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Array Digital Infrastructure saw strong tower leasing growth and additional spectrum deals.
Telephone and Data Systems, Inc. (TDS - Free Report) reported first-quarter 2026 earnings that beat the Zacks Consensus Estimate, driven by gains tied to spectrum license sales and continued fiber expansion. Earnings came in at $1.11 per share against the consensus estimate of a loss of 87 cents, delivering a surprise of 227.6%. Revenues rose 6.6% year over year to $309.5 million but missed the consensus mark of $317 million by 2.5%.
The company benefited from strong momentum in its fiber broadband and tower businesses. TDS Telecom expanded its marketable fiber footprint to 1.1 million addresses, while Array Digital Infrastructure posted robust growth in tower rental revenues and spectrum monetization activities.
Telephone and Data Systems, Inc. Price, Consensus and EPS Surprise
Telephone and Data Systems reported net income from continuing operations attributable to common shareholders of $129.3 million compared with a loss of $23.2 million in the year-ago quarter. The sharp improvement was primarily driven by gains associated with wireless spectrum license sales completed by Array.
During the quarter, Array closed the sale of certain 3.45 GHz and 700 MHz spectrum licenses for $1.018 billion. TDS recorded a book gain of $150.9 million, or $114.7 million net of taxes, from the transaction. Total operating revenues increased to $309.5 million from $290.4 million a year earlier.
Telephone and Data Systems Expands Fiber Reach
TDS Telecom continued to execute on its fiber broadband expansion strategy. The company delivered 40,000 new marketable fiber service addresses during the quarter, up nearly 180% year over year and the highest first-quarter deployment level in company history.
Residential fiber net additions totaled 10,900 during the quarter, up more than 30% from the prior-year period. Total marketable fiber service addresses increased to 1.102 million from 1.062 million at the end of 2025. Fiber revenues rose 13% year over year, helping offset declines in legacy copper and cable operations.
The company also announced an agreement to acquire Granite State Communications in New Hampshire. The acquisition will add approximately 11,000 fiber service addresses contiguous to existing TDS markets and is expected to close in the third quarter of 2026, subject to regulatory approval.
TDS Telecom Revenues Face Legacy Pressure
TDS Telecom generated revenues of $250 million in the quarter compared with $257 million a year earlier. The decline reflected continued weakness in copper and cable markets as well as the impact of divestitures completed in 2025.
Residential revenues declined to $178.6 million from $183.8 million in the year-ago quarter. Cable revenues dropped roughly 10% year over year, while copper-related revenues continued to contract. However, residential revenue per connection improved 1% year over year to $66.41 due to pricing actions and increased fiber penetration.
Adjusted EBITDA for TDS Telecom decreased 3% year over year to $74 million. Capital expenditures more than doubled to $126 million as the company accelerated fiber construction activity and expanded internal construction capabilities.
Telephone and Data Systems Sees Tower Momentum
Array Digital Infrastructure continued to benefit from healthy tower leasing activity. Cash site rental revenues increased 64% year over year, excluding the impact of DISH revenues and T-Mobile interim revenues.
The company also reported sequential improvement in tower tenancy ratios after excluding DISH colocations. Array stopped recognizing DISH revenues during the quarter after the customer failed to make the required payments under its master lease agreement.
Array closed the sale of certain 700 MHz spectrum licenses to T-Mobile on May 5, 2026, for proceeds of $74.8 million. The company also expects to close additional spectrum transactions with T-Mobile and Verizon later in the year, subject to customary approvals.
Telephone and Data Systems Improves Financial Flexibility
Telephone and Data Systems generated strong liquidity during the first quarter of 2026, supported by proceeds from spectrum monetization activities. Cash and cash equivalents totaled $1.37 billion at quarter-end compared with $766 million at the end of 2025, while long-term debt declined to $672.7 million from $823.4 million.
Net cash provided by operating activities from continuing operations was $68.1 million in the first quarter of 2026 compared with net cash used of $42.5 million in the year-ago quarter.
