NASDAQ:ATNI ATN International Q1 2025 Earnings Report $16.04 +1.07 (+7.15%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$16.04 0.00 (-0.01%) As of 05/2/2025 04:46 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast ATN International EPS ResultsActual EPS-$0.57Consensus EPS -$0.10Beat/MissMissed by -$0.47One Year Ago EPSN/AATN International Revenue ResultsActual Revenue$179.29 millionExpected Revenue$178.67 millionBeat/MissBeat by +$620.00 thousandYoY Revenue GrowthN/AATN International Announcement DetailsQuarterQ1 2025Date4/30/2025TimeAfter Market ClosesConference Call DateThursday, May 1, 2025Conference Call Time10:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by ATN International Q1 2025 Earnings Call TranscriptProvided by QuartrMay 1, 2025 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Day, and thank you for standing by. Welcome to the ATN International Q1 twenty twenty five Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. Operator00:00:19You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michelle Sutrowski, Head of Investor Relations and Treasurer. Please go ahead. Speaker 100:00:43Thank you, operator, and good morning, everyone. I'm joined today by Brad Martin, APN's Chief Executive Officer and Carlos D'Oguilloli, APN's Chief Financial Officer. This morning, we'll be reviewing our first quarter twenty twenty five results and reaffirming our 2025 outlook. As a reminder, we announced our twenty twenty five first quarter results yesterday afternoon after the market closed. Investors can find the earnings release and conference call slide presentation on our Investor Relations website. Speaker 100:01:17Our earnings release and the presentation contain forward looking statements concerning our current expectations, objectives and underlying assumptions regarding our future operations. These statements are subject to risks and uncertainties that could cause actual results to differ from those described. Also, in an effort to provide useful information for investors, our comments today include non GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures and for further information regarding the factors that may affect our future operating results, please refer to our earnings release on our website at ir.atni.com or the eight ks filing provided to the SEC. Before handing the call back to Brad, I'd like to note that moving forward and in line with common practice, we plan to shift the timing of our earnings release and calls by approximately one week. Speaker 100:02:15The adjustment is intended to better align with the timing of our 10 Q filing. With that, I'll hand the call over to Brad. Speaker 200:02:22Thank you, Michelle. Good morning, everyone, and thank you for joining us. I'd like to start by recognizing our teams across ATN for their continued commitment and execution. In the face of industry wide shifts and macroeconomic uncertainty, we remain focused on what we can control: operational performance, disciplined investment, and our long term strategy. Our Q1 results reflect that discipline. Speaker 200:02:46As expected, our top line revenue declined year over year largely due to the wind down of COVID era government subsidy programs in The U. S. Markets. We delivered 2% adjusted EBITDA growth, and cash from operations increased 55% to $35,900,000 These outcomes demonstrate early progress as we start the year and execute against our strategy. The strategic capital investments we've made over the past three years are delivering tangible returns. Speaker 200:03:15In the first quarter, we expanded the number of broadband homes passed by high speed data services to 427,000 households, an increase of 11% year on year, and grew our high speed subscriber base by 2% year on year. We remain confident in our long term vision, leveraging our fiber and digital infrastructure to deliver high value services, especially in markets where connectivity is both underbuilt and essential. And that vision is supported by a financial foundation that continues to strengthen. Let me take a moment to highlight key themes from the quarter. In our International segment, we saw improved operating efficiency, resulting in an 11% increase year on year in adjusted EBITDA. Speaker 200:04:00Demand for high speed broadband and business services remained steady. Increases in postpaid mobile subscribers and mobile data consumption continue to drive improvements in ARPU. The segment remains strong contributor to our financial performance and a framework for how we are positioning our U. S. Business over time. Speaker 200:04:20Domestically, while revenue declined as expected, we remain focused on executing our strategic shift. Our goal is clear: grow our base of fiber and fiber fed business and carrier solutions as we transition legacy consumer services towards fiber and fiber fed broadband solutions. We are aligning our network, go to market strategy and capital deployment with this long term focus. While the near term transition creates revenue pressure, we are building a more resilient and higher margin business for the future. Importantly, we are advancing approximately $370,000,000 in government funded broadband infrastructure projects. Speaker 200:05:02Over half of these projects are expected to be completed in 2025. These programs are essential to our longer term U. S. Growth strategy. They enable us to expand our fiber footprint with reduced capital intensity and provide long term upside as projects come online and begin to generate revenue. Speaker 200:05:21In the first quarter, we submitted additional applications under the Bead program in The US Southwest, reinforcing our commitment to expanding broadband access in historically underserved regions. These efforts are a natural extension of our mission to connect people, communities, and businesses with the infrastructure that enables opportunity. We also made strong progress on cash generation in Q1, reflecting disciplined cost controls and focused capital allocation. We are encouraged by these early results, and we are reaffirming our annual guidance as previously outlined on our Q4 earnings call. Looking ahead to the rest of 2025, our priorities remain unchanged: continue expanding high speed broadband and business services in our international markets while improving margin and capital efficiency stabilize and reposition our US business around sustainable fiber and fiber fed revenue streams, and maintain a strong financial position through disciplined capital allocation and a focus on cash flow growth. Speaker 200:06:30On the broader policy front, we're also monitoring recent developments around trade and tariffs. While we do not source devices or equipment at the same scale as large national carriers, any sustained increase in tariffs on network infrastructure, including fiber related components and electronics, could introduce cost pressure over time. That said, based on our current supply chain visibility and the fact that half of our revenue in our largest consumer markets are outside of The United States and not immediately impacted, we believe we can manage any near term impact within our existing 2025 financial outlook. We will continue working closely with our vendors and partners to mitigate cost volatility and ensure continuity of service delivery. While we recognize that the operating environment remains dynamic from policy shifts to competitive intensity, we believe we're executing the