Telephone and Data Systems, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total operating revenues from continuing operations were $306.7 million for the third quarter of 2026, compared to $308.5 million in the same period in 2025.
• Net income attributable to TDS common shareholders from continuing operations was $29.6 million ($0.26 per diluted share) for the third quarter of 2026, versus $40.2 million ($0.33 per diluted share) in the prior year period.
• TDS Telecom service revenue decreased 3% year-over-year; residential fiber revenue grew 14%, offset by impacts of divestitures and legacy declines.
• Array site rental revenues grew 14% year-over-year.
• For the nine months ended September 30, 2026, total operating revenues were $925.4 million, up 3% from $897.5 million in 2025.
• Net income attributable to TDS common shareholders for the nine months ended September 30, 2026, was $436.9 million, compared to a loss of $114.6 million in the same period in 2025.
• Free cash flow from continuing operations for the nine months ended September 30, 2026, was $(472.8) million, compared to $(38.7) million in 2025.
• Cash and cash equivalents were $1.635 billion as of September 30, 2026, compared to $770.2 million at the beginning of the period.
• Long-term debt, net, was $668.7 million as of September 30, 2026, down from $823.4 million as of December 31, 2025.

Guidance and Future Outlook:

• TDS Telecom updated 2026 financial guidance:
  • Revenues: $990 million to $1,010 million (previously $1,000 million to $1,025 million).
  • Adjusted OIBDA: $280 million to $300 million (previously $300 million to $320 million).
  • Adjusted EBITDA: $290 million to $310 million (previously $310 million to $330 million).
  • Capital expenditures: Approximately $750 million (previously $625 million to $675 million).
• Array reaffirmed 2026 financial guidance with no changes to previous estimates for revenues, Adjusted OIBDA, Adjusted EBITDA, or capital expenditures.

Business Segments and Product Lines:

• TDS Telecom:
  • Expanded marketable fiber service footprint by approximately 76,000 addresses during the quarter.
  • Grew residential fiber net adds by approximately 17,000.
  • Total residential fiber net adds for the nine months ended September 30, 2026, were 42,700.
  • Total residential broadband net adds for the nine months ended September 30, 2026, were 13,000.
  • Residential revenue per connection was $66.88 for the quarter ended September 30, 2026.
• Array:
  • Delivered consecutive quarter-over-quarter colocation growth.
  • Number of colocations increased to 4,372 as of September 30, 2026, from 4,362 in the prior quarter.
  • Tower tenancy rate was 0.98 as of September 30, 2026.
  • Continuing to close pending sales of wireless spectrum; received regulatory approval for remaining pending transactions in October, subject to FCC finality and other customary closing conditions.

Market and Competitive Landscape:

• TDS Telecom faces competition from fixed wireless and satellite providers.
• TDS notes a lack of scale relative to larger competitors.
• Array relies on a small number of tenants for a substantial portion of its revenue.

Risks and Challenges:

• Risks include the manner in which Array's remaining business is conducted, strategic decisions regarding the tower business, and the consummation of additional spectrum license sales to T-Mobile.
• Economic and business risks associated with fixed rate annual escalators on colocation revenue contracts.
• Intense competition, including fixed wireless and satellite.
• Potential inability to protect rights to land under towers.
• Risks related to cyber-attacks, network security breaches, and changes in the regulatory environment.
• Uncertainties in future cash flows and access to capital markets.

Management Commentary and Tone:

• Walter Carlson, President and CEO, stated, "We continue to make progress as our teams execute our strategic objectives."
• Management highlighted the value of Array's assets following the withdrawal of the offer to acquire minority interest in Array.
• Management expressed satisfaction with the repurchase of nearly 15 million shares in 2026, returning over $520 million to shareholders.

Other Key Points:

• The TDS Board authorized an incremental $250 million share repurchase plan.
• TDS repurchased approximately 6 million shares in the third quarter of 2026 at an average price of $36.65 per share.
• Following the end of the quarter, TDS was virtually exhausting the existing share repurchase authorization.
• TDS withdrew its offer to acquire the minority interest in Array on September 1, 2026.
• TDS Telecom acquired 7,800 connections (including 4,700 residential broadband) in September 2026.
• A divestiture in December 2025 resulted in a decrease of 12,500 connections.
• Array received regulatory approval for remaining pending spectrum transactions in October 2026.