When can TDS resume share buybacks given the Array offer, and is there an open window for C-band discussions after the recent AWS auction?

Vicki Villacrez stated TDS is committed to its $520 million share buyback program but was restricted in Q2 due to the Array offer and cannot speculate on timing. Array executive noted no specific C-band process update but is encouraged by AWS auction results for spectrum valuation, reiterating that Array is not a forced seller of its valuable C-band spectrum. “TDS was not in the market for share repurchases during the second quarter because we were restricted from doing so due to the TDS offer to Array. As of the end of the quarter, we had $520 million remaining under the TDS share repurchase authorization, and we remain committed to executing on that program as business, market and other conditions permit.”

What is the confidence underlying the implied $350 million annualized run rate for TDS Telecom's EBITDA in the second half of FY26, and will this momentum persist into FY27?

Kris Bothfeld attributed the confidence to continued fiber revenue growth (13% in Q2) and savings from cost transformation efforts, which are expected to lead to a 2% cost reduction for the full year. She confirmed that this momentum and cost efficiency should persist into FY27. “what we are seeing nice momentum is on our fiber revenue growth. we reported residential fiber revenue growth of 13% in the quarter, and we expect that to continue to grow continue to grow as we're even fueling more service address delivery in the back half of the year and expect those revenues to come.”

Have fiber M&A valuations changed, and what is Array's M&A strategy given current market conditions?

Vicki Villacrez highlighted the Granite State acquisition ($25 million for 11,000 fiber addresses) as an example of attractive, contiguous tuck-in opportunities. Array executive stated that private market valuations for towers are currently high, leading Array to focus on improving its internal operations rather than pursuing M&A. “we did sign an agreement earlier in the quarter. We expect to close next quarter on a very attractive small tuck-in that's adjacent to our current footprint at tds.com and this was 11,000 fiber service alerts that was for $25 million.”

TDS

Telephone and Data Systems (TDS) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Communication Services· Aug 7, 2026

Source: earnings call transcript

Executive summary

Telephone and Data Systems, Inc. Q2 FY26 — Strong Fiber Buildout and Spectrum Monetization

TDS and Array reported Q2 FY26 results highlighted by robust execution in fiber network expansion and significant progress in spectrum monetization. TDS Telecom achieved record fiber address delivery and raised its full-year guidance, while Array continued to grow tower tenancy and completed substantial spectrum sales. The company is strategically balancing capital investments with financial flexibility, though legacy revenue pressures impacted Telecom's EBITDA guidance and the pending Array offer temporarily restricted share repurchases.

Highlights

TDS Telecom delivered approximately 66,000 marketable fiber service addresses in Q2, bringing H1 total to 106,000, the strongest first half delivery in company history.
TDS Telecom increased its 2026 fiber service address guidance range by 50,000 to 250,000-300,000.
TDS Telecom residential fiber net adds were 15,100 in Q2, up 47% year-over-year.
Array Digital Infrastructure's cash site rental revenue increased 65% year-over-year when normalized for the DISH impact.
Array Digital Infrastructure's tenancy ratio improved sequentially from 0.98 to 0.96 (excluding DISH impact).
Array closed $1.168 billion in spectrum transactions in Q2, including $168 million with T-Mobile and $1 billion with Verizon.

Concerns

TDS Telecom's total operating revenues declined 6% in Q2, or 4% excluding the impact of divestitures, primarily due to legacy revenue stream pressures.
TDS Telecom's total residential revenue declined $6 million compared to prior year, with cable revenues down roughly 10% versus Q2 FY25 and faster declines in copper.
TDS Telecom's adjusted EBITDA guidance was narrowed to $310 million to $330 million, reflecting legacy revenue challenges falling to the bottom line.
Array Digital Infrastructure projects 1,000 to 1,700 tenantless towers post T-Mobile integration.
TDS was restricted from share repurchases during Q2 due to the ongoing offer to acquire the minority interest of Array.