right strategy for the long term. Speaker 200:07:29Our focus is on monetization, operational leverage, and value creation. Carlos will take you through the numbers, but I want to reiterate we are making steady progress. We are focused on our goals, and we remain confident in ATN's future. With that, I'll turn it over to Carlos. Speaker 300:07:47Thank you, Brad. Good morning, everyone, and thanks for joining us. Today, I'll walk through our first quarter financial results and our outlook for the remainder of 2025. As Brad mentioned, we entered the year focused on executing with discipline, and our Q1 results reflect early signs of progress, particularly in terms of cash flow and operational efficiency. While the macro environment remains challenging, especially in our domestic markets, we believe the strategic actions taken in recent quarters, along with the benefits of our investment cycle, have strengthened our ability to serve our customers, support durable revenue generation and drive margin expansion. Speaker 300:08:32With that, let's now review our P and L results for the first quarter in more detail. Total company revenue for the quarter was $179,300,000 down four percent year over year. As expected, this decline reflects the wind down of the emergency connectivity fund and affordable care program. Operating income for the quarter decreased to $2,700,000 as cost management actions and ongoing efficiency efforts across the business were offset by increases in transaction related expenses, losses on asset transfers and restructuring and reorganization expenses. Net loss for the first quarter was $8,900,000 or $0.69 per share. Speaker 300:09:20This compares with the prior year's net loss of $6,300,000 and $0.50 per share, as the factors influencing operating income similarly impacted net loss for the period. Adjusted EBITDA was $44,300,000 up 2% from the prior year, supported by continued growth and margin expansion in our international segment, partially offset by the anticipated decline in our U. S. Segment. Looking now at the segment's performance. Speaker 300:09:50Beginning with our International segment, Q1 revenues increased to $94,500,000 from $93,100,000 in the first quarter of the previous year, driven partially by carrier services growth. Adjusted EBITDA for the International segment increased to $32,400,000 for the quarter compared to $29,300,000 in the same period last year. Cost containment efforts and operational improvements contributed to the quarter's performance. In our domestic segment, first quarter revenues were 84,800,000.0 down 9.5% year over year. As previously mentioned, revenue was impacted by the conclusion of the ECF and ACP programs. Speaker 300:10:38The lower revenue led to a decrease in adjusted EBITDA to 17,500,000.0 down 15.4% compared with the same quarter last year. Moving on to the balance sheet and cash flow highlights. We ended the quarter with $97,300,000 in cash, up from $89,200,000 at year end. Total debt stood at $562,400,000 and our net debt ratio was 2.52 times. Net cash provided by operating activities increased 55% year over year to 35,900,000.0 driven by working capital management efforts. Speaker 300:11:17Capital expenditures in Q1 totaled $20,800,000 net of $22,400,000 in reimbursable capital spending. This compares to $36,000,000 in CapEx and $13,500,000 in reimbursable in the prior year's quarter. This reduction in expenditures reflects the shift in our framework to increase operational cash flow, supplemented by available grant funding. We returned capital to our shareholders through $3,600,000 in dividends during the first quarter of twenty twenty five. With that, let's move to our outlook for 2025. Speaker 300:11:57We are reaffirming the outlook for 2025 that we provided in our fourth quarter release. We continue to expect revenue for the year to be in line with 2024, excluding construction revenue. Adjusted EBITDA to be essentially flat with last year. Net capital expenditures between 90,000,000 and 100,000,000 Net debt ratio to remain flat to year end 2024 with a slight potential improvement exiting the year. As we look ahead to the balance of the year, we continue to expect the second half to contribute a larger share of full year results. Speaker 300:12:41This reflects the timing of revenue stabilization efforts in The U. S. Segment and the continued ramp up in our international markets. As part of our continued cost containment initiatives, we anticipate incurring further reorganization and restructuring expenses in the second quarter. In summary, we're executing on a clear set of priorities: improving cash flow, transitioning our U. Speaker 300:13:07S. Business and leveraging the strategic capital investments we've made in recent years. While we're not immune to broader market headwinds, we believe our strategy is sound, our balance sheet is strong, and we remain committed to delivering long term value for shareholders. Thank you. And now I'll hand the call back over to Brad. Speaker 200:13:29Thanks, Carlos. Before we open the call for questions, I want to leave you with a clear message. We are focused on execution, committed to financial discipline and confident in the strategy we've put in place. This is a year of transition, and we're beginning to see encouraging signs improved cash flow, progress on our grant funded builds, and consistent performance internationally. Our long term goal remains the same to create a stronger, more efficient, and more resilient ATM. Speaker 200:13:58With that, operator, we'd like to open it up for questions. Operator00:14:02Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. Our first question comes from the line of Rick Prentiss of Raymond James and Associates. Your line is now open. Speaker 400:14:30Thanks. Good morning, everybody. Speaker 300:14:32Good morning, Rick. Good morning, Rick. Speaker 400:14:34Hey, appreciate the comments on monitoring trade and tariffs and feels like your supply chains are good for this year. How much of the like, we we obviously have talked to a lot of the the big telcos, AT and T and Verizon reported last week, they felt that they were pretty insulated from from it because a lot of the electronic components are are smaller compared. Do do you buy your fiber from outside The United States? Or is it really just more of the electronic side that you're exposed to? Speaker 200:15:06So Rick, a lot of our construction materials or fiber construction are sourced in The US. And that's part of the reason we've looked at our build of materials for our builds for 2025 and understand the dynamics. Quite a significant portion of that is sourced locally. So the electronics and the variations of where those electronics are coming from, whether it be China, Taiwan, Thailand, Vietnam, some of the major vendors like Cisco and others, are something we're watching closely. There are a lot of projects in place now that purchasers have already been built, issued. Speaker 200:15:47And those are really immune. We have major programs that are dependent upon vendors like Ericsson with a lot of manufacturing done in Mexico that are exempt the USMCA exemption. So it's dynamic as we all know and we're watching it very closely. But a really important dynamic for us is that our largest consumer markets with handsets that have a lot of manufacturing in China are all in our international markets. So those are generally exempt from these tariffs. Speaker 200:16:23So