ATNI earnings call analysis

NASDAQ:ATNI Q4 2025 Earnings Call Transcript Generated on 6/9/2026 Operator | Conference Call Operator: Hello, and thank you for standing by. Welcome to ATN International 4th Quarter 2025 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to hand the conference over to Michelle Sutrosky. You may begin. Michelle Sutrosky | Vice President, Investor Relations: Thank you, Operator, and good morning, everyone. I'm joined today by Brad Martin, ATN's Chief Executive Officer, and Carlos Doglioli, ATN's Chief Financial Officer. This morning, we'll be reviewing our fourth quarter and full year 2025 results and providing our 2026 outlook. As a reminder, we announced our 2025 fourth quarter results yesterday afternoon after the market closed. Investors can find the earnings release and conference call slide presentation on our investor relations website. Our earnings release and the presentation contain certain forward-looking statements concerning our current expectations, objectives, and underlying assumptions regarding our future operations. These statements are subject to risk and uncertainties, and that could cause actual results to differ from those described. Also, in an effort to provide useful information for investors, our comments today include non-GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures, and for further information regarding the factors that may affect our future operating results, Please refer to our earnings release on our website at ir.atni.com or the 8K filing provided to the SEC. Now I'll turn the call over to Brad. Brad Martin | Chief Executive Officer: Good morning, and thank you for joining us to discuss ATN's fourth quarter and full year 2025 results. Before I get into the details, I want to recognize the exceptional work of our teams across all of our markets. The progress we delivered this year, both in our financial performance and in the underlying health of the business, reflects their commitment to operational excellence and to building long-term value for our customers and shareholders. Our fourth quarter results show the continued execution of our strategic plan and further validate the operational improvements we have been implementing across our business segments. In the quarter, we grew revenue, expanded adjusted EBITDA, and improved operating income while continuing to expand our base of high-speed broadband homes paths and high-speed subscribers. For the full year, that execution translated into higher operating profitability, stronger cash generation, and a business that is better aligned with our strategic focus on mobility, high-speed data, and differentiated carrier and enterprise solutions. While there's still more work ahead to fully optimize the business, I believe we are on the right track. 2025 was a turning point for ATN as we shifted from stabilizing the business to clearly demonstrating progress against our strategy. We increased net cash provided by operating activities, reduced capital intensity while continuing to invest in our networks, and grew and improved the quality and durability of our mobility and high speed subscriber bases across our markets. At the same time, we improved operating income, expanded full year adjusted EBITDA, and held revenues essentially flat year over year. Together with a recently announced pending sale of our Southwest US portfolio of towers, this positions us to enter 2026 with greater resilience, more flexibility, and with a clear focus on our core strategic objectives. Let me take a moment to review the performance of our two business segments in the fourth quarter. In our international segment, our network investments and focus on service quality are driving growth in mobility and high-speed data subscribers and contributing to adjusted EBITDA expansion. We are seeing the benefits in better network performance, stronger customer retention, and higher data usage, which together support a more durable earnings profile in these markets. We remain focused on deepening customer relationships, continuing to upgrade our networks, and optimizing our operations to further enhance profitability and long-term value. In our U.S. segment, we are seeing tangible benefits from the strategic shift we've been executing in response to changing industry dynamics, particularly in combat. As our large carrier customers have expanded and matured their own product offerings, our approach has been to deepen our role as a partner to increase carrier-managed services, while steadily pivoting away from legacy subsidized and lower margin consumer offerings in certain southwest consumer markets. This strategy is gaining traction, and we are seeing improved performance as a result, particularly in the second half of 2025. We have a durable presence in Alaska and New Mexico, anchored by fiber and fiber-fed fixed wireless infrastructure that is supporting growth in the consumer broadband and carrier services. Over the past year, the number of homes passed by high-speed broadband increased 25 percent, given primarily by Alaska's deployment of fiber-fed fixed wireless solutions across Anchorage, Fairbanks, Juneau, and the Kenai Peninsula. These efforts contributed to fourth quarter revenue growth and create opportunity for additional subscriber growth. At the same time, our structural cost actions drove higher operating income and improved margins, particularly in the second half of 2025. Domestically, our broadband infrastructure expansion continued to progress as planned, with several government-supported projects advancing through key milestones during the quarter. These investments remain central to our long-term U.S. growth strategy, enhancing our network capabilities and creating new revenue opportunities as deployments are completed. We continue to leverage available government funding, including federal broadband programs, while maintaining a careful, disciplined approach to capital deployment and aligning spend with the highest return opportunities. We also recently advanced several important strategic initiatives. First, we received notice of provisional BEAT awards and preliminary commitments totaling more than $150 million in key markets such as New Mexico and Alaska. expanding our opportunity to pass additional homes with fiber and high-speed broadband in underserved communities, and reinforcing our position as a partner of choice in these regions. We're approaching these programs selectively and expect to invest approximately 10 to 15 percent of total project costs with our own capital, ensuring that BEAD-supported builds align with our financial return thresholds and long-term infrastructure strategy. We currently expect these initiatives to begin contributing to our business results in 2027 and beyond. In addition, we completed the sale of certain U.S. spectrum assets, allowing us to unlock value and further optimize our operations, reinforcing our focus on infrastructure and service-based revenue streams. Taken together, these actions support the long-term growth potential of our U.S. business and demonstrate our ability to attract incremental government funding for network expansion and monetize non-core assets in a disciplined way. Just after year end, we took another important step with the announced pending sale of our Southwest U.S. Tower Portfolio for up to $297 million in total cash consideration. Upon full completion, we expect the divestiture to modestly reduce revenue and EBITDA associated with those assets, while providing meaningful