Key Highlights

● Second-quarter operating revenues were $309.3 million, up 4% from $298.5 million.

● TDS Telecom added about 66,000 marketable fiber service addresses.

● TDS Telecom capex guidance of $625 million to $675 million is roughly double EBITDA guidance.

● Investments in unconsolidated entities were $475.1 million, including $421.6 million tied to Array.

Telephone and Data Systems (NYSE:TDS) is now largely a fiber-focused Business after the separation of its wireless operations, while still holding a significant stake in Array Digital Infrastructure (NYSE:AD). That structure raises questions about how the company funds an ambitious fiber build.

Fiber Additions and Array Income

For the second quarter, TDS reported total operating revenues of $309.3 million, up 4% from $298.5 million a year earlier, with TDS Telecom contributing $248.4 million and Array $54.1 million. Net Income from continuing operations attributable to TDS common shareholders was $260.6 million, or $2.24 per diluted share, and total net income attributable to common shareholders was $281.1 million including discontinued operations. TDS Telecom added about 66,000 marketable fiber service addresses and 15,100 residential fiber net additions, and raised its 2026 target for marketable fiber service addresses to 250,000 to 300,000. Consolidated long-term Debt was $680.1 million at June 30, 2026, of which Array held $674.9 million. These are the latest confirmed figures; the third quarter filing, once published, will supersede them.

Spending Double the EBITDA

The drivers are structural. TDS Telecom's 2026 guidance includes revenue of $1,000 million to $1,025 million, adjusted EBITDA of $310 million to $330 million and capital expenditures of $625 million to $675 million, meaning spending is roughly double the EBITDA range. Array guidance calls for revenue of $205 million to $215 million and adjusted EBITDA of $220 million to $235 million.

Investments in unconsolidated entities were $475.1 million, of which $421.6 million related to Array, and Equity in Earnings from those entities was $34.7 million in the second quarter. These holdings and cash flows may help support the fiber program, depending on how they are used. Because the Array stake is held through unconsolidated entities, its value to TDS depends on Array's own performance and decisions, which are outside the control of the fiber business.

Funding Options to Monitor

Investors may watch the third quarter report for updated fiber addresses, net additions and take rates, which indicate whether new builds convert into subscribers. The gap between capital spending and EBITDA could draw attention to financing needs, including any asset monetization, borrowing or dividends from the Array position. Changes to guidance ranges, particularly capex, may signal pacing adjustments. Competition from cable operators and other fiber builders, as well as the availability of federal and state broadband funding, could also influence returns. Investors may also watch for changes in the company's capital allocation priorities, including whether spending is reprioritised toward markets with stronger early adoption.

Equity Stakes Underwrite Fiber

TDS offers a picture of a fiber operator funding heavy Investment from a combination of operating cash flow, equity stakes and debt. The second quarter data showed growth in revenue and fiber additions, plus large income from discontinued operations that may not recur. The next report could clarify how the capital plan and Balance Sheet are evolving, including whether the higher fiber address target is being met within the existing spending range. Guidance represents management expectations and not guaranteed outcomes.