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Image source: The Motley Fool. Thursday, July 30, 2026 at 8:30 a.m. ET Senior Vice President of Investor Relations and Treasury - Bill DiTullio Chief Executive Officer - Kenneth Gunderman Chief Financial Officer - Paul Bullington President of Kinetics - John Harrobin Operator: Good morning, and welcome to today's conference call to discuss Uniti's Second Quarter 2026 Earnings Results. My name is Jonathan, and I will be your operator for today. Today's call is being recorded, and a webcast will be available on the company's Investor Relations website, investor.unity.com, beginning today and will remain available for 365 days. [Operator Instructions] It is now my pleasure to introduce Bill DiTullio, Uniti's Senior Vice President of Investor Relations and Treasury. Please begin. Bill DiTullio: Thanks, Jonathan. Good morning, everyone, and thank you for joining today's conference call to discuss Uniti's second quarter 2026 results. Speaking on the call today will be Kenny Gunderman, our CEO; and Paul Bullington, Uniti's CFO. John Harrobin, President of Kinetics, will also be joining us this morning during Q&A. Before we get started, I'd like to quickly cover our safe harbor statement. Please note that today's remarks may contain forward-looking statements. These statements include, but are not limited to, statements regarding Uniti's fiber build strategy, the business' growth potential, our 2026 outlook and other statements that are not historical facts. Numerous factors could cause actual results to differ materially from those described in the forward-looking statements. For more information on those factors, please see the section titled Safe Harbor Statement in the accompanying presentation in the Risk Factors sections in our filings with the United States Securities and Exchange Commission. With that, I would now like to turn the call over to Kenny. Kenneth Gunderman: Thank you, Bill. Good morning, everyone, and thank you for joining. Uniti posted another terrific quarter of results as we continue to execute well on our strategy as the premier insurgent fiber provider. We're consistently growing wholesale, enterprise and consumer fiber revenue at 10% to 20% with an insurgent share taker mentality. Our strategy of being first with fiber to metro and wholesale markets, along with a mission-critical and future-proof technology positions us for many years of predictable execution and value creation for our shareholders. Demand for fiber is continuing to accelerate, and hyperscalers and neo-clouds are leading the way. We posted a record quarter of new bookings at Fiber Infrastructure, exceeding our previous record by almost 30%. Demand was strong across virtually all categories, reinforcing the benefit of our robust diversified customer base, especially at Uniti Wholesale. The use of Agentic AI is now upon us and growing. As has proven typical with AI adoption, both the time line and TAM appear ahead of our prior expectations. Near-term Agentic AI use cases with measurable ROIs such as customer service agents, cybersecurity threat hunting and mitigation and automation of corporate functions are only a precursor to more bandwidth-intensive functions like physical robotics, autonomous driving, personal AI agents, scientific research and many others. Uniti is building the infrastructure to enable this growth and benefit our shareholders. This growth started and continues with dark fiber networks in Tier 2 and 3 markets with fiber strand counts of 50 to 100x prior levels and is now evolving to lit Waves packages at the same 50 to 100x prior levels. These wholesale investments by our hyperscaler and neo-cloud customers are a precursor to enabling greater Agentic AI usage by our enterprise and residential customers, and we've seen estimates of dramatic multiplier effects on broadband usage as a result. Distribution of inference to the edge requires low latency and high-bandwidth connectivity, highlighting the significant benefit of our 5 million future-proof connected endpoints at Uniti, including fiber-to-the-home, on-net buildings and data centers, towers and small cells. Fixed wireless, LEO and even cable remain somewhat competitive today at the edge, but over time, as usage, reliability and latency become more mission-critical, customers large and small will demand fiber at the edge, presenting us an opportunity to win back share from these other technologies. In short, Uniti is well positioned strategically. We have the right assets, plan and team in place going forward. Now we have to execute. Our results indicate we're doing just that. Total fiber revenue grew 10% year-over-year and fiber revenue at Fiber Infrastructure grew 6%, right in line with our expectations and demonstrating the robust demand we're seeing. In addition to the record bookings at Fiber Infrastructure, we had the strongest quarter ever of net adds at Kinetic and just as importantly, the number of new fiber homes constructed. As we've been foreshadowing for some time, we really hit our stride for the fiber build in the second quarter, and we fully expect that momentum to continue. Our footprint at Kinetic has substantial opportunities to build first, and there are increasingly