WideOpenWest, Inc. (WOW) Earnings Call Transcript & Summary

Today, at our Virtual 2021 Investor Day, I can sincerely say that I really look forward to being able to host an Investor Day in person, but unfortunately, just not today. Before we get started, I would like to direct your attention to our safe harbor slide concerning any forward-looking statements we make today during this afternoon's presentation. I am joined virtually by WOW!'s executive leadership including Teresa Elder, our CEO; John Rego, our CFO; Henry Hryckiewicz, our CTO; Amy Bell, our SVP, Marketing; Don Schena, Chief Customer Experience Officer; Bill Case, Chief Information Officer; David Brunick, Chief HR Officer; and Craig Martin, our General Counsel. Our agenda today will include presentations from several of our executives, followed by a Q&A session. Please submit your questions using the online tool, and we will go through as many of them as we can at the end of the management presentations. This afternoon, you will hear from Teresa Elder, who will discuss our strategic outlook; followed by Amy Bell, who will present WOW!'s competitive positioning. Don Schena will then talk to you about our customer growth strategy and our history of operational excellence. Our Chief Technology Officer, Henry Hryckiewicz, will then present our technology strategy and walk you through how the strength of our network is another pillar of what sets WOW! apart. And lastly, John Rego, our CFO, will present WOW!'s financial model to help you build models to support and drive your investment thesis in WOW!. Now I'd like to hand the meeting over to Teresa Elder, WOW!'s CEO.