TDS Reaffirms 2026 Outlook
Management reaffirmed its 2026 outlook for both TDS Telecom and Array. TDS Telecom continues to expect total operating revenues between $1.015 billion and $1.055 billion for the full year.
Adjusted EBITDA guidance remains in the range of $310-$350 million, while capital expenditures are projected between $550 million and $600 million. The company expects to deliver 200,000-250,000 new fiber service addresses during 2026.
Array also reaffirmed its 2026 guidance. The business expects revenues between $200 million and $215 million and adjusted EBITDA in the range of $200-$215 million. Capital expenditures are expected to be between $25 million and $35 million as the company continues optimizing tower operations and monetizing spectrum assets.
Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to release second-quarter fiscal 2026 earnings on May 19. The Zacks Consensus Estimate for earnings is pegged at $2.33 per share, suggesting growth of 37.06% from the year-ago reported figure.
Keysight has a long-term earnings growth expectation of 17.45%. The company delivered an average earnings surprise of 4.58% in the last four reported quarters.
Workday, Inc. (WDAY - Free Report) is set to release first-quarter fiscal 2027 earnings on May 21. The Zacks Consensus Estimate for earnings is pegged at $2.49 per share, implying growth of 11.7% from the year-ago reported figure.
Workday has a long-term earnings growth expectation of 20.16%. The company delivered an average earnings surprise of 8.53% in the last four reported quarters.
Analog Devices, Inc. (ADI - Free Report) is set to release second-quarter fiscal 2026 earnings on May 20. The Zacks Consensus Estimate for earnings is pegged at $2.88 per share, implying growth of 55.7% from the year-ago reported figure.
Analog Devices has a long-term earnings growth expectation of 21.89%. The company delivered an average earnings surprise of 6.11% in the last four reported quarters.
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TDS Q1 Earnings Surpass Estimates on Spectrum Sale Gains
Key Takeaways
Telephone and Data Systems, Inc. (TDS - Free Report) reported first-quarter 2026 earnings that beat the Zacks Consensus Estimate, driven by gains tied to spectrum license sales and continued fiber expansion. Earnings came in at $1.11 per share against the consensus estimate of a loss of 87 cents, delivering a surprise of 227.6%. Revenues rose 6.6% year over year to $309.5 million but missed the consensus mark of $317 million by 2.5%.
The company benefited from strong momentum in its fiber broadband and tower businesses. TDS Telecom expanded its marketable fiber footprint to 1.1 million addresses, while Array Digital Infrastructure posted robust growth in tower rental revenues and spectrum monetization activities.
Telephone and Data Systems, Inc. Price, Consensus and EPS Surprise
Telephone and Data Systems, Inc. price-consensus-eps-surprise-chart | Telephone and Data Systems, Inc. Quote
TDS Gains From Spectrum Monetization
Telephone and Data Systems reported net income from continuing operations attributable to common shareholders of $129.3 million compared with a loss of $23.2 million in the year-ago quarter. The sharp improvement was primarily driven by gains associated with wireless spectrum license sales completed by Array.
During the quarter, Array closed the sale of certain 3.45 GHz and 700 MHz spectrum licenses for $1.018 billion. TDS recorded a book gain of $150.9 million, or $114.7 million net of taxes, from the transaction. Total operating revenues increased to $309.5 million from $290.4 million a year earlier.
Telephone and Data Systems Expands Fiber Reach
TDS Telecom continued to execute on its fiber broadband expansion strategy. The company delivered 40,000 new marketable fiber service addresses during the quarter, up nearly 180% year over year and the highest first-quarter deployment level in company history.
Residential fiber net additions totaled 10,900 during the quarter, up more than 30% from the prior-year period. Total marketable fiber service addresses increased to 1.102 million from 1.062 million at the end of 2025. Fiber revenues rose 13% year over year, helping offset declines in legacy copper and cable operations.
