TDS Q2 Earnings Fall Short of Estimates, Revenues Decline Y/Y

Telephone and Data Systems, Inc. TDS posted mixed second-quarter 2025 results, with top line beating the Zacks Consensus Estimate but the bottom line missing the same. TDS reported a revenue decline year over year, owing to demand softness across several verticals. However, growth in residential broadband connections and tower business partially cushioned the top line.

Net Income of TDS

The company reported a net loss of $5 million or a loss of 5 cents per share compared with a net loss of $14 million or 13 cents in the year-earlier quarter. The narrower loss was due to declining operating expenses year over year. The bottom line missed the Zacks Consensus Estimate by 4 cents.

Revenues of TDS

Net sales were $1.18 billion, down from $1.23 billion reported in the year-ago quarter. Declining revenues in all segments affected the top line. However, the figure beat the Zacks Consensus Estimate by $18 million.

U.S. Cellular changed its name to Array Digital Infrastructure in July 2025.

Revenues from Array were $916 million, down 1% year over year. A reduction in postpaid retail and prepaid connections impeded the top line. However, growth in tower revenues is a positive factor. Net sales beat our revenue estimate of $893.7 million. Total operating expenses were $881 million, down from $891 million in the prior-year quarter.

The company reported an operating income of $35 million compared with $36 million registered in the year-ago quarter. Postpaid average revenues per user (ARPU) rose to $51.91 from $51.45. Postpaid average revenues per account increased to $131.89 from $130.41 in the year-ago quarter. Prepaid ARPU was $31.72, down from $32.37 in the prior-year quarter.

TDS Telecom contributed $265 million to revenues compared with $266 million reported in the prior-year quarter. The top line beat our estimate of $249.2 million. Total residential connections were 924,500, down from 950,400 in the year-earlier quarter. Residential revenues per connection were $65.85, up from $65.26 in the prior-year quarter.

Total operating expenses were $251 million, up 1% year over year. Around 26% of customers opted for 1 Gigabit+ speed compared with the prior-year quarter’s 19%. About 13% of users have chosen a 600 Mbps speed compared with 10% in the year-earlier quarter. Its broadband expansion rose to 141,800 from 107,800 a year ago. Total connections were 1,108,000 compared with 1,152,200 in the year-ago quarter.

Other Details of TDS

Total operating expenses were $1.14 billion, down 4% from the prior-year quarter’s levels. The company reported an operating income of $40 million compared with $39 million.

Adjusted EBITDA in TDS Telecom was $89 million, down 3% year over year. Adjusted EBITDA for Array Digital declined to $254 million compared with the prior-year quarter’s figure of $268 million.

TDS’ Cash Flow & Liquidity

In the second quarter, Telephone and Data Systems generated $422 million of net cash from operating activities compared with $403 million in the prior-year quarter. As of June 30, 2025, the company had $540 million in cash and cash equivalents, with $4.03 billion of long-term debt.

TDS’ Outlook

For 2025, management expects total operating revenues at TDS Telecom in the range of $1.03-$1.07 billion. Adjusted EBITDA is estimated in the band of $320-$360 million. Adjusted OIBDA (non-GAAP) is expected to be $310-$350 million. Capital expenditures are expected in the range of $375-$425 million. Array Digital has not provided an outlook for 2025.

TDS’ Zacks Rank & Stocks to Consider

TDS currently carries a Zacks Rank #5 (Strong Sell).

Ubiquiti Inc. UI carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the last reported quarter, it delivered an earnings surprise of 61.29%. Ubiquiti spends significantly on research and development activities for developing innovative products and state-of-the-art technology to expand its addressable market and remain at the cutting edge of networking technology. The company believes its new product pipeline will help to increase average selling prices for high-performance, best-value products, thus raising the top line. Ubiquiti is witnessing healthy traction in the Enterprise Technology segment.

Jabil, Inc. JBL currently carries a Zacks Rank #2. In the last reported quarter, it delivered an earnings surprise of 9.44%.

Jabil’s focus on end-market and product diversification is a key catalyst. The company’s target of “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable. This initiative should position Jabil well on the growth trajectory.

Motorola Solutions, Inc. MSI currently carries a Zacks Rank #2. The company delivered an earnings surprise of 6.8% in the trailing four quarters.

While benefiting from a solid foundation, Motorola expects to record strong demand across video security and services, land mobile radio products and related software. Motorola intends to boost its position in the public safety domain by entering into strategic alliances with other players in the ecosystem.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research