Thank you, Andrew. Welcome, and thanks to all of you for joining us today. We're excited about our company and delighted to tell you about the new WOW!. WOW! is one of the leading broadband providers in the U.S. and recently completed the sale of 5 of our 19 service areas. We have transformed the company over the past few years and especially the past 6 months. Today, we will share our progress and give you a glimpse into our future. So WOW! has changed and is stronger and better positioned than ever before, but our vision hasn't changed. Our vision is still connecting people to their world through the WOW! experience, reliable, easy and pleasantly surprising every time. Today, we are delighted to show you how we have been transforming well into a low leverage high-growth business. Here's a quick look at the new WOW! since we completed the sale of 5 service areas last month. WOW! passes nearly 2 million homes throughout Michigan and the Southeast. We serve 532,000 customers, 96% of whom take our high-speed data service. Our high-speed data or HSD revenue has been growing at an 11% CAGR and now represents 54% of our total revenue. In fact, over 85% of our new customers take HSD only, leading to a 36% LTM EBITDA margin. So how have we created this high-growth HSD revenue stream with growing EBITDA margins? It's because of our broadband-first strategy that we launched at the beginning of 2020. We listened to our customers and know that they value the speed and reliability of our network. They trust us as advisers because we give them choices for video. We don't force them into a bundle we want to sell, rather we listen to what they want to buy. We're flexible and easy to do business with, which also leads to high customer loyalty. All of this is provided to customers for a superior value with competitive pricing. WOW! has executed a 3-part transformation of our business. We transformed our strategy to broadband first to meet customer demand and grow our margins. We've done an operational transformation over the past 4 years to improve the customer experience decrease costs and to improve speed, reliability and agility to win in the marketplace. And we just closed 2 transactions for $1.8 billion to bring leverage down to 2.6x and allows self-funding of our growth strategy through -- without relevering up, meaning we are now positioned as a low leverage high-growth business. So let's look at our 3 transformations and how they've impacted our business. First, the sale of 5 service areas have had a significant impact. We now serve 14 markets in Michigan and the Southeast. Our penetration has risen to 28% of our homes passed, and we are now low leverage at just 2.6x. We also received credit rating upgrades from S&P and Moody's in the past week. And today, we announced that we've locked down our refinancing on our new, much smaller term loan. John will share the details. Importantly, this opens the door for us to now focus on strategic growth funded through our business operations, not through leveraging backup. The transformation of operations has had positive impact on our customers and the proof is in some of our key metrics. We've gone from 5 separate legacy billing systems to 1. Now this allows us to achieve significant operational efficiency while giving us more agility to provide local and specialized plants. And just to note on this. We call it the billing system that it really does provisioning and provide significant information about our customer relationships as well. We have gone from virtually no customer self-installations to 78% of HSD-only self-installations, which provides very high customer satisfaction. 7% of truck rolls used to require an in-home technician, and now only 28% due because of the reliability of our network and the benefits of IP-based services. We previously had only 3% of our sales through online channels, and now 30% of our sales are through this low-cost channel, a recognition of customers' buying preferences. We previously had no customer online checks, and now we have an omnichannel for customer care with 30% of customer actions going through that. The bottom line is that our operational improvements for customers have dramatically increased the efficiency and strength of the business, all while making customers happy. The transformation to our broadband-first strategy have had positive impacts on our customers and is flowing through to our financials. The proof is in some of our key metrics. We've gone from 62% of our new customers taking HSD only in 2019 to 87%, and we've been at or near that level for the last 5 quarters. We've gone from no IPTV, which we call WOW! tv+ product availability to 100% of customers with access to WOW! tv+ from 50% of our new customers taking speeds of 200 meg or higher to now 87% of new customers taking these higher speeds. We've gone from 45% of our total revenue coming from HSD to now 54%, the majority of our revenue coming from high-speed data. And that shows up in the incremental contribution margin now at 70%. And our LTM pro forma adjusted EBITDA margin has risen to 36%. And Clearly, our broadband-first strategy has driven significant improvements across our key metrics. So to recap the evolution of WOW, we are now well positioned for the future as a low leverage high-growth business. In fact, we have set a policy that we will not exceed pre guideline leverage, and we have no plans to even go that high. Rather, we now can grow strategically through funding our existing business operations and fully capitalize on the increasing demand for broadband in the U.S. Looking at the U.S. broadband usage more closely, we see there is a more critical need than ever before for a reliable connection. Broadband usage has increased by 21% over the past year. In fact, it jumped even faster than that at the start of the pandemic. Connected devices are growing rapidly and are anticipated to be up 63% by 2023 from 8 to 13 devices per capita. It's estimated that there are 25 connected devices in the average household today. OTT or streaming usage on average is nearly 2 hours per day while we see paid TV declining by 36% from 2021 to 2024. But to be clear, customers aren't watching less video. They're changing their habits on how and where they watch and they also tell us they don't want to pay for channels that they don't want. In this growing U.S. broadband market, we are a challenger that competes. It has been part of our culture since we were founded. We compete by focusing on delivering quality services on a fast and reliable network at competitive prices. We know customers need their broadband. So we give customers a true choice not forced bundles. Our existing network is ready for current and future demand without having to be rebuilt. We are well positioned for the future. Importantly, we have the right team of people. Our people and culture are the secret sauce of WOW! We're honored to have just been named one of the best and brightest companies to work for nationally for the eighth time and the fourth time in a row. We all feel responsible for WOW!'s success together. So we are ready to compete and grow. So how will we grow? We will grow our business through new hot pass subscribers and products and services. On new homes passed. We will grow our footprint of new homes passed through a new opportunity now available to us as a low leverage business. greenfield. We define greenfield as builds that are not adjacent to our existing markets and in markets with less competitive intensity. We also continue along with our selected strategy of edge-outs adjacent to our existing footprint. Both are being built were significantly lower cost than we could do M&A and they provide us with attractive returns. We've already added 200,000 homes passed through Edge-Outs over the last approximately 5 years, and we've had an Edge-Out program for years before that. This strategy of building out new selected markets, which is now in the business plans of companies like Metronet, was an approach familiar to us long ago, and we know how to make this successful. We're very pleased with the IRRs that we've seen from those edge-outs for both residential and business customers. And as we look to add greenfield to our approach, we plan to add 200,000 homes passed and can envision a plan of up to 400,000 homes or more over the next 5 years. On subscribers, WOW! is also positioned for growth in our organic footprint. In fact, one of our most highly penetrated markets just achieved over 50% penetration in the last month. So even highly penetrated markets are growing. And we see growth in both our residential and commercial subscribers. We grow through attracting new customers and by having low churn. Our customers are very loyal, and we work hard every day to attract and keep them. We now have the capability of using sophisticated customer analytics to predict and prevent churn. We've also empowered our commercial sales and engineering teams to assist business customers as they come out of the pandemic through innovative partnerships, such as one with our ad sales group. We also strategically do wholesale deals that provide even more return from our robust network. We believe that we can have over 30% penetration in our existing footprint. At the center of our product portfolio is broadband. We make sure it's fast and reliable while preparing for new residential and commercial products. In our labs, we are getting ready for the launch of higher speeds in the coming year, while also making sure that we have products like whole home WiFi and Internet security for both residential and business customers. So they have the very best WiFi experience. We've been rolling out more online account management and care options for customers, while also offering an array of business products. All of this is with WOW!'s signature customer service and competitive pricing. We have invested strategically over the past several years developing a high-quality fiber deep network and product suite. So how will we grow? Well, we're going to grow through having new homes passed to serve between 200,000 and 400,000 new greenfield homes by 2027. And by deepening the penetration in our existing footprint to over 30%, all while providing great products and services for now and the future without needing to rebuild our existing network, but rather focusing on building new greenfield markets. Now I'd like to share more details about our greenfield plans to grow our footprint by 200,000 homes passed while envisioning a plan where we could get up to 400,000 homes or more by 2027. Now that would be a 21% increase in our homes passed. Greenfield, as we define it, is building new markets not adjacent to our existing networks, to enter new areas so WOW! Can drive rapid penetration after build-outs and have strong returns. Now we've been looking at greenfield opportunities for quite a while, and we see a large addressable market in the Continental U.S. We have a very robust process for the analysis of future greenfields, and this was enhanced through our work with our industry consultant, Altman Solon. We now know how to do this as we have for many years, and we have been doing builds as well for many years, and we know it's critical to partner with new communities. Community leaders like to offer choice for their constituents, and we know there are many markets with less competition than those we currently serve. So those communities will especially welcome a quality customer-focused operator like WOW! Because we are starting from scratch with the builds in these markets, the economics of fiber to the home now makes sense as those costs have come down in recent years. We plan to use fiber-to-the-home in all greenfield markets, just as we are using it today in a few communities recently built. Greenfield utilizes the expertise, scale and resources of WOW!'s existing company. We don't need to set up a separate organizational structure. WOW! pioneered this approach over a decade ago of growing homes passed through building versus M&A, and we have the playbook to be successful. We also have success growing our brand awareness in the very cluttered markets of our existing footprint. So we know how to break through and drive subscriber growth. Greenfield gives us another engine of growth. And while we won't see new subscribers from greenfield until 2023, we will begin building in 2022. Our long history of growth through edge-outs really gives us confidence in how we will also win with greenfields. When we look at choosing markets, we look at the competitive landscape, the density of homes the mix of aerial in the underground plant. We also look at relationships with the local power company and the demographics of the communities that we want to serve. We model our projected penetration, our ARPU, the cost for sale, including the cost of equipment, as, well as the cost of construction, and we work with communities to drive engagement from everything from walking out and doing the plant design, to pull permitting, field planning and beginning the plant construction. When we launch markets, we grow penetration. We have seen edge-out penetration rates above 20% to 25% in 2 to 3 years from recent builds even though these are in very intense, competitive footprints, and yet they still provide us very strong IRRs. Since 2018, 60% of our Edge-Out net customer growth has come from properties that we kept as part of our remaining company. So we still have plenty of growth opportunity ahead. For greenfield, the cost per home passed is a bit higher, but we will see penetration rates grow faster as we launch in markets with less competitive intensity. So to recap my section before turning it over to the team, WOW! has executed a 3-part transformation. We launched our broadband-first strategy to meet customer demand and grow our margins. We've executed an operational transformation over the past 4 years to improve customer experience, decrease costs and provide speed, agility and reliability to win in the marketplace, and our robust network is ready for the future. We completed 2 transactions which closed, by the way, in a record time for $1.8 billion to bring leverage to 2.6x and allows self-funding of our new high-growth strategy without relevering up. And all of this has positioned us to be low leverage, high growth company for the future. We're going to give you some further insights into how we plan to win and wow our customers. I'd like to turn it over to Amy Bell, our SVP of Marketing. Amy?

