In This Article:
-
Free Cash Flow: $79 million in Q1 2025, an $18 million increase year-over-year.
-
Postpaid Handset Results: Year-over-year improvements noted.
-
Third-Party Tower Revenues: Increased by 6% in the quarter.
-
Capital Expenditures: Declined as 5G coverage builds are largely completed.
-
Debt Repayment: Approximately $1.2 billion of TDS's outstanding bank debt expected to be repaid.
-
Fiber Service Addresses: Delivered 14,000 new fiber service addresses in the quarter.
-
Residential Broadband Net Additions: 2,800 in Q1 2025, with 8,300 from fiber markets.
-
Operating Revenues: Down 3% in the quarter compared to prior year.
-
Cash Expenses: Increased by 6% or $11 million in the quarter.
-
Adjusted EBITDA: Under pressure due to various factors including increased expenses.
-
Capital Expenditures (Fiber): More than 80% of full-year CapEx dedicated to fiber.
Release Date: May 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Telephone and Data Systems Inc (NYSE:TDS) is making progress on its 2025 priorities, including the anticipated mid-2025 closing of the transaction with T-Mobile, which is expected to enhance competitive choices and connectivity for customers.
-
The company has extended near-term bank maturities and amended revolvers to ensure financial flexibility and liquidity in anticipation of the T-Mobile and UScellular transactions.
-
TDS has achieved a 30% expansion in its fiber program footprint over the last three years, with further growth opportunities identified.
-
UScellular reported a 6% increase in third-party tower revenues due to new co-locations and escalators on renewed leases, indicating strong demand in the tower business.
-
The company generated $79 million in free cash flow in the first quarter of 2025, an $18 million increase over the same quarter last year, driven by cost optimization and reduced capital expenditures.
Negative Points
-
The ongoing loss of handset customers continues to pressure service revenues, despite improvements in year-over-year handset losses.
-
The competitive environment remains challenging, with aggressive promotions from competitors, including multi-year price locks and contract buyouts.
-
TDS's first-quarter results were impacted by prior year divestitures, leading to a decrease in operating revenues.
-
The company faces uncertainties related to regulatory approvals for the T-Mobile transaction and spectrum transactions with Verizon and AT&T.
-
Cash expenses increased by 6% in the quarter, partly due to non-cash adjustments to stock-based compensation and investments in sales and marketing.