Guidance & targets

Category	Target	Timeline	Confidence
TDS Telecom Fiber Service Address Delivery	250,000 to 300,000 high materiality	FY26	High
TDS Telecom Capital Expenditures	$625 million to $675 million medium materiality	FY26	High
TDS Telecom Total Operating Revenues	$1 billion to $1.025 billion high materiality	FY26	Medium
TDS Telecom Adjusted EBITDA	$310 million to $330 million high materiality	FY26	Medium
Array Total Operating Revenue	$205 million to $205 million medium materiality	FY26	High
Array Adjusted OIBDA	$60 million to $75 million medium materiality	FY26	High
Array Adjusted EBITDA	$220 million to $235 million high materiality	FY26	High
Array Equity Income	$145 million medium materiality	FY26	High
Array Interest and Dividend Income	$15 million low materiality	FY26	High
Array Capital Expenditures	unchanged low materiality	FY26	High
Array T-Mobile Integration Timeline	finalize 2015 committed sites by January 2028 medium materiality	January 2028 · FY28	High
Array Remaining T-Mobile Spectrum Transactions Close	by the end of 2026 medium materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
TDS Telecom Total operating revenues declined due to legacy revenue stream pressures, partially offset by fiber growth. Adjusted EBITDA guidance narrowed due to these challenges. Strong fiber address delivery led to increased guidance and CapEx. Marketable fiber service addresses delivered (Q2): 66,000Marketable fiber service addresses delivered (H1 FY26): 106,000Fiber service addresses guidance (FY26): 250,000-300,000Residential fiber net adds (Q2): 15,100Residential fiber net adds YoY growth (Q2): 47%Total fiber service addresses: nearly 1.2 millionFiber footprint as % of total: 60%Addresses capable of gig speeds: 80%Incumbent markets overbuilt with fiber: 52%Cable markets served by fiber: 22%Residential revenue per connection YoY growth: 1%Fiber revenue YoY growth: 13%Fiber revenue YoY increase: $11 millionTotal residential revenue YoY decline: $6 millionCable revenues YoY decline (vs Q2 FY25): roughly 10%Cash expenses: flat	$1 billion to $1.025 billion	-6%	—	$310 million to $330 million
Array Digital Infrastructure Revenue growth driven by T-Mobile MLA and other customers. Adjusted OIBDA and EBITDA guidance increased due to higher revenue outlook and lower operating expenses. Continued focus on optimizing tower operations and monetizing spectrum. Cash site rental revenue YoY growth (normalized for DISH): 65%Cash site rental revenue YoY growth (all customers): 55%Cash site rental revenue YoY growth (with T-Mobile interim site revenue): 81%Cash site rental revenue YoY growth (with T-Mobile interim site revenue, normalized for DISH): 92%Tenancy ratio: 0.96 (sequential improvement from 0.98)Equity income (6 months ending June 30): $75 millionEquity income guidance (FY26): $145 millionInterest and dividend income guidance (FY26): $15 millionProjected tenantless towers post T-Mobile integration: 1,000-1,700	$205 million to $205 million	65%	—	$220 million to $235 million

Deals & partnerships

Granite State Communications Acquisition of a fiber-based company, adding 11,000 fully fiber service addresses and supporting TDS's clustering strategy. $25 million

Agreement announced in mid-April, expected to close in Q3 FY26.

T-Mobile Sale of 600 megahertz, 700 megahertz, and AWS licenses. $168 million

Closed in May as part of Array's spectrum monetization strategy.

Verizon Spectrum transaction. $1 billion

Closed in June as part of Array's spectrum monetization strategy.

Array minority shareholders TDS's previously announced offer to acquire the minority interest of Array in an all-stock transaction.

Process is ongoing; TDS will not be commenting further or taking questions on this topic during the call.

Risks & headwinds

Legacy revenue stream pressures Ongoing

TDS Telecom total operating revenues declined 6% (4% excluding divestitures); total residential revenue declined $6 million YoY; cable revenues down roughly 10% vs Q2 FY25; faster declines in copper.

Mitigation:Deploying fiber across ILEC footprint at a record pace; increasing investment and sales capacity in cable markets; cost management initiatives.

DISH bankruptcy impact on Array Ongoing

Array ceased recognizing revenue from DISH in Q1; all outstanding 2025 balances fully reserved; DISH colocations no longer included in tenancy ratio.

Mitigation:Focus on consistent growth from other customers; excluding DISH impact from tenancy ratio calculations.

Restriction on share repurchases Q2 FY26

TDS was not in the market for share repurchases during Q2.

Mitigation:Restriction due to the TDS offer to acquire Array; commitment to execute on the $520 million authorization when business, market, and other conditions permit.

Wind-down costs for Array legacy wireless operations Expected to persist throughout 2026, but at a declining level.

SG&A expenses continue to include these costs, though a decline was seen in H1 FY26.

