that grow total last the since really fiber

care specifically since were period improved fewer cost is service reasons serve. down lower the down would resulting were last call, in our and volumes why customer that leads satisfaction demonstrates year volumes which to center fewer levels higher Lastly, to call a a complaints, at same This XX%. XX%

While us. these results care are improvement a is encouraging, journey for of customer continuous

constantly measuring our as rigorously are progress with go. refining, our customers and processes automating simplifying for and We interacting we

our XX, also Slide made for critical to significant this and quarter Business a have and Wholesale performance progress marked improving SMB. Turning turning we point

last revitalized a have this that implemented we series improvements have Over the of segment. truly few quarters,

our We with recently offering have with RingCentral. strengthened product announced the partnership X-gigabit and

door-to-door enhanced our have outbound sales expanded relationships. campaign with We channels with fourfold and vendor generation best-in-class have we our marketing tailored demand and

the higher months. sales management we customer and implemented operations driven drive have robust Together, predict analytics a a key which SMB and inflection points platform, to have over installed and optimizes these last have of retention. CRM number actions churn X We in

demonstrating gross doubled, That still fiber have higher our services. our broadband X%, broadband net pay to quality fiber and customers’ is Our up said, ARPU adds willingness sevenfold fiber not broadband are we see and increased connectivity market. adds of we This consumer. in penetration SMB significantly segment of a early in the the and our the levels old Frontier was achieving days remains SMB the our aspirations in focus in have below

Frontier done company quarter this to work minimally this elements broadly centered The was broken. key have and engaged, the new build job define drive On of front hard future. gears generated me, say put I we introduced address we critical and However, ago, points new the lacked that’s which purpose as Frontier I When earning into will a culture. these elements a culture in rapidly in morale year we things loyalty, what our the inflection corporate and this Slide creating within low. we together, cultivate will build We this is have and to us. customer momentum to untapped and we culture. largely set Way, of out these doing culture on XX, the And getting business do them the ideas shift to in were encouraging our in opportunity something really was joined important Employees we

where For business progress call company-wide from openly questions with which Live, started town and in team the Listen along discussed our the example, answer we executive we we halls, employees.

and goal include examples Policy. a in cost Leadership of get employee initiative Frontier savings that employees throughout our We and have called Two of high from on $XX launching more bureaucracy an Dumb to better. Academy in strengthened can by to we have suggestions performance. new our and organization we Eliminating of make eliminate the And management program training than implemented doubled how to number finally, initial a million reduction a culture engagements directly we invested initiatives recognize performance formed

clear conduct a months, is driven Pulse all by employees, across we People employee to which of spans a these administered engagement. that that next as measurable survey, X improvements slide, initiatives a Every the it’s anonymous our is survey have On completely third-party.

them work to XX Frontier we survey share XX the employees Over up with percentage come. the improvements year, be The positive to the between to personal sentiment this These employees share last are past work from the link exciting up is I trajectory resulting of we’ve momentum from employee see up who on is able points. clear, objectives is in continue to will a the percentage of the still with employees the where wanted But and topic on And of gives I’ll their build be. that brand far of of percentage accomplishment clear share made unveiled points. XX is week. shows sense points. the results a new years we our close that overall

Over methodical, evaluated our a brand the past through process. year, data-driven we’ve

And reputation and paths customers know deep our brand qualitative found fiber fiber brand that and a customers affinity behavior Frontier and and ones quantitative over are XX the and positive and and loyalty. to with and to to understand XX,XXX perception, a our was customers equity performed over high ethnographies surveys their purchase. expand because research tracking Our We observe critical come. is employee the copper in died our tested in creative interactions tested the brand customers. exploration across than years stakeholders. growing to future and the name We more X,XXX customer market, and brand across our close visional growth market, tremendous we up. while brand that we in than fiber We more that And and culture there community will this in struggled some positioning, resonance XX is drive sentiment to

new what strongly we its that doesn’t from on transformation hard drive a out. and brand customer’s but I own change we simply do a the perception believe what brand is inside does. A Now brand change working are

