Array Digital Infrastructure (AD) Q3 2024 earnings summary

Executive summary

• Announced and closed major spectrum monetization transactions, including $1 billion in sales to Verizon and other carriers, with additional sales contingent on the T-Mobile deal closing; agreements to sell wireless operations and select spectrum assets to T-Mobile for $4.4 billion, all pending regulatory approval and expected to close mid-2025.

• Q3 2024 net loss attributable to shareholders was $79 million (or $0.92 per share), driven by a $136 million non-cash impairment charge on high-band spectrum licenses; excluding this, net income was $23 million ($0.26 per share), flat year-over-year.

• Sale of OneNeck IT Solutions closed, generating free cash flow; additional non-strategic asset divestitures at TDS Telecom expected later in the year.

• Leadership transition at TDS Telecom with Chris Bosfeld succeeding Michelle Brukwicki as CFO.

• Both business units are investing strategically while maintaining cost discipline and a strong cash position.

Financial highlights

• Q3 2024 total operating revenues were $922 million, down 4% year-over-year; service revenues declined 2% to $747 million; equipment sales fell 13% to $175 million.

• Adjusted EBITDA for Q3 2024 was $269 million, up 3% year-over-year; Adjusted OIBDA was $222 million, up 1%.

• Free cash flow for the nine months ended September 30, 2024 was $331 million, up from $237 million in the prior year period.

• Capital expenditures for Q3 2024 were $120 million, with full-year guidance of $550–$600 million.

• TDS Telecom Q3 2024 revenues grew 2% to $263 million; Adjusted EBITDA up 21% to $83 million.

Outlook and guidance

• 2024 service revenue guidance narrowed to $2.95–$3.0 billion; Adjusted OIBDA raised to $800–$875 million; Adjusted EBITDA raised to $970–$1,045 million; capital expenditures forecasted at $550–$600 million.

• TDS Telecom’s 2024 guidance unchanged: revenues $1,050–$1,080 million, Adjusted EBITDA $330–$360 million, capex $310–$340 million.