TDS-PU — Telephone and Data Systems, Inc.

Summary of TDS-PU Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Total Operating Revenues: Decreased 1% in Q4 and 2% for the full year. Excluding divestitures, revenues were flat year-over-year.
• Adjusted EBITDA: Improved by 6% in Q4; however, declined 6% for the full year primarily due to divestitures and a non-cash stock-based compensation adjustment.
• Capital Expenditures (CapEx): Totaled $406 million for 2025, with a forecast increase to $550 million - $600 million for 2026.
• Share Repurchases: Invested $67 million in Q4 to repurchase 1.8 million shares, totaling 2.8 million shares for 2025. Remaining authorization for share buyback is $524 million.

2. Strategic Updates and Business Highlights

• Divestiture of Wireless Operations: Completed the largest transaction in company history, divesting wireless operations to focus on fiber and tower businesses.
• Fiber Business Growth: Added 58,000 new marketable fiber addresses in Q4, totaling 140,000 for 2025. Set a new long-term target of 2.1 million fiber addresses, up from 1.8 million.
• Array Digital Infrastructure: Focus on optimizing tower operations and monetizing spectrum holdings. Closed a $1 billion spectrum sale to AT&T in January 2026, with a special dividend of $10.25 per share.
• Operational Improvements: Enhanced construction capacity and efficiency in the fiber business, with record crew counts in Q4.

3. Forward Guidance and Outlook

• 2026 Revenue Forecast: Expected telecom revenues of $1.015 billion to $1.055 billion, reflecting growth from fiber investments but offset by declines in video, voice, and wholesale revenues.
• Adjusted EBITDA Guidance: Projected between $310 million and $350 million for 2026.
• Fiber Address Goals: Aim to deliver 200,000 to 250,000 new marketable fiber addresses in 2026.

4. Bad News, Challenges, or Points of Concern

• Revenue Declines: Continued secular declines in cable and copper markets, with divestitures impacting revenue.
• DISH Wireless Lease Issues: DISH has failed to make required payments under its master lease agreement, which could impact future revenue.
• Competitive Pressures: The fiber market is competitive, and while TDS aims to be first to market in new areas, execution challenges remain.
• Video Bundling Challenges: Fewer customers are opting for bundled video services, putting downward pressure on average revenue per connection.

5. Notable Q&A Insights

• DISH Revenue Impact: DISH's revenue is excluded from 2026 guidance, with any settlements considered upside potential.
• Fiber Service Delivery: There is optimism about maintaining construction crew levels into 2026, which could enhance service delivery.
• Spectrum Monetization: C-band spectrum is viewed as highly valuable, with ongoing efforts to monetize it without urgency to sell.
• Sales Strategy: TDS is focusing on improving sales channels and increasing penetration rates, particularly in multi-dwelling units.

Overall, TDS-PU is navigating a transformative period with a focus on expanding its fiber business and optimizing its tower operations, while facing challenges in revenue growth and competitive pressures.