Telephone and Data Systems Reports 7% Revenue Growth and Net Income Turnaround in Q1 2026

Telephone and Data Systems, Inc. (TDS) reported significant financial results for the first quarter of 2026, showcasing a total operating revenue of $309.5 million, a 7% increase from $290.4 million in the same period last year. The company’s net income attributable to TDS shareholders surged to $127.3 million, compared to a net loss of $9.8 million in the prior year. This turnaround was primarily driven by a substantial increase in revenues from its Array subsidiary, which rose 93% to $52.0 million, while TDS Telecom revenues decreased by 3% to $249.6 million.

The financial performance reflects a notable shift in TDS's operational landscape following the divestiture of its wireless operations to T-Mobile in August 2025. The sale, valued at approximately $4.3 billion, has allowed TDS to focus on its core telecommunications services. The company recorded a book gain of $150.9 million from the sale of certain spectrum licenses to AT&T in January 2026, further bolstering its financial position. Additionally, TDS's operating expenses decreased significantly by 49% to $165.6 million, largely due to the absence of costs associated with the divested wireless operations.

Operationally, TDS Telecom serves approximately 1.1 million connections across 30 states, employing around 3,600 associates. The company reported a 5% increase in service addresses to 1.9 million, with 50% of these served by fiber. Notably, 79% of TDS Telecom's footprint now offers 1Gig+ service, up from 74% a year ago. However, total residential connections decreased by 4% year-over-year, attributed to declines in legacy voice and video services, despite growth in broadband and wireless connections.

Looking ahead, TDS is actively pursuing strategic alternatives, including a non-binding proposal to acquire all outstanding shares of Array not owned by TDS, which was presented to Array's Board of Directors on May 7, 2026. The company is also focused on expanding its fiber deployment and enhancing its competitive position in the telecommunications market. TDS anticipates capital expenditures for 2026 to range between $550 million and $600 million, primarily aimed at supporting broadband growth and infrastructure enhancements. The company remains optimistic about its future growth prospects, driven by its strategic initiatives and ongoing investments in high-quality communications services.