I on have improving resulted focus customer that year, proposition Over a our a improved services customer our improved the in product, we’ve value changes conviction validation. And experience. strong dedicated have with past these and

past XX% win with penetration is the Our accelerating over up year. shares fiber

the improving low a clear resulting established sequential with record NPS, in this rising in quarter. trend of quarter second is loyalty churn record another fiber Our and high

changing and progress underlying we’ve do generated the and a we clearly, new what So supports that we’ve made exciting brand in momentum reinvention.

seen more changes in customer research we’ve and and relevant, Frontier one wider name decision that more reinvent extensive is into to the we’ve the brand the keep strong with more response the validation underlying tech-oriented with guided on that Our brand conjunction in our appeal. made, modern, to

So you our new I’m and brand with pleased share visual identity. to

nation and round America. new speed and logo connected the customers that Our an inclusive build an as to we or Gigabit we symbolizes iconic is representing bring capabilities

phase color touchy, our the building. reflecting we’re and And represents big and future type new aspiration. is expertise bold Our ambition, our of vibrant scheme celebration the

the claims. Following industry-leading our we week, last brand rolled brand launch advertising showcases a revitalized out campaign new new and that

fastest Our messaging we that’s emphasize and third-party future fastest encompasses were And [indiscernible] creating visual verified a Ookla, our Internet eye-catching. campaign is with now company in Internet fiber recently are, by the having and new L.A. these to Florida, in the our claims And bold we customers. identity it is The crisp. who with our the so and begin customers. the sharing independent

adds brand reinvented fuel ignite. perceptions changing that customer we’ve to to Our begun the

our forward Scott, response and turn look been quarters updating to come. and our you over encouraging, performance over of to fourth Our has performance through I’ll to to initial you. operational impact and that, we efficiency. our in with Scott performance on to financial the pillar operational against quarter its it our run strategic And first to financial

Scott Beasley

good and Thank morning, you, Nick, everyone.

XXXX last have on periods. that order adjusted pro I start more our performance the accounting numbers forma clearly business been will calls, the for of several changes As I’ve in fresh in previous to versus done describe reference

generated We of of fiber and quarter, management. operating products. lower and adjusted by in quarter, net consumer but from on of in driven X% subsidy $XXX Slide This fiber results Revenue $XX adjusted earned million the was was healthy billion year-over-year EBITDA. We sequential came to income $X.XX operations million video offset cash performance XX. net of broadband in the up capital $XXX EBITDA by Turning on our the growth declines higher million as and from voice, and revenue. million strong other. working revenue, increased data focus voice $XXX driven

Turning to Slide XX.

primarily quarter, due this XX% expiration of CAF II revenue. subsidy the declined revenue to total Our

Excluding quarter. from subsidy declines revenue, with consistent revenue declined X%, last

flat $XX in but Additionally, we impacted in year-over-year sold QX the revenue had EBITDA. our business revenue by CPE XXXX, of which was Fiber minimal year-over-year. to quarter impact million roughly negatively

As revenue in by broadband declines X% consumer other. video, business growth broadband offset voice and of XX% revenue growth and of were

representing grew from fiber quarter. Excluding revenue growth an video, X% X% acceleration last year-over-year,

fiber broadband and grew consistent partly gig this Consumer X ARPU Our growth for new and mix cards a was speed offset $X our increases autopay promotional expectations, gift from our higher by as or discount above with X% price customers. quarter, underlying

value-creating them lap for full We these to be in but we X% the half to continue on growth remain for X% year. second to growth expect ARPU XXXX, of we initiatives headwinds the to until ARPU target

As calls, declines and high as I’ve to impact to decision expected revenue early video to mentioned but XXXX, made customers on several stop in year-over-year Copper due content both contributed new XX% Consumer costs. we minimal marketing Business the on which the faced profit revenue headwinds. last has growth declined to has had

year we Wholesale. growth and driven accelerate, fiber this strong in revenue and stabilization progresses, growth Consumer to Business in As by continued fiber expect