anyway, like we said in the prepared remarks, we're planning that 2025 we're going to be able to absorb any variations that we see within our guidance. Speaker 400:16:37Okay. And then remind us because obviously trade and tariffs have impacted interest rates. They've impacted FX rates. Remind us how the US dollar being a US reporting company, what kind of FX exposure do you have in your international markets when you bring it back to US? Speaker 500:16:57So, Rick, this is Carlos. So the the majority of the markets where we operate international internationally are I think in Guyana, we haven't seen any significant fluctuation so far, probably even the fact that right now they're being able to kind of be exporting a significant amount of oil out of the market so that that allows them to have a little bit of a buffer there. So we haven't seen yet any significant impact from from that front. Speaker 400:17:35Okay. Good. And then obviously, we're seeing a lot of roll ups of fiber companies and private multiples being higher than public multiples. How are you viewing the marketplace as far as that private versus public multiples and some of the roll ups that might be occurring? Speaker 200:17:55Yeah, so we are watching those dynamics too, Rick. And ultimately, it is a vibrant market. And there are a lot of players that are performing well in the fiber space. There are players that have got some headwinds. But look, we recognize that dynamic. Speaker 200:18:12And that's something that we're always trying to understand how we can best unlock value for our investors. Speaker 400:18:20Okay. And the last one for me. You mentioned some of the government funding. Is that something that's going to find its way through kind of gross CapEx, reimbursement, net CapEx? Is that something that's going find its way onto the revenue in the shorter term versus the longer term? Speaker 400:18:37Help us understand that $370,000,000 of government funding and half of it in 'twenty five, how you think that might play into your financials? Speaker 200:18:46Yeah. So I mean, just to clarify a couple of points on that. So of the $3.70, about half of the projects will be complete or expect to be complete this year. And to clarify, we had many of those projects going on even in 2024 under construction date. So our reimbursable CapEx as of last for 2024 was around $108,000,000 I believe for the year. Speaker 200:19:10This you see similar ratios. We have quite a bit of reimbursable this year as well. So those programs, Rick, really there are some programs that will be going live in mid to late Q3. We will see some revenue but that's in our plan right now. The significant monetization of those is going to be in our out years 'twenty six, 'twenty seven, where we see the larger benefits of the monetization. Speaker 200:19:42And to be clear, $370,000,000, a significant portion of that are some very large subsea and remote regional fiber projects in Alaska. So it's obviously these would not get built without these subsidies. So they are definitely opening up opportunities. But there's not an equivalency of the size of the grant to the size of the economic value. But those will certainly be something we'll be taking advantage of here in 'twenty six. Speaker 200:20:10They'll provide more visibility when we guide to that next year. Speaker 400:20:15Thanks. Operator00:20:18Thank you. Our next question comes from the line of Greg Burns of Sidoti. Your line is now open. Speaker 600:20:27Good morning. Just to follow-up on the government grant funding, you mentioned the $370,000,000 that you've won already, but you also, I guess, mentioned some bids you have in under the Bead program. Can you just talk about the relative size of what the opportunity is there? Speaker 200:20:49Yes. Bead is something that we are participating in the Southwest as we mentioned. The dynamics with Bead, Greg, are obviously fluid. So there are dynamics with NTAA and the funding mechanisms that need to be effectively passed through. There is a commerce memo that's scheduled for May 15 that we're watching closely that is going to clarify some of the dynamics of administration around BEAT. Speaker 200:21:19So the general theme we're seeing is there are delays. Most states are delaying the award timing or even the submission timing. One dynamic that we are seeing, which is positive, is that the basic financial and technical requirements for the programs are going unchanged. So it allows us to leverage the work we've done around planning for those projects. But at a high level of the six states we operate, there's 4,000,000,000 approximately of BEAF funding that is effectively provisioned for those states. Speaker 200:21:59So we obviously won't participate in all of that but in areas our view, Greg, is we're going to look at it very strategically, where it can build on to strategic network footprint that we have today, where we have good distribution and middle bound network. Because remember, many states are this is really to connect the end users. So it's really a fiber to the home preference. Some states do allow for middle mile reimbursement. So we're trying to take advantage of that where that is possible. Speaker 200:22:30And like kind exchange is another important dynamic, which offsets the match and the capital intensity for ATM. So we're looking at all the variations. There are and we do expect we'll be learning more about the grants that we've submitted here in the coming months. And it will be an important dynamic for our continued investment in fiber. But the dynamics right now are watching this memo coming out on the fifteenth from Commerce that will likely help the states finalize timing of their final submissions and awards. Speaker 600:23:03All right, great. Thanks for that. And then just lastly, in terms of monetizing the investments, the organic investments you've already made over the last couple of years, can you just talk about maybe give us an update on some of the changes you're making in terms of leadership processes to improve your sales motion? And are you seeing any maybe green shoots or progress in terms of those monetization efforts? Speaker 200:23:33Yeah. So as we've talked, we've got two new leadership teams in our two US markets really that started here in Q1. And look, we're encouraged by some early progress. Obviously, new leadership brings in new focus. But there are one of the key themes we are seeing is that there is a growing carrier demand for access and transport in the markets that we offer. Speaker 200:23:59That's a very good sign. That's one of the key services we provide in The US markets. So that's a very positive dynamic that we continue maximize for the business. But that is a growing pipeline. We have had a more successful USAC season this year. Speaker 200:24:17So these are programs that renew every one to two years and that season is in Q1. We did better this year. Those will be projects built and we'll start to monetize in the second half of this year. Again, all built into our current forecast. But again, a little bit better performance there, which is encouraging. Speaker 200:24:37But the teams are taking a focus. I think that's one of the really important areas, really renewed focus on how we're approaching this conversion of legacy technologies. To remind folks, we exited our retail mobile operations. Which is a pretty long process, but that was effective as of effectively January 