Telephone and Data Systems Reports 4% Revenue Growth and Significant Net Income Turnaround in Q2 2026

Telephone and Data Systems, Inc. (TDS) reported a notable financial performance for the second quarter of 2026, with total operating revenues reaching $309.3 million, a 4% increase from $298.5 million in the same period last year. The company’s net income from continuing operations attributable to TDS shareholders surged to $298.4 million, compared to a loss of $5.7 million in the prior year. This significant turnaround was largely driven by gains from the sale of wireless spectrum licenses and a reduction in interest expenses, which fell by 61% year-over-year.

In terms of segment performance, TDS Telecom experienced a 6% decline in revenues, totaling $248.4 million, primarily due to decreases in legacy voice and video services. Conversely, Array, TDS's subsidiary focused on digital infrastructure, saw its revenues nearly double to $54.1 million, up 90% from $28.5 million a year earlier, largely attributed to increased site rental income following new leasing agreements with T-Mobile. The overall operating income for TDS consolidated operations was $373.2 million, a significant recovery from a loss of $12.3 million in the previous year.

Operationally, TDS Telecom served approximately 1.1 million connections across 30 states, with a workforce of around 3,700 employees. The company reported a 7% increase in service addresses, reaching 1.9 million, and 80% of its total footprint now offers 1Gig+ broadband service. However, total residential connections decreased by 4% year-over-year, reflecting declines in legacy services, although fiber connections grew by 47%. Array's tower operations also expanded, with 4,456 towers and a high tenancy rate of 98%.

Strategically, TDS has been active in acquisitions and divestitures, including the sale of its wireless operations to T-Mobile for $4.3 billion in 2025. The company is currently exploring further strategic alternatives, including a non-binding proposal to acquire all outstanding shares of Array not owned by TDS. The ongoing review process aims to optimize TDS's operational structure following the divestiture of its wireless business. TDS anticipates continued capital expenditures in 2026, projected between $625 million and $675 million, primarily for fiber deployment and infrastructure enhancements.

Looking ahead, TDS remains focused on leveraging its strategic initiatives to enhance shareholder value and strengthen its competitive position in the telecommunications market. The company expects to continue its investment in high-quality broadband services and explore opportunities for growth through potential acquisitions and market expansions.