We in legacy expect customer to product to headwinds. experience expect still take overall hold, but initiatives copper decline copper our due as moderate we declines

on note revenue. final the year of first be expect to the XXXX quarter for of we revenue, low a As point subsidy the

to by funding. to the million revenue range the $XX driven per expect of the We RDOF by to the end $XX subsidy commencement increase of quarter largely million sequentially year,

before, adjusted growth consumer and increasingly II our as of a Fiber of Slide as strong for XX, and offset represent fiber overall trajectory XX% the was Frontier EBITDA will EBITDA subsidy. expiration legacy headwinds company. the growth company. primary margin headwind drive improvements EBITDA to from Turning Fiber broadband products. EBITDA products CAF is fiber-first of X% total grew we the noted the adjusted the year-over-year

exited which we impairment will and a on quarter. on great operating the lease cost We going XX. of reduce approximately move our in $XX XX will office structure strides capital million, allocation made to locations resulted We forward. Next, quarter, this our business in Slide initiatives simplification

Fit the gross QX, $XXX our exceed XXXX. the realized our to of against continue of on and track exceeding of perform We by to well end savings, our initial had savings Future million $XXX goal cost million putting cost $XXX initiatives. target end we annual for of XXXX Through the million us of

of business underlying remains the our strong. generation flow cash Additionally,

Our procurement newly controlling outstanding an doing while is chain also team capital challenging through centralized managing job supply a closely. working environment

We’re committed manner, managing the a net leverage sheet to balance our disciplined in with mid-Xs. in

primary over fiber our focus be build next Finally, the will of capital the allocation several years.

Our projected build to remains cost $XXX per location unchanged. of $X,XXX

profile of to investments, of on XX. totaling Turning short-term ended our first liquidity debt $X.X $XXX We $X.X with and available million and our Slide roughly roughly on maturity the quarter billion cash billion liquidity. revolver, of and capacity

In addition we flexibility. liquidity, balance sheet ample have to also the strong

fiber net This of line services maturities well leverage specific as than our any at we a in government’s a range macroeconomic in build. products critical affordable point, customers, services not X environment. headroom The under positioning our XX are Building Approximately significant connectivity meet Giving strong offer rates, to participation to the Slide have X.Xx rates, program. do and during end the target. we is needs that clear including and at XXXX. provide the provide describes we our as us the current on our time Wave of XX% wide higher runway and net earlier fixed protection Our of maturity potentially roughly low us structure capital remained quarter. interest leverage debt healthy our and at from

we focused best-in-class customers customers on service to remains value, with focus a value that are our unmatched bringing more and take. on action offering in every Our relentlessly we

Our we in of suppliers and inflation, that cost the to savings and pool Future agreements Fit and our the material cost is well our build withstand mid-XXXX, expanded to due structure fiber established our for labor multiyear positioned also program.

and Finally, interest structure XXXX. rates I of our insulated noted also debt well capital on with rising rates, is significant no from our until the at XX% as maturities slide, previous fixed

Moving last to that financial are the provided quarter. reiterating we XX guidance we XXXX Slide

customers billion Business accelerate on to least notes billion million connect as we Wholesale. $X.X at Two locations expenditures and X We our $X.X of Consumer, build expect CapEx. other more capital new fiber to and pass across

follow and cadence weather quarters build of and faster pace a XXXX a of a to QX. with quarters throughout our winter than QX pattern, expect better We QX QX seasonal the at

are year have build for we to be CapEx from into we open for as costs until that related our and in the not XXXX part locations from build this is that material XXXX latter pulled accelerating Additionally, next XXXX, will will sale of forward year.

maintaining guidance EBITDA Finally, the EBITDA billion in on growth. $X.X an we by Slide inflection billion. thesis we are adjusted sustained return I’ll to $X.XX we XX. the of investment to the as year, altogether EBITDA our of end point By expect for close bringing Frontier

for lower speeds of far lower conferencing enable that levels technology exceed by is important by reasons, consumption. First, a household cable’s download cost there capability, expanding is Fiber fiber, that like and demand driven ownership Fiber’s strong latency video data product a and growing and a passive superior gaming. for driven upload number uses and of including symmetrical

purpose. clear We and a have strategy

digital America economy. building to connect Gigabit are We to the Americans

who to four-part Last, for we have to strong the We strategic leadership have our on with a strategy. balance and ample I’ll now open to turn line to singularly our us access the Spencer up team executing experienced sheet, questions. attracted strong over and are capital liquidity call fund providing plan. a back focused

