Summary of Uniti Group (UNIT) Conference Call - August 12, 2025 Company Overview - **Company**: Uniti Group (UNIT) - **Event**: Eleventh Annual TD Cowen Communication Infrastructure Summit - **Key Speaker**: Kenny Gunderman, President and CEO Key Points Industry Context - The telecommunications industry is experiencing a convergence of fiber to the home and AI-driven demand in commercial fiber business, which are seen as significant growth drivers for Uniti Group [4][5][6] Financial Performance and Guidance - The company reported a weaker-than-expected earnings performance, with a $60 million shortfall compared to models [3] - Guidance was lowered due to several factors, including slower builds and subscriber penetration from the Windstream acquisition, increased costs associated with fiber builds, and competitive pressure on DSL services [10][11][12][14] - The company is transitioning from a REIT to a C Corp, which has implications for its shareholder base and may lead to volatility in stock performance [7][8] Strategic Initiatives - Uniti Group is pivoting to focus on unsubsidized builds to increase home coverage and improve penetration rates [12][13] - The company is onboarding third-party contractors to enhance build predictability and efficiency, which is expected to help catch up on build plans by the end of the year [14][19] - The Fiber Forward initiative aims to optimize market penetration and improve the overall build strategy, focusing on densification and clustering of existing markets [28][31] Legacy Services and Transition - Uniti Group is actively managing out of legacy TDM services, with expectations to be virtually out by the end of 2025, while still generating positive cash flow from these services [23][24][27] Subscriber Growth and Pricing Strategy - The company is optimistic about ARPU growth, citing opportunities for upselling higher-speed plans and the introduction of new pricing strategies tailored to local markets [36][39][40] - The current pricing for fiber services is competitive, and the company believes it can maintain or increase ARPU despite market pressures [38][39] Wireless and Commercial Fiber Business - Wireless bookings have increased by 30% year-over-year, driven by densification efforts and upgrades to rural towers [72] - The commercial fiber business is expected to benefit from new hyperscaler deals, which are anticipated to enhance cash flow and growth potential [64][66][67] M&A Activity and Market Outlook - The company remains open to M&A opportunities, particularly in the commercial fiber space, as the market shows signs of increased activity [79][81] - There is a growing interest in fiber businesses, especially those that own their networks and demonstrate steady growth [83][84] Tax Implications - As a result of the merger, Uniti Group expects to benefit from a step-up in tax basis, reducing the likelihood of becoming a cash taxpayer in the near future [88][89] AI Integration - The company is leveraging AI to improve operational efficiency and customer experience, with a dedicated team focused on AI innovations [94][96][97] Additional Insights - The company is confident in its ability to navigate current challenges and capitalize on future growth opportunities, particularly in the fiber and AI sectors [18][71]

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $1,259,000,000, a 10.2% increase over Q1 2025 [5][19] - Adjusted EBITDA was $150,400,000, representing 11.9% of revenues and an increase of 14.9% over Q1 2025 [5][19] - Net income was $61,000,000, with diluted EPS of $2.90 per share, exceeding expectations [20] - The company increased its revenue expectations for the year to a range of $5,290,000,000 to $5,425,000,000, representing a growth of 12.5% to 15.4% over the prior year [6][23] Business Line Data and Key Metrics Changes - The service and maintenance business has grown significantly, providing a stable base of recurring revenue [8][9] - The company has diversified its customer base and services within telecommunications and digital infrastructure, which buffers against the impact of any single customer [7][9] - The backlog at the end of Q1 was $8,127,000,000, including $4,685,000,000 expected to be completed in the next twelve months [21] Market Data and Key Metrics Changes - The company noted robust demand drivers, particularly in fiber to the home programs and hyperscaler infrastructure [12][13] - Recent awards include significant contracts with Verizon and Windstream for fiber to the home and maintenance work [13] - The company is seeing increased opportunities related to AI infrastructure and middle mile networks [13][14] Company Strategy and Development Direction - The company aims to build on its service and maintenance business while capitalizing on fiber to the home deployments and other growth drivers [9][16] - The strategy includes expanding services inside the fence with hyperscalers, which opens new opportunities [17] - The company is focused on improving free cash flow and maintaining a balanced risk-return profile in its backlog [15][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on market opportunities despite macroeconomic uncertainties [6][11] - The impact of tariffs and international trade actions is expected to be negligible, with most components produced in the U.S. [11][23] - Management remains optimistic about the growth prospects, with ongoing opportunities in fiber infrastructure and service maintenance [12][16] Other Important Information - The company repurchased 200,000 shares for $30,200,000 during the quarter [6][22] - Operating cash flows used in the quarter were $54,000,000, reflecting seasonal uses of cash [22] - The company is closely monitoring the impact of tariffs and trade actions on its operations [23] Q&A Session Summary Question: Performance of Black and Veatch - Management noted that the performance is a mix of pull forward and ramping quicker than expected, with strong integration into operations [26][27] Question: Second Quarter Guidance - The guidance reflects continued strength from fiber to the home builds and wireless business, with expectations for ongoing growth [32][33] Question: CapEx and Tariff Impact - Management feels confident about managing equipment costs and has been proactive in planning to mitigate tariff impacts [34][36] Question: Margin Improvement - Operating leverage is a key factor in margin improvement, with expectations for continued growth in margins [39][41] Question: BEAD Program Importance - While the BEAD program is significant, it is not essential for current growth, with other drivers providing robust opportunities [42][44] Question: Backlog and Organic Growth - The backlog is diversified, and organic growth is slightly positive, with long-term opportunities expected [48][52] Question: Government Layoffs and Deregulation - Management is monitoring the potential easing of permitting and other regulatory changes that could positively impact the industry [80]