fewer skilled footprints like ours in the country. We're moving in haste to take advantage of this benefit. To that end, as highlighted on Slide 5, our priorities have not changed for the full year. Building off the momentum in the Kinetic build engine, we're now raising our expectations on new fiber homes constructed this year to 475,000 to 525,000. We also continue to lean into this generational opportunity at Fiber Infrastructure, which I'll comment further on in a moment. At Uniti Solutions, we're seeing growing success in cross-selling products into our on-net fiber base at Uniti Fiber and Kinetic. Today, we estimate our managed services attachment rate to be only around 6%, excluding voice, but we're growing that materially as during the quarter, about 16% of new bookings came with the managed services product. We believe selling more products to on-net customers will not only lead to greater sales, but enhanced margins and more loyal customers. 2026 is an important inflection year for Uniti and the terrific industry tailwinds we just discussed are fueling that pivot. We previously committed to some key milestones as highlighted on Slide 6, and we're demonstrating progress towards our goals. Convergence offerings and new initiatives from big cable are having an expected impact on ARPU across the industry, and we've seen some near-term pressure. However, we expect ARPU to stabilize industry-wide and at Kinetic, especially given the favorable competitive dynamics in our markets and the upsell opportunities that exist in our base. The current industry dynamics suggest it has never been more important to build fiber first or early, and that's exactly what we're doing now at an accelerated pace. Slide 7 shows that we're well on our way to 3.5 million homes passed with fiber and 1.25 million fiber subs, and we're closer to 90% of our revenue coming from our core business. We remain focused on operational excellence, customer obsession and together with executing on our strategy of building fiber into unique locations, progress on our key KPIs will remain up and to the right. Driving lower churn is critically important to driving higher customer lifetime value, and we are very pleased with our plan and progress there as highlighted on Slide 8. Our fiber churn at Kinetic this quarter is the best second quarter churn we've ever seen, and we believe that with the various actions we've taken to date plus future planned actions will bring Kinetic fiber churn down to industry-leading levels. Managing churn effectively is a team effort, and we've actually made it a company-wide metric for our incentive compensation plan as a result. Turning to Fiber Infrastructure on Slide 9. Having a previously built robust fiber network in Tier 2 and Tier 3 markets is presenting us an opportunity to capture meaningful share of the generational demand as evidenced by a record quarter of new bookings. Importantly, over 50% of the new bookings this quarter were Waves or lit capacity as opposed to dark fiber, reinforcing the pivot from the build cycle to more lease-up and inference. As we previously pointed out, we expect approximately $1.5 billion of revenue in the next few years as we build profitably to enable AI learning. However, the truly exciting opportunity for Uniti is the approximately $500 million of recurring revenue that will sit on top of those new builds, and we're starting to realize that recurring revenue now. We've also said that we expect that broadband usage to come from a diversified base of customers. And during the quarter, we demonstrated a healthy mix of demand across our key customer segments, including about 20% from neo-clouds, 18% from superscalers, 10% from hyperscalers and 6% from fiber-to-the-home providers. A special thank you to Mike Friloux, Greg Ortel and the terrific sales leaders at Uniti Wholesale and our world-class network and service delivery teams under the leadership of Eric Daniels and Cathy DeLaGarza following through for our customers. With that said, our funnel of opportunities is even more exciting. So we expect continued positive momentum. As a reminder, while quarterly bookings in wholesale will always be lumpy given the nature of the customer base, the general trend over the next few years should be up and to the right. Slide 10 illustrates we're building our fiber network profitably and strategically. Although we're building some attractive new greenfield routes for hyperscalers, close to 80% of our hyperscaler business actually includes selling all or at least partial existing infrastructure, leveraging heavily the previously built network. Make no mistake, this is a big advantage for Uniti from a cost and time to deploy perspective as evidenced by our blended anchor lease-up cash yields of 37%, the highest we've ever seen. Turning to Slide 11. During the quarter, we sold more Waves than ever. And as a result, Waves were the single biggest product contributing to our record bookings. As a reminder, we're not enabling Waves' capability all across the country. We're focusing on routes that are unique to Uniti that give us a competitive advantage. Our pre-existing routes are enhanced by the unique build cycle that we're currently undertaking for the hyperscalers as we