Spencer Kurn

ready we’re Thanks, Q&A. Scott. Operator, for now


you. Thank

Feldman from your Brett Sachs. from Please line comes go question. your now ahead question Goldman with open. first Brett, Our is

Brett Feldman

your net the landscape your little some looks for of like mean, a cable fiber color adds to you bit degree, us you what improving obviously, was right have, expense competitive Thank I becoming on the give more having could taking the question. the I hoping Nick, with at now. competitors. Yes. traction you’re

service, you’re are know in looking versus areas make that you’re seeing to from to your wireless you versus people impact disconnecting who rural you. So you hear of many deploying interested are just for populated more are them to on decision areas might I’m a to more other are whether forced be and your that’s at seeing whether then coming more also different, from how meaning where your wondering people them. you what densely Thank fixed when And you as thoughts reaction jump the you’re balls they I’m switchers, the winning fiber, to just extent terms move? of what are fiber.

Nick Jeffery

good Three Brett. Thanks, questions there.

the off of to the pick are our of vast majority customers them sort fiber. of It’s Let’s new that time. clear new one

we taking just clearly I at think So where fiber think from are therefore, are taking in widely obvious the hope is, share I gaining better is a same we fact beta cable equally, that reflects market simply, that that particularly consistently And I of our market, base now And proposition. share understood, now cable. fiber that’s time. share, the

terms switching said horses cable respect a labor advantage better accelerating I in and both got for build, product companies is fiber. can some And is service perhaps and is we as in In recognizing we’ve a year, better for the than really parts see pre-prepared are starting reflected systematically in done I’m I fixing the have number industry and product prices to and our time, reflect not in a said think I in sophisticated and in XX-month and On able competitors, over many reaction, that more something extremely it course, that cable more XX% least then, with. of pleasing materials, delivering contractors a we they which But service, as on even to our competitors our locking simply our invest back my that should have the of a that that up them. we’ve also FWA, fact investing scores is at country, a have areas. better But just of improving in deep have service in I of on fact tracking is than moved cable much in to than But the the are of risk we’re the before, fiber thoughts. do. as think now a some as pleased cable comments, single cut fact forward is NPS

different is not different economics. proposition proposition, a Internet. It’s high-speed also Firstly, FWA but a really fundamentally has only fundamentally fiber it underlying to different

us customers take terabytes, use X our to more at capacity. X.X for extremely about of and upper is the network fiber And of fiber than seeing high Our end-to-end we’re mentioned quartile, X.X, on already average terabytes.

gig from then grow compare if usage, of that the see must where of with figures at can there our point, FWA highly simply some data in be a announced and to you XXX per relentless if FWA negative, point, some in continues of of flipped to to XXX we industry kind the continues. negative usage that that be data economics players month, Now growth

in feature So as definitely and market, it And will want in think will going see ultimately, But see is market. the data are what I a that’s it. be grows we winner high-speed fiber as think – clearly the to always the consumers internet, we be there. it fiber reliable I

Brett Feldman

you. thank Okay,

John Stratton

a take we Thanks, question, Brett. Operator, please. next will


is So the line your next ahead from question go now with JP Philip Morgan. Please question. your from Philip, Cusick open. is

Philip Cusick

Thank guys. you. I Hi, Two if things, can.

from second, to would it why regulatory XX legacy if seems brand are more so the issue it’s experience over used the there was or you towards penetration. do then barrier customer getting in go EBITDA to sort it a your share competitors I you penetration that quarter the build higher interesting or as $X.X than cautious be? back that And Thanks. is think base the through Do is It issue just sequentially the pretty side time? year, X you where base thought a First, current those up ramps, base market What think of XX? at is like billion especially down point. be months any we new

