It has been about a month since the last earnings report for Array Digital Infrastructure (AD). Shares have lost about 32.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Array Digital due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Array Digital Infrastructure Inc. before we dive into how investors and analysts have reacted as of late.
Array’s Q2 Earnings Beat Estimates Despite Lower Revenues
Array reported strong second-quarter 2025 results, with both top and bottom lines surpassing the respective Zacks Consensus Estimate. However, the company reported a revenue decline year over year, owing to a decrease in postpaid and prepaid retail connections. However, strong momentum in the tower businesses partially supported the top line.
Net Income
The company reported a net income of $31 million or 36 cents per share compared with $17 million or 20 cents in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 3 cents
Revenues
The company generated $916 million in operating revenues compared with $927 million in the prior-year quarter. Net sales were negatively affected by a decline in postpaid and prepaid retail connections. However, the top line also beat the Zacks Consensus Estimate of $904 million.
Service revenues decreased to $736 million from $743 million, while Equipment sales registered $180 million in revenues compared with $184 million in the prior-year quarter.
Tower business witnessed healthy momentum during the quarter and registered revenues of $62 million, up 7% year over year. Management’s effort to diversify its third-party customer base is a positive factor. Wireless revenue was $888 million down 1% year over year.
Handset connections were 70,000, down from the prior-year quarter’s figure of 73,000. Handset churn rate was 1.12%, compared to the prior-year quarter’s figure of 0.97%. Connected devices decreased to 39,000 from 44,000, while the churn rate was 2.36%, down from 2.47% in the year-ago quarter. Total postpaid connections declined to 3,904,000 from 4,027,000 in the year-earlier quarter. Total prepaid connections were 429,000, down from 439,000 in the year-ago quarter.
Postpaid average revenues per account improved to $131.89 from $130.41 in the year-ago quarter. Postpaid ARPU rose to $51.91 from $51.45 a year ago, with postpaid churn rates of 1.29% and 1.16%, respectively. Prepaid ARPU was $31.72, down from $32.37 in the prior-year quarter. The prepaid churn rate decreased to 3.58% from 3.6% recorded in the year-ago quarter.
Quarterly Details
Adjusted EBITDA in the quarter was $254 million, down from $268 million in the prior-year quarter. Adjusted OIBDA was $208 million, down from $227 million in the year-earlier quarter. Total operating expenses were $881 million, down 1% year over year. The company reported an operating income of $35 million compared with $36 million in the prior-year quarter.
Cash Flow & Liquidity
In the June quarter, Array generated $325 million of cash from operating activities compared with $313 million in the year-ago quarter. As of June 30, 2025, the company had $386 million in cash and cash equivalents and $2.81 billion in long-term debt.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted -19.36% due to these changes.
VGM Scores
Currently, Array Digital has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Array Digital has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Array Digital is part of the Zacks Wireless National industry. Over the past month, Cogent Communications (CCOI), a stock from the same industry, has gained 6.6%. The company reported its results for the quarter ended June 2025 more than a month ago.
Cogent reported revenues of $246.25 million in the last reported quarter, representing a year-over-year change of -5.4%. EPS of -$1.21 for the same period compares with -$0.75 a year ago.
Cogent is expected to post a loss of $1.15 per share for the current quarter, representing a year-over-year change of +13.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -18.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Cogent. Also, the stock has a VGM Score of F.
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Array Digital Infrastructure Inc. (AD): Free Stock Analysis Report Cogent Communications Holdings, Inc. (CCOI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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