strategically expand our connectivity among unique markets. Highlights in the quarter were a 20-terabit Waves package connecting a neo-cloud from a data center in a Tier 2 market back to a large metro and an 18-terabit Waves package sold to a superscaler out of another major data center in a Tier 2 market. To put this in perspective, that's 96 400-gig Waves sold as lease-up in 1 quarter to just 2 customers over fiber recently built into new data centers. And there's more to come as our current Waves funnel represents approximately 1.3 petabytes of traffic and the vast majority of this funnel consists of relatively new customers. As we see it today, the demand appears staggering. With that, I'll turn the call to Paul. Paul Bullington: Thank you, Kenny. Starting on Slide 13, I'd like to review the key second quarter highlights for both Kinetic and our Fiber Infrastructure segment. Results for the quarter were once again strong, and we continue to make significant progress across several fronts. Starting with Kinetic, we expanded our fiber network to pass an additional 141,000 homes with fiber, our highest level of new passings on record, ending the quarter with approximately 2.1 million homes passed with fiber. Kinetic also added 38,000 net new fiber subscribers during the second quarter, ending the quarter with 603,000 total fiber subscribers. As Kenny mentioned earlier, Fiber Net Adds for the quarter were the highest on record, and total Kinetic fiber subscribers grew 25% from the prior year period. Kinetic Consumer Fiber revenue grew 19% year-over-year during the quarter. This growth is being driven by strong adoption of our fiber-to-the-home product, bolstered by the performance of the various marketing initiatives at Kinetic that target both our newer and more seasoned cohorts. At Fiber Infrastructure, we recorded consolidated bookings MRR of approximately $2.2 million, our highest level on record and an almost 30% increase from the previous record level. These record levels continue to be driven by the robust demand we are seeing for both dark and lit fiber solutions from hyperscaler and neo-cloud superscaler customers. Slide 14 highlights the sustained momentum we are seeing within Kinetic Fiber. We achieved fiber penetration of 29% during the quarter, which is up 90 basis points year-over-year. We also now passed 46% of our Kinetic consumer footprint with fiber. Consumer Fiber ARPU during the quarter was impacted by a number of factors, including new customer volume, the timing of rate plan adjustments and customer retention initiatives. For the remainder of the year, we expect Consumer Fiber ARPU to decrease low single digits year-over-year in the third quarter, but should stabilize in the fourth quarter with an expected increase of low single digits year-over-year. Turning to Slide 15. The continued strong improvement in our cohort fiber penetration is being driven by highly targeted marketing, customer experience and customer retention initiatives being deployed by the Kinetic team. Penetration levels in our year 1 2025 cohort are now exceeding year 2 penetration rates in the prior year cohort and year 3 penetration rates in our older cohorts. We expect to maintain or improve this trajectory going forward. And given our current trajectory, we remain confident that our 40% terminal penetration target is very achievable and perhaps conservative. Slide 16 lays out our key targets for Kinetic in 2026. Given the accelerated pace of our fiber build, we are increasing our incremental homes passed with fiber target by 25,000 and now expect to reach 2.33 million to 2.38 million homes passed with fiber by the end of this year. This would bring fiber coverage within the Kinetic footprint to over 50%, a significant milestone in our goal to reach 3.5 million homes by the end of 2029. We also expect to end the year with between 675,000 and 700,000 Fiber subs and realized $635 million to $655 million of Consumer Fiber revenue in 2026, an increase of roughly 25% to 30% from the prior year. Slide 17 provides a pro forma view of Uniti's consolidated results for the second quarter. Consolidated pro forma revenue and adjusted EBITDA were down 5% and 10% year-over-year, respectively, during the quarter, primarily driven by the continued declines at Uniti Solutions and in legacy copper and TDM services. However, we continue to see strong growth in the strategic parts of our business. Kinetic Fiber-based revenue, inclusive of consumer business and wholesale services grew 12% year-over-year. As we continue to execute on and accelerate our Fiber overbuild plan, Fiber services at Kinetic will deliver consistent strong growth quarter-over-quarter. At Fiber Infrastructure, revenue and adjusted EBITDA grew 10% and 20%, respectively, year-over-year. In addition to the information provided in our earnings materials, we have also included supplemental pro forma financial information on our investor website. Slide 18 demonstrates that the growth in each of our core Fiber lines of business has been very strong, and we expect that growth to continue given the superior nature of Fiber as a Service. With this pace of growth, we continue to expect Fiber to overtake legacy services as the majority of our revenue by the end