Scott Beasley

Sure, the John to then first second for Phil, is pass one one. I’ll the and this Scott. take

EBITDA. our start noted, XXXX as reinforces guidance, to which, billion the was in in our billion $X.XX QX you year So $X.X confidence strong the of to

We expect some we have like QX QX before, wholesale to we repricing that items growing flat to some our and inflation be headwinds expected continue as legacy fuel copper consumer we’ve then from products discussed in but and electricity. cost particularly fiber, and SMB roughly will

fiber will that by programs as three first in we there quarters, have we’re in the year the about, Consumer from by have we’re that Fit Future very reduction solid subsidy impact inflection significant growth, we the and, our year. the the for expect continued confident the but the be momentum of talked of end for and EBITDA cost additionally, a a we to position we full cadence that QX will So point

John Stratton

John. it’s Phil, Yes,

that penetration the in XXXX its cohort of tranche, on Just kind down We’ve build rate. real quick of second. talked first the terms

market of by what penetration could it was that own that mean rates. in I sort it and what fiber as So is very as right right rich it’s of small build, optimal their a the in pre-existing very high had of the was sort be, middle as

broader see So, the you those it to effectively as we country. would out, the mirrors looks were markets rate the it on opposed as and going ground in what penetration across

last an make thing think gen we to number really as here continue us as at [indiscernible] XX channels the I will hard to leadership business, and and that. disclose we consumer mark. on go behind XX% XX The point will did of are at then months that. fast, quarter forward to to was And build through a go we was keep mark, is the right we quarter, XX% to first target go now, at I for a months of XX% is the every the to the with XX% this months is couple eye important the go to

put place really were year, they their mid are getting teams new those and As now up last going. in engines of spooled

really as we just level But the half end expectation that see at second we be show will each upper go and those high cohort into you will of really at a start maybe is through described. to we that ranges of out will think ‘XX, go the Our as it. we I what year into the

So, hopefully, that’s helpful.

Philip Cusick

very much. Thanks

Spencer Kurn

our next will Thanks Philip. question take we please. Operator,


from Please is with your is And question. our next open. Anthony your question Citi. go now ahead from Anthony, line Nemoto

Anthony Nemoto

Good morning and thanks taking the questions.

Just to back margins. go on the

that? For in the you And m point And in quarter, for that megabytes adds contributed, for outperformance? net what think sequential just that the the on like that a quarter? any XXX I traction of headwind. wondering the terms month of offer update ACP, basis any, XXX last announced the then you I I to mean drove expecting were the how if much

Scott Beasley

is Anthony, Scott. Sure. this

improve our our Fit of beyond reduction program, our did cost driven Future the we by our expectations, margins for outperformance, outperformance margin program. largely the On

of ahead schedule there. are We

of real demand estate for done some have both improved electricity fuel. productivity, management, We improved and great really rationalization, in things terms

ahead QX, of plan we So, which in were led to that outperformance.

have second of headwinds I And until ago, EBITDA QX in was prices, I to on and have kind fuel was before, that’s We we ACP uptake broadband. out continued government We the said access seeing an QX. high-speed we release way noted As the around to to participation question do be just able think there. weeks new expect important I for think think very are some QX and it electricity question, program, the flattish put why program. the from we about of we healthy participation rates our two a it’s in press consumers

and a are large grow are numbers We in we participant seeing our it, every day.

Anthony Nemoto

you. Thank

Spencer Kurn

we question Operator, take please. Anthony. will Thanks our next


go question. And our your Greg, Greg Please question open. line with Williams comes from your Cowen. now ahead from next is

Greg Williams

questions. Thanks my Great. taking everybody

impressive, really both and in was churn copper. Your fiber

in going low-Xs I still? it’s the and question is I the to from seeing if that churn you just way was from not, have levels am there. fixed it inferior wireless but you about can from? product, getting your know or mean wireless this for fiber, fixed further reach the to off look the curious the on any you thoughts previous fixed base? an I always they are where the would And taking questions, half broadband low-Xs. it took industry, are So, forward, your are question, I hear saying take X.XX. on copper copper these think past at fiber Are improvement Second I think Is noted X.XX just – there at dovetailing