proceeds to strengthen our balance sheet and support our long-term growth plans. This transaction unlocks value from an asset we've built over many years, and importantly, allows us to sharpen our focus across ATN on our mobility, broadband, and carrier services business. Combined with the operational improvements we delivered in 2025, the tower sale increases our financial flexibility and enhances our ability to invest in sustainable long-term value creation. Throughout 2025, we did what we said we would do, advance our strategic plan to improve the profitability and cash generation of our operations, maintain high-quality revenue streams and customer relationships, optimize our operating structure, and strengthen the balance sheet. We also grew our mobility and high-speed subscriber base across our markets. These outcomes reinforce our confidence that we are building a stronger, more efficient ATM. Looking ahead, we are encouraged by the steady momentum across our business segments and remain focused on disciplined execution. Our priority for 2026 is to convert the network and system investments we have made over the past several years into margin expansion, cash flow, and further balance sheet strength. We are entering the year with positive momentum in both our international and US business segments with a more efficient operating model. We are maintaining a disciplined approach to capital allocation and leveraging available government funding to support continued network growth while enhancing returns. The pending tower sale is a key milestone in unlocking asset value and strengthening of our balance sheet, and we intend to use the added flexibility to support our highest priority growth opportunities. Before I turn it over to Carlos for a detailed review of our financial performance, I want to leave you with a clear takeaway. Our 2025 results show that ATN is stronger, more efficient, and better positioned than it was a year ago. We remain confident in our ability to build on this progress and generate long-term value for our shareholders. With that, I will hand it over to Carlos for a detailed review of our financial performance. Carlos Doglioli | Chief Financial Officer: Thank you, Brad, and good morning, everyone. Let me walk you through the 2025 results and provide some context on our 2026 outlook. Our fourth quarter capped a year of improved financial performance, especially in the second half of the year. Total revenues for the fourth quarter grew 2% to $184.2 million compared with $180.5 million in the prior year quarter. Excluding construction and other revenues, communication service revenues increased 3% driven by growth across multiple service offerings. For the full year, revenues were essentially flat at $728 million and in line with our expectations. Increases in carrier services, construction, and other revenues offset decreases in mobility and fixed revenues driven in part by our transition away from legacy offerings in our U.S. market. Operating income was $15.7 million in the fourth quarter, up from $8.7 million in the same period last year. The improvement reflects the benefit of cost management efforts, including reductions in selling, general, and administrative expenses, and gains on asset dispositions. For the full year, operating income increased to $28.4 million, compared with an operating loss of $0.8 million in 2024, which included a $35.3 million goodwill impairment charge. Net loss attributable to ATN stockholders in the fourth quarter was $3.3 million, or $0.32 per share, compared with net income of $3.6 million, or $0.14 per diluted share in the prior year quarter. The change reflects the absence of an $8.9 million tax benefit that positively impacted Q4 2024, along with higher other expense resulting from marking a minority equity investment to market in 2025. For the full year, our net loss narrowed to 14.9 million or $1.38 per share versus a net loss of 26.4 million or $2.10 per share in 2024. Adjusted EBITDA for the fourth quarter was $50 million, up 8% from $46.2 million in the prior year quarter. For the full year, adjusted EBITDA increased 3% to $190 million, compared with $184.1 million in 2024. The year-over-year growth in both the quarter and the full year reflects our ongoing focus on cost management and margin improvement. Turning now to segment performance. Our international segment continued to deliver top-line growth and margin expansion in 2025. The combination of targeted capital investments in support of our commercial progress and disciplined cost management contributed to higher adjusted EBITDA, even as we navigated heightened competitive dynamics in certain markets. Specifically for the fourth quarter, international revenues increased nearly 3% to $97.3 million from $94.8 million in the prior year quarter. And for the full year 2025, revenue was up 1% to $381.9 million from $377.5 million for full year 2024. Adjusted EBITDA for the international segment increased 1% to $32.7 million for the fourth quarter and approximately 4% to $131.6 million for the full year. In our domestic segment, during the fourth quarter, revenues increased 1% to $86.9 million from $85.8 million in the prior year quarter. And for the full year 2025, revenue declined just under 2% to $346.1 million compared with $351.6 million for full year 2024. Adjusted EBITDA for the domestic segment increased 11% to $21.6 million for the fourth quarter and declined approximately 2% to $78.5 million for the full year. Our results for the segment reflect the impact of transitioning away from legacy and subsidy driven revenue streams in the first half of the year. and the benefits of stronger performance in carrier solutions in the second half, supported by continued margin improvement efforts. Let me now turn to the balance sheet and cash flow highlights. Total cash, cash equivalent, and restricted cash increased to $117.2 million at December 31, 2025, compared with $89.2 million at the end of 2024. Total debt was $565.2 million versus $557.4 million a year ago, resulting in a net debt ratio of 2.36 times as of year-end and improvement from 2.54 times at December 31, 2024. Just as a reminder, approximately 60% of total debt resides at the subsidiary level and is non-recourse to ATN parents. Net cash provided by operating activities increased 5% year-over-year to $133.9 million, driven in part by improved working capital management. Capital expenditures for the full year were $90 million, net of $84.6 million in reimbursable capital expenditures, compared with $110.4 million, net of $108.5 million in reimbursement in 2024. Our capital spending for the year was in the lower end of our guidance range, driven by the timing of some investments that are now expected and incorporated in our 2026 outlook. The year-over-year reduction in net capital spending also reflects our commitment to maintaining more normalized levels of CapEx. We maintained our quarterly dividend of 27.5 cents per share, paid on January 9, 2026, to shareholders of record as of December 31, 2025. We did not repurchase any shares during the quarter. Turning to the 2026 outlook. As Brad mentioned, earlier this month, we announced that our ComNet subsidiaries agreed to sell a portfolio of 214 Southwestern U.S. towers and related operations an affiliate of everest infrastructure partners for up to 297 million in an all cash transaction we continue to expect the initial closing to occur in the second quarter of 2026 with gross proceeds of approximately 250 million