of 2026. Please turn to Slide 19, and I'll now cover our updated full year 2026 outlook for the combined company. Beginning with Kinetic, we continue to expect revenues and contribution margin to be $2.145 billion and $905 million, respectively, at the midpoint. Given the high number of Fiber premises now expected to be constructed in 2026 and the incremental capital expected to be spent later this year to support our accelerated build plan for 2027, we now expect to deploy approximately $1.27 billion of net CapEx at the midpoint of our guidance, a $100 million increase from our previous range. At Fiber Infrastructure, we expect revenues and contribution margin to be $1 billion and $575 million, respectively, at the midpoint for full year 2026. The increase from our prior guidance range reflects the strong hyperscale and AI activity we saw in the second quarter. As a reminder, we expect the revenue from large sales-type lease Dark Fiber deals to be lumpy and to come in unevenly during 2026. As such, we have further adjusted our third quarter and fourth quarter guidance to account for the timing of these deals in the second half of the year. While we still expect to see a significant portion of those deals hit later this year in the fourth quarter, as we previously communicated, there is a possibility that some of those deals could slip into early 2027. Our outlook for net CapEx at Fiber Infrastructure this year remains $140 million at the midpoint of our guidance and represents a capital intensity of approximately 14%. Please also note that as has always been our practice, our net CapEx reporting offsets our gross CapEx by upfront payments received in an IRU arrangement as the cash received will offset a significant portion of the CapEx related to those deals. Turning to Uniti Solutions. We expect revenues and contribution margin of $700 million and $320 million at the midpoint. The increase in our contribution margin guidance is due to higher-margin strategic services sold during the quarter. As we have mentioned several times before, while Uniti Solutions is not core to our go-forward Fiber Infrastructure strategy, it does generate meaningful predictable cash flow. While we expect revenue and EBITDA to continue to decline at a mid-teens pace year-over-year over the next few years, a crucial part of our strategy is to retain the most profitable portion of this business while winding down low-value legacy and TDM services. Altogether, we expect consolidated revenue and adjusted EBITDA of approximately $3.655 billion and $1.475 billion at the midpoint of our 2026 outlook with consolidated net CapEx of about $1.525 billion. Finally, I'd like to provide some brief comments on our capital structure. Since announcing our agreement to merge with Windstream, we have successfully executed on a series of planned actions that were systematically implemented to extend our debt maturities, lower our overall cost of debt, establish access to new debt markets, optimize our mix of secured and unsecured debt and drive meaningful interest expense savings. As Slide 20 highlights, partially as a result of these actions, the blended yields on our debt have improved significantly, falling an impressive 600 basis points over the past 3 years from around 12.5% in February of 2023 to around 6.5% today on a blended basis. In recent quarters, we have discussed the attractive nature of the ABS debt market and the likelihood that ABS would play a significant and growing role in our capital structure going forward. To that end, we recently completed our second ABS transaction at Kinetic that will not only substantially help fund our Fiber build for the next year, but also allows us to potentially pay down up to $500 million of secured debt through the asset sale offers that are currently ongoing. As I've said many times previously, we intend to be balanced in our approach to raising ABS financing and these associated offers to pay down secured debt with ABS proceeds is in keeping with that balanced approach. While ABS will be an important part of our strategy to fund the strategic investments we are making in our business, it's not the only source of capital we have at our disposal. For example, as has been our practice at Uniti, we are constantly evaluating our portfolio of assets for optimization. Optimization opportunities could include assets that are underutilized or fallow, assets that are outside of our prioritized footprint or assets for which we can receive premium valuation multiples. As we mentioned last quarter, we believe there are $500 million to $1 billion of noncore assets that we could monetize. It's important to also note that the monetization of these assets would have a negligible effect on our adjusted EBITDA as many of them are underutilized today and currently produce minimal to no cash flow for the business. As Slide 21 shows between Excess Fiber, noncore and nonclustered assets in operations, such as select non-clustered Kinetic and non-Southeast Fiber Infrastructure markets as well as spectrum and other real estate assets, we believe the opportunity exists to generate material proceeds over the next 12 to 36 months, and we are making progress on several potential transactions. With that, we'd be