Nick Jeffery

progress made here. yes, Greg, churn. Nick Churn, great Yes. on we

low at. conscious – of the are understanding churn volume are importantly, significant chipping to keep in into it’s things Therefore, and and why away to one never fiber we a then low of thing, well, both systematically more it market it’s perhaps a in we of is hundreds as literally the course, company But that very and thousands that moving it at effort week-in little the course, eliminate very churn big copper. And that’s systematic not. I yes. we as the as got are like bit. churn helps would And it’s have sustainable, it be, and to putting to it improvements Is to the for week-out. even and is reasons moment think We I seeing a small

where the operating customer our think as it, one of then But are fiber don’t fiber to reason copper fundamentally proposition. areas it we footprint a customers build we better can. the can, time a it of as us. will aggressively up in, and make leave the try slow. to if way of kind look, keep we remote the want better the in across I just rural, as those out going really want to is a But always trend will if more be pushing currently to about happy why out. are turn you market, we we fiber On pretty are we yes, customers attractive there it’s We and copper SWA, with one course, and to and I ever look, be to is many perhaps convert more does some to try think

in three you down. If or high-speed got XK hanging fiber better else Playstation, go call and six doubly again, on they uplink the or you going from performance, which off network, TVs, that in four then where more you of is devices, areas, household rural And five true it’s work on a your just is results with someone to some to imagine cellular fiber. the Zoom if well home, wins your reliance hands be working reliable might whatever

fiber rural look, as see but nibbling about some just proposition. comes So, the in it’s will areas, we in,

Greg Williams

you. Thank it. Got

Spencer Kurn

we Operator, question next please. our Thanks will Greg. take


question is line And our go Research. your Vikash, from ahead Please comes next from your question. Street now New open. Vikash Harlalka with

Vikash Harlalka

Thank question. you taking my for

switching is that comment in question, anything off Just talked cable to Nick adds. about the made just which have of companies of environment, depressing gross the the a prior sort response low

churn about helping bit. that talked you a So,

your the back guys would to does up? product goes go for take that been sort of what [ph] normal, XGBS you environment mean has that sort switching of secondly, launched? So, the when And churn that rate

Nick Jeffery


trending a underlying we non-fiber churn carry and our term of that that’s work naturally us. So, force that’s strong the counterbalance for stay thing, just move the of industry, on course, copper broadband the core to are is I I return an and market. is And not switching the the it’s reason the think doing both force Then, think down done. is in and environment, fiber. think I Perhaps as will that, does important to why the and more upward in assuming journey, true

include. and gigabit and ARPU than on want course, helped of as very, what In our overall that new terms customers mix to that, not is share. really we they in of pleased half our faster the rather customers But timing a take-up. about say, penetration, very number are we fact use taking high-speed now we continue is And speed. that of place And there of with we reflective the have fiber

John Stratton

for higher all Yes. value activity, I favor. where our accrued a higher In In Maybe about move to environment, just question environment. higher market reality, Vikash, other switching we if single compete, one gaining are in can we your first every share. potential switching switching point. just Back

take in And those more so the as the customers customers have to we play, opportunity that are broadband. higher

have increased time think I with increase by is we for momentum that that for add over the aided volatility built, way. marketplace. Nick only other in the translation team and And net expect us not the the So, obviously, would the to

Vikash Harlalka

much. Got it. Thanks helpful. Very so

Spencer Kurn

Thanks please. take will our we next Vikash. Operator, question


Raymond your with from now open. line go Please question Frank James. ahead next comes Our your Frank, from question. is

Frank Louthan

Great. Thank Two questions. you.