to 270 million with additional closings occurring over the following 12 months tied to construction and operational milestones for full year 2026 and excluding any impact from the pending sale of our US Tower portfolio, we expect adjusted EBITDA to increase modestly from 2025 levels to a range of $190 million to $200 million. Our 2026 outlook incorporates a headwind of approximately $5 million related to the conclusion of high-cost funding support for our US Virgin Islands market. Based on current expectations of the second quarter timing of the initial closing for the tower sale, we would anticipate a reduction of approximately $6 million to $8 million to that annual adjusted EBITDA outlook. We also expect capital expenditures to remain within a disciplined range of $105 million to $115 million net of reimbursable expenditures and reflective of the timing of some investments initially expected in 2025. Together with available government funding, this supports continued network growth while maintaining our focus on cash generation and managing leverage. We plan to revisit and update our 2026 outlook as appropriate after the initial closing of the Tower portfolio sale. Before handing the call back to Brad, let me provide some insight into how we expect the quarters to play out in 2026. In the first quarter, we expect adjusted EBITDA to improve compared with the prior year period, and we expect the second half of the year to deliver the majority of our annual results consistent with our typical business seasonality. As part of the actions embedded in our plan to achieve our adjusted EBITDA outlook for the year, we expect to incur restructuring and reorganization expenses of $3 million to $4 million in the first half. with most of those costs occurring in the first quarter. Looking ahead, our financial focus remains unchanged. Drive operating efficiencies to support margin expansion, continue to allocate capital in a disciplined way, maintain a healthy balance sheet, and expand cash flow. We believe our 2025 results and 2026 outlook show progress toward our long-term objectives and in line with maximizing shareholder value. With that financial overview, I'll turn the call back to Brad for closing comments before we open it up for questions. Brad Martin | Chief Executive Officer: Thanks, Carlos. To summarize, we closed 2025 with solid operating momentum, stronger cash generation, and a more focused, higher-quality revenue mix that supports our long-term strategy. We are entering 2026 with a healthier balance sheet, more efficient cost structure, and a clear line of sight to further the benefits of our strategic initiatives in the pending tower transaction. Operator | Conference Call Operator: with that when i open the call for questions thank you ladies and gentlemen as a reminder to ask the question please first start one one on your telephone then wait for your name to be announced to withdraw your question please press start one one again please stand by while we compile the q a roster Operator | Conference Call Operator: Our first question comes from the line of Greg Burns with Sedoti. Your line is open. Greg Burns | Analyst, Sedoti & Company: Good morning. Can you just help us understand maybe how the sale of the tower assets might impact your business model in the U.S.? Does that in any way impact your ability to provide managed services to carriers? Brad Martin | Chief Executive Officer: Morning, Greg. Yeah, so really it's an unchanging business model. Today we provide our carrier-managed services on third-party towers and owned towers, almost about half and half. So really, the continuation of the business model will remain. Brad Martin | Chief Executive Officer: We'll just be doing more on third-party towers. Greg Burns | Analyst, Sedoti & Company: All right, great. Greg Burns | Analyst, Sedoti & Company: And then I see you're continuing to grow your high-speed data subscribers. Total broadband subscribers continue to decline. Are we getting to the Are we nearing a point where maybe some of these legacy services that you're turning down or deemphasizing stop detracting from the overall growth of that business? What should we expect next year in terms of maybe your view on broadband subscriber growth? Brad Martin | Chief Executive Officer: So, Greg, yeah, as you mentioned, some of the broadband reductions have been from us shutting down legacy services. That is inclusive of legacy copper services in some markets where we've overbuilt and shut down services and decided not to rebuild in areas. And similarly, in areas in the Southwest where we've taken down, where we had unprofitable areas and we decided to not necessarily compete at the consumer level, as we mentioned in my prepared remarks, we will be continuing to partner with Brad Martin | Chief Executive Officer: major carriers. Brad Martin | Chief Executive Officer: You know, we do have, you know, bead outcomes I spoke to in my remarks. Brad Martin | Chief Executive Officer: We do expect that to be a key driver in the out years to expand our high-speed subscriber, you know, subscriber base and obviously expand our assets and facilities. Greg Burns | Analyst, Sedoti & Company: Okay. Greg Burns | Analyst, Sedoti & Company: And, you know, with the, you know, the expansion of the high-speed data, you know, the reach of your network in Alaska, could you just talk about maybe some of the changes you've made in your go-to-market or sales strategy to kind of start to accelerate maybe the penetration and growth of your services? Brad Martin | Chief Executive Officer: Yeah, so Alaska, our Alaska market has been historically heavily weighted towards enterprise and carrier. In this past year, they announced a pretty large build out of a fixed wireless solution. We have been building fiber facilities, fiber to the home in certain areas in Alaska as well. We do have a new leadership team in Alaska in the last couple of years. We are investing in back office platforms to effectively enhance the customer interaction. So it's something we're targeting and continuing to focus on improving our ability to execute there. But we have work to do. We did see some progress in the back half of the year on subscriber acquisition, specifically in Alaska, albeit starting on a small base, but we did actually show over 11% year-over-year improvement in our high-speed data subscribers. Greg Burns | Analyst, Sedoti & Company: Okay, thank you. Thank you. Operator | Conference Call Operator: Ladies and gentlemen, I am showing no further questions in the queue. I would now like to turn the call back over to Brad, for closing remarks. Brad Martin | Chief Executive Officer: Thank you, operator. Thank you all again for joining us today and for your questions. We're encouraged by the progress we've made in 2025. We're confident in the path that we're on. We'll focus on executing against the priorities we've outlined in today's call. Weeks and months ahead, our teams will be meeting with many of you at conferences and one-on-one meetings. Brad Martin | Chief Executive Officer: We look forward to continuing the dialogue and continuing updating you on our progress as we move to 2026. Thanks. Have a great day. Operator | Conference Call Operator: Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect. jsPDF 3.0.3 D:20260609232048-00'00'

