Array Digital Infrastructure (AD) Q1 2025 earnings summary

Executive summary

• Progress continues on the $4.4 billion sale of wireless operations and spectrum to T-Mobile, expected to close mid-2025, with additional spectrum sales to Verizon ($1.0 billion) and AT&T ($1.018 billion) contingent on the T-Mobile deal and regulatory approval.

• Net income remained flat at $18 million in Q1 2025, with total operating revenues declining 6% year-over-year to $891 million.

• Financial flexibility was enhanced by extending bank maturities, amending revolvers, and repaying $55 million in long-term debt.

• Special dividends are anticipated for shareholders upon transaction close, with proceeds primarily used to repay outstanding bank debt.

• Strategic alternatives review and capital structure optimization are ongoing, with a focus on monetizing remaining spectrum and expanding fiber broadband.

Financial highlights

• Q1 2025 free cash flow improved to $79 million from $61 million a year ago, driven by cost optimization and lower capital expenditures.

• Adjusted EBITDA was $254 million, down 7% year-over-year; Adjusted OIBDA was $215 million, down 6%.

• Capital expenditures dropped 60% year-over-year to $53 million, reflecting a shift in 5G deployment strategy.

• Tower segment revenues increased 5% to $61 million, with third-party tower rental revenues up 6% year-over-year.

• TDS Telecom Q1 2025 revenues decreased 3% to $257 million; Adjusted EBITDA down 20% to $76 million.

Outlook and guidance

• The T-Mobile transaction is expected to close mid-2025, with special dividends planned for shareholders.

• No 2025 financial guidance provided for UScellular due to the pending sale.

• TDS Telecom 2025 guidance: operating revenues $1,061 million, Adjusted EBITDA $350 million, Adjusted OIBDA $340 million, capital expenditures $324 million.

• Transformation efforts at TDS Telecom are expected to yield $100 million in annual cost savings by 2028.

• Ongoing focus on monetizing remaining spectrum assets not included in announced transactions.