happy to take your questions. Operator: [Operator Instructions] Our first question comes from the line of Gregory Williams from TD Cowen. Gregory Williams: It sounds like business is booming on the Fiber Infra side. So my questions are more on the Kinetic side, actually. One is just on the consumer Fiber ARPU. As you guys noted, it was down 2.6% and you gave us some guidance for the third quarter and fourth quarter, saying that you have new customers, timing of rate plan adjustments and retention. Can you just help provide more color to the ARPU trajectory? We're seeing ARPU pressures everywhere, whether it's cable repricing, fixed wireless and now Starlink in the mix. How do you think about the ARPU curve sort of longer term as you think about maybe 2% or 3% growth from previous messaging? Second question is on Kinetic CapEx. You did raise it by $100 million, and you did raise the Fiber home deployment by $25,000. So it implies cost per home pass might be going up? Or is this just because you're front-end loading some of the costs or warehousing equipment? Or is it actually indeed cost per Home Passed going up from rising equipment costs? John Harrobin: Yes. Greg, this is John. I'll take that. And I'll start with the second one. And on the equipment costs, we've seen all the stories that you've seen. We believe that there's going to be a slight increase in our cost of Fiber in the outer years, '27 and beyond. And as a result, I think when you look at the range that we've guided to in terms of cost per passing, we're going to come in at the upper end of that range. So I would plan for that, and that's what we are planning for as well. We're not going to be impacted by the CPE memory charge issues for a variety of reasons, including our long-term contracts and volume and the fact that we can balance different SKUs in order to hit the targeted CPE cost number that we are -- that we planned for. So I think we're good on the CPE side and an uptick a little bit in the Fiber material side beginning in, I'd say, mid-2027 and beyond. Relative to the ARPU trends, as Paul said, we expect a slight decrease year-over-year next quarter and then return to positive in the fourth quarter. And on an annual basis, our forecast still show 2% to 3% ARPU accretion in 2027 and beyond. And all the reasons Paul mentioned are entirely accurate. When he talks about cost of retention, that is in response to the competitive promotions that cable started with and the telcos matched on. And we've seen that. We're fortunate in a sense that we only compete with cable in less than -- big cable in less than 60% of our Fiber territory. So it means that -- and that compares to like mid-80s to low 90s versus other peers in our category. So we're not as impacted. But make no mistake, 60% is still a number, and we are in a growth business. And like Kenny said, we're not going to chase unprofitable growth, but we're not going to see the market either. So we're being really smart about it. We've got -- we call them regional, but they're not geographic. They're more like tiers of pricing and cohorts that we adjust based on our performance, the strength of that market and the competitors' pricing. And we track it and monitor it, and we adjust that to be rational yet maintain our growth. And as you can see, we haven't necessarily been slowed down by growth on the top line or churn improvements either. So I think we'll see it play out. We said ARPU -- we said churn would come in where it did at an improved guidance last quarter, and we expect that to improve. And like Paul said, we're going to return back to that 2% to 3% growth beginning in the fourth quarter. Paul Bullington: Greg, let me just add a couple of things to what John said, to reemphasize on the CapEx, make sure we're clear there. You can't really take the increase in capital that we're guiding to and apply it directly to just those 25,000 additional homes we're guiding to. As mentioned in my comments, a lot of that CapEx is a pull forward of CapEx to accelerate 2027 growth. So those households that we're investing in at the end of 2026 will be households that are passing, I think, in 2027. So as we've talked about before, these builds tend to be more front-loaded from a CapEx standpoint with design and permitting and then construction starts on homes to be passed in future periods. So we're confident in our ability to hit the cost to pass range that we've put out prior, even though -- as John said, there might be forces that are driving us a little bit more towards the higher end of that range, but that range still holds. Operator: And our next question comes from the line of Richard Choe from JPMorgan. Richard Choe: I wanted to ask about the demand funnel or pipeline you see from the 3 different categories you called out, neo-cloud, superscalers and hyperscalers. And is there any differentiation in what type of projects they're looking at or you're potentially doing for them. Kenneth Gunderman: Richard, this is Kenny. I think you trailed off a little bit at the end there, but I think I got the gist of your question, which is the distribution of our funnel across the key customer segments and the types of products. I'm paraphrasing a little bit. But look, fundamentally, the