NASDAQ:ATNI Q3 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: Good day and thank you for standing by. Welcome to the ATN International Q3 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michelle Citrowski, Head of Investor Relations. Please go ahead. Michelle Citrowski | Head of Investor Relations: Thank you, operator, and good morning, everyone. I'm joined today by Brad Martin, APN's Chief Executive Officer, and Carlos Doglioli, APN's Chief Financial Officer. This morning, we'll be reviewing our third quarter 2025 results and our outlook for the remainder of 2025. As a reminder, we announced our 2025 third quarter results yesterday afternoon after the market closed. Investors can find the earnings release and conference call slide presentation on our investor relations website. Our earnings release and the presentation contain forward-looking statements concerning our current expectations, objectives, and underlying assumptions regarding our future operations. These statements are subject to risks and uncertainties that could cause actual results to differ from those described. Also, in an effort to provide useful information for investors, our comments today include non-GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures, And for further information regarding the factors that may affect our future operating results, please refer to our earnings release on our website, ir.atni.com, or the 8K filing provided to the SEC. Now, I'll turn the call over to Brad. Brad Martin | Chief Executive Officer: Good morning, and thank you for joining us to discuss ATN's third quarter 2025 results. Before I dive into our performance, I want to take a moment to recognize the exceptional work of our teams across our markets. Today's results reflect their commitment to operational excellence and their dedication to building long-term value. Our third quarter results show the continued execution of our strategic plan and validate the operational improvements we've been implementing across our business segment. The 3% revenue growth and 9% increase in adjusted EBITDA year over year demonstrate the positive momentum we've been building and the effectiveness of our operational efficiency initiatives. During the third quarter, we grew our high-speed broadband homes past by 8% and increased our total high-speed subscriber base by 1% year-over-year. These operational metrics underscore the value creation potential of our fiber and broadband investments. Let me take a moment to review the performance of our two business segments in the third quarter. In our international segment, we continue to make steady progress on our key priorities, enhancing mobile networks, improving service quality, and driving operational efficiency. The investments we've made in network quality and data capabilities are translating into measurable results, better customer retention, and higher average revenue per user, preparing the segment for sustained profitable growth. Third quarter revenues were up 1% with adjusted EBITDA growing 3%. The stronger EBITDA growth reflects the operational leverage we're achieving through improved efficiency initiatives. We remain focused on driving sustainable value across our international markets by deepening customer engagement, optimizing operations, and enhancing profitability. In our U.S. segment, we're seeing tangible benefits from our investments in carrier and enterprise solutions, with new site activations from our carrier-made services efforts and continued momentum in our fiber-fed deployments. We're particularly encouraged by gains in Alaska's enterprise revenue and consumer-fixed wireless wins, demonstrating improved operational execution and stronger pipeline conversions compared with last year. Third quarter revenues in the U.S. segment increased 4.6% year-over-year, with sequential improvement driven primarily by carrier services growth. Adjusted EBITDA for the quarter was up 19.6% compared with the same quarter last year. reflecting both our strategic transition from legacy revenue streams to higher growth higher margin services and recovery from a challenging third quarter last year we remain focused on our key priorities expanding fiber and fiber fed fixed wireless across markets where we have a durable consumer presence while growing our base of business and carrier solutions we are aligning our network strategy and capital deployment with this long-term vision And while the transition continues, we're building the foundation for a more resilient, higher margin domestic business. Domestically, our broadband infrastructure expansion continues to progress as planned, with several government-funded projects advancing through key milestones during the quarter. These fiber network investments remain central to our long-term U.S. growth strategy, enhancing our network capabilities while creating new revenue opportunities as deployments reach completion. We continue to actively monitor federal broadband policy developments and funding mechanisms, including BEAD, which offer opportunities to further penetrate underserved areas. As always, we're maintaining our careful approach to capital deployment while positioning ATN for additional infrastructure opportunities. Across our international operations, we are tracking geopolitical developments and the conclusion of hurricane season in our Caribbean markets. with business continuity and network resilience remaining key priorities. Our network teams work collaboratively with local authorities and partners to address potential disruptions while maintaining our service standards. To support these strategic and operational initiatives, we remain focused on the strength of our cash flow from operations to support our business initiatives while preserving the financial flexibility needed to capitalize on growth opportunities. Looking ahead, we're encouraged by the steady momentum across our business segments and remain focused on executing our operational roadmap. The revenue growth in our domestic operations led by carrier managed services expansion and targeted enterprise sales execution reinforces our confidence in the direction we've set. While internationally, we're seeing stabilization in mobility trends and improving operational metrics. With three-quarters of solid execution behind us, we are refining our adjusted EBITDA outlook while reaffirming our guidance for revenue, capital expenditure, and net debt ratio. We're methodically strengthening our operational foundation and improving our cost structure to position the business for sustainable growth as we move towards 2026. We remain confident in our ability to generate long-term value for our shareholders. With that, I'll turn it over to Carlos for a detailed review of our financial performance. Carlos Doglioli | Chief Financial Officer: Thank you, Brad, and good morning, everyone. I would also like to echo Brad's recognition of our team. Their disciplined execution has been critical in our third quarter results, as well as in our stabilization efforts to better position us for the future. I'll walk you through our third quarter financial performance in more detail. Total revenues for the third quarter were $183.2 million, representing a 3% increase from $178.5 million in the prior year quarter. This growth was driven by increases across multiple revenue streams, including fixed services, carrier services, construction, and other revenue categories, which more than offset the expected decline in mobility revenues as we continue our transition away from legacy products. Operating income improved significantly to $9.8 million in the third quarter compared to an operating loss of $38.4 million in the same quarter last