Mitigation:Costs are declining as wind-down progresses.

Elevated strategic alternatives costs for Array Q2 FY26

Elevated costs in Q2.

Mitigation:Costs relate to the evaluation of TDS's proposal to acquire Array's public shares.

What to watch in Q3 FY26

TDS Telecom Fiber Service Address Delivery

H2 FY26

Current 106,000 in H1 FY26

Target Progress towards 250,000-300,000 for FY26

Why it matters

This is a key indicator of network expansion and future revenue growth for TDS Telecom.

This gives us confidence to increase our 2026 guidance for fiber service address delivery to 250,000 to 300,000, increasing our range by 50,000.

Find out whether TDS delivers this. Inve re-checks your case every morning.

Q&A highlights

How does satellite competition affect fiber, copper, and coax, especially in rural areas, and what's its impact on wireless and towers for TDS and Array?

TDS Telecom sees no material impact from satellite where fiber is deployed, noting strong demand and increased fiber build pace. Array believes terrestrial networks and macro sites remain the bedrock for mobile data delivery, with strong growth potential for their tower assets.

“In the markets where TDS has deployed fiber, we're not seeing a material impact from satellite. As you just saw in our reported marketable addresses and we're seeing strong demand across the business with a nice sequential improvement in our fiber net adds.”

asked by Ric Prentiss · answered by Kenneth Dixon

3 min read 6 chapters

Detailed narrative

TDS Telecom Fiber Expansion and Strategy

TDS Telecom achieved a record 66,000 marketable fiber service addresses delivered in Q2, contributing to a total of 106,000 in the first half of FY26. This strong performance led to an upward revision of the full-year guidance for fiber service address delivery to 250,000-300,000.

The company is strategically leveraging federal ACAM program support to accelerate fiber expansion in rural areas, targeting over 300,000 addresses in 22 states over the next two years. The fiber network now covers nearly 1.2 million addresses, representing 60% of the total footprint, with 80% capable of gig speeds.

TDS Telecom Sales and Operational Transformation

Residential fiber net adds increased by 47% year-over-year to 15,100 in Q2, driven by footprint expansion and copper-to-fiber conversions. The company is intensely focused on converting new service addresses into customers by expanding sales teams, including door-to-door capacity, and enhancing the dot-com channel.

Operational transformation initiatives are underway to modernize systems, aiming to improve efficiency and customer experience, with several key enhancements scheduled for completion in the second half of FY26.

TDS Telecom Financial Performance and Headwinds

Total operating revenues for TDS Telecom declined 6% in Q2, or 4% excluding divestitures, primarily due to ongoing pressures from legacy copper and cable revenue streams. This decline, coupled with a roughly 10% decrease in cable revenues compared to Q2 FY25 and faster copper declines, led to a $6 million reduction in total residential revenue year-over-year.

The adjusted EBITDA guidance was narrowed to reflect these legacy challenges impacting the bottom line, despite a 13% growth in fiber revenue.

Array Digital Infrastructure Tower Operations

Array continued to demonstrate sequential improvement in its tenancy ratio, which increased from 0.98 to 0.96 at the end of the prior quarter (excluding the impact of DISH). Cash site rental revenue saw a significant increase of 65% year-over-year when normalized for DISH.

The company is actively engaged in ground lease optimization and continuously evaluating the economic viability of its tower portfolio, with 1,000-1,700 projected tenantless towers remaining post T-Mobile integration.

Array Digital Infrastructure Spectrum Monetization

Array successfully closed multiple significant spectrum transactions in Q2, including a $168 million sale of 600 MHz, 700 MHz, and AWS licenses to T-Mobile in May, and a $1 billion transaction with Verizon in June. These transactions mean Array has monetized approximately 70% of its spectrum holdings.

The company continues to pursue opportunistic monetization of its remaining C-band spectrum, which is considered a highly compelling 5G asset with a mature ecosystem for carrier deployment.

Capital Allocation and M&A Strategy

TDS's balance sheet has been strengthened by recent transactions, including Array's spectrum sales, providing significant capital flexibility. The company remains committed to M&A, focusing on small- to medium-sized opportunities that align with its clustering strategy and have an accretive path to all-fiber, exemplified by the acquisition of Granite State Communications for $25 million.

While TDS was restricted from share repurchases in Q2 due to the ongoing offer for Array, it maintains a $520 million authorization and commitment to its buyback program.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.