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    UNIT
    Earnings call· Jun 2026(Q2 FY26)

    Uniti Group Q2 FY26 earnings call UNIT

    Jul 30, 2026 Source

    Executive summary

    Uniti Group Inc. Q2 FY26 — Record Fiber Bookings and Accelerated Build

    Uniti Group delivered a strong quarter, driven by record fiber infrastructure bookings fueled by AI demand and accelerated fiber-to-the-home builds at Kinetic. The company is strategically expanding its network and optimizing its capital structure, while navigating industry-wide ARPU pressures and managing the timing of large infrastructure deals. Management is focused on operational excellence and customer obsession to drive future growth.

    Highlights

    5

    • Fiber Infrastructure recorded record new bookings, exceeding the previous record by almost 30%.

    • Kinetic achieved its strongest quarter ever of net adds, with 38,000 net new fiber subscribers.

    • Kinetic's fiber churn this quarter was the best second quarter churn ever seen.

    • Fiber Infrastructure consolidated bookings MRR reached approximately $2.2 million, its highest level on record.

    • The full-year target for new fiber homes constructed was raised to 475,000-525,000.

    Concerns

    4

    • Consumer fiber ARPU decreased 2.6% year-over-year and is expected to decrease low single digits in Q3 FY26.

    • Consolidated pro forma revenue and adjusted EBITDA were down 5% and 10% year-over-year, respectively.

    • Kinetic CapEx guidance increased by $100 million to $1.27 billion at the midpoint, partly due to pull-forward for 2027 builds.

    • There is a possibility that some large Fiber Infrastructure deals could slip from Q4 FY26 into early 2027.

    Guidance & targets

    25
    CategoryTargetConfidence
    New fiber homes constructed
    475,000-525,000
    high materiality
    High
    Homes passed with fiber (Kinetic)
    2.33 million to 2.38 million
    high materiality
    High
    Fiber subscribers (Kinetic)
    675,000 and 700,000
    medium materiality
    High
    Consumer fiber revenue (Kinetic)
    $635 million to $655 million
    medium materiality
    High
    Revenue (Kinetic)
    $2.145 billion
    high materiality
    High
    Contribution margin (Kinetic)
    $905 million
    medium materiality
    High
    Net CapEx (Kinetic)
    $1.27 billion
    high materiality
    High
    Revenue (Fiber Infrastructure)
    $1 billion
    high materiality
    High
    Contribution margin (Fiber Infrastructure)
    $575 million
    medium materiality
    High
    Net CapEx (Fiber Infrastructure)
    $140 million
    medium materiality
    High
    Revenue (Unity Solutions)
    $700 million
    medium materiality
    High
    Contribution margin (Unity Solutions)
    $320 million
    medium materiality
    High
    Consolidated revenue
    $3.655 billion
    high materiality
    High
    Consolidated Adjusted EBITDA
    $1.475 billion
    high materiality
    High
    Consolidated Net CapEx
    $1.525 billion
    high materiality
    High
    Consumer fiber ARPU
    decrease low single digits
    medium materiality
    Medium
    Consumer fiber ARPU
    stabilize with expected increase of low single digits
    medium materiality
    Medium
    Fiber as majority of revenue
    overtake legacy services
    high materiality
    High
    Homes passed with fiber (Kinetic)
    3.5 million
    high materiality
    High
    Fiber subscribers (Kinetic)
    1.25 million
    high materiality
    High
    Revenue from core business
    closer to 90%
    medium materiality
    High
    Terminal fiber penetration (Kinetic)
    40%
    medium materiality
    High
    Revenue from new builds (Fiber Infrastructure)
    $1.5 billion
    high materiality
    High
    Recurring revenue from new builds (Fiber Infrastructure)
    $500 million
    high materiality
    High
    Non-core assets monetization
    $500 million to $1 billion
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Kinetic
    Kinetic's fiber-based revenue, including consumer, business, and wholesale services, grew 12% year-over-year. The segment achieved its highest level of new passings on record and strongest quarter ever of net fiber adds. Consumer fiber ARPU was impacted by various factors but is expected to stabilize.
    Homes passed with fiber: 2.1 millionNet new fiber subscribers: 38,000Total fiber subscribers: 603,000Fiber subscribers growth YoY: 25%Consumer fiber revenue growth YoY: 19%Fiber penetration: 29% (up 90 bps YoY)Fiber coverage within footprint: 46%
    		$2.145 billion12%—$905 million
    Fiber Infrastructure
    Fiber Infrastructure revenue grew 10% year-over-year, driven by robust demand from hyperscaler and neocloud customers. The segment recorded its highest-ever consolidated bookings MRR and strong anchor lease-up cash yields.
    Consolidated bookings MRR: $2.2 millionAnchor lease up cash yields: 37%
    		$1 billion10%—$575 million
    Unity Solutions
    Unity Solutions revenue and contribution margin are expected to decline at a mid-teens pace year-over-year over the next few years. The increase in contribution margin guidance is due to higher margin strategic services sold during the quarter. The company aims to retain profitable portions while winding down low-value legacy services.
    		$700 millionmid-teens decline—$320 million

    Operational metrics

    24
    Total fiber revenue growth
    10%YoY
    Q2 FY26

    Company-wide fiber revenue growth.

