TDS Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Operating Revenues: Declined by 6% year-over-year, or 4% excluding divestitures.

Adjusted EBITDA: Decreased due to legacy revenue pressures, with a narrowed guidance range of $310 million to $330 million for the year.

Capital Expenditures: Totaled $179 million in Q2, with increased guidance for 2026 to $625 million to $675 million to support fiber expansion.

Residential Fiber Revenue: Increased by 13% year-over-year, contributing to overall revenue despite declines in legacy segments.

Fiber Service Addresses: TDS Telecom delivered approximately 66,000 addresses in Q2, raising the 2026 guidance for total fiber service addresses to 250,000-300,000.

2Strategic Updates and Business Highlights

Fiber Expansion: TDS Telecom is focused on accelerating fiber deployment, particularly in E-ACAM markets, leveraging federal support for broadband expansion.

M&A Activity: TDS is actively pursuing small to medium-sized acquisitions to enhance its fiber footprint, with an agreement to acquire Granite State Communications expected to close in Q3.

Array Digital Infrastructure: Reported a 65% increase in cash site rental revenue year-over-year, with continued growth in tower tenancy and successful spectrum monetization transactions with T-Mobile and Verizon.

3Forward Guidance and Outlook

Revenue Guidance: TDS Telecom projects total revenues of $1 billion to $1.025 billion for 2026, reflecting challenges in copper and cable markets.

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

Fiber Growth: Continued focus on fiber expansion is expected to drive future revenue growth, with a strong pipeline of addresses under construction.

4Challenges and Points of Concern

Legacy Revenue Declines: Continued pressure from declining copper and cable revenues, with total residential revenue down $6 million year-over-year.

Operational Costs: Flat cash expenses due to inflation and costs associated with expanding markets, which may impact profitability.

Competitive Pressures: Increased fiber overbuild activity in certain markets, although TDS remains confident in its growth strategy and market position.

5Notable Q&A Insights

Sales Efficiency: TDS is enhancing its sales capacity, particularly through door-to-door initiatives and improving online sales channels to convert fiber passings into paying customers.

M&A Valuations: TDS is focused on economically viable acquisitions, with recent transactions indicating favorable pricing for fiber assets.

Market Competition: While satellite broadband competition exists, TDS has not seen significant impacts in its fiber markets, maintaining strong demand for its services.

Future Spectrum Sales: Array is open to selling its C-band spectrum, with interest from a broader range of parties beyond traditional telecom companies. Overall, TDS is navigating a challenging environment marked by legacy revenue declines while making significant strides in fiber expansion and operational transformation. The company remains optimistic about future growth driven by its strategic initiatives and market positioning.