TDS-PV — Telephone and Data Systems, Inc.

TDS-PV Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Operating Revenues: Decreased 1% YoY for Q4 and 2% for the full year, flat when excluding divestitures.
• Adjusted EBITDA: Improved 6% in Q4 but declined 6% for the full year, primarily due to divestitures and a noncash stock compensation adjustment in Q1.
• Cash Expenses: Decreased 4% in Q4 but increased 1% for the year.
• Capital Expenditures: Totaled $406 million for 2025, with a forecast increase to $550-$600 million for 2026.
• Share Repurchases: $67 million spent in Q4 to repurchase 1.8 million shares, totaling 2.8 million shares for 2025.

2. Strategic Updates and Business Highlights

• Divestiture of Wireless Operations: Completed the largest transaction in company history, strengthening the balance sheet and positioning Array as a growing tower company.
• Fiber Expansion: Added 58,000 new marketable fiber addresses in Q4, up 39% YoY, and a total of 140,000 for 2025. The long-term target for fiber addresses was raised from 1.8 million to 2.1 million.
• Operational Improvements: Focus on modernizing systems and improving execution in fiber build and installation operations.
• Array Digital Infrastructure: Achieved significant growth in tower revenue, with a 64% YoY increase in cash site rental revenue, driven by T-Mobile agreements.

3. Forward Guidance and Outlook

• 2026 Revenue Forecast: TDS Telecom expects total revenues of $1.015 billion to $1.055 billion, with adjusted EBITDA projected between $310 million and $350 million.
• Fiber Goals: Targeting 200,000 to 250,000 new marketable fiber addresses in 2026.
• Array Guidance: Forecasting total operating revenue of $200 million to $215 million, with adjusted EBITDA in the same range.

4. Bad News, Challenges, or Points of Concern

• Revenue Declines: Ongoing secular declines in cable and copper markets continue to pressure revenues.
• DISH Wireless Agreement: DISH has failed to make required payments under its master lease agreement, leading to uncertainty in future revenue from this source.
• Competitive Pressures: The fiber market is increasingly competitive, with a focus on being first to market in new communities.
• Operational Execution: Although improvements were noted, the company did not meet its 150,000 address goal for 2025, indicating challenges in execution.

5. Notable Q&A Insights

• DISH Revenue: Confirmed that DISH revenue is excluded from 2026 guidance, with any settlement considered upside.
• Tower Leasing Activity: Anticipated growth in leasing activity, with a focus on rural markets. The company is optimistic about increasing tenancy ratios through insourcing sales and new agreements.
• Fiber Market Strategy: The company is committed to maintaining video services as part of its value proposition, despite pressures on ARPU from declining video bundling.
• C-band Spectrum Monetization: The company views its C-band spectrum as highly valuable and is actively seeking monetization opportunities, although it is not a forced seller.

This summary encapsulates TDS-PV's performance in Q4 2025, highlighting both achievements and challenges as the company navigates a transformative period in its operations.