Thanks, Teresa. As we think about how we've executed our 3-part transformation and positioning ourselves for the future, we continue sharpening our broadband-first focus so that WOW! gets noticed in a cluttered media landscape, and sets us up for continued long-term growth in current markets as well as in new greenfield areas. As a challenger brand, we wanted to ensure we were anchored to an idea that fuels future growth and builds upon our brand legacy, while providing differentiation by living up to our name. This is about how we will, how we will by becoming the provider of choice giving customers new options in the marketplace for a super fast, extra reliable connection, how we wow by offering flexibility, no contracts, 30-day money back guarantee, options to bring their own devices and the ability to move from different packages without penalty; how we wow by delivering great value competitive pricing on all our packages, ensuring choice for all budgets, oftentimes with the best incentives on our fastest speeds; how we wow by building upon our brand legacy, treating customers like neighbors, not numbers, and doing business locally. As I'm sure you can all relate, it's become an undeniable part or how critical part the Internet plays in all aspects of our lives, how we work or entertained and how we stay connected, and while we believe it all starts with great Internet. This idea is core to how we not only think about our business, but how we design the network, enhance our product offering, market and price our services do business locally and of course, delivers on our broadband-first strategy. We don't force customers into bundles to get the best pricing. For WOW! broadband first means customer first. WOW! modernizes around that changing consumer behavior, shedding the outdated approach of traditional cable providers with a deliberate move to broadband first. WOW! wins on customer choice, flexibility, value, speed and reliability and a customer-first legacy. WOW! scores higher than many of our competitors in customer satisfaction and reliability. We are customer obsessed. Every customer counts, and we go above and beyond to prove that our customers matter all the time. We're solutions-driven. We strive to make things easier, faster, more affordable, and we're empowering, giving our customers control and choice over how they are connected, wowing them at every opportunity. But don't take it from me. Here's what a few of our happy Internet customers have to say. And as you can see, they appreciate our transparency for providing solutions to help manage their bills, solutions that fit their lifestyle and budget and a network they can rely on every day. One of my favorite things is hearing from our customers and them talking about how they were surprised when they received a letter from us suggesting streaming options as a way to reduce their WOW! bill, offering to help better educate them on their options and to mis-define streaming for customers who don't fully understand the way it all works. We also hear repeatedly in our customer exit surveys from those customers that move to a home or a business that isn't in our footprint and how they wish they could take us with them. WOW! is well positioned in the broadband first market. We continue to attract customers seeking value, reliable connections and easy solutions. In our latest brand health study fielded in Q3 of this year, we've seen our efforts are making a difference. We're showing a 12% increase in awareness with prospects compared to data from our 2018 study. And we were accepted amongst 15 other competitors in aided awareness. Both of these are especially meaningful when you consider our historical spend and share of voice is a fraction of the investment versus the competition. We've also found compared to bundlers cord cutters more often say WOW! will likely be their next provider and are more likely to currently use WOW, versus all competitors across our footprint. And cord cutters consider and prefer WOW! more often than our competitors. Essentially, WOW! has done a great job positioning itself as the brand of choice amongst this rapidly growing consumer segment. And here are just a few more of the recent accolades within the industry and among our employees. We're especially proud of those awards, recognizing our legacy for being honored as one of the best and brightest companies to work for in the nation as well as locally in the markets we serve year after year. And we received were just late yesterday that we can add another win in Denver to this list. Finally, our footprint covers really dynamic communities where it's fun to compete and win. We have a great mix of demographics and a cross-section of appealing segments with some unique opportunities for growth. Our approach continues to build upon the brand recognition, so we are part of the consideration set for consumers when they're looking for a new choice in their Internet service provider. We are efficient when attracting prospects at the right time and price, driving penetration locally creating micro markets within specific areas to maximize growth. We get into the nooks and crannies. We evaluate all markets from an individualized local perspective. For example, we know that trash pandas aren't just another name for a raccoon, but the minor league baseball team, playing it a state-of-the-art ballpark in Huntsville, Alabama, where WOW! has a major partnership. And during the season each month, we recognize an award teachers who are making a difference in their community, or how about the National Peanut Festival in dose in Alabama, where we have been a local sponsor since 2017, giving us a chance to connect with customers and attract new prospects over the 10-day event. How about funding scholarships, delivering Easter baskets and setting up hotspots so people could more easily connect to file claims and stay connected after a massive tornado damage the community in Newnan, Georgia, the weekend before Easter. From an online perspective, our continued investment and optimization in digital channels, resulting in driving growth and retention while minimizing costs, an area where we've had tremendous growth over the past 3 years, growing this channel from around 3% contribution to close to 30. Protecting our base through targeting selective customers with unique offers and upgrades and treating them to some fun surprise and delight events along the way. For example, earlier this year, we doubled the speed, moving many loyal customers up from 100 meg to 200 meg. We're leveraging government programs and subsidies, delivering greater value and savings to price-sensitive customers participating in the emergency broadband benefit program, which will evolve to a new program offering subsidies to more people in 2022. These programs have helped thousands of our current customers stay connected. And of course, greenfield expansion. We'll leverage the right mix of awareness, partnership and acquisition strategies to drive early penetration. With that, I'll hand it over to Don Schena, Chief Customer Experience Officer.

