Array Digital Infrastructure Q2 Earnings Call Highlights

Key Points

• Array raised its 2026 outlook, increasing adjusted OIBDA guidance to $60 million–$75 million, adjusted EBITDA guidance to $220 million–$235 million, and the low end of total revenue guidance to $205 million.
• Array completed major spectrum transactions, including a $168 million sale to T-Mobile and a $1 billion transaction with Verizon, monetizing roughly 70% of its spectrum holdings while continuing to evaluate its remaining C-band assets.
• Cash site rental revenue grew strongly, helped by T-Mobile interim sites, although interim revenue is beginning to decline as T-Mobile integrates operations. Array also narrowed its expected post-integration tenantless tower count to 1,000–1,700 and fully reserved outstanding 2025 DISH balances.

TDS reported second-quarter progress in its fiber expansion and tower infrastructure operations, while updating 2026 guidance for both TDS Telecom and Array Digital Infrastructure NYSE: AD. Management also said it would not provide further updates or take questions regarding TDS’s pending proposal to acquire Array shares it does not already own.

TDS President and CEO Walter Carlson said the company continued to advance its operational priorities during the first half of 2026. TDS Telecom added fiber service addresses and customers during the quarter, while Array increased tower tenancy on a sequential basis and completed transactions to monetize virtually all of its spectrum outside the C-band.

TDS Telecom Raises Fiber Build and Capital Outlook

TDS Telecom delivered approximately 66,000 marketable fiber service addresses in the second quarter, bringing first-half delivery to about 106,000 addresses. Ken Dixon, president and CEO of TDS Telecom, said the first-half total was the company’s strongest on record and exceeded its second-half 2025 fiber-address delivery, which is typically its peak construction period.

The company raised its 2026 fiber service address delivery outlook by 50,000 addresses and now expects to deliver between 250,000 and 300,000 new fiber service addresses this year. TDS Telecom also increased its capital expenditure guidance to a range of $625 million to $675 million to support the higher construction activity.

Dixon said TDS Telecom’s expanded construction capacity and pipeline of addresses under construction support the increased outlook. The build program includes new expansion markets, upgrades through its Fiber Deeper program, and work supported by the federal Enhanced Alternative Connect America Cost Model, or E-ACAM, program.

TDS Telecom is the largest recipient of E-ACAM support, according to Dixon, and is using the program to bring fiber to more than 300,000 addresses across 22 states in its incumbent footprint. The company has already met its 2026 E-ACAM obligations in three states and has its highest-ever crew counts in remaining E-ACAM markets, Dixon said.

Residential fiber net additions totaled 15,100 during the quarter, up 47% from a year earlier. The company now serves nearly 1.2 million fiber service addresses, representing 60% of its total footprint, with 80% of addresses capable of gigabit speeds.

Residential fiber revenue increased 13%, or $11 million, from a year earlier, helping offset declines in legacy revenue streams. Residential revenue per connection rose 1%, reflecting annual price increases partly offset by lower video attachment rates. However, cable revenue declined roughly 10% from the second quarter of 2025, and total residential revenue fell $6 million year over year, including about $2 million attributable to divestitures of primarily copper-based markets.

Telecom Guidance Reflects Legacy Revenue Pressure

TDS Telecom’s total operating revenue declined 6% in the quarter, or 4% excluding divestitures. Kris Bothfeld, vice president of financial analysis and strategic planning, said roughly half of the year-over-year decline resulted from discrete wholesale revenue adjustments that benefited 2025. The remainder reflected continued pressure in legacy revenue streams, partly offset by fiber customer growth and higher revenue per connection.

Cash expenses were flat year over year, as savings from cost-management initiatives were offset by expenses supporting expansion markets and inflation. Capital expenditures totaled $179 million in the quarter.

For 2026, TDS Telecom lowered its total revenue outlook to $1 billion to $1.025 billion, citing headwinds in copper and cable markets. It narrowed adjusted EBITDA guidance to $310 million to $330 million. Bothfeld said the legacy revenue challenges were largely falling to the bottom line, while fiber revenue growth and transformation-related cost savings are expected to support results in the second half.

TDS also said it remains active in pursuing small- to medium-sized fiber acquisitions that fit its clustering strategy. The company expects to close its acquisition of Granite State Communications in the third quarter, adding approximately 11,000 fully fibered service addresses for $25 million.

Array Completes Major Spectrum Transactions

Array’s second-quarter performance was driven by tower leasing activity and spectrum monetization. Anthony Carlson, president and CEO of Array, said cash site rental revenue increased 55% year over year from all customers, or 65% when normalized for the impact of DISH.

Array ceased recognizing revenue from DISH during the first quarter after DISH generally stopped making payments under its contracts in December. Array said all outstanding 2025 DISH balances have been fully reserved, and DISH co-locations are no longer included in the company’s tenancy ratio.

The company said T-Mobile interim site revenue contributed to its growth. Cash site rental revenue increased 81% year over year with the addition of that revenue, or 92% when normalized for DISH. However, Carlson said interim site revenue has begun to decline as T-Mobile advances its integration process.

T-Mobile has until January 2028 to finalize 2,015 committed sites under the companies’ new master lease agreement. Array narrowed its projected range of tenantless towers following the T-Mobile integration to 1,000 to 1,700.

Array has reached agreements to monetize roughly 70% of its spectrum holdings. During the quarter, it closed a $168 million sale of 600 MHz, 700 MHz and AWS licenses to T-Mobile and a $1 billion spectrum transaction with Verizon. Remaining T-Mobile transactions are expected to close by the end of 2026, subject to regulatory approvals and other closing conditions.

Array continues to evaluate monetization options for its remaining spectrum, primarily C-band. Carlson said the company does not view itself as a forced seller and believes it has time to pursue value for the spectrum because there are no near-term build-out requirements.

Array Raises 2026 Profit Outlook

Array raised the low end of its 2026 total operating revenue guidance to $205 million from $200 million, while leaving the high end unchanged. The company cited expectations for higher T-Mobile interim site revenue based on the current pace of integration.

It increased adjusted OIBDA guidance to $60 million to $75 million from $50 million to $65 million, reflecting the higher revenue outlook and expectations for modestly lower operating expenses. Adjusted EBITDA guidance was revised to $220 million to $235 million, compared with prior guidance of $200 million to $250 million.

The company also raised its expected equity income to $145 million from $140 million and increased expected interest and dividend income to $15 million from $10 million, citing year-to-date trends, partnership budgets and a higher cash balance associated with the timing of spectrum transaction inflows and outflows.

TDS said it paid its regular quarterly dividend, while Array paid a special dividend of $11 per common share during the quarter. TDS did not repurchase shares in the second quarter because it was restricted by its offer for Array, though it had $520 million remaining under its repurchase authorization at quarter-end.

About Array Digital Infrastructure (NYSE:AD)

United States Cellular Corporation provides wireless telecommunications services in the United States. The company offers wireless services, including voice, messaging, and data services. It also provides devices, such as smartphones and other handsets, tablets, wearables, mobile hotspots, routers, and internet of things devices. In addition, the company offers various accessories, such as cases, screen protectors, chargers, and memory cards; and consumer electronics, including audio, home automation, and networking products; as well as offers option to purchase devices and accessories under installment contracts.

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