TDS-PV Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Operating Revenues: Declined 6% YoY, or 4% excluding divestitures.

Adjusted EBITDA: Decreased due to legacy revenue pressures, now guided to $310 million to $330 million for 2026.

Capital Expenditures: Totaled $179 million in Q2, with an increased guidance range of $625 million to $675 million for 2026.

Residential Fiber Revenue: Increased by 13% YoY, contributing to overall revenue despite declines in legacy streams.

Fiber Service Addresses: 66,000 added in Q2, with a total of approximately 106,000 for H1 2026, leading to an updated guidance of 250,000 to 300,000 new addresses for the year.

2Strategic Updates and Business Highlights

Fiber Expansion: TDS Telecom is aggressively expanding its fiber footprint, leveraging federal E-ACAM support to accelerate deployment in rural areas.

M&A Activity: TDS is actively pursuing small to medium-sized acquisitions, with a recent agreement to acquire Granite State Communications, adding 11,000 fiber addresses.

Array Digital Infrastructure: Achieved a 65% increase in cash site rental revenue YoY, driven by tower tenancy growth and spectrum monetization efforts.

Spectrum Monetization: Closed significant transactions with T-Mobile and Verizon, monetizing approximately 70% of its spectrum holdings.

3Forward Guidance and Outlook

TDS Telecom Revenue Guidance: Revised down to $1 billion to $1.025 billion for 2026 due to legacy revenue headwinds.

Adjusted EBITDA Guidance: Narrowed to $310 million to $330 million, reflecting ongoing challenges in legacy revenue streams.

Array's Revenue Guidance: Increased low end of operating revenue to $205 million, with adjusted EBITDA guidance raised to $220 million to $235 million.

4Bad News, Challenges, or Points of Concern

Revenue Declines: Continued pressure from legacy copper and cable revenues, with total residential revenue down $6 million YoY.

Churn Rates: Increased broadband churn year-over-year, though sequential improvements were noted in Q2.

Competitive Pressures: Increased fiber overbuild activity in certain markets, raising concerns about competition, particularly from satellite providers.

Pending Acquisition: TDS' pending offer to acquire Array's minority interest remains a point of uncertainty, restricting share buybacks.

5Notable Q&A Insights

Sales Efficiency: TDS is enhancing its sales capacity, particularly in door-to-door efforts, and is focused on converting fiber addresses into paying customers.

Market Dynamics: Management indicated that while satellite competition exists, TDS is confident in its fiber strategy and market demand.

M&A Valuations: TDS is finding attractive acquisition opportunities, while Array is cautious about high valuations in the private market for tower assets.

Future Spectrum Sales: Array is open to monetizing C-band spectrum but is not in a rush to sell, emphasizing the value of maintaining these assets. Overall, TDS-PV is navigating a challenging environment with legacy revenue declines but is making significant strides in fiber expansion and operational transformation, positioning itself for future growth.