Key points for investors:
- Strategic transaction: TDS announced a proposal to acquire the remaining public shares of Array Digital Infrastructure, Inc. in an all‑stock merger (0.86 TDS share per Array share, subject to certain spectrum sale dividends and assumptions). TDS says the deal would simplify structure, eliminate duplicate costs, improve liquidity and capital flexibility, and is subject to Array's special committee review, shareholder approvals and customary conditions.
- Strong fiber execution at TDS Telecom: Q1 delivered a record 40,000 marketable fiber service addresses (highest Q1 in company history), bringing the total to ~1.1 million fiber service addresses (58% of footprint; 79% gig-capable). TDS reiterates 2026 build target of 200,000–250,000 new fiber addresses and unchanged 2026 guidance: telecom revenues $1.015B–$1.055B, adjusted EBITDA $310M–$350M, and capex $550M–$600M.
- Revenue / customer trends: Residential fiber net adds ~11,000 in Q1 (up 32% YoY). Fiber revenue up ~13% YoY (~$11M uplift) which partially offsets legacy declines (cable down ~10% YoY). Total operating revenue declined ~3% (1% ex‑divestitures); adjusted EBITDA down ~3%; Q1 capex was $126M.
- M&A and capital allocation: TDS remains focused on disciplined, accretive tuck-in M&A for fiber. They signed to acquire Granite State Communications (~11,000 fiber addresses; expected to close in Q3 subject to approvals). Share buyback program remains authorized ($520M available at quarter end) but no repurchases in Q1.
- Operational transformation & cost program: TDS is modernizing systems (billing conversion in cable markets complete; new FieldForce platform) and targeting $100M run‑rate savings by end of 2028, with some benefits already flowing to the bottom line while some savings will be reinvested.
- Array / tower business update: Array reports strong tower fundamentals—cash site rental revenue up substantially (55% YoY, 64% YoY when normalized for DISH) and sequential tenancy growth (0.95 → 0.96 normalized). Array ceased recognizing DISH revenue due to nonpayment and has reserved unpaid 2025 amounts. Array continues to monetize spectrum: AT&T deal closed (dividend paid), several T‑Mobile transactions approved/closing in Q2/Q3, Verizon deal expected Q2/Q3; Array expects remaining announced spectrum sales to generate significant cash (example dividend assumption of $10.40/share ≈ $900M net proceeds). Array guidance unchanged, but ranges remain wide due to T‑Mobile MLA uncertainties and timing of interim site terminations.
- Capital discipline and outlook: Both businesses emphasize disciplined capital allocation—funding fiber with internal cash, evaluating bolt‑on fiber M&A, and opportunistically monetizing spectrum while retaining tower asset upside. Management reiterates confidence in execution and long‑term strategy.
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