1. And we legacy broadband, DSLs, and legacy fixed wireless that we're looking to convert to fiber or fiber bed fixed wireless. Speaker 200:25:06And we are making some progress. It's still a relatively smaller component of the revenue streams for our US markets, but we are encouraged by some of that progress. And internationally, we continue to unlock the leverage of the investments that we've made. We've seen some good improved performance in inbound roaming. That's based upon the improvements we've made with data capacity in our five gs networks. Speaker 200:25:31So that's, again, a good progress sign we've seen here in Q1. And we still see significant data demand and data plan growth in our largest mobile market in Guyana, which is, again, another positive sign which is impacting ARPUs. All right, great. Thank you. Operator00:25:53Thank you. For our next question, we will come back Rick Prentiss with Raymond James and Associates. Your line is now open. Speaker 400:26:03Hey, thanks for the opportunity for follow-up. Back on the Bead Funding, a follow-up on the previous question. What are you hearing as far as NTIA confirmation and will that slow anything down or can Congress just move forward and then NTIA will kind of implement it? But is the NTIA leadership transition affecting it? Speaker 200:26:28So there's a lot going on. I mean, are several bills right now, Rick, as you know, they're in front of Congress that relate to a lot of different topics. I think a couple went through the House just this week. So there's everything from spectrum authority to some of the newer rules around the NTIA B program. So look, the primary impact we're seeing right now is the delay in the B program. Speaker 200:26:55Effectively, of the subsidy programs we participate in and reimbursable CapEx programs, all of that has been on time and as expected here in Q1. So that is all moving as expected and we don't foresee any impact on service subsidy programs like CAF or reimbursable programs that we've already won. But BEAT is the primary, and we're watching that closely. There are states that are further ahead that people are moving forward with some early builds. Our states have not yet granted any funds yet. Speaker 200:27:30So the fund flow is still something that is an important dynamic in that. We expect that to be delayed, as you've read in the press. So that's the primary dynamic. The timing of those delays could impact the ability to monetize those B builds in which half of 'twenty six or which half of 'twenty seven. That's what we're watching closely to our outlook forecasts. Speaker 200:27:56Okay. Speaker 400:27:57And speaking of '26 and '27, I know too early to give official guidance, but how are you feeling about the prospects of being able to grow businesses? Obviously, we were down from '23 to '24. We're flattish from '24 to '25. What does it take to be able to get growth? Or could there be further declines then? Speaker 200:28:23So some of the things I mentioned, Rick, are encouraging signs. So in our US markets and remind the primary dynamic for revenue shifts and EBITDA shift was the loss of this ECF program, this COVID era funding program. So again, with that in mind, the fundamentals for carrier demand, again, remind you that our primary revenue streams in The US markets where we had some of these headwinds are carrier business and wholesale. So the demand we're starting to see for the support of transport, And that's coming from the carrier success in areas where they're adding on effectively fixed wireless or where they're seeing improved performance around fiber. We sell transport services. Speaker 200:29:18And we sell, obviously, this carrier managed services, which are tower services. So we expect, as they are improving their footprint, we are going to continue to leverage our wholesale arrangements to see that growth. And again, the pipeline build is encouraging. On the consumer side in those markets, we are still in a transition, as we've talked, about legacy services to new fiber and fiber fed services. That was behind the 24. Speaker 200:29:49We are seeing some encouraging signs, a relatively small base. But we are continually improving that footprint. Programs like the programs that we have underway now for grants, include Fibers of the Home and middle mile, are all things that are going to help us monetize as we go forward. So we see in The US the opportunity based on grants and based on carrier demand to keep an approved. But the effective demand for broadband is still pervasive, which is a great sign for our business. Speaker 200:30:19Our belief is if we can provide that broadband on durable assets, we've got a great business to run the long term. Speaker 400:30:27Okay. And then for Carlos, talk to us a little bit about the balance sheet. Obviously, rates are bouncing around, but how are you thinking about managing the interest costs and particularly then as it affects the free cash flow? Speaker 500:30:42Yeah. I think, Rick, we continue to work on improving margins and that way, you know, continue to work on delivering. We're So, you you can see that as part of the kind of the cost structure, how we've been moving it, lowering CapEx. So all those elements that we have been acting on from the beginning of, you know, actually from 2023 on, we believe are going to continue to help us and to improve leverage, reduce our interest expenses, and then also provide improved capital allocation optionality. Speaker 400:31:27And what time frame does that capital allocation changes look like? Is it able to jump in '26 or is it thinking it's '27? Speaker 300:31:35I think, you know, we believe that we're going Speaker 500:31:38to continue to improve the position. You know, we think that if we continue to march towards that improving EBITDA margins, you know, as we go into 2026, you know, certainly there there'll be more options for, you know, optionality for capital allocation. Speaker 400:31:58Okay. Great. Thanks for the follow ups. Speaker 300:32:01Thanks, Rick. Operator00:32:04Okay. I am showing no further questions at this time. I would now like to turn it back to Brad Martin for closing remarks. Speaker 200:32:12Thank you, operator. Thank you all for joining us today. We look forward to continuing our discussions with many of you in the coming months. Appreciate all your time and support. Have a good day. Operator00:32:22Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallATN International Q1 202500:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K) ATN International Earnings HeadlinesATN International, Inc.: ATN Reports First Quarter 2025 Results; Reaffirms 2025 OutlookMay 3 at 5:53 AM | finanznachrichten.deEarnings call transcript: ATN International Q1 2025 misses forecasts, stock dropsMay 3 at 12:52 AM | investing.comU.S. Stock Market Now on Verge of CollapseThe last time the U.S. economy looked like this, stocks didn't move for 16 years... And many investors lost 80% of their wealth in real terms. But before you touch any of your holdings – or buy anything – please review my latest warning about the U.S. stock market. It's free to watch.May 3, 2025 | Stansberry Research (Ad)ATN International, Inc. (ATNI) Q1 2025 Earnings Call TranscriptMay 2 at 5:01 PM | seekingalpha.comATN International Inc (ATNI) Q1 2025 Earnings Call Highlights: Strategic Progress Amid Revenue ...May 2 at 9:50 AM | finance.yahoo.comATN International, Inc. (NASDAQ:ATNI) Sees