Thanks very much, Amy. I'm going to discuss how we win at the market level by driving both our top line acquisition engine and a very robust set of tactics to keep our customers once we have acquired them. We'll also touch upon a real differentiator for a while. Our end-to-end customer experience led by our operations teams throughout the organization that provide an exceptional level of service each and every time. And finally, we'll discuss why we have the right team at the right time to aggressively deploy our greenfield strategy, which you heard about from Teresa and Amy. So growing our business. We are in a great position to build upon our multichannel distribution strategy for both residential and commercial sales growth. We've invested in and continue to refine our online store, making this low-cost option viable and easy to use. We've added new indirect channel partners, and we have -- we've grown our field sales presence to cover all of the markets in key strategic SMB and MDU properties. You heard Amy talk about micro markets literally to the node level. We identify areas where we have lower penetration within our existing markets, and then we employ targeted tactics and effectively drive that penetration quickly, including near net commercial opportunities, which are really just opportunities for us to solicit commercial accounts with a low capital investment. Our sales chat capability is growing consistently to support growth in the online store. And along with our commercial e-commerce site, we'll continue to expand and enhance the buying experience for resi and commercial. And we continue to explore partnerships on value-added products. Wireless is right at the top of the list, new streaming content providers and IoT opportunities that support our acquisition and retention strategies. Teresa mentioned our highly loyal customer base, and it's not by accident we've got there. It's through continued optimization of existing retention programs we keep tweaking it over and over. We expect to continue that legacy of excellent customer care, satisfaction and loyalty going forward. Our approach uses very targeted tactics within each market for proactive and reactive retention efforts. We factor in competitive dynamics, of course, ensuring that we stay nimble and efficient in whatever we're going to do. our predictive modeling in further evolving customer segmentation allows us to look around the corner and see what's coming and be better informed on our investment strategies. And of course, we actively leverage customer feedback loops, voice of the customer programs for proactive service recovery. growing customers, it's just really 1 part of the equation. We earn that business and trust from the customers every single day, and we just never take it for granted. Operational excellence, it really is a key differentiator for us. We have a continued operational improvement mindset. We maintain a relentless focus on consistent process and procedures throughout each customer engagement point from sales to fulfillment to care, and we measure everything. We expect and have realized ongoing improvements to our operating efficiencies and our cost structure by literally taking out millions of costs out of our business. Self-care solutions are dramatically changing the way that we interact with our customers. We provide that with a reliable, easy and intuitive way to serve themselves online to shop, buy, install, pay bills, manage their accounts and seek technical support. Some examples are Huawei.com, which is our online store, our online account management tools and of course, self-installs, which you'll hear a bit more about in a moment. Leveraging our omnichannel platform, we deliver best-in-class customer experience as a key differentiator between how WOW! operates and how we win. We provide a differentiating level of in-home experience from self-installs to whole home WiFi to additional IoT setup. And our employees and partners have a long history, living up to a one-and-done mentality around first call resolution. We don't hand things off. We maintain an absolute focus on our performance, process improvement, best practice sharing and cost reduction through aggressive consistent management of the right KPIs, all with an eye toward reducing what we've come to call bad volume from the business. We're never done. There's always more we can do to continuously improve our relationship with our customers. But someone who's done this for a long time, I can tell you we sure are very, very solid. Our customer care and field operations teams are tightly aligned to maximize efficiencies while reducing customer contact rates and service-related truck roll volumes. Online chat, our self-installing initiatives have reduced our cost significantly, but equally important, it's led to an exceptional customer experience. 78% of our high-speed data-only customers, and it's still growing, are being self-installed today. This has been an absolute game changer for us and for our customers. 75% of our mesh whole home WiFi upgrades are completed using self-installs and, over 20% of our truck rolls can meet same-day customer request for install and service. One that we're all very proud of, truck roll service calls as a percentage of our total customers has decreased by 37% from the third quarter of 2019 to the third quarter of '21, an equally impressive customers having the need to contact care for service issues has decreased by almost 20% from Q3 '20 to Q3 '21. Our operating teams throughout the business have over 2 dozen distinct KPIs. We measure everything, as I said a moment ago, drives performance, it reduces truck rolls and it really, really improves our free cash flow. We leverage an omnichannel platform to drive customer insights and enable operating efficiencies and improve that customer set. And we have local leadership in each market to help drive customer satisfaction, while keeping a keen eye on opportunities and any competitive offers that we need to be aware of. Everything we do operationally today and have for the past several years will directly transfer to a fast go-to-market strategy and execution for our greenfield markets. Greenfield really is, it's an exciting next engine, new engine of growth, however you want to think about it. We're thrilled to begin this. We have a long history, as you heard from Teresa, where we've enjoyed as a challenger brand, demonstrating our ability to successfully compete with the larger MSOs. Over 200,000 homes over the past 5 years with tremendous success in near adjacent communities to our existing footprint. That's what we've called agile. And we've achieved very strong penetration when the profile that we're competing against is an MSO offering a 1 or better gig service and a DSL incumbent. With that competitive profile, we've seen penetrations have 20% within 6 months of activation and 30% within the first year, using hyper-focused local sales and marketing strategies along with our award-winning customer service. That playbook for success that we've used in the past and our past edge-out communities will be implemented in the greenfield projects. So it does -- greenfield represents a new strategy for us with the ability to take our challenger brand playbook in markets that don't need to be adjacent to our existing WOW! system. As Teresa mentioned, we partnered with Altman Solon, who is a leading worldwide telecom consulting firm, and we developed a progressive filtering approach to tightly target projects that we want to consider going and building. We'll target cities currently served by a single 1 gig provider and a DSL incumbent, the profile I mentioned a minute ago that we've had terrific success against using fiber-to-the-home technology, which Henry will talk about in a moment. We began that filter with over 100 million homes in our search area in the Continental U.S. and then we filtered that down to more than 22 million homes that meet that competitive profile. We'll now take that 22 million and get it down into the hundreds of thousands to have in the near term what we're going to go and take on. We'll ultimately choose the cities that meet strong economic parameters, have strong demographics, providing significant residential and commercial growth opportunities and, of course, meet our filtering guidelines. And we think this is key. Unlike many new entrants that you see every day, offering alternatives to incumbent providers, we have the team and the support infrastructure in place to drive immediate results. while still being nimble and extremely focused at the market level, we know how to do this. Both a dependable supply chain and the scalable access to construction crews are critical elements for success and each of those are solidly in place for several years to come with us. And finally, just as we do today, greenfield markets will be managed locally. With that, I'd like to hand it off to Henry Hryckiewicz, our Chief Technical Officer. Henry?

