ITTI(US:TDS)2025-11-07 16:00Financial Data and Key Metrics Changes - Total operating revenues decreased by 3% year-over-year, with a 1% decline when excluding divestitures, driven by declines in legacy cable and copper markets, partially offset by fiber growth [31] - Adjusted EBITDA also fell by 3% year-over-year, impacted by divestitures and legacy revenue declines, but supported by disciplined cost control [31] - Capital expenditures increased compared to the previous year due to spending on the EACAM program and higher expansion address delivery, with over 80% of 2025 capital expenditures focused on fiber [31][32] Business Line Data and Key Metrics Changes - TDS Telecom achieved a milestone of 1 million fiber addresses, with 42,000 fiber addresses delivered in the quarter, contributing to a 19% growth in residential fiber connections year-over-year [15][23] - Residential fiber net additions were 11,200 in the quarter, reflecting an 8% year-over-year increase [30] - The company is behind schedule on its annual address delivery target but expects the fourth quarter to be the strongest [29] Market Data and Key Metrics Changes - The fiber business is expected to grow significantly, with a target of 1.8 million marketable fiber service addresses, up from approximately 900,000 [28][84] - The company anticipates achieving gig speeds for at least 95% of its footprint, with 76% currently at gig speeds [28] Company Strategy and Development Direction - The company is focused on capital allocation decisions, prioritizing investments in fiber, achieving inorganic growth through M&A, and returning capital to shareholders [17][20] - The EACAM program aims to replace legacy copper infrastructure, adding approximately 300,000 new fiber addresses and providing $1.2 billion in regulatory revenue support over 15 years [24][25] - The company plans to pursue edge-out opportunities in adjacent communities without fiber providers, with several hundred thousand potential service addresses identified [18][57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fiber business's growth potential and the successful transition to an independent tower company [14][33] - The company is focused on optimizing tower operations and monetizing spectrum, with significant progress made in spectrum monetization [36][38] - Management acknowledged the challenges of transforming the business but emphasized the strong culture and commitment of associates [16] Other Important Information - A $500 million share repurchase program was announced, reflecting the board's confidence in the company's long-term strategy [20][60] - The company expects to declare a special dividend of approximately $10 per share following the closing of the AT&T transaction [18] Q&A Session Summary Question: Update on fiber plan and cohort analysis - Management acknowledged the request for cohort analysis and plans to provide updates in February regarding fiber opportunities and market performance [54][56] Question: Stock buyback program significance - The board's authorization of the buyback program reflects confidence in the company's strategy and is seen as a balanced approach alongside business investments [60] Question: SG&A expenses and wind down costs - Management indicated that SG&A costs are expected to remain high through the first half of next year, with ongoing efforts to rationalize expenses [64][65] Question: Naked tower strategy and land leases - The strategy involves leasing up towers and rationalizing ground rents, with minimal long-term commitments on land leases [75][78] Question: Leverage target and fiber passings impact - The leverage target is set to maximize flexibility, with current leverage at 1.4 times, and future updates on fiber goals will be provided in February [82][84] Question: M&A strategy and edge-out opportunities - Current focus is on operational execution rather than M&A, with potential future opportunities being evaluated [107]