funnel is very, very strong across all of those customer segments. And I think our distribution of bookings in the quarter is actually a pretty good representation of the funnel. And of course, it ebbs and flows because any time you've got a funnel that just grows and grows, that means you're not selling enough. So we need the funnel to grow, but then retract and grow again. But fundamentally, each of those segments are strong. As we've been saying now for really 2 years, and we're really just paring what the hyperscalers and Neo-clouds have been saying, there is a constraint on compute supply in the industry and therefore, the infrastructure to enable that compute. And that has been a consistent message. It's been a consistent message among that customer segment that they need to invest to stay ahead of the demand, and they're consistently surprised by the amount of demand that's chewing up the capacity. And so they're having -- they're struggling to stay ahead of it. And of course, we're on the -- at the tip of the spear of that, and we see the same amount of demand across all of those segments. I think the hyperscalers are much more in the vein of building new Fiber and whether it's greenfield or interconnecting routes or overpulling routes and more in the vein of Dark Fiber as a product. So think about them as more of enabling AI, building the learning models. And really, that's a large percentage of the $1.5 billion of revenue that we've talked about over the next several years as being the build cycle. So they're generally the anchor customers in that build cycle. And we've talked about the emergence of the neo-clouds and the superscalers and other names of customer categories that we haven't come up with yet that will enable -- that will then use that -- those learning models and that Fiber and use that for inference and obviously selling and reselling compute capacity. And frankly, we're starting to see that demand sooner than we expected. And we're now using words like petabytes that are needed to capture the amount of demand. And I'd say the majority of the funnel that we talked about there is really coming from the neo-cloud group. And these multi-terabit Waves packages are more of the norm than the exception. And we talked about 2 of them this quarter. They're right down the fairway of lease-up on greenfield builds that we've had over the past couple of years, driving really terrific margins in a capital-efficient way, and we've got a lot more of those coming. So I would say the shorter version of the answer to your question is demand continues to accelerate, and we're starting to see the neo-clouds and the superscalers as the higher growth component of that, and they're taking more Waves and lit capacity versus Dark Fiber than the hyperscalers. Richard Choe: Yes. Sorry for fading out there. In terms of the hyperscaler lease-up IRR, the 15% for spade, is that just timing? Or is that a mixture of timing, volume and maybe pricing? Kenneth Gunderman: Yes. I think -- so it's a combination of all of the above. As you know, Richard, many of these hyperscaler deals come with very large NRCs. And so we used to measure our anchor deals on a cash flow yield basis, but we can't do that with hyperscalers because it's not measurable in many cases because there's -- the cash upfront offsets the initial capital or largely offsets the initial capital. So when you think about both the anchor and the lease-up, in many cases, it's the same hyperscaler taking the original anchor plus the lease-up. And so it's definitely a function of timing and the amount of Fiber that they're taking. But in all cases, the returns are very attractive, and we think they're only going to get more attractive because as we -- as I said earlier, the build cycle is the precursor to where the real demand and the real upside for us is, and that's on the recurring revenue. Operator: [Operator Instructions] Our next question comes from the line of Frank Louthan from Raymond James. Frank Louthan: Great. On the lease-ups going forward, how do those work? Are there any restrictions on what you can charge new tenants or any most degradation clauses for the anchor tenants? And then on the wavelengths, do you offer wages at any point that a customer or any endpoint a customer wants? Or are your wages between certain POPs or data centers? Kenneth Gunderman: Frank, we have very few limitations, restrictions and sort of unique terms with respect to what we can or can't do with the Fiber that we're building. And that's by conscious design. And many of our customers know that we're building Fiber as a shared infrastructure asset, which means in order to get acceptable returns for ourselves, we've got to be able to lease that Fiber up to other customers, and that's an understanding from the very beginning. So I could list on one hand the number of kind of unique deal terms that we might have. So it's absolutely more of the exception than the rule. And so as we look forward, and we're currently building Fiber, we've built Fiber, there's very, very few limitations on what we're going to be able to do with that Fiber going forward. There's probably more limitations on what our customers can do with what we sell to them than the other way