Large Decline in Short InterestMay 2 at 2:47 AM | americanbankingnews.comSee More ATN International Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like ATN International? Sign up for Earnings360's daily newsletter to receive timely earnings updates on ATN International and other key companies, straight to your email. Email Address About ATN InternationalATN International (NASDAQ:ATNI), through its subsidiaries, engages in the provision of digital infrastructure and communications services to residential, business, and government customers in the United States and internationally. The company operates through International Telecom and US Telecom segments. The company offers mobile, data, voice, broadband, and fixed services; handsets and accessories; and wholesale roaming, long distance voice services, and site maintenance services. It also leases critical network infrastructure, including towers and transport facilities; and provides managed information technology services, such as network, application, infrastructure, and hosting services. The company was formerly known as Atlantic Tele-Network, Inc. and changed its name to ATN International, Inc. in June 2016. ATN International, Inc. was founded in 1987 and is headquartered in Beverly, Massachusetts.View ATN International ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of EarningsAmazon's Earnings Will Make or Break the Stock's Comeback Upcoming Earnings Palantir Technologies (5/5/2025)Vertex Pharmaceuticals (5/5/2025)Realty Income (5/5/2025)Williams Companies (5/5/2025)CRH (5/5/2025)Advanced Micro Devices (5/6/2025)American Electric Power (5/6/2025)Constellation Energy (5/6/2025)Marriott International (5/6/2025)Energy Transfer (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 7 speakers on the call. Operator00:00:00Day, and thank you for standing by. Welcome to the ATN International Q1 twenty twenty five Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. Operator00:00:19You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michelle Sutrowski, Head of Investor Relations and Treasurer. Please go ahead. Speaker 100:00:43Thank you, operator, and good morning, everyone. I'm joined today by Brad Martin, APN's Chief Executive Officer and Carlos D'Oguilloli, APN's Chief Financial Officer. This morning, we'll be reviewing our first quarter twenty twenty five results and reaffirming our 2025 outlook. As a reminder, we announced our twenty twenty five first quarter results yesterday afternoon after the market closed. Investors can find the earnings release and conference call slide presentation on our Investor Relations website. Speaker 100:01:17Our earnings release and the presentation contain forward looking statements concerning our current expectations, objectives and underlying assumptions regarding our future operations. These statements are subject to risks and uncertainties that could cause actual results to differ from those described. Also, in an effort to provide useful information for investors, our comments today include non GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures and for further information regarding the factors that may affect our future operating results, please refer to our earnings release on our website at ir.atni.com or the eight ks filing provided to the SEC. Before handing the call back to Brad, I'd like to note that moving forward and in line with common practice, we plan to shift the timing of our earnings release and calls by approximately one week. Speaker 100:02:15The adjustment is intended to better align with the timing of our 10 Q filing. With that, I'll hand the call over to Brad. Speaker 200:02:22Thank you, Michelle. Good morning, everyone, and thank you for joining us. I'd like to start by recognizing our teams across ATN for their continued commitment and execution. In the face of industry wide shifts and macroeconomic uncertainty, we remain focused on what we can control: operational performance, disciplined investment, and our long term strategy. Our Q1 results reflect that discipline. Speaker 200:02:46As expected, our top line revenue declined year over year largely due to the wind down of COVID era government subsidy programs in The U. S. Markets. We delivered 2% adjusted EBITDA growth, and cash from operations increased 55% to $35,900,000 These outcomes demonstrate early progress as we start the year and execute against our strategy. The strategic capital investments we've made over the past three years are delivering tangible returns. Speaker 200:03:15In the first quarter, we expanded the number of broadband homes passed by high speed data services to 427,000 households, an increase of 11% year on year, and grew our high speed subscriber base by 2% year on year. We remain confident in our long term vision, leveraging our fiber and digital infrastructure to deliver high value services, especially in markets where connectivity is both underbuilt and essential. And that vision is supported by a financial foundation that continues to strengthen. Let me take a moment to highlight key themes from the quarter. In our International segment, we saw improved operating efficiency, resulting in an 11% increase year on year in adjusted EBITDA. Speaker 200:04:00Demand for high speed broadband and business services remained steady. Increases in postpaid mobile subscribers and mobile data consumption continue to drive improvements in ARPU. The segment remains strong contributor to our financial performance and a framework for how we are positioning our U. S. Business over time. Speaker 200:04:20Domestically, while revenue declined as expected, we remain focused on executing our strategic shift. Our goal is clear: grow our base of fiber and fiber fed business and carrier solutions as we transition legacy consumer services towards fiber and fiber fed broadband solutions. We are aligning our network, go to market strategy and capital deployment with this long term focus. While the near term transition creates revenue pressure, we are building a more resilient and higher margin business for the future. Importantly, we are advancing approximately $370,000,000 in government funded broadband infrastructure projects. Speaker 200:05:02Over half of these projects are expected to be completed in 2025. These programs are essential to our longer term U. S. Growth strategy. They enable us to expand our fiber footprint with reduced capital intensity and provide long term upside as projects come online and begin to generate revenue. Speaker 200:05:21In the first quarter, we submitted additional applications under the Bead program in The US Southwest, reinforcing our commitment to expanding broadband access in historically underserved regions. These efforts are a natural extension of our mission to connect people, communities, and businesses with the infrastructure that enables opportunity. We also made strong progress on cash generation in Q1, reflecting disciplined cost controls and focused capital allocation. We are encouraged by these early results, and we are reaffirming our annual guidance as previously outlined on our Q4 earnings call. Looking ahead to the rest of 2025, our priorities remain unchanged: continue expanding high speed broadband and business services in our international markets while improving margin and capital efficiency stabilize and reposition our US business around sustainable fiber and fiber fed revenue streams, and maintain a strong financial position