Telephone And Data Systems 2025 Q2 Earnings Strong Net Income Growth Amid Revenue Decline

Telephone And Data Systems (TDS) reported mixed fiscal 2025 Q2 earnings on August 11, 2025. The company’s revenue declined year-over-year but delivered a significant improvement in net income, with profitability turning positive for the first time in recent quarters. Management highlighted key strategic actions and revised guidance for 2025, reflecting a renewed focus on core operations.

Revenue
Total revenue for Telephone And Data Systems fell by 4.2% year-over-year to $1.19 billion in Q2 2025, compared to $1.24 billion in the same period of 2024. Within the company’s segments, Array remained the largest contributor, generating $916 million, followed by TDS Telecom with $265 million. The Corporate, Eliminations and Other segment accounted for a minimal $5 million. The overall decline reflects ongoing industry headwinds and strategic shifts in resource allocation toward fiber and towers.

Earnings/Net Income
Despite the revenue decline, TDS significantly improved profitability. The company narrowed its loss per share to $0.05 in Q2 2025 from $0.13 in Q2 2024, a 61.5% improvement. Moreover, it reported a net income of $18 million for the quarter, up from $7 million in the prior-year period—a 157.1% increase. This turnaround highlights effective cost management and the benefits of recent operational restructuring.

Price Action
The stock of Telephone And Data Systems has experienced fluctuating short-term performance. On the latest trading day, it edged down by 0.79%. Over the most recent full trading week, it gained 3.12%, while showing a 1.98% decline month-to-date. Investors appear to remain cautious, balancing optimism over improved earnings with broader market uncertainties.

Post-Earnings Price Action Review
Despite the positive earnings, TDS shares have shown poor returns over the past three years for investors holding post-earnings reports. A strategy of buying TDS shares following quarterly revenue improvements and holding for 30 days has delivered an annualized return of -14.57% and a total return of -42.61% since 2023. This underperformance suggests that short-term trading based on quarterly reports may not be an effective investment approach for TDS.

CEO Commentary
Walter C. D. Carlson, Chairman, President & CEO, emphasized the successful closure of the $4.3 billion UScellular sale to T-Mobile as a catalyst for unlocking shareholder value. He underscored the company’s strategic focus on towers and fiber businesses, including Array’s 4,400 towers and a new master license agreement with T-Mobile. Additionally, he expressed confidence in TDS Telecom’s growth potential, highlighting leadership under Ken Dixon and progress toward a stronger capital structure.

Guidance
TDS Telecom revised its 2025 guidance, projecting revenue between $1.03 billion and $1.05 billion, adjusted EBITDA of $320–$350 million, and adjusted OIBDA of $310–$340 million. The company aims to reach 1.8 million marketable fiber service addresses, with 80% fiber penetration and 95% gig-speed coverage by 2025. Array anticipates $2 billion in proceeds from pending spectrum sales and plans to issue special dividends post-closing.

Additional News
Recent company announcements include TDS Telecom’s commitment to expanding fiber service to 150,000 new addresses in 2025. The company is also planning a $23 per share special dividend, alongside a $1.1 billion debt redemption plan. Array is targeting 3x leverage and aims to resume regular dividends after completing spectrum sales. These steps reflect a disciplined approach to capital structure optimization and long-term shareholder value creation.