    Fiber revenue growth
    6%YoY
    Q2 FY26

    In line with expectations, demonstrating robust demand.

    Managed services attachment rate
    6%
    Q2 FY26

    Estimated attachment rate for cross-selling products into on-net fiber base.

    New bookings with managed services product
    16%
    Q2 FY26

    Percentage of new bookings that included a managed services product.

    Fiber Infrastructure bookings increase
    30%vs previous record
    Q2 FY26

    Record quarter of new bookings, exceeding previous record.

    Fiber Infrastructure bookings mix (neoclouds)
    20%
    Q2 FY26

    Contribution to bookings from neoclouds.

    Fiber Infrastructure bookings mix (superscalers)
    18%
    Q2 FY26

    Contribution to bookings from superscalers.

    Fiber Infrastructure bookings mix (hyperscalers)
    10%
    Q2 FY26

    Contribution to bookings from hyperscalers.

    Fiber Infrastructure bookings mix (fiber optic to the home providers)
    6%
    Q2 FY26

    Contribution to bookings from fiber optic to the home providers.

    Fiber Infrastructure bookings mix (product)
    over 50%
    Q2 FY26

    Reinforcing the pivot from build cycle to lease-up and inference.

    Waves funnel
    1.3 petabytes
    Q2 FY26

    Current funnel of opportunities, vast majority from relatively new customers.

    Blended yields on debt improvement
    600
    Past 3 years

    Improved significantly over the past three years.

    Blended debt yields
    6.5%down from 12.5% in Feb 2023
    Current

    Current blended yield on debt.

    Non-core assets monetization potential
    $500 million to $1 billion
    Next 12-36 months

    Believed to be monetizable assets with negligible effect on adjusted EBITDA.

    Kinetic fiber build cost per passing
    upper end of range
    FY26

    Expected to come in at the upper end of the guided range.

    Hyperscaler deals contract length
    10-20 years
    Ongoing

    Typical contract length for greenfield builds and overpulls for hyperscalers.

    Lit wave deals contract length
    3-5 years
    Ongoing

    Typical contract length for lit deals, with focus on credit quality.

    Fiber Infrastructure capital intensity
    14%
    FY26

    Capital intensity at the midpoint of FY26 guidance.

    Consolidated pro forma revenue
    5%down YoY
    Q2 FY26

    Primarily driven by declines in Unity Solutions and legacy services.

    Consolidated Adjusted EBITDA
    10%down YoY
    Q2 FY26

    Primarily driven by declines in Unity Solutions and legacy services.

    Kinetic fiber-based revenue growth
    12%YoY
    Q2 FY26

    Inclusive of consumer, business, and wholesale services.

    Unity Solutions revenue and EBITDA decline
    mid-teens paceYoY
    Next few years

    Expected decline over the next few years.

    Fiber Infrastructure Adjusted EBITDA growth
    20%YoY
    Q2 FY26

    Growth in Adjusted EBITDA for Fiber Infrastructure.

    Hyperscaler business model
    80%
    Q2 FY26

    Leveraging heavily the previously built network, providing a cost and time to deploy advantage.

    Industry KPIs

    1
    MetricValueDetails
    Broadband fwa net adds split141,000homes

    Deals & partnerships

    2
    WindstreamAgreement to merge

    Since announcing our agreement to merge with Windstream, we have successfully executed on a series of planned actions.

    KineticSecond ABS transaction

    Recently completed our second ABS transaction at Kinetic to fund fiber build and potentially pay down secured debt through asset sale offers.

    Risks & headwinds

    4
    Consumer fiber ARPU pressureQ3 FY26

    Decreased 2.6% YoY in Q2 FY26; expected to decrease low single digits YoY in Q3 FY26.

    Mitigation: Targeted marketing, customer experience, and customer retention initiatives; adjusting pricing based on market strength and competitor pricing; expecting stabilization and low single-digit increase by Q4 FY26.

    Timing of large Fiber Infrastructure dealsQ4 FY26 / Early 2027

    Possibility that some large sales type lease dark fiber deals could slip from Q4 FY26 into early 2027.

    Mitigation: Acknowledged as a reality of building large amounts of fiber (hundreds of miles, multiple permitting authorities, contractors); not a reflection of deal quality, typically a matter of weeks or a month.

    Increased cost per home passMid-2027 and beyond

    Expected to come in at the upper end of the guided range for cost per passing.

    Mitigation: Long-term contracts and volume for CPE memory; ability to balance different SKUs; CapEx increase for 2026 is largely a pull-forward for 2027 builds, not necessarily higher 2026 costs.

