UZF Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

Total Operating Revenues: Declined by 3% year-over-year, or 1% excluding divestitures.
Adjusted EBITDA: Decreased by 3% due to revenue losses from divestitures.
Capital Expenditures: Totaled $126 million, reflecting increased construction activity.
Fiber Service Addresses: Delivered 40,000 in Q1, nearly tripling from the previous year.
Residential Fiber Net Adds: Approximately 11,000, a 32% increase year-over-year.
Total Residential Revenue: Declined by $5 million, with fiber revenue up 13% offsetting legacy declines.

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 to simplify corporate structure and enhance growth potential.
Fiber Growth Strategy: TDS Telecom is focused on expanding fiber addresses, with a long-term goal of reaching 2.1 million marketable addresses. Significant progress made with the highest first-quarter delivery in company history.
Granite State Communications Acquisition: Agreement to acquire this fully fibered company, adding over 11,000 service addresses, expected to close in Q3 2026.
Operational Improvements: Investments in internal construction teams and modernization of systems are underway to enhance efficiency and customer experience.

3. Forward Guidance and Outlook

Revenue Guidance: Projecting total telecom revenues between $1.015 billion and $1.055 billion for 2026, 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.
Long-Term Cost Savings: On track to achieve $100 million in run-rate savings by 2028, with some benefits starting to materialize in 2026.

4. Bad News, Challenges, or Points of Concern

Revenue Declines: Continued pressure from legacy revenue streams, particularly in copper and cable markets, leading to overall revenue declines.
DISH Revenue Issues: Ceased recognizing revenue from DISH due to nonpayment, impacting tenancy ratios and revenue growth.
Competitive Pressures: Challenges in the cable market due to intense competition and repricing pressures, necessitating investments to stabilize performance.
Transition Costs: Array Digital Infrastructure, Inc. expects ongoing costs related to the wind-down of wireless operations, which may depress EBITDA in the medium term.

5. Notable Q&A Insights

Fiber Business Metrics: Management emphasized the importance of build velocity and fiber net performance as key metrics for assessing growth.
Potential for REIT Structure: Discussions around structuring fiber assets for tax efficiency were acknowledged but deemed not optimal at this time.
Market Prioritization: TDS is focusing on expanding into adjacent markets with favorable demographics and competitive landscapes.
Cost Transformation: Management confirmed that while some cost savings will be reinvested, benefits are starting to positively impact the bottom line.
C-band Spectrum Monetization: Management remains optimistic about realizing fair value from C-band spectrum but is not in a rush to sell.

This summary encapsulates the key points from the earnings call, highlighting the company's financial performance, strategic initiatives, and outlook while addressing challenges and insights from the Q&A session.

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