Broadband and telecommunications services provider WideOpenWest (NYSE: WOW) announced better-than-expected revenue in Q3 CY2025, but sales fell by 8.9% year on year to $144 million. Its GAAP loss of $0.43 per share was significantly below analysts’ consensus estimates.

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Company Overview

Initially started in Denver as a cable television provider, WideOpenWest (NYSE: WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, WideOpenWest’s demand was weak and its revenue declined by 12.3% per year. This was below our standards and suggests it’s a low quality business.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. WideOpenWest’s annualized revenue declines of 8% over the last two years suggest its demand continued shrinking.

We can dig further into the company’s revenue dynamics by analyzing its number of subscribers, which reached 464,500 in the latest quarter. Over the last two years, WideOpenWest’s subscribers averaged 5.2% year-on-year declines. Because this number is higher than its revenue growth during the same period, we can see the company’s monetization has fallen.

This quarter, WideOpenWest’s revenue fell by 8.9% year on year to $144 million but beat Wall Street’s estimates by 1.1%.

Looking ahead, sell-side analysts expect revenue to decline by 8.6% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and suggests its newer products and services will not catalyze better top-line performance yet.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

WideOpenWest’s operating margin has risen over the last 12 months, but it still averaged negative 1.4% over the last two years. This is due to its large expense base and inefficient cost structure.

In Q3, WideOpenWest’s breakeven margin was in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for WideOpenWest, its EPS declined by 44.5% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.

In Q3, WideOpenWest reported EPS of negative $0.43, down from negative $0.27 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects WideOpenWest to improve its earnings losses. Analysts forecast its full-year EPS of negative $0.95 will advance to negative $0.89.

Key Takeaways from WideOpenWest’s Q3 Results

It was good to see WideOpenWest narrowly top analysts’ revenue expectations this quarter. On the other hand, its EPS missed and its number of subscribers fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock remained flat at $5.14 immediately after reporting.

WideOpenWest underperformed this quarter, but does that create an opportunity to invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.