The company also announced an agreement to acquire Granite State Communications in New Hampshire. The acquisition will add approximately 11,000 fiber service addresses contiguous to existing TDS markets and is expected to close in the third quarter of 2026, subject to regulatory approval.
TDS Telecom Revenues Face Legacy Pressure
TDS Telecom generated revenues of $250 million in the quarter compared with $257 million a year earlier. The decline reflected continued weakness in copper and cable markets as well as the impact of divestitures completed in 2025.
Residential revenues declined to $178.6 million from $183.8 million in the year-ago quarter. Cable revenues dropped roughly 10% year over year, while copper-related revenues continued to contract. However, residential revenue per connection improved 1% year over year to $66.41 due to pricing actions and increased fiber penetration.
Adjusted EBITDA for TDS Telecom decreased 3% year over year to $74 million. Capital expenditures more than doubled to $126 million as the company accelerated fiber construction activity and expanded internal construction capabilities.
Telephone and Data Systems Sees Tower Momentum
Array Digital Infrastructure continued to benefit from healthy tower leasing activity. Cash site rental revenues increased 64% year over year, excluding the impact of DISH revenues and T-Mobile interim revenues.
The company also reported sequential improvement in tower tenancy ratios after excluding DISH colocations. Array stopped recognizing DISH revenues during the quarter after the customer failed to make the required payments under its master lease agreement.
Array closed the sale of certain 700 MHz spectrum licenses to T-Mobile on May 5, 2026, for proceeds of $74.8 million. The company also expects to close additional spectrum transactions with T-Mobile and Verizon later in the year, subject to customary approvals.
Telephone and Data Systems Improves Financial Flexibility
Telephone and Data Systems generated strong liquidity during the first quarter of 2026, supported by proceeds from spectrum monetization activities. Cash and cash equivalents totaled $1.37 billion at quarter-end compared with $766 million at the end of 2025, while long-term debt declined to $672.7 million from $823.4 million.
Net cash provided by operating activities from continuing operations was $68.1 million in the first quarter of 2026 compared with net cash used of $42.5 million in the year-ago quarter.
TDS Reaffirms 2026 Outlook
Management reaffirmed its 2026 outlook for both TDS Telecom and Array. TDS Telecom continues to expect total operating revenues between $1.015 billion and $1.055 billion for the full year.
Adjusted EBITDA guidance remains in the range of $310-$350 million, while capital expenditures are projected between $550 million and $600 million. The company expects to deliver 200,000-250,000 new fiber service addresses during 2026.
Array also reaffirmed its 2026 guidance. The business expects revenues between $200 million and $215 million and adjusted EBITDA in the range of $200-$215 million. Capital expenditures are expected to be between $25 million and $35 million as the company continues optimizing tower operations and monetizing spectrum assets.
Zacks Rank
TDS carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to release second-quarter fiscal 2026 earnings on May 19. The Zacks Consensus Estimate for earnings is pegged at $2.33 per share, suggesting growth of 37.06% from the year-ago reported figure.
Keysight has a long-term earnings growth expectation of 17.45%. The company delivered an average earnings surprise of 4.58% in the last four reported quarters.
Workday, Inc. (WDAY - Free Report) is set to release first-quarter fiscal 2027 earnings on May 21. The Zacks Consensus Estimate for earnings is pegged at $2.49 per share, implying growth of 11.7% from the year-ago reported figure.
Workday has a long-term earnings growth expectation of 20.16%. The company delivered an average earnings surprise of 8.53% in the last four reported quarters.
Analog Devices, Inc. (ADI - Free Report) is set to release second-quarter fiscal 2026 earnings on May 20. The Zacks Consensus Estimate for earnings is pegged at $2.88 per share, implying growth of 55.7% from the year-ago reported figure.
Analog Devices has a long-term earnings growth expectation of 21.89%. The company delivered an average earnings surprise of 6.11% in the last four reported quarters.