Thanks, Don. One of the most significant aspects of our technology is that we've been continuously innovating and investing in our network to keep it best in class, and it is in an exceptional position for the future. WOW!'s network, coupled with top technology talent is the underpinning of our strength and our broadband-centric approach guides our strategic investments and focus on innovation. We are continually evolving our network to deliver the products and services customers expect, maintaining our competitive advantage. And here's how we've applied this. Our progressive technology culture is driving -- is the driving force behind our robust product portfolio and enables us to rapidly develop and deploy new data, voice and video services for both residential and commercial customers. A great example of that is WOW! TV+, our curated IP video service. We identified the need for a video product that would not only deliver a state-of-the-art curated video service with seamlessly integrated OTT services like Netflix and other OTT service providers, but would also deliver an avenue to unlock additional HSD capacity on the network, all in just under 12 months, a remarkable timeframe. And our network is the foundation for delivering robust products and services in a highly reliable manner. We've taken several actions to ensure it is well positioned to scale and support future broadband services. We've invested in centralizing our services where appropriate. And in the optical platform of our metro networks, transforming them into a standardized network capable of scaling up to 4.4 terabits, easily supporting future requirements. And we've established key colocation and content caching agreements, delivering a low latency superior customer experience. These also deliver significant traffic efficiencies on our core network. All of this, coupled with the edge compute platform we're deploying, will deliver next-generation, low-latency services that are becoming increasingly important to consumers. And of course, all of this requires an advanced access network, a key strength for us. We have a best-in-class fiber-rich network architecture with fiber typically down to the neighborhood level that can undoubtedly handle consumer broadband demands. This was evidenced recently during the early days of the pandemic, where our customers' broadband traffic increased by over 50% in just a matter of weeks, where we normally experienced just half of that annually. The network supported this well, demonstrating the strength of our architecture and its ability to handle increasing demands. And the HFC network is highly scalable, enabling continuous broadband evolution, an important attribute as we look to the future to stay out in front of the competition. The DOCSIS platform is a key enabler in that continuing evolution of our network to deliver 10 gigabit per second speeds. As an example of this scalability, take a look at the timeline on the top of the page. You'll see that our industry has been continuing to innovate and advance the DOCSIS technology for 20 years now, increasing the broadband capability of the network time and time again. We'll be leveraging the next iteration of this, DOCSIS 4.0, in the coming years. This allows us to increase capacity of the broadband network by merely upgrading the transmission medium rather than having to rebuild and completely replace the network as many in the telecommunications industry are experiencing. And as we think about greenfield opportunities, our focus on the development of advanced products like WOW! tv+ and virtual services like IP voice applications, coupled with our technical expertise with fiber-to-the-home have positioned the company well to expand into new geographic areas, as Teresa and Don have mentioned. With our all-IP network, we can easily deliver our products and services, to far-reaching markets without costly infrastructure constraints associated with more typical expansions. In other words, distance to a new market is not an issue for us. And we've reached an inflection point in the industry where fiber-to-the-home build costs have reached parity with HFC. And this is a key driver supporting our decision to build fiber-to-the-home architecture and greenfield markets. So to conclude, I'd like to leave you with what I think are the key takeaways about our technology platform. First, I want to emphasize how enthusiastic I am about the future of WOW and how our technology is in a great place to support and drive our growth. Over the past several years, we've invested strategically. As you can see, we've done a ton of work building out our infrastructure, including a robust and strong product suite. This is led by an experienced forward-thinking agile technology team with the ability to quickly adapt to evolving conditions. Second, our network is high quality with a fiber deep access network that is scalable and has a clear upgrade path to 10 gigabit per second speeds. And lastly, because we have made these investments and have such a strong infrastructure and incredible team, we are extremely well positioned to rapidly expand our network into new areas, whether that means expanding through edge-outs through adjacent markets or launching WOW! into greenfield markets that are not adjacent to our current footprint. Our technology will continue to help us drive growth. And now I'll hand it over to John Rego, our Chief Financial Officer.