year. While this improvement was primarily driven by a $35.3 million goodwill impairment charge in Q3 2024, our underlying operational performance improved year over year. Key drivers of the year-over-year improvement included a $5.1 million reduction in depreciation and amortization expenses, reflecting our disciplined capital allocation strategy, and the natural completion of certain asset depreciation schedules, a $3.3 million reduction in transaction-related charges compared to the prior year, and a $1.1 million improvement in cost of services through our ongoing cost reduction and containment initiative. Net income attributable to ATN stockholders for the third quarter was $4.3 million or $0.18 per share. This compares with the prior year's net loss of $32.7 million or $2.26 per share. Adjusted EBITDA increased 9% to $49.9 million compared to $45.7 million in the prior year quarter. This improvement is the result of the company-wide efforts to improve cost management and drive margin expansion. Turning now to segment performance, our international segment continues to deliver solid performance with Q3 revenues up 1% to approximately $95 million and adjusted EBITDA growing 3% to $33.3 million. The investments we've made in network quality and data capabilities are translating into measurable results, retention, sequential increase in post-paid customer base, and higher average revenue per user. Combined with our cost management actions, these efforts are positioning this segment for adjusted EBITDA growth. In the US telecom segment, third quarter revenues excluding construction revenues were 87 million, up 3.5% year over year. with improvement driven by carrier services and fixed business revenue growth. Adjusted EBITDA for the quarter was $21.2 million, up 19.6% compared with the same quarter last year. Our balance sheet position strengthened during the quarter. Total cash, cash equivalents, and restricted cash increased to 119.6 million at September 30, 2025, up from 89.2 million on December 31, 2024. Total debt was 579.6 million, resulting in a net debt ratio of 2.47 times, improving sequentially from 2.58 times at the end of the second quarter. Our disciplined capital allocation continued during the quarter, Capital expenditures for the nine months ended September 30, 2025, totaled $60.9 million, net of $67.3 million in reimbursable capital spending, compared to $85.7 million in capex and $71.8 million in reimbursables in the prior year period. We also maintained our quarterly dividend of $0.27.5 per share, paid in October. This dividend reflects our confidence in sustainable cash flow generation and our commitment to consistent shareholder returns. Based on our improved year-to-date performance and outlook for the fourth quarter, we are refining our adjusted EBITDA guidance for full year 2025 while reaffirming our other key financial metrics. Revenue, excluding construction revenue, is expected to be in line with 2094's results of $725 million. Adjusted EBITDA is expected to be flat to slightly above 2024's result of $184 million. Capital expenditures are expected to be in the range of $90 to $100 million net of reimbursements, down from 2024's $110.4 million. Net debt ratio is expected to remain flat with full year 2024, at approximately 2.54 times, with potential for slight improvement exiting 2025. Our refined guidance reflects our continued focus on cost containment and enhanced capital efficiency initiatives that we have been executing over the past several quarters. We expect some residual activity from these efforts in the fourth quarter, resulting in minor reorganization and restructuring costs anticipated to be less than $1 million. We remain confident in our execution capabilities and our path towards sustainable long-term value creation. With that financial overview, I'll turn the call back to Brad for closing comments before we open it up for questions. Brad Martin | Chief Executive Officer: Before we open the call for questions, I want to leave you with a clear takeaway. We are focused on disciplined execution, grounded in financial responsibility, and confident in the strategic path we set. Our revenue and adjusted EBITDA improvements demonstrate that our key initiatives are gaining traction and translating into stronger performance. These results underscore our ability to execute effectively while adapting to evolving industry dynamics. Our long-term objective remains unchanged, to build a stronger, more efficient, and more resilient ATM that delivers sustainable value for our shareholders. The foundation we built through operational stability and strategic investment positions us well to achieve this goal. With that, operator, we'd like to open it up for questions. Operator | Conference Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Our first question comes from the line of Greg Burns of Sidoti. Your line is now open. Greg Burns | Analyst, Sidoti & Company: Morning. Are you being impacted in any way by the government shutdown? Is it affecting any awards for government subsidy programs or maybe like the rural healthcare market in Alaska? Are you seeing any impact from the shutdown on any of those areas? Brad Martin | Chief Executive Officer: Hey, Greg. Good morning. Yeah, really, all payments, we've not seen any impact in regards to payments on programs, subsidies that we typically participate in. You know, and we expect, you know, no impacts here really through Q4. On that, you know, things, you know, Things pervading the future, longer, things like permitting. We do a lot on Bureau of Land Management lands, permitting things into 26 could pose some challenges, but as of right now, no. Greg Burns | Analyst, Sidoti & Company: Okay, and it's not delaying any new awards, or is there any other impact to maybe new business developments? Brad Martin | Chief Executive Officer: No, so one of the primary areas we reference in the call is BEAD, and BEAD is still in the review cycle under NTIA. Expected results from that will be in January, so we're still expecting those schedules to be held. But no, no impact as of yet. Greg Burns | Analyst, Sidoti & Company: Okay. And you kind of mentioned maybe better pipeline conversion or execution. Can you just maybe talk about some of the initiatives you put in place over the last year or so to kind of get the close rates and the improvement in the execution in Alaska up and what you've done and what you're seeing there in terms of results from those initiatives? Brad Martin | Chief Executive Officer: Yeah, so a couple of fronts there, Greg. And we've had a new team in Alaska. There has been new management in the last year. So with any new leadership team, they come in and really establish their ground game on the ground. And we're happy with what the team is doing there. We have been in the process of working with key partnerships. uh key partnerships with the leo operators uh to help address more of the uh of the uh some of the rural health care opportunities that are that are in that market is pretty large part of the telecom market in alaska uh and again that's and that's uh some of the some of the progress we're seeing here this year okay and then just lastly in terms of um cash flow it's obviously um improving nicely this year what are your priorities going forward um you know you are you uh Greg Burns | Analyst, Sidoti & Company: okay with where the leverage is on the business, or do you want to bring that down, or do you have other priorities for the improved cash flow that