through disciplined capital allocation and a focus on cash flow growth. Speaker 200:06:30On the broader policy front, we're also monitoring recent developments around trade and tariffs. While we do not source devices or equipment at the same scale as large national carriers, any sustained increase in tariffs on network infrastructure, including fiber related components and electronics, could introduce cost pressure over time. That said, based on our current supply chain visibility and the fact that half of our revenue in our largest consumer markets are outside of The United States and not immediately impacted, we believe we can manage any near term impact within our existing 2025 financial outlook. We will continue working closely with our vendors and partners to mitigate cost volatility and ensure continuity of service delivery. While we recognize that the operating environment remains dynamic from policy shifts to competitive intensity, we believe we're executing the right strategy for the long term. Speaker 200:07:29Our focus is on monetization, operational leverage, and value creation. Carlos will take you through the numbers, but I want to reiterate we are making steady progress. We are focused on our goals, and we remain confident in ATN's future. With that, I'll turn it over to Carlos. Speaker 300:07:47Thank you, Brad. Good morning, everyone, and thanks for joining us. Today, I'll walk through our first quarter financial results and our outlook for the remainder of 2025. As Brad mentioned, we entered the year focused on executing with discipline, and our Q1 results reflect early signs of progress, particularly in terms of cash flow and operational efficiency. While the macro environment remains challenging, especially in our domestic markets, we believe the strategic actions taken in recent quarters, along with the benefits of our investment cycle, have strengthened our ability to serve our customers, support durable revenue generation and drive margin expansion. Speaker 300:08:32With that, let's now review our P and L results for the first quarter in more detail. Total company revenue for the quarter was $179,300,000 down four percent year over year. As expected, this decline reflects the wind down of the emergency connectivity fund and affordable care program. Operating income for the quarter decreased to $2,700,000 as cost management actions and ongoing efficiency efforts across the business were offset by increases in transaction related expenses, losses on asset transfers and restructuring and reorganization expenses. Net loss for the first quarter was $8,900,000 or $0.69 per share. Speaker 300:09:20This compares with the prior year's net loss of $6,300,000 and $0.50 per share, as the factors influencing operating income similarly impacted net loss for the period. Adjusted EBITDA was $44,300,000 up 2% from the prior year, supported by continued growth and margin expansion in our international segment, partially offset by the anticipated decline in our U. S. Segment. Looking now at the segment's performance. Speaker 300:09:50Beginning with our International segment, Q1 revenues increased to $94,500,000 from $93,100,000 in the first quarter of the previous year, driven partially by carrier services growth. Adjusted EBITDA for the International segment increased to $32,400,000 for the quarter compared to $29,300,000 in the same period last year. Cost containment efforts and operational improvements contributed to the quarter's performance. In our domestic segment, first quarter revenues were 84,800,000.0 down 9.5% year over year. As previously mentioned, revenue was impacted by the conclusion of the ECF and ACP programs. Speaker 300:10:38The lower revenue led to a decrease in adjusted EBITDA to 17,500,000.0 down 15.4% compared with the same quarter last year. Moving on to the balance sheet and cash flow highlights. We ended the quarter with $97,300,000 in cash, up from $89,200,000 at year end. Total debt stood at $562,400,000 and our net debt ratio was 2.52 times. Net cash provided by operating activities increased 55% year over year to 35,900,000.0 driven by working capital management efforts. Speaker 300:11:17Capital expenditures in Q1 totaled $20,800,000 net of $22,400,000 in reimbursable capital spending. This compares to $36,000,000 in CapEx and $13,500,000 in reimbursable in the prior year's quarter. This reduction in expenditures reflects the shift in our framework to increase operational cash flow, supplemented by available grant funding. We returned capital to our shareholders through $3,600,000 in dividends during the first quarter of twenty twenty five. With that, let's move to our outlook for 2025. Speaker 300:11:57We are reaffirming the outlook for 2025 that we provided in our fourth quarter release. We continue to expect revenue for the year to be in line with 2024, excluding construction revenue. Adjusted EBITDA to be essentially flat with last year. Net capital expenditures between 90,000,000 and 100,000,000 Net debt ratio to remain flat to year end 2024 with a slight potential improvement exiting the year. As we look ahead to the balance of the year, we continue to expect the second half to contribute a larger share of full year results. Speaker 300:12:41This reflects the timing of revenue stabilization efforts in The U. S. Segment and the continued ramp up in our international markets. As part of our continued cost containment initiatives, we anticipate incurring further reorganization and restructuring expenses in the second quarter. In summary, we're executing on a clear set of priorities: improving cash flow, transitioning our U. Speaker 300:13:07S. Business and leveraging the strategic capital investments we've made in recent years. While we're not immune to broader market headwinds, we believe our strategy is sound, our balance sheet is strong, and we remain committed to delivering long term value for shareholders. Thank you. And now I'll hand the call back over to Brad. Speaker 200:13:29Thanks, Carlos. Before we open the call for questions, I want to leave you with a clear message. We are focused on execution, committed to financial discipline and confident in the strategy we've put in place. This is a year of transition, and we're beginning to see encouraging signs improved cash flow, progress on our grant funded builds, and consistent performance internationally. Our long term goal remains the same to create a stronger, more efficient, and more resilient ATM. Speaker 200:13:58With that, operator, we'd like to open it up for questions. Operator00:14:02Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. Our first question comes from the line of Rick Prentiss of Raymond James and Associates. Your line is now open. Speaker 400:14:30Thanks. Good morning, everybody. Speaker 300:14:32Good morning, Rick. Good morning, Rick. Speaker 400:14:34Hey, appreciate the comments on monitoring trade and tariffs and feels like your supply chains are good for this year. How much of the like, we we obviously have talked to a lot of the the big telcos, AT and T and Verizon reported last week, they felt that they were pretty insulated from from it because a lot of the electronic components are are smaller compared. Do do you buy your fiber from outside The United States? Or is it really just more of the electronic side that you're exposed to? Speaker 200:15:06So Rick, a lot of our construction materials or fiber construction are sourced in The