So, one clarification. just

a question ARPU what could Can the fiber in you before when feel from get competitive a it a markets? watch are with you So, have in the of positive bounce And with is lot that lot with markets is copper, or of cable that the hear – or trend? fiber I investors around in, permanent my about is been? to the sort this becomes concern do on this lot will trajectory what just set you cable, a the those you coming with expectation, your is how over new a worse. And second where the is adds and Thanks. pricing net bit normal, response you new competition the pricing of the comment then seeing competitive a with

Nick Jeffery

excellent Thank It’s you, Nick. questions. Frank. Two Yes.

as rational Look, And is the seen expect and On well. the I got to intend have our seeing seen is the than course, and I on and as think adds build said first, I to encouraged that reaction, and we is the value better we is that’s to way so of competitors have compete. movement some will continue starting competing of have way reaction to to That’s I fiber pricing the I a the deliver service, some thoroughly add And earlier, would really know fiber. switches more that? price. on yes, net environment positive pricing services on. primary is we new by end anything competitor recognition stay provider, On think the value-added don’t you that normal. and in if quarter-over-quarter. future, market that, up Yes, the John, we

John Stratton

No, right. no, XXX%. you I agree exactly with Yes,

Frank Louthan

you Thank Great. Alright. very much.

Spencer Kurn

Operator, we Frank. Thanks will question please. next take our



now Simon ahead open. is So, our next your go Morgan line is Simon, question from Please Stanley. from your question. with

Simon Flannery

thinking on you I the about restructuring an to or plans then maybe other million that, what the referenced quarter. and the Wave update think, like think had Thanks. year? And might $XX Good or was just think the how And bill much. non-cash? then your in we thoughts balance are X, latest the you for Is morning. and estate there? that assets you the the I how I so if about offices And the have Scott, apply infrastructure Thanks those wondering for latest that looked into that that. do for sold. being money real us of cash, restructuring

John Stratton

John. it’s Simon, Hi Yes.

and piece. Wave has X, to First will X, and last take will Wave Scott two Nick for the the then I go

of It’s plus it underlying we think are the of on million heard piece, level administered as doubt this supply able Wave so that as towards about issue else. that sort, an perhaps about the of it the chronologically. but year speed. we profile, buffeted million Is can. to unleash for to we on state referencing is is Nick total, what’s incremental set a you prior a things. have best it competitors, few that level and Wave less a X funding the And of us, and chain the of full from number jump on them year, the analysis inherent here a call, it for a opportunity calculus divestiture, contracting to build. a into a organic we last segregating determine And because venture spoken return no piece that allows But and way an the it, for being the are of is then what the of value terms that anticipate that, managed, Still great – as value implications Because referenced bit been really important Wave be to the some a we get detail. about we of everything said you onwards. As positive, And to of the have for set to is go this a And Federal labor, more issues balance able is now tap X assets. what some just million $XX X the have was move it $X-plus been a building was as And absolutely earlier not build a to That build then of materials us our down very a we and for that’s have sequential changing work at in factor. less fast pulling of was getting to it. and creation. of pace

leading at all And return in like the rates has in for and understanding driving be for increased were that potentials of modeled, believe to year. have the And the local through business are leverage are better. case is been very, its the return But validated conservative. exceptional a initially efforts initiatives, penetration all bankruptcy company is that’s important both of we the for that, fundamental that that understated, what Wave of we addition, distribution important, candidly we at previously the this on has have channel what also now actually Scott’s is, our the market So, Wave now we can a work then X base that level. had and the very increased path, the a properties and X, been cost underway. about of team, profile do to actually on the note down what and we level by improving business, parallel in confidence see an that back further that we is saw we And leaders the

the we saying, way that now are than So, the Wave assets X anticipated have even this well. we itself months believe six of into value introduced consideration higher might as X of long ago. A Wave has a

work that continues. So,

will have to final We certainly And conclusion. fruits quarters two end, of delays next said then doing this in get with be the out the work into we market of on that course just the during that no year, the the quarters here three max, a our to to decision.

you applications for to can opportunity that to order of thousands And if in as literally translate We span XX their in would there this into be build, us. infra is markets. will enabling into we value expect, important across, states the the service today. customers is required On tap look our that we

we team it. that been So, around have assembled a has

that do the future believe company. other the creation do term you of we to of in come longer any That would effect. do that we for through there think be for could the end Scott, that not that we as nice We shown that will will want is be take have a incremental expect. the that? in business, space out active our this this in lay of And we manner process, but you guidance the value