you're seeing? Carlos Doglioli | Chief Financial Officer: Hey, Greg. This is Carlos. So, look, we're happy with the way the cash flow is trending, you know, as you say. The operating cash flow is doing well and with the more normalized level of CapEx, we expect to continue to trend leverage down. And at the same time, we are very pleased with the support that we're getting to the business with some of the grants and reimbursable programs that we have there. So we believe that things are working the way we have been expecting and we should continue to be able to push leverage down. Greg Burns | Analyst, Sidoti & Company: Great, thank you. Operator | Conference Operator: Thank you. I am showing no further questions at this time, so I would like to turn it back to Brad Martin, Chief Executive Officer, for closing remarks. Brad Martin | Chief Executive Officer: Thank you, operator, and thank you all for joining us today. We appreciate your continued engagement as we execute our strategy. We look forward to sharing more progress on our fourth quarter call. Have a great day. Operator | Conference Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. jsPDF 3.0.3 D:20260606085951-00'00'

NASDAQ:ATNI Q2 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. Please note, this conference is being recorded. Now it's my pleasure to turn the call over to the BP Corporate Treasurer, Michelle Satrosky. Please proceed. Michelle Satrosky | Corporate Treasurer: Thank you, Operator, and good morning, everyone. I'm joined today by Brad Martin, APN's Chief Executive Officer, and Carlos Doglioli, APN's Chief Financial Officer. This morning, we'll be reviewing our second quarter 2025 results and reaffirming our 2025 outlook. As a reminder, we announced our 2025 second quarter results yesterday afternoon after the market closed. Investors can find the earnings release and conference call slide presentations on our investor relations website. Our earnings release and the presentations contain certain forward-looking statements concerning our current expectations, objectives, and underlying assumptions regarding our future operations. These statements are subject to risks and uncertainties that could cause actual results to differ from those described. Also, in an effort to provide useful information to investors, our comments today include non-GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures, and for further information regarding the factors that may affect our future operating results, please refer to our earnings release on our website at ir.atm.com or the 8K filing provided to the SEC. Now I'll turn the call over to Brad. Brad Martin | Chief Executive Officer: Good morning and thank you for joining us today. Let me begin by recognizing our dedicated team across ATM for their unwavering focus on execution and continued progress in advancing our long-term strategic priorities. Our Q2 results were in line with our expectations and reflect the steps we're taking to optimize our cost structure. As expected, revenue declined 1% year-over-year, primarily due to the wind-down of subsidy programs. While adjusted EBITDA decreased 6%, net cash from operations rose 2% to approximately $60 million. Across the business, our focus on simplification, operational stability, and disciplined capital allocation is driving stronger cash generation. Consistent with our commitment to delivering sustainable returns to shareholders, I'm pleased to highlight that our Board of Directors approved a 15 percent increase in our quarterly dividend, raising it up to 27.5 cents per share. This reflects the confidence we have in the underlying strength and resilience of our cash flow. It also reinforces our commitment to delivering sustainable value to shareholders while maintaining a disciplined approach to capital allocation. The strategic investments we've made continue to deliver returns. In the second quarter, we expanded the number of broadband homes passed by high-speed data services by 8% and grew our high-speed subscriber base by 1% year over year. We remain firmly committed to our long-term strategy, capitalizing on our fiber, fiber fed, and broader network infrastructure to deliver essential, high-value services in underserved markets. This vision is underpinned by a solid and strengthening financial foundation. Let me take a moment to review the performance of our two business segments in the second quarter. In our international segment, we continue to make steady progress on our strategic priorities, enhancing mobile networks, improving subscriber and service quality, and driving operational efficiency. These efforts are translating into tangible results. Adjusted EBITDA for the segment remained essentially flat compared to last year, reflecting the balance between strategic investment and disciplined cost management. Importantly, we are seeing improvements in the quality of our mobile consumer base. In our largest mobile market, post-based subscribers grew by 4% year-over-year, and we continue to experience positive momentum in the number of customers purchasing and consuming data plans, which rose by 25% year-over-year. We've also delivered two consecutive quarters of improvement in customer retention. Mobile churn rates declined by more than 5% for the second quarter in a row, driven by better network performance, automation, and a sharper focus on operational execution. While overall consumer fixed revenue remains flat, we saw encouraging signs of stabilization and growth. High-speed data ARPU and subscriber churn both improved by 3% year-over-year, offsetting the ongoing decline in legacy services. Our focus remains on driving sustainable value across our international footprint by deepening customer engagement, optimizing operations, and enhancing profitability. In the U.S. segment, our performance continues to reflect the anticipated impacts of discontinued subsidy programs and the continued phase-out of legacy consumer service technologies. Despite these known headwinds, we are seeing early signs of progress. The demand for carrier services, such as backhaul, is strong, and we are progressing nicely on our carrier-managed services bills. Additionally, we have seen improvement in our sales execution, specifically in the rural healthcare marketplace. Although this segment is primarily focused on business and wholesale markets, we have made progress in delivering fiber and fiber-fed high-speed data broadband services. Our consumer broadband subscriber base grew more than 10% this quarter, and we are seeing positive trend in our people. We remain focused on the strategic transformation, expanding fiber and fiber-fed fixed wireless across markets where we have durable consumer market presence, while growing our base of business and carrier solutions. We are aligning our network or to market approach and capital investments with this long term vision. So the transition continues to weigh on revenue. We are laying the foundation for a more resilient and higher margin domestic business. We are moving forward with more than $300 million in broadband infrastructure initiatives backed by government funding, with more than half of these projects slated for completion in 2025. These projects are a key pillar of our long-term U.S. growth strategy, allowing us to broaden our fiber network more efficiently and positioning us for future revenue gains as they come online. On the policy side, we continue to closely track evolving subsidy programs, FCC policy advancement, and trade and tariff