Thanks, Henry. Okay. So with December 2019, and I just sold my company, which enabled video advertising on connected TVs and over-the-top platforms. When you used to speak publicly about that company, I used to besmirch the cable industry every chance I got because cord cutting was real, and it seemed to me that traditional video was dying a slow death, which was great for my business because we supported IPTV only. So I've got about 6 months left on the contract, and I'm wondering, what am I going to do next? So I thought about retiring, but my wife informed me that the Regal Household didn't need a full-time CFO micromanaging from the kitchen table. So that was off the table. But it was pre-pandemic and the job market for folks who do what I do is really robust. When I put the word out, and I was looking for a new opportunity. And fortunately, lots of jobs fix came my way from biomedical tech to crypto to IoT to renewables to SaaS. And in the middle of that pile of job specs was one for WOW! Now it's counterintuitive that after besmirching the cable sector that I would get drawn to it. It might have been the name at first. WOW! sounds pretty interesting, or the fact that I had taken meetings with WOW! over 20 years ago when I was involved in the VoIP industry. But I kept coming back to that job spec, and my gut was telling me that this was a fantastic opportunity for me. And so we decided to do some real due diligence, and what I found was pretty amazing. I went back and I read all the earnings call transcripts. I got my hands on the IPO roadshow deck. I was able to rip through all the SEC filings. And what I saw was the company well into a strategic pivot into something much more than a traditional cable company. Now cord cutting is very real. But what I hadn't realized was that it was the video cord that was getting cut, not the HSD cord. And from that IPO roadshow deck, I learned that 4 years ago, HSD was a 97% gross margin product that kind of feels like software and video was a 40% margin product. And just so we all know, today, HSD margins are still in the upper 90s, and video margins are now in the sub-20s. And I also learned that video drives a disproportionate amount of OpEx predominantly through calls to the care center and a greater amount of CapEx due to higher CPE costs and capitalizable installs to name a few. So it seemed to me that if you could cut the video cord and keep the HSD cord and then sold lots more HSD, you could substantially transform the business. That was and remains the company's strategy. That's broadband first. So as my dad used to say, you got the talking done in now go get it done. This team talked about transformation, but they actually executed on it. The earnings releases told the story of the transition to broadband first. And as I read them, I realized all of the operational fixes that this team was working through from moving off of multiple billing platforms to migrating off the QAM network to reclaim bandwidth building a robust IPTV product to spearheading self-installation kits to creating chat functionality for customer care to improving online sales, you name it. This team was rebuilding WOW! And operationally, those types of changes are really, really hard, and they take a dedicated and talented team to execute. So I spent time diligencing the team. I read their bios, and I have the good fortune to spend considerable time with each of them during the interview process. I was completely hooked. Having done multiple startups working with brash young serial entrepreneurs, this was the first time in ages that I was speaking with seasoned professionals who know how to execute, and the proof of that can be seen in the financial statements. And folks have started to notice that as well. And yes, our stock price is up over 200% this year. As proof of this team's abilities, we've been working remotely the whole time on here. And due to the pandemic, I'm very sad to admit that I've never met a single member of this team in person, and yet I feel like I've known them and work with them all my life. Looking at the transformation and the financial results, it seemed to me that the company was on the right path to becoming cash flow generating, but was still encumbered by a significant amount of debt. So I thought that if we could clean up the capital structure whilst continuing the broadband first pivot, we had a massive opportunity. To me, it felt like a pre-IPO startup, getting ready to lift off and I definitely want it in on WOW!. Now when my wife and I consider investments in our own portfolio, we look at the sector, we look at trends, we look at financial performance, we look at growth prospects. But after ticking those boxes, we focus on management teams. And I believe that to be the most important element of any company's success. It's the team. I had the great fortune of working with the folks you've heard from today, plus a few you haven't heard from. And quite frankly, above all else, they are why I came here. These folks know how to get stuff done, and so do I. So it's a really great match. The company I joined was high leverage, low growth, pivoting off to something better. And that something is here and it's now, and we are now low leverage at a high-growth entity with a management team of experienced folks who can take us to the next level. So we've been talking about this transformation all afternoon, but just to reiterate, broadband first is becoming broadband-centric. Over half of all of our revenues are now HSD. Well over 85% of new customer adds over the last several quarters have been HSD only. Almost 80% of those customers are choosing self-installation kits, which save CapEx and OpEx dollars. HSD drives fewer operating costs into the business, specifically because the drain on custom occurs less. At this point, most people are smart enough to know that when you turn the modem off and wait 30 seconds and then turn it back on, that pretty much solves the issue most of the time. Fortunately, that's not the case with video. Billing migration, tax functionality, workforce management to name a few operational changes are enabling us to operate more profitably. And finally, our massive deleveraging really adds significant value to the equity, and it gives us a robust platform where we can grow again substantially, but now we'll be growing with the cash flow that we generate from our business. Our goal was to become low leverage, high growth, and here we are. Okay. highlighting the financial aspects of the transformation. Over 95% of our customers have HSD. And as I just said, approximately 85% of new customers are HSD only. Our revenue shifted so that the majority is now high-speed data, 95-plus percent gross margins versus 20% for video and low 80s for telephony is moving our incremental contribution, and that's the gross margin for the recurring revenue streams up. My expectation is that we'll be in the mid-80s in the next few years. High-speed data business is less costly to run, period. So we'll continue to see our incremental contribution, our EBITDA margins and more specifically, our free cash flow generation improve and increase over time. As you know, we exited Q2 2021 at a 40.5% EBITDA margin. We've spoken of the stranded corporate overhead due to our centralized management structure, but we've already started to cut those costs. And I believe we can get close to that 40.5% by the end of 2022 and then increase it well beyond them. Okay. As we've discussed before, we're going to cut $35 million out of the corporate overhead by the end of 2024 and thus realizing the full benefit in 2025 and beyond. We're no strangers to cost-cutting here. We've done it before. Remember, we have to satisfy 2 transition service agreements during this period. So this slows down the process of cutting a bit and that some, not all headcount and other reductions have to wait until the TSAs are satisfied. Certain contractual obligations, such as SaaS software contracts and real estate leases, cannot be cut. They need to expire. And so we're going to need the full 3 years to finish up the full commitment. But we are committed to doing it. We'll continue to track our progress. And clearly, we will continue to report back to you on how we're doing with that. Okay. One of the keys to the low leverage high-growth strategy is obviously the delevering event. We're transparent. We told you we are contemplating this we did it. We executed it. Our company has a history of buying and selling markets. And as valuations started to increase, it seems like an interesting time to consider selling markets to facilitate the delivery. We were able to sell 5 markets and at 11x multiple, and I might add at a time when we were trading at 8x. And I believe that speaks to the true value of the company. And quite frankly, post those transactions, many investors start to see that value as well, but we still have a ways to go, and I believe we're still undervalued versus our peers. At 2.6x, we have the lowest leverage now in our peer group, but we also have a Board mandate to ensure that we stay below 3.5x. And to clarify, we have no immediate plans of levering up, but in the future, should we consider an acquisition or some other use of capital, we know we have a ceiling, and that ceiling is 3.5x. We were able to go to the rating agencies and get upgrades from both S&P, who took us up 2 notches from B to BB-, and from Moody's, who took us up one notch from B2 to B1. That delivering took our debt down from $2.3 billion to $730 million, and that represents for us an annual cash interest savings of $70-plus million a year. As you saw this morning, we priced and allocated a transaction to refinance our remaining $730 million Term Loan B as well as establishing a new $250 million revolving line of credit, and we expect both of those transactions to close next week. Look, we can now generate significant cash flow from our business, and we're committed to using that cash flow to grow. You've heard a lot about greenfield today, and surely, we are committed to doing them, but we are also committed to edge-outs and to growing our commercial operations as well. We've modeled $160 million greenfield spend through 2025. But quite frankly, if greenfields are as successful as we expect them to be, we can envision increasing that CapEx commitment to build as many as 400,000 homes by 2027. As you would expect, our greenfield model is rather detailed. But please note that it is IRR-based, and we envision IRRs between 30% and 40% on those investments. Another way to look at greenfield is that we can build new markets for under 5x EBITDA at a time when folks are willing to pay 11x or more to buy markets. We believe that by focusing on less competitive markets, we can see a 30-plus percent penetration rate. And by the way, we already have existing markets where our penetration rates far exceed that. Remember, aspirationally if all goes well, we'll attempt to pass 400,000 homes by 2027. And also, don't forget we plan to continue investing in edge-outs and business services. Look, we have fundamentally transformed our business from a traditional cable company to a broadband first company. And simultaneously, we have managed through a mesmerizing number of operational changes in fixes to ensure our profitability. We've cleaned up our capital structure, and we've put ourselves in a position to expand our growth engine. That cleanup was driven by the sale of 5 markets for $1.8 billion. And due to the tax efficiency of those transactions, we were able to pay down over $1.5 billion in debt. On our Q3 earnings call, we showed the historical financials on a pro forma basis, and we retroactively restated our trending schedules, all of which are on our website for your review. This was to give you a historical review of the new wow. But we also want to give you the tools to project forward. The following are long-range targets. They're not guidance, their targets. We will guide the full year and Q1 2022 on the next earnings call in February. That being said, the targets over the next 4 years are we see HSD revenues growing at a 9% to 10% CAGR, and Total revenues growth at roughly 1% to 1.5% CAGR. Growth in pro forma adjusted EBITDA between 8% and 9%. And as a reminder, pro forma adjusted EBITDA removes the 5 markets we sold and will improve as we continue to cut the $35 million in stranded corporate overhead over the next 3 years, increase our incremental contributions as well as find more operational efficiencies in our business. Moving on to CapEx. We plan to strategically invest in our growth all from the cash flow generated by the business. Expansion CapEx, which includes greenfields business services as well as edge-outs. We would anticipate an investment between $65 million to $75 million per year. And again, if greenfields prove as successful as we believe we're going to increase that capital commitment prospectively. Core CapEx, which would include CPE infrastructure as well as maintenance, should range between $115 million and $120 million per year. It's important for you to note that as we drop video subs and we start selling less video, core CapEx will be coming down. In fact, it's already coming down. All in all, we anticipate spending between $180 million and $195 million per year, and we can fund that from the cash flow generated from our business. As I've said before, we will save over $70 million per year in cash interest expense alone, and that's on top of all the other cash flow generated from our operations. CapEx efficiency on core spend will easily go below 20%, and I believe the average for our peer group was about 16.2%. But we plan on taking advantage of our cash flow generation and our low leverage to start strategically growing our business again. And with that, I'd like to return the call to Teresa.