Scott Beasley

$XX of to roughly the Simon, a an lease event. your in as that restructuring, a The on part exit That that of million was $X on one-time question highest XX items. our impairment the reorganization, that – roughly million costs of biggest impairment result should quarter be be office lease headcount based one-time the was given was terms plans was additional on Yes, non-cash. a There severance-related have but locations. definitely should we

Simon Flannery

you. Great. Thank

Spencer Kurn

And Thanks one we for question. Simon. have operator I think more time

have let’s our So, please. question final


now Nick from is line Deo Del Please MoffettNathanson. question open. final go Our is Nick, ahead. from your

Nick Del Deo

in. Alright. Hey. Good me guys. morning Thanks fitting for

subscriber is if churn. to have theme or new talked have rates the and the continuing you give you First, inputs your capped how annual in the on your costs contracts some you have maybe of your does and acquisition by build industry-wide, second, contractually Just supply that share a long-term better with what SAC we for understand remain this like And the understand can how implications protection issues expected help chain other of risk over – the any either so planned If environment from about model, any the there. locked us Thanks. or rates? or retention? next pressure network churn few side inflation penetration offset then normal, profile equation a are would growth Can of low in is supply key years risk. or we of the

Scott Beasley

Nick. Sure, Yes.

Let me take those.

you where process on So, us noted, and as RFP base diversified materials to supplier about head that we fortunate extensive labor. start to were year an in fiber both have we build, the led our a

both working RFP example, have multiyear resilience process our most multiple materials. of labor but with that with that partner if issues. kind supply ones the protection, of of have on potentially provide price to one one key in runs was labor we geography, Coupled suppliers, will and also the both For signing used contractor we chain into where contracts now

feel the environment We cost a in the number, $X,XXX gives the the haven’t very confidence us we even protected per reiterate which to well to in inflationary specific passing across overall build, economy. given but $XXX macro

And on the are on fiber you think that’s I churn, So, build. right.

number and if one, industry-wide levels, also churn think increase churn better we return may bit – at even that more would are pre-pandemic creates I that to switching a but adds, moves, we gross time, therefore, working acquisition same the to more with At channels and number subscriber very allow market. adds. reduce us our efficient in we increasing to hard are total of net getting cost

We numbers are digital seeing improve those our as capabilities. we down trend

mentioned, Wave and more the X as And improved months John make together of valuable of were ago. lead economics. thought views those both both So, our X than to probably things assets X they XX Wave to we months

Nick Jeffery

I Scott, Maybe if Yes. can.

one mind Just and you fiber going. are tricky our understand out point. trying understand model and but how print this as pumping new the doing we into manage had we to really started you more if we network blended Nick, fiber pot One fiber, to it point, understandable, new how things and the that base expansion we fiber of when the is legacy are all the at very are network, we equation, dilutes rate, fiber other the hard total are from two in for it’s have was segregated penetration which

So, are all externally, at we for our XX.X, I And doing own reason we how what showing, we possible purposes our work XX.X. well to to the to, penetration internal to what side in penetration other the give one base have rate are But proxy improving just you a for quarter, was was that on terminal there. think levels. as every wanted was clarity both you as

Here is this we in the even at are share. environment, low-churn of end first quarter, taking

first kind up demand comes Scott is show own clarity. taking product stimulating before, first is easily better every pretty different we not one an than but because up the are share any the XX% mature net It’s of positive, two improving and share our with market. and quarter. I and those a enough translation, a the of in with described incumbent This are combination we choice And – the adds a much just to have providers. market now. as XX%, cases, got So, gross new a It’s is adds we our

that So, that reason build. when is the about why And on continue. look think should there should terminal no will different the I talk fiber we and penetration ultimate new

Spencer Kurn

Thanks quarter for everyone Alright. Thanks call. first us. concludes That Nick. joining XXXX earnings our

to talk soon. Thanks. will you We


Thank you very much.

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