developments. We remain confident in our ability to absorb any short-term effects within the parameters of our current 2025 financial guidance. We're actively collaborating with vendor ecosystems, local and federal regulators, and state broadband offices to manage outcomes in the best interest of ATN shareholders. Looking ahead, our improved cash generation in the first half reflects the disciplined approach we continue to take toward both cost management and capital deployment, positioning us well for the second half of the year. These early results reinforce our confidence in the path forward, and we are reaffirming our full-year guidance as outlined during our fourth quarter earnings call. As we look to the remainder of 2025, our strategic priorities remain clear. Continue improving quality and efficiency of our operations, especially in international markets where we see strong demand and steady performance. advance the transition of our U.S. business by growing fiber and carrier services while managing the phase out of non-strategic legacy products, and maintaining financial discipline to support long-term value creation. While macroeconomic conditions and competitive dynamics remain fluid, our results this quarter demonstrate we are moving in the right direction, strengthening our operational base and positioning ATN for durable growth. With that, I'll turn it over to Carlos to review the numbers. Carlos Doglioli | Chief Financial Officer: Thank you, Brad. Good morning everyone and thanks for joining us. Today I'll walk through our second quarter financial results and outlook for the back half of 2025. Our second quarter results were consistent with our expectations and reflect disciplined execution across our operations. While year-over-year revenue comparisons continue to reflect headwinds, on a quarter-over-quarter basis, we're seeing improved top-line momentum and benefits from our focus on operational efficiency, cost control, and capital discipline. With that, let's now review our P&L results. Total company revenue for the quarter was $181.3 million, down 1% year-over-year. As expected, this decline reflects the wind down of certain subsidy programs and the decommissioning of legacy mobile consumer services partially upset by an increase in construction revenue during the quarter. Operating income for the second quarter decreased to $0.2 million versus $24.3 million in the year-ago period. The year-ago quarter included a $15.9 million gain from the disposition of assets in one of our international markets. The quarter's results reflect ongoing cost containment efforts, leading to a reduction in selling general and administrative costs. These savings were partially offset by $4.9 million in restructuring and reorganization charges. Net loss for the second quarter was $7 million, or $0.56 per share. This compares with the prior year's net income of $9 million, or $0.50 per share, as the factors influencing operating income similarly impacted the net loss for the period. Adjusted EBITDA was $45.8 million, down 6% from the prior year, mainly due to the impact of lower US telecom revenues. Turning now to segment performance. Beginning with our international segments, Q2 revenues were essentially flat at approximately $95 million as growth in fiber and fiber-fed services was offset by a decline in legacy technology services and lower mobility equipment sales. During the quarter, we recorded restructuring and reorganization charges of $1.4 million, reflecting our ongoing efforts to simplify the organization and better position the business to improve margins over time. Adjusted EBITDA for the international segment was essentially flat at $33.3 million for the quarter, reflecting our continued focus on cost containment. In our domestic segment, second quarter revenues were $86.4 million, down 1.7% year over year. As previously mentioned, revenue was impacted by the conclusion of the ECF and ACP programs, as well as the decommissioning of our legacy consumer mobility solution. This year-over-year decline was partially offset by an increase in construction revenues. In addition, we continued to gain traction in our carrier service revenue as we replaced legacy roaming contracts with carrier managed service solutions. During the quarter, we took restructuring and reorganization actions resulting in charges of $2.4 million as part of our strategy to improve operational efficiency and drive margin improvement over time. At the end of the quarter, it was $18.3 million, down 16.7% compared with the same quarter last year, primarily due to revenue performance and the timing of certain expenses in the prior year. Moving on to the balance sheet and cash flow highlights. We ended the quarter with $113.3 million in cash, up from $97.3 million at the end of Q1. Total debt stood at $583.4 million and our net debt ratio was 2.58 times. Net cash provided by operating activities for the first half of the year increased 2% year-over-year to approximately $60 million, driven largely by working capital improvements. Capital expenditures for the first half of 2025 totaled $42 million, net of $45.9 million in reimbursable capital spending. This compares to $61.8 million in capex and $46.2 million in reimbursables in the first half of last year, reflecting our plan to moderate spending and enhance operational cash flow. We returned $7.3 million in capital to our shareholders in the form of dividends during the first half of 2025. With that, let's move to our outlook for 2025. We are reaffirming the outlook for 2025 that we provided in our fourth quarter release. We continue to expect revenue for the year to be in line with 2024 of $725 million excluding construction revenue. Adjusted EBITDA to be essentially flat with last year's $184 million. Net capital expenditures between $90 and $100 million down from $110.3 million in 2024. A net debt ratio to remain flat to year-end 2024 with a slight potential improvement exiting the year. We see positive momentum in the business as our efforts to stabilize revenues, gain operational efficiencies, and increase cash flow are beginning to gain traction. As we look ahead to the balance of the year, we continue to expect the second half to contribute a larger share of full year results. The size of these quarters restructuring and reorganization charges was greater than originally expected as we accelerated some actions planned for the upcoming quarters into the second quarter. As a result, we expect to incur residual reorganization and restructuring expenses in the third quarter as we complete organizational transitions, although at a lower level than in the second quarter. To wrap up, we're executing against a clear set of priorities, managing costs, strengthening cash flow, and positioning our network and services for sustainable growth. Our continued operational discipline and focus give us confidence in our ability to meet our 2025 targets and deliver long-term value to our shareholders. Thank you, and now I'll hand the call back over to Brad. Brad Martin | Chief Executive Officer: Thanks, Carlos. Before we open the call for questions, I want to leave you with a clear takeaway. We are focused on disciplined execution, grounded in financial responsibility, and confident in the strategic path we've chosen. This is a year of transition. we're beginning to see encouraging momentum. We're generating stronger cash flow, advancing our grant-funded bill, and digitally empowering people and communities so they can connect to the