UZE Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

Total Operating Revenues: Declined 3% year-over-year; down 1% excluding divestitures.
Adjusted EBITDA: Decreased 3%, primarily due to revenue losses from divestitures.
Capital Expenditures: Totaled $126 million, reflecting increased construction activity.
Fiber Service Addresses: Delivered 40,000 in Q1, the highest first-quarter total in company history, nearly tripling from 2025.
Residential Fiber Net Adds: Approximately 11,000, a 32% increase year-over-year.
Cash Expenses: Decreased 3%, attributed to transformation initiatives.

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, aimed at simplifying corporate structure and enhancing growth potential.
Fiber Growth Strategy: TDS Telecom is focused on expanding fiber addresses, with a target of reaching 2.1 million marketable addresses.
Granite State Communications Acquisition: Agreement to acquire this fully fibered business, adding over 11,000 service addresses, expected to close in Q3 2026.
Operational Transformation: Continued efforts to modernize systems and improve customer experience, including a new FieldForce platform for technicians.

3. Forward Guidance and Outlook

2026 Revenue Guidance: Projected total telecom revenues between $1.015 billion and $1.055 billion, with adjusted EBITDA guidance of $310 million to $350 million.
Capital Expenditure Guidance: Expected to be between $550 million and $600 million to support the delivery of 200,000 to 250,000 new fiber service addresses.

4. Bad News, Challenges, or Points of Concern

Legacy Revenue Pressures: Continued declines in copper and cable markets are impacting overall revenue.
DISH Revenue Impact: Revenue from DISH has been ceased due to nonpayment, affecting tenancy ratios and revenue recognition.
Competitive Pressures: Challenges in the cable market with ongoing declines in video attachment rates and increased competition.
Transition Costs: Array Digital Infrastructure, Inc. faces wind-down costs related to its previous wireless operations, impacting EBITDA.

5. Notable Q&A Insights

Fiber Business Metrics: Management is focused on improving fiber service address delivery and customer penetration, with a strong emphasis on sales capabilities and customer experience.
Ownership of Array Digital Infrastructure, Inc.: TDS currently owns approximately 81.9% of Array, with plans to retain this interest.
Cost Transformation: The company is on track to achieve $100 million in run-rate savings by 2028, with some benefits starting to impact the bottom line in 2026.
C-band Spectrum Monetization: Management remains optimistic about the value of their C-band spectrum and is not in a rush to sell, focusing on optimizing current assets.

Overall, TDS is making significant strides in its fiber expansion and operational transformation while navigating challenges in legacy revenue streams and competitive pressures. The proposed acquisition of Array Digital Infrastructure, Inc. represents a strategic move to consolidate and enhance growth potential across its telecommunications portfolio.

UZE — Array Digital Infrastructure, Inc. 5.500% Senior Notes due 2070