US. And that's part of the reason we've looked at our build of materials for our builds for 2025 and understand the dynamics. Quite a significant portion of that is sourced locally. So the electronics and the variations of where those electronics are coming from, whether it be China, Taiwan, Thailand, Vietnam, some of the major vendors like Cisco and others, are something we're watching closely. There are a lot of projects in place now that purchasers have already been built, issued. Speaker 200:15:47And those are really immune. We have major programs that are dependent upon vendors like Ericsson with a lot of manufacturing done in Mexico that are exempt the USMCA exemption. So it's dynamic as we all know and we're watching it very closely. But a really important dynamic for us is that our largest consumer markets with handsets that have a lot of manufacturing in China are all in our international markets. So those are generally exempt from these tariffs. Speaker 200:16:23So anyway, like we said in the prepared remarks, we're planning that 2025 we're going to be able to absorb any variations that we see within our guidance. Speaker 400:16:37Okay. And then remind us because obviously trade and tariffs have impacted interest rates. They've impacted FX rates. Remind us how the US dollar being a US reporting company, what kind of FX exposure do you have in your international markets when you bring it back to US? Speaker 500:16:57So, Rick, this is Carlos. So the the majority of the markets where we operate international internationally are I think in Guyana, we haven't seen any significant fluctuation so far, probably even the fact that right now they're being able to kind of be exporting a significant amount of oil out of the market so that that allows them to have a little bit of a buffer there. So we haven't seen yet any significant impact from from that front. Speaker 400:17:35Okay. Good. And then obviously, we're seeing a lot of roll ups of fiber companies and private multiples being higher than public multiples. How are you viewing the marketplace as far as that private versus public multiples and some of the roll ups that might be occurring? Speaker 200:17:55Yeah, so we are watching those dynamics too, Rick. And ultimately, it is a vibrant market. And there are a lot of players that are performing well in the fiber space. There are players that have got some headwinds. But look, we recognize that dynamic. Speaker 200:18:12And that's something that we're always trying to understand how we can best unlock value for our investors. Speaker 400:18:20Okay. And the last one for me. You mentioned some of the government funding. Is that something that's going to find its way through kind of gross CapEx, reimbursement, net CapEx? Is that something that's going find its way onto the revenue in the shorter term versus the longer term? Speaker 400:18:37Help us understand that $370,000,000 of government funding and half of it in 'twenty five, how you think that might play into your financials? Speaker 200:18:46Yeah. So I mean, just to clarify a couple of points on that. So of the $3.70, about half of the projects will be complete or expect to be complete this year. And to clarify, we had many of those projects going on even in 2024 under construction date. So our reimbursable CapEx as of last for 2024 was around $108,000,000 I believe for the year. Speaker 200:19:10This you see similar ratios. We have quite a bit of reimbursable this year as well. So those programs, Rick, really there are some programs that will be going live in mid to late Q3. We will see some revenue but that's in our plan right now. The significant monetization of those is going to be in our out years 'twenty six, 'twenty seven, where we see the larger benefits of the monetization. Speaker 200:19:42And to be clear, $370,000,000, a significant portion of that are some very large subsea and remote regional fiber projects in Alaska. So it's obviously these would not get built without these subsidies. So they are definitely opening up opportunities. But there's not an equivalency of the size of the grant to the size of the economic value. But those will certainly be something we'll be taking advantage of here in 'twenty six. Speaker 200:20:10They'll provide more visibility when we guide to that next year. Speaker 400:20:15Thanks. Operator00:20:18Thank you. Our next question comes from the line of Greg Burns of Sidoti. Your line is now open. Speaker 600:20:27Good morning. Just to follow-up on the government grant funding, you mentioned the $370,000,000 that you've won already, but you also, I guess, mentioned some bids you have in under the Bead program. Can you just talk about the relative size of what the opportunity is there? Speaker 200:20:49Yes. Bead is something that we are participating in the Southwest as we mentioned. The dynamics with Bead, Greg, are obviously fluid. So there are dynamics with NTAA and the funding mechanisms that need to be effectively passed through. There is a commerce memo that's scheduled for May 15 that we're watching closely that is going to clarify some of the dynamics of administration around BEAT. Speaker 200:21:19So the general theme we're seeing is there are delays. Most states are delaying the award timing or even the submission timing. One dynamic that we are seeing, which is positive, is that the basic financial and technical requirements for the programs are going unchanged. So it allows us to leverage the work we've done around planning for those projects. But at a high level of the six states we operate, there's 4,000,000,000 approximately of BEAF funding that is effectively provisioned for those states. Speaker 200:21:59So we obviously won't participate in all of that but in areas our view, Greg, is we're going to look at it very strategically, where it can build on to strategic network footprint that we have today, where we have good distribution and middle bound network. Because remember, many states are this is really to connect the end users. So it's really a fiber to the home preference. Some states do allow for middle mile reimbursement. So we're trying to take advantage of that where that is possible. Speaker 200:22:30And like kind exchange is another important dynamic, which offsets the match and the capital intensity for ATM. So we're looking at all the variations. There are and we do expect we'll be learning more about the grants that we've submitted here in the coming months. And it will be an important dynamic for our continued investment in fiber. But the dynamics right now are watching this memo coming out on the fifteenth from Commerce that will likely help the states finalize timing of their final submissions and awards. Speaker 600:23:03All right, great. Thanks for that. And then just lastly, in terms of monetizing the investments, the organic investments you've already made over the last couple of years, can you just talk about maybe give us an update on some of the changes you're making in terms of leadership processes to improve your sales motion? And are you seeing any maybe green shoots or progress in terms of those monetization efforts? Speaker 200:23:33Yeah. So as we've talked, we've got two new leadership teams in our two US markets really that started here in Q1. And look, we're encouraged by some early progress. Obviously, new leadership brings in new focus. But there are one of the key themes we are seeing is that there is a growing carrier