Telephone and Data Systems Reports Q3 Revenue Decline, Net Income Turnaround

Telephone and Data Systems, Inc. (TDS) reported its financial results for the third quarter and nine months ended September 30, 2025, revealing a total operating revenue of $308.5 million, a decrease of 6% compared to $327.5 million in the same period last year. For the nine months, total operating revenue was $897.5 million, down 10% from $1 billion in 2024. The decline in revenue was primarily attributed to decreased contributions from TDS Telecom, which saw a 3% drop in quarterly revenue to $255.1 million, and an 84% decline in "All Other" revenues, which fell to $6.3 million. In contrast, Array, TDS's subsidiary, experienced an 83% increase in revenue to $47.1 million for the quarter, driven by higher site rental income.

The company's operating expenses also decreased significantly, totaling $376.5 million for the quarter, down 21% from $477.2 million in the prior year. This reduction was largely due to lower costs associated with Array's operations following the divestiture of its wireless operations to T-Mobile on August 1, 2025. The overall operating loss for TDS improved to $(68.0) million from $(149.7) million year-over-year. Notably, TDS reported a net income from continuing operations of $78.8 million, a significant turnaround from a loss of $99.4 million in the previous year, largely due to favorable tax adjustments and increased equity earnings from unconsolidated entities.

Strategically, TDS has undergone significant changes, including the divestiture of Array's wireless operations, which has allowed the company to focus on its core telecommunications services. The sale to T-Mobile was valued at approximately $4.3 billion, comprising $2.6 billion in cash and $1.7 billion in debt assumed by T-Mobile. Following this transaction, TDS is now concentrating on expanding its broadband services through TDS Telecom, which serves approximately 1.1 million connections across 31 states and has increased its service addresses by 5% year-over-year to 1.8 million.

Operationally, TDS Telecom reported a slight decline in total residential connections to 921,100, down 3% from the previous year, while broadband connections increased by 2% to 562,400. The company continues to enhance its fiber deployment, with 76% of its footprint now offering 1Gig+ service. TDS's capital expenditures for the nine months ended September 30, 2025, were $268.7 million, reflecting a 4% increase from the prior year, as the company invests in expanding its infrastructure.

Looking ahead, TDS anticipates continued challenges in the telecommunications market, particularly in light of competitive pressures and the need for ongoing investments in technology and infrastructure. The company is focused on leveraging its recent strategic changes to enhance operational efficiency and drive future growth, while also managing its liquidity and capital resources effectively. TDS expects to maintain its commitment to shareholder value through potential dividends and share repurchase programs, although future dividend declarations may be influenced by the outcomes of ongoing strategic reviews and market conditions.