Thanks, John. To recap, we're so excited about the new WOW! We've been doing the hard work of transforming and executing the broadband first business, delivering new systems and a better customer experience to drive strong metrics and significantly take down our leverage through our recent market sale transactions. . We now have set the stage for our future as a low leverage high-growth company through self-funding greenfield builds, further driving penetration in our organic footprint and edge outs for both residential and commercial customers. We are able to win through our people who have built the WOW! legacy of customer centricity and who have been precisely executing this transformation. WOW! is a challenger, and we are better positioned than ever before. With that, I'd like to open it up to questions. Andrew?

Thanks, Teresa, and thanks again, everybody, for joining us. As you've seen, as many of you have seen, on the tool that you're watching, there's the opportunity for you to type in a question. We'll take those questions, and then we'll hand them over to people on the call, who will answer the questions. So I'll start with the first question that came in with regards to greenfields. And I'll send this to you, Teresa. What has changed fundamentally that opens up greenfield nonadjacent expansion? And what are the main potential risks and benefits of these efforts? And what kind of pace should we expect? And how could those markets and competitive dynamics be different from your current footprint?

Okay. Thanks, Andrew, for that multipart question, that's great. Those are my favorite. So what's changed? What's changed is, first of all, we are now a low leverage company. the transactions that we did allowed us to have the money to go forward with a greenfield build, which we've always been excited to do. but also the hard work that Henry and his team has been doing, making sure that we have a full suite of IP-based products and services. Now the benefits that I see are that this is right within our core expertise. This is what we've known how to do for a long time. And there are a lot of opportunities out there. So it gives us a broader universe where we can go forward and provide WOW products and services. And we specifically have robust criteria that we talked about, where we're looking at markets with less competitive intensity where we can really drive faster penetration growth and get better returns than we've gotten in some of the edge-out areas which have a bit higher or more intense competitive environment. To me, the biggest risk is not doing enough fast enough. We think this is a significant opportunity for us. Did I get through all the parts of the question, Andrew?

Yes, I think you did. So why don't we go to another question that came in with regards to penetration rates. So you talk about penetration rates under a scenario where you compete with a 1 gigabyte cable incumbent and a DSL incumbent. But in the future, you're likely to be competing with a 10 gig cable incumbent and a fiber-to-the-home telco incumbent. Why should we believe that penetration rates in new markets should change with this dynamic? And additionally, what do you see as the fiber-to-the-home overlap today? And where do you expect that to go over the next 3 years? Teresa, why don't you start with that?

Great. Thanks, Andrew. Once again, my favorite multipart questions. So when we're choosing markets for the future, we're looking at those where we would be first to the door with fiber to the home. So we wouldn't be walking into a situation where we would be second to the market with those kinds of offerings, and we know we could be extremely successful to that -- with that. This is technology that we are using in a limited basis in some of our markets today, and we also aren't ever sitting still. We have quite a bit of runway, as Henry has shared with you, and I'll turn it over to Henry in just a second here. But just to address the question about why we think we'd be successful, not only are we going to choose places where we would be first to market with that. But customers don't just buy on technology, either. They look at choice. They look at value. They look at the ease of doing business and the customer care. And those are all the reasons why we've always won. We have very low overlap with fiber-to-the-home competitors in our current footprint, and we know how to compete against them as well. With that, I'll turn it over to Henry to talk a little bit more about the future.

Sure. Thanks, Teresa. So yes, I mean, fortunately, because we've invested in converting to an all-IP network and platforms and services, we can rapidly deploy into new markets. So as Teresa mentioned, we'll get there quick. We'll build quick and be able to achieve that penetration. We don't necessarily need to build a segment network all the way from our plant to these greenfield opportunities because we're doing an all-IP network that reduces the amount of capacity that's required versus legacy build-out. So we can merely leverage existing third-party medium-haul, long-haul providers, acquire broadband circuit to that location and really focus on the belt and really build it rapidly.

Great. Thanks, Henry. Here's another one that I think would probably go well for you. Will the current footprint need a fiber upgrade in the coming years? And what's your overlap with telco fiber today? And where will that go in 5 years?

Sure. So the short answer is no, we will not. We have plenty of scalability in our network, as I alluded to in my slides. We will purely be upgrading the network expanding the DOCSIS capability into the future up to 10 gigabit speeds, for example, when the time is right, when we need to do that. We have relatively low fiber overlap today. And I don't necessarily see that increasing significantly within our footprint because there are typically 2 major 1-gig providers in the markets we're in today. So just as we are looking at these greenfield opportunities, where there's 1 gigabit provider and on DSL provider, those are the areas that are more attractive to belt.

Great. Let's switch a little bit to something more topical this morning. John, how much did the ratings upgrade save you on the new credit facility? And how much of the EBITDA CAGR is from the cost savings versus operating leverage benefiting the margin profile?

Thanks, Andrew. Good questions all in all. So as you recall, the old term loan was at L plus 325 with a 1% floor on LIBOR, so 4.25%. The new deal is at SFR plus 300 bps with a sulfur floor of 50 bps. So we went down from 4.25% to 3.5%, so effectively savings of 75 bps. And we took the debt round from $2.259 million down to $730 million. So I think that's substantial savings from both of those. As it relates to the EBITDA question, I would suggest that probably about 15% is going to come from the cost cutting and the rest is us doing it organically.

Continuing on that topic, can you -- what is the implied EBITDA margins with the revenue EBITDA CAGR provided? And how should we think about the progression of EBITDA margins the annual targets that you can share?

Yes. Okay. So a great question as well. So as I said on the speaking part, we exited the second quarter. This is pre transactions, at 4.5%. The peer group that we measure ourselves up against on averages at around 42%. So firstly, we've got cost-cutting to do. And I suggested by the end of '22, we're going to get very close back to that 40%, 40.5%. But I think we've got a path to get to over the next several years, close to 50%. And that's going to grow. So if I was going to try to build that sort of growth, I'd be looking at maybe an 8% CAGR over the horizon of the 4 years. Something I'd point out for all of you is that the EBITDA growth that you'll see from '22 versus '21 should theoretically be double digits. And the reason for that is, as I'm sure you know, '21 has the full load of that $35 million in corporate overhead in that number. And then some of that as, if I refer you back to the chart, I forget which page it's on, we start taking that out over the course of 2022. So it's not perfectly apples-to-apples. So you see a big boost in EBITDA margin from '21 versus '22, and then you'll get to a more normalized, and then you'll see it start to grow as we become more and more broadband. First, yet again, higher incremental contribution margins, less operating costs because less video, et cetera, et cetera. So that's how I would look at it.

