AD — Array Digital Infrastructure, Inc.

Earnings Call Summary for TDS NRA (Q1 2026)

1. Key Financial Results and Metrics

• Total Operating Revenues: Declined 3% year-over-year, or 1% excluding divestitures.
• Adjusted EBITDA: Decreased 3%, primarily due to revenue losses from divestitures.
• Capital Expenditures: Totaled $126 million, reflecting increased construction activity.
• Residential Fiber Net Adds: Approximately 11,000, a 32% increase year-over-year.
• Fiber Service Addresses: Delivered 40,000 in Q1, nearly tripling from the previous year.
• Cash Expenses: Decreased 3%, driven by transformation initiatives.
• Share Buyback Authorization: $520 million available, with no buybacks executed in the quarter.

2. Strategic Updates and Business Highlights

• Acquisition Proposal: TDS proposed to acquire the remaining shares of Array Digital Infrastructure, Inc. in an all-stock transaction, aiming to simplify corporate structure and enhance growth potential.
• Fiber Growth: TDS Telecom is on track to reach 2.1 million marketable fiber service addresses, with a strong focus on operational efficiency and customer experience.
• Granite State Communications Acquisition: Agreement to acquire a fully fibered business with over 11,000 service addresses, expected to close in Q3 2026.
• Tower Operations: Array Digital Infrastructure reported a 64% increase in cash site rental revenue year-over-year, with continued growth in tower tenancy.

3. Forward Guidance and Outlook

• Revenue Guidance: Projecting total telecom revenues of $1.015 billion to $1.055 billion for 2026.
• Adjusted EBITDA Guidance: Expected to be between $310 million and $350 million.
• Capital Expenditures Guidance: Projected between $550 million and $600 million for the year to support the delivery of 200,000 to 250,000 new fiber service addresses.

4. Bad News, Challenges, or Points of Concern

• Legacy Revenue Pressure: Continued declines in copper and cable revenues, with total residential revenue down $5 million compared to the prior year.
• DISH Revenue Non-Recognition: Array Digital Infrastructure ceased recognizing revenue from DISH due to non-payment, impacting reported tenancy ratios.
• Market Competition: Increased competitive pressures in the cable market, with ongoing declines in video attachment rates.
• Cost Transformation: While on track for $100 million in run-rate savings by 2028, some savings are being reinvested rather than falling directly to the bottom line.

5. Notable Q&A Insights

• Fiber Business Metrics: TDS is focused on improving address delivery and fiber net performance, with a commitment to increasing penetration in new markets.
• Cable Investments: Plans to enhance cable operations by transitioning to multi-gig speeds and improving service delivery through new tools and systems.
• Ownership of Array Digital Infrastructure: TDS currently holds approximately 81.9% of Array Digital Infrastructure, with no intention to entertain third-party offers.
• C-band Spectrum Monetization: Array Digital Infrastructure remains optimistic about the value of its C-band spectrum, viewing it as a valuable asset with no immediate need to sell.
• Competitive Landscape: TDS remains vigilant regarding the potential impact of satellite technology on terrestrial communications but believes in the strength of its fiber and tower assets.

This summary encapsulates the key points from the earnings call, highlighting financial performance, strategic initiatives, future outlook, and challenges faced by TDS NRA and its subsidiaries.