world and prosper. Our long-term objective remains unchanged. We build a stronger, more efficient, and more resilient ATN for the future. With that, operator, we'd like to open it up for questions. Operator | Conference Operator: Thank you so much. And as a reminder to ask a question, press star 11 to get in the queue. and wait for your name to be announced. One moment for our first question. It comes from Rick Prentice with Raymond James. Please proceed. Unknown Participant: Yes. Rick Prentice | Analyst, Raymond James: Good morning, everybody. Unknown Participant: Hi, Rick. Hey, Rick. Hey, Rick. Rick Prentice | Analyst, Raymond James: Hey. A couple questions on my side. First is, what was the impact of the 1-triple-B bill on you guys? Anything on cash taxes? Anything on other aspects of the bill. Carlos Doglioli | Chief Financial Officer: Hey, Rick. This is Carlos. Thanks for the question. At this point, it hasn't had an impact. Given our jurisdictions and tax positions, we're not expecting an impact in the short term. We're looking into it, but that's the current rate. We like some of the elements, obviously, the 100% points of depreciation and some of those other elements, but at this point, we're not expecting a short-term impact. Rick Prentice | Analyst, Raymond James: Okay. Related question is, there obviously is a fiber race going on in the United States. Other companies have talked about the bill driving increased pacing of fiber deployment. How is that going to impact you all from a standpoint of either competition or access to labor and materials as fiber kind of, becomes a heated up spot. Brad Martin | Chief Executive Officer: Yeah, Rick, I mean, those certainly, you know, those policies to help to really help expedite permitting are going to be very helpful for us. So, you know, where we operate and build, we build a lot of Bureau land management land. So, you know, these can be very slow permitting and regulatory process. Unknown Participant: So we do expect that's going to help speed up pace. So we are looking forward to that. But that's still to be seen. Rick Prentice | Analyst, Raymond James: And as far as access to labor, supply, materials, all that, there's starting to be a little bit of buzz in the community about it's going to tighten up stuff if everybody starts trying to race ahead. Brad Martin | Chief Executive Officer: And we're not seeing that. In fact, we're seeing people coming to us quite regularly looking for work. So, no, we've not seen that yet. That could potentially be a constraint as things move forward. But right now we're seeing there's enough capacity for facilities. Rick Prentice | Analyst, Raymond James: Okay, last one for me. It's kind of a bizarre question, but since you do have fiber, have you ever looked into the possibility of could the fiber portion of the business be converted into a REIT type of structure, a real estate investment trust for taxation purposes? Still trying to figure out. Obviously, towers are very readable data centers, but we see fiber as another digital infrastructure category that Some people are trying to ponder it. Is it something that could be turned into a REIT structure? Brad Martin | Chief Executive Officer: So, at this point, Rick, yeah, that's not something we've, you know, we've looked at. So, there are, you know, as you mentioned, you know, there are certainly opportunities and powers and beyond. And there are other mechanisms out there, asset back, securitization, that, you know, are kind of taken advantage of. Unknown Participant: But from a REIT perspective, not yet. Okay. Thanks, guys. Have a good day. Operator | Conference Operator: Thank you. We have a question from the line of Greg Barnes with CDOTI. Please proceed. Good morning. Greg Barnes | Analyst, CDOTI: In the U.S. markets, do you have a line of sight on when we might see the inflection of growth in the fiber-led newer services finally offsetting the declines you're seeing in those legacy services and getting back to growth in that part of the business? Brad Martin | Chief Executive Officer: Yeah, so certainly, you know, as we mentioned, you know, we're certainly, Greg, in a transition stage in our U.S. market, something we're watching very closely. You know, we are optimistic with the progress we've made with our fiber builds, and we are seeing demand from the carriers starting to increase. So we are seeing a decent pipeline. We are also seeing some better execution within our sales organizations in areas like rural health care. So again, we are expecting to see some improvements here in the second half of the year. We typically do see a better second half with federal funding and state funding cycles and the consumer Q4 strength. So we are expecting to continue to see improvements. But again, the pipeline is building. And getting through, in Carlos's prepared remarks, I referenced the year-to-date CapEx, 42 million, in addition to the 40, almost 46 million of reimbursable. That's all U.S. So there's quite a bit of activity, quite a bit of capital intensity happening in the U.S. market. So, yeah, we have not guided beyond the 25 window. We'll be guided for 26, a few more earnings, But ultimately, we are hopeful and we are seeing the demand that that is going to start to lift. Unknown Participant: And we're working diligently to deliver that. Greg Barnes | Analyst, CDOTI: All right. And then internationally and on the mobile side, I know the focus is on growing those higher valued postpaid subs, but it looks like the the competitive pressures of ease somewhat, maybe a little bit, on the prepaid side? Has there been any changes in the competitive dynamics, or has the market just kind of stabilized to a level where you're not going to see the types of declines we saw there over the last year or so? Brad Martin | Chief Executive Officer: Look, I still think there's competitive pressures, Greg. So I do think the initial new entrant in our largest market That was disruptive last year, even in late 23. We think that is normalized to a degree. Again, our focus has been let's get the quality of our subscriber base moving, and that's true in all markets. So data consumption, data plan expansion, which we're seeing, contract expansion, which we're seeing in our more mature markets. So that has been the thesis. We're happy with that thesis, but the competitive pressures are still there. And what we're seeing is the impact really on prepaid you know, that's really where the competitors come into these markets. But, you know, we're happy with where we're going. You know, we are really in a number one, number two position in most of these markets. So it's really a defense play going forward. Unknown Participant: So that's why it's important that we see these good trends in data consumption. Again, we're happy with that progress. Operator | Conference Operator: All right. Thank you. Thank you. And as a reminder, to ask a question, simply press star one one to get in the queue. As I see no further questions in the queue, I will turn the call back to Brad Martin for final comments. Brad Martin | Chief Executive Officer: Great. Thank you, operator. Thank you all for joining us today. We appreciate your continued engagement as we execute our strategy. We look forward to sharing more progress in the course ahead. Have a great day. Operator | Conference Operator: Thank you. And with that, ladies and gentlemen, we conclude our program today. Thank you for joining. And you may now disconnect. jsPDF 3.0.3 D:20260606085952-00'00'