Great. Teresa, can you give us some perspective on the uptake so far of tv+ Plus in the markets that you've launched it?

Yes. Thanks, Andrew. So we're feeling good about tv+, as we've talked about, it's a product that we now have available in every one of our markets, and that's just in our recent launch. So IPTV is definitely here. We don't give out specific numbers on the details of that. But what we do say is, overall, we have about 150,000 video customers out of our 532,000 video subscribers -- sorry, 532,000 total subscribers. So about 28% of our customers are taking video. Keep in mind, we don't force our existing base of customers to convert to TVs, although many of them do want to because of all the many features that come with tv+. And we don't force new customers into bundles with video in order to get the very best pricing. But yet, we do see -- we're pleased with the uptick and the pace of moving forward with that. But overall, our focus is really on broadband first, and we provide that and streaming to our customers as they wish to have video services.

Great. Thank you. Here's a question on greenfields and I guess, edge-outs. What is the pacing of the build? How many new homes per year? Teresa, do you want to start with that?

Yes. Well, as I mentioned, and just to reiterate, we're going to start the building in 2022. But we really won't be launching markets and bringing on new subscribers until 2023. With that said, we'll also continue the machine rolling, building out new markets in '23 and '24. So there will be that multiplier effect as the years go on as we're bringing on greenfield comps.

Great. You mentioned that you expect higher homes passing costs in the greenfield markets. How does this compare to the historical edge-out costs?

Did you want me to take that, Andrew?

Sure. Yes.

Yes, you bet. We do think these are going to be a little bit more costly than what we've traditionally said for edge-outs, which makes sense because they're right there adjacent to our existing properties, and we've decided to go with fiber-to-the-home technology. However, we think because we'll have faster penetration and we feel like they'll have very strong returns, in fact, stronger returns than we're even seeing in edge-outs, but the cost initially will be a bit higher.

Yes. Let me jump on that one also. I mean, we've historically told you all that edge-outs have been done for, call it, $700 to $800 neighborhood. These will be more expensive. But as Teresa said, since we're greenfields are specific to areas that are far less densely competitive, full expectation is that penetrations will come higher and quicker. And that's the trade-off.

So let's pivot back to a modeling type question with regards to CapEx. Thanks for the details on the CapEx outlook, including your expectations for the average annual CapEx from '22 to '25. Can you provide more color on the cadence from '22 to '25? Any more specifics on 2022?

Okay. So let me start with this one. So we've got 2 components of CapEx. We've got the expansion, which includes the greenfields, as well as edge-outs and business services. And then we also have what we're calling core, which is sort of the day-to-day, let's run the business. Core is going to be coming down over time. It has come down already, and we've talked about that in the past. What drives the decrease in core CapEx has a lot to do with the diminution of the VDO business because video drives a lot of CapEx because of high CPE costs, capitalizable installation costs and certain maintenance costs for the network. So that is going to be coming down. If I wanted to model that coming down that component of it, I would be at like a negative 4%, negative 5% CAGR, and we do something like that to take it down. The expansion CapEx as it relates to greenfields, the way I'm looking at it right now is simply on a straight line. So we're going to go in and we're going to do this $160 million. So if I wanted to throw that in a model for now, I would probably look at $40 million per year and do something similar with edge-outs and biz out. So I think expansion CapEx, I'd be looking at it as a straight line, and the core CapEx is going to be coming down the way I just suggested. And again, to remind you, we think greenfields are an amazing opportunity. If we feel that we're proven right in that, then we would have the ability perhaps to go in and ramp that spend up and instead of passing 200,000 homes, like Teresa mentioned, maybe alter that plan to go do 400,000 homes. But let's see what happens over the course of the next 12 months. And clearly, on every earnings call, we will update you with those types of analysis.

Teresa, here's another 2-parter for you in one of our favorite topics, the competitive dynamic. Have you felt more competitive pressure in your current markets, whether that be fixed wireless, cable or fiber? And what do you see to be your biggest threats to your current churn rates?

Thanks, Andrew. No, we did not feel more competitive pressure in our current markets. In fact, a couple of the markets we sold were extremely competitive market. So when I look at the different technologies, fixed wireless, we feel very good about our ability to compete against fixed wireless. We've been competing against the cable companies for our entire history, and that's just part of our DNA. And we don't have a big driver overlap, but we also, like I mentioned, feel good about our ability to compete there, too, across the board and what we're doing in the future. A threat to our churn rate, our churn is very low. And from my experience across both the table and the wireless industry. I would say our churn rates are some of the lowest I know I've ever seen. And the threat to that, to me, are things like our customers -- Some of the customers who are most financially challenged, their ability to pay, which is one of the reasons that we work so hard on things like the emergency broadband benefit and now the affordable connectivity program to make sure that there's always available services for our customers so they can continue on with us. And let's see, other than that, I think we just need to keep doing what we're doing, always listening to our customers and providing the value that they want, and that has worked out well for us in terms of ongoing churn rates. Did I answer all of that?

Yes. And as a quick follow-up, do you plan on doing more data caps? Or is that isolated to the sold assets?

Yes. We have launched usage-based billing, which doesn't really create data caps. It creates different tiers of pricing, but we want customers to use all the data that they want in our Chicago market. And then that was, of course, one of the markets that we sold. We are launching that in a few other markets. And we think that really provides the ability for all customers to fairly pay for what they're actually using. And very few customers actually ever break through the data allotments that are given by the different tiers. We have extremely generous tiers, and we offer unlimited packages as well.

Great. Thanks, Teresa. Henry, here's one for you. Can you talk about your plans to upgrade the network to DOCSIS 4.0? How should we expect speeds provided to customers to progress over the next 3 years? And how does that inform your view on packaging pricing of those products?

Sure. I'll certainly speak to the first 2. So we don't necessarily have specific plans and timing around upgrading to DOCSIS 4.0. It's important to note that the spec was just recently finalized and equipment is just starting to be manufactured now -- So what will happen is we'll upgrade to DOCSIS 4 when the time is right when we need to. . What we don't want to do is spend in advance of needing that additional capability. We offer what our customers want today. And we're already testing higher speeds without DOCSIS 4.0. So we'll be increasing our customer tiers as the marketplace dictates that. So we're in really good shape there.