demand for access and transport in the markets that we offer. Speaker 200:23:59That's a very good sign. That's one of the key services we provide in The US markets. So that's a very positive dynamic that we continue maximize for the business. But that is a growing pipeline. We have had a more successful USAC season this year. Speaker 200:24:17So these are programs that renew every one to two years and that season is in Q1. We did better this year. Those will be projects built and we'll start to monetize in the second half of this year. Again, all built into our current forecast. But again, a little bit better performance there, which is encouraging. Speaker 200:24:37But the teams are taking a focus. I think that's one of the really important areas, really renewed focus on how we're approaching this conversion of legacy technologies. To remind folks, we exited our retail mobile operations. Which is a pretty long process, but that was effective as of effectively January 1. And we legacy broadband, DSLs, and legacy fixed wireless that we're looking to convert to fiber or fiber bed fixed wireless. Speaker 200:25:06And we are making some progress. It's still a relatively smaller component of the revenue streams for our US markets, but we are encouraged by some of that progress. And internationally, we continue to unlock the leverage of the investments that we've made. We've seen some good improved performance in inbound roaming. That's based upon the improvements we've made with data capacity in our five gs networks. Speaker 200:25:31So that's, again, a good progress sign we've seen here in Q1. And we still see significant data demand and data plan growth in our largest mobile market in Guyana, which is, again, another positive sign which is impacting ARPUs. All right, great. Thank you. Operator00:25:53Thank you. For our next question, we will come back Rick Prentiss with Raymond James and Associates. Your line is now open. Speaker 400:26:03Hey, thanks for the opportunity for follow-up. Back on the Bead Funding, a follow-up on the previous question. What are you hearing as far as NTIA confirmation and will that slow anything down or can Congress just move forward and then NTIA will kind of implement it? But is the NTIA leadership transition affecting it? Speaker 200:26:28So there's a lot going on. I mean, are several bills right now, Rick, as you know, they're in front of Congress that relate to a lot of different topics. I think a couple went through the House just this week. So there's everything from spectrum authority to some of the newer rules around the NTIA B program. So look, the primary impact we're seeing right now is the delay in the B program. Speaker 200:26:55Effectively, of the subsidy programs we participate in and reimbursable CapEx programs, all of that has been on time and as expected here in Q1. So that is all moving as expected and we don't foresee any impact on service subsidy programs like CAF or reimbursable programs that we've already won. But BEAT is the primary, and we're watching that closely. There are states that are further ahead that people are moving forward with some early builds. Our states have not yet granted any funds yet. Speaker 200:27:30So the fund flow is still something that is an important dynamic in that. We expect that to be delayed, as you've read in the press. So that's the primary dynamic. The timing of those delays could impact the ability to monetize those B builds in which half of 'twenty six or which half of 'twenty seven. That's what we're watching closely to our outlook forecasts. Speaker 200:27:56Okay. Speaker 400:27:57And speaking of '26 and '27, I know too early to give official guidance, but how are you feeling about the prospects of being able to grow businesses? Obviously, we were down from '23 to '24. We're flattish from '24 to '25. What does it take to be able to get growth? Or could there be further declines then? Speaker 200:28:23So some of the things I mentioned, Rick, are encouraging signs. So in our US markets and remind the primary dynamic for revenue shifts and EBITDA shift was the loss of this ECF program, this COVID era funding program. So again, with that in mind, the fundamentals for carrier demand, again, remind you that our primary revenue streams in The US markets where we had some of these headwinds are carrier business and wholesale. So the demand we're starting to see for the support of transport, And that's coming from the carrier success in areas where they're adding on effectively fixed wireless or where they're seeing improved performance around fiber. We sell transport services. Speaker 200:29:18And we sell, obviously, this carrier managed services, which are tower services. So we expect, as they are improving their footprint, we are going to continue to leverage our wholesale arrangements to see that growth. And again, the pipeline build is encouraging. On the consumer side in those markets, we are still in a transition, as we've talked, about legacy services to new fiber and fiber fed services. That was behind the 24. Speaker 200:29:49We are seeing some encouraging signs, a relatively small base. But we are continually improving that footprint. Programs like the programs that we have underway now for grants, include Fibers of the Home and middle mile, are all things that are going to help us monetize as we go forward. So we see in The US the opportunity based on grants and based on carrier demand to keep an approved. But the effective demand for broadband is still pervasive, which is a great sign for our business. Speaker 200:30:19Our belief is if we can provide that broadband on durable assets, we've got a great business to run the long term. Speaker 400:30:27Okay. And then for Carlos, talk to us a little bit about the balance sheet. Obviously, rates are bouncing around, but how are you thinking about managing the interest costs and particularly then as it affects the free cash flow? Speaker 500:30:42Yeah. I think, Rick, we continue to work on improving margins and that way, you know, continue to work on delivering. We're So, you you can see that as part of the kind of the cost structure, how we've been moving it, lowering CapEx. So all those elements that we have been acting on from the beginning of, you know, actually from 2023 on, we believe are going to continue to help us and to improve leverage, reduce our interest expenses, and then also provide improved capital allocation optionality. Speaker 400:31:27And what time frame does that capital allocation changes look like? Is it able to jump in '26 or is it thinking it's '27? Speaker 300:31:35I think, you know, we believe that we're going Speaker 500:31:38to continue to improve the position. You know, we think that if we continue to march towards that improving EBITDA margins, you know, as we go into 2026, you know, certainly there there'll be more options for, you know, optionality for capital allocation. Speaker 400:31:58Okay. Great. Thanks for the follow ups. Speaker 300:32:01Thanks, Rick. Operator00:32:04Okay. I am showing no further questions at this time. I would now like to turn it back to Brad Martin for closing remarks. Speaker 200:32:12Thank you, operator. Thank you all for joining us today. We look forward to continuing our discussions with many of you in the coming months. Appreciate all your time and support. Have a good day. Operator00:32:22Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.Read morePowered by