Highlights

  • Second quarter operating revenues rose 4% to $309.3 million, while TDS Telecom revenue fell 6% and Array revenue rose 90%.
  • Net income was $366.4 million and diluted EPS $2.42, including $409.8 million of gains on spectrum license sales.
  • Cash and cash equivalents were $2,194.0 million after spectrum sale proceeds, with Array paying two special dividends totaling $1.84 billion.
  • TDS Telecom had an operating loss of $8.3 million, and DISH Wireless, a tower tenant, filed for bankruptcy in June.

Telephone and Data Systems (NYSE:TDS) shares were trading near their 52-week low at USD 31.79 on October 21, 2026, down 6.71%. The diversified telecommunications company made a non-binding proposal on May 7 to acquire the Array Digital Infrastructure shares it does not own, closed a $1 billion spectrum sale to Verizon on June 1 and reported second quarter 2026 results in a Form 10-Q filed August 7.

Based in Chicago, Illinois, TDS is a Delaware corporation that provides broadband, video, voice and wireless services through its wholly owned subsidiary TDS Telecom, which serves 1.1 million connections in 30 states. It also owns 81.9% of Array, which owns 4,456 towers in 19 states, holds noncontrolling interests in mainly wireless operating companies and retains wireless spectrum. TDS operates entirely in the United States, and its fiscal year ends December 31.

Second Quarter Revenue Up 4% and Net Income of $366.4 Million

Operating revenues for the quarter ended June 30, 2026 were $309.3 million, versus $298.5 million a year earlier. TDS Telecom contributed $248.4 million and Array $54.1 million. Operating income was $373.2 million, compared with an operating loss of $12.3 million, mainly because Array recorded $409.8 million of gains on license sales.

The company tied the rise in net income to those gains, $23.8 million of short-term imputed spectrum lease income, lower interest expense and higher interest and dividend income, partly offset by income tax expense of $106.4 million. Net income attributable to TDS common shareholders, after $17.3 million of preferred dividends, was $281.1 million, or $2.42 per diluted share, against a loss of $0.05. Adjusted EBITDA, a non-GAAP measure, rose 16% to $139.2 million, although equity in earnings of unconsolidated entities fell 14% to $37.1 million.

TDS Telecom: Fiber Growth, Legacy Declines

TDS Telecom revenue fell 6%, with residential down 3% to $177.8 million, commercial down 5% and wholesale down 19%, reflecting legacy-market declines and 2025 divestitures. Its operating result swung to a loss of $8.3 million from income of $14.0 million, and Adjusted OIBDA, a non-GAAP measure, fell 19%. Capital expenditures nearly doubled to $179.2 million.

Total connections fell 5% to 1,054,200, but fiber grew. Incumbent fiber broadband connections rose 11% to 134,300 and expansion fiber connections rose 27% to 179,600, while copper broadband connections fell 27%. Residential fiber net additions were 15,100, up from 10,300. Service addresses grew 7% to 1.9 million.

Array, Spectrum Sales and the Buyout Proposal

Array's site rental revenue nearly doubled to $53.2 million, largely under its master lease agreement with T-Mobile. Interim lease revenue of $6.7 million is expected to decline through January 2028. DISH Wireless failed to make certain payments after claiming its obligations were excused, Array stopped recognizing DISH revenue in 2026, and DISH entities filed for bankruptcy in June 2026.

Array closed spectrum sales to Verizon and T-Mobile for $1,167.6 million in the quarter, and expects roughly $170.0 million of cash taxes, mostly in the third quarter. The AT&T sale closed in January, while two smaller T-Mobile sales still await regulatory approval. Array's $10.25 and $11.00 per share special dividends totaled $1,836.8 million. A special committee of independent directors is evaluating the Array Proposal.

Liquidity, Legal Items and 2026 Plans

Cash and cash equivalents stood at $2,194.0 million, up from $766.0 million at year end. The $400.0 million TDS and $100.0 million Array revolving credit agreements were essentially undrawn, Array owes $325.0 million on a term loan maturing in June 2030, and TDS repaid a $150.0 million term loan in January. Both said they met their financial covenants.

For 2026, management expects TDS Telecom capital expenditures of $625.0 million to $675.0 million, mainly for fiber deployment, and Array capital expenditures of $25.0 million to $35.0 million. The $523.9 million of remaining share repurchase authorization went unused in the quarter, and the quarterly common dividend remained $0.04 per share. The filing also describes a False Claims Act case brought by private plaintiffs over spectrum auction bid credits, which TDS and Array call without merit, and a shareholder derivative suit that TDS intends to contest.