    Competitive promotionsNear-term

    Impact on ARPU across the industry from convergence offerings and new initiatives from Big Cable.

    Mitigation: Implementing targeted pricing tiers and cohorts; fortunate to compete with cable in less than 60% of fiber territory; not chasing unprofitable growth but not ceding market share.

    What to watch in Q3 FY26

    5

    Consumer Fiber ARPU trajectory

    Q4 FY26
    CurrentDown 2.6% YoY in Q2 FY26, expected to decrease low single digits YoY in Q3 FY26
    TargetStabilize and increase low single digits YoY in Q4 FY26

    Why it matters

    ARPU stabilization is key for Kinetic's profitability and growth amidst competitive pressures.

    For the remainder of the year, we expect consumer fiber ARPU to decrease low single digits year-over-year in the third quarter, but should stabilize in the fourth quarter with an expected increase of low single digits year-over-year.

    Q&A highlights

    5

    Asked for more color on ARPU trends given industry pressures and whether the CapEx increase implies higher cost per home pass or front-loading of costs.

    Management acknowledged ARPU pressure due to competitive promotions but expects stabilization and return to positive growth by Q4 FY26, driven by targeted strategies. They clarified that the CapEx increase is largely a pull-forward for 2027 builds, not necessarily higher cost per passing for 2026, though 2026 costs might be at the higher end of the range due to fiber material costs in outer years.

    “You can't really take the increase in capital that we're guiding to and apply it directly to just those 25,000 additional homes we're guiding to. As mentioned in my comments, a lot of that CapEx is a pull forward of CapEx to accelerate 2027 growth.”

    asked by Gregory Williams · answered by Unknown Speaker

    2 min read6 chapters

    Detailed Narrative

    01

    AI-Driven Demand for Fiber Infrastructure

    Uniti is experiencing accelerating demand for fiber infrastructure, particularly from hyperscalers and neoclouds, driven by the rapid adoption of agentic AI. This demand is evolving from dark fiber networks to lit wave packages, with significant multiplier effects expected on broadband usage as AI inference moves to the edge, requiring low latency and high bandwidth connectivity. The company is building the necessary infrastructure to enable this growth, positioning itself to benefit from the expanding AI market.

    02

    Accelerated Fiber Build and Market Positioning

    As a premier insurgent fiber provider, Uniti is strategically positioned in Tier 2 and 3 markets, leveraging its robust existing network. The company significantly accelerated its fiber build at Kinetic, achieving a record 141,000 new passings in Q2 FY26, bringing total homes passed with fiber to 2.1 million. The full-year target for new fiber homes constructed was raised to 475,000-525,000, with a long-term goal of 3.5 million homes passed by the end of 2029, capitalizing on unique market opportunities.

    03

    Record Bookings and Product Mix Shift

    Fiber Infrastructure recorded its highest-ever new bookings, with consolidated bookings MRR of approximately $2.2 million, an almost 30% increase from the previous record. Over 50% of these new bookings were WAVES or LIT capacity, reinforcing a pivot from the initial build cycle to lease-up and inference. This shift is primarily driven by neoclouds and superscalers demanding multi-terabit wave packages, leveraging Uniti's unique routes and network quality, with a current waves funnel representing approximately 1.3 petabytes of traffic.

    04

    Kinetic Performance and ARPU Dynamics

    Kinetic achieved record net fiber subscriber adds of 38,000 in Q2 FY26, ending the quarter with 603,000 total fiber subscribers, a 25% YoY increase. Fiber penetration reached 29%, up 90 basis points YoY, with 46% of the Kinetic consumer footprint now fiber-passed. While consumer fiber ARPU decreased 2.6% YoY due to competitive pressures, it is expected to stabilize and return to low single-digit growth by Q4 FY26, supported by targeted marketing and retention initiatives.

    05

    Capital Structure Optimization and Asset Monetization

    Uniti has successfully optimized its capital structure, extending debt maturities, lowering costs, and improving blended debt yields by 600 basis points over three years to 6.5%. The company completed its second ABS transaction at Kinetic to fund fiber builds and potentially pay down up to $500 million of secured debt. Additionally, Uniti is actively pursuing the monetization of $500 million to $1 billion in non-core assets over the next 12-36 months, which are currently underutilized and produce minimal cash flow, to generate material proceeds.

    06

    Cross-Selling and Strategic Services Growth

    Uniti Solutions is demonstrating growing success in cross-selling managed services into its on-net fiber base, with approximately 16% of new bookings including a managed services product. While Unity Solutions is not core to the long-term fiber infrastructure strategy, it generates meaningful and predictable cash flow. The company aims to retain the most profitable portions of this business while winding down low-value legacy and TDM services, contributing to enhanced margins and customer loyalty.

    AI-generated summary of the company’s earnings call. Not investment advice.