Array Digital Infrastructure Inc (AD) Q3 2025 Earnings Call Highlights: Strong Site Rental ...

This article first appeared on GuruFocus.

Special Dividend: $1.6 billion received from Array in August. Pending AT&T Transaction: Expected to close for $1 billion in either Q4 2025 or H1 2026. Site Rental Revenue Growth: 68% year-over-year increase in Q3 2025. Fiber Addresses Delivered: 42,000 in the quarter, with a goal of 150,000 for the full year. Residential Fiber Net Adds: 11,200 in the quarter, contributing to 19% growth year-over-year. Capital Expenditures: Increased due to EA-CAM program and higher expansion address delivery. Adjusted EBITDA: Down 3% year-over-year, impacted by divestitures and legacy revenue declines. Revenue from Divested Markets: $6 million decrease compared to the prior year. Noncontrolling Investment Income: $34 million equity income recognized from Iowa transactions. Distributions from Verizon Managed Entities: $25 million received related to a prepaid tower lease transaction.

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Release Date: November 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Array Digital Infrastructure Inc (NYSE:AD) has successfully transitioned into an independent tower company, showing promising growth. The company has made substantial progress in monetizing its spectrum, with agreements covering 70% of its holdings. Array Digital Infrastructure Inc (NYSE:AD) reported a significant increase in site rental revenue, growing 68% year-over-year. The T-Mobile Master Lease Agreement (MLA) has significantly boosted revenue, enhancing the company's financial performance. The company is focused on optimizing tower operations and monetizing spectrum, which are key value drivers for future growth.

Negative Points

Array Digital Infrastructure Inc (NYSE:AD) is facing challenges with DISH Wireless, which disputes its obligations under the Master Lease Agreement. The company expects high selling, general, and administrative expenses to persist into the first half of 2026. There are concerns about the impact of regulatory approval delays on the timing of spectrum transaction closures. The company has a number of 'naked towers' that may require decommissioning if they remain unleased. Array Digital Infrastructure Inc (NYSE:AD) is dealing with legacy wireless operations wind-down costs, which are expected to continue into 2026.

Q & A Highlights

Q: Can you provide an update on the fiber plan and potential expansion opportunities? A: Vicki Villacrez, Executive Vice President and CFO, mentioned that they are evaluating business cases and engineering designs for several hundred thousand additional fiber opportunities. They plan to update investors in February on capital allocation and success measures for these expansions.

Story Continues

Q: How does the stock buyback program fit into TDS's capital allocation strategy? A: Vicki Villacrez explained that the $500 million stock buyback program reflects the Board's confidence in the company's long-term strategy. The buyback will be balanced with investments in the business, particularly in fiber, and will depend on the successful closing of spectrum transactions.

Q: What is the strategy for managing naked towers and potential decommissioning? A: Douglas Chambers, Interim President and CEO of Array Digital Infrastructure, stated that they are working to lease up towers and rationalize ground rents. They will assess the leasability of towers and may decommission those that are uneconomical over a multi-year process.

Q: What are the leverage targets for TDS Telecom, and how do they relate to future fiber expansions? A: Vicki Villacrez noted that TDS aims to maintain a leverage ratio under 1.4 times. This target does not yet include additional edge-out fiber opportunities, which will be updated in February. The leverage strategy is designed to support ongoing fiber investments and tax obligations.

Q: How does TDS Telecom plan to improve fiber penetration and sales? A: Ken Dixon, President and CEO of TDS Telecom, highlighted efforts to double construction crews and enhance sales strategies, including door-to-door sales and digital marketing. They aim to improve address delivery and penetration rates in new and existing fiber markets.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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