around. And that's something we've covered in the past and has always been a part of our business model and will be on a go-forward basis. With respect to Waves, I just we couldn't be more happy with our Waves strategy and the progress that we're making. And we have talked for several quarters, Frank, as you know, that -- about how the Waves market is growing at roughly 10% a year, which I think is conservative. We've talked about how we have probably less than 5% market share in that market. So we don't have a big embedded base of Waves that are susceptible to competition. And we've also talked about how we're selectively lighting routes around the country where we've got a right to win on network quality and network uniqueness and customer service capabilities as opposed to on price, which there are many Tier 1 routes around the country, as you know, where you've got multiple competitors and they're competing largely on price. And we don't want to be in that game. We want to be in the Waves business where we've got unique routes, and we're able to compete based on that and network quality. And this hyperscaler build has helped us accelerate that strategy because we're building a lot of new Fiber in Tier 2 and Tier 3 markets, in some cases, connecting back to Tier 1 markets. And so you have an embedded Waves opportunity that we're now taking advantage of. And the 2 big Waves packages that we highlighted this quarter are exactly that. This is Dark Fiber that was recently built and connecting data centers. And we -- these are clearly not just single-use data centers. They're multi-use as evidenced by the fact that we had an anchor customer and now we're leasing up to Waves customers. So that's the strategy. It always has been, but I think this AI-fueled hyperscaler build is actually accelerating the Waves product for us, and we're very excited about it. Operator: And our next question comes from the line of Matthew Griffiths from BofA. Matthew Griffiths: So you mentioned in the prepared remarks, I believe, that some Fiber Infrastructure revenue could slip maybe from 4Q into 2027. Is the driver of that just kind of data center construction completion timing? Or is it -- or what other factors could be behind that? And then just I'm curious on the terms of the kind of Waves and Dark Fiber deals. Are you -- can you comment on the terms, the number of years that you're signing up for and if that's moving in a certain direction or not, would be helpful. Kenneth Gunderman: Matthew, it's Kenny. I'll start with that. Yes, on the large deals, hyperscaler deals for the year, we've tried to be really transparent not only just coming into this year, but foreshadowing next year and beyond that these big deals are ones that will move the needle from a quarter-to-quarter basis and even from a year-to-year basis because they're big deals. And in the first half of the year, we've had -- we've actually either been able to pull in deals sooner than expected or on schedule, but a pleasant surprise to the market. And so that's part of what's helped us outperform expectations for the first couple of quarters. We're foreshadowing that the third quarter will be down because we don't actually think there's going to be a material amount of larger deals in the third quarter, and therefore, most of them in the fourth quarter. And that's just the math and the expectation on current expectation on timing. And we flag it because we don't want people to be surprised if something does happen to slip from '26 into '27 and move the numbers in a big way based on paper, but we're really talking about a matter of weeks or maybe a month or so as opposed to quarters or years. So it's not a reflection of the quality of the book of business. It's just a reality that when you're building hundreds of miles of new Fiber and you're building 864 strand count Fiber with multiple conduits or even 1728 Fiber with multiple conduits. And there's -- and you're building that through multiple permitting authorities and using multiple contractors or subcontractors in addition to our internal crews, there's always a risk of slippage even when you're in control of your -- largely in control of your destiny. So I wouldn't flag any particular issue around the builds of the deployments that we're concerned about. We're really flagging it because of the materiality of the numbers and just the reality of building large amounts of Fiber. With respect to your second question, we've talked a lot about the greenfield builds and the overpulls for the hyperscalers as being largely 10- to 20-year deals, and that has continued to be the case. So -- and we love those deals. We love Dark Fiber. That has always been a core part of our business. And of course, locking in that long-term revenue and long-term anchor customers is terrific. But when you start to get into the lease-up phase, you're generally going to be into shorter-term contracts as almost by definition. And taking that one step further with respect to this new class of customers, the neo-cloud, superscalers, we're very, very focused on credit quality of the customer and making sure that when we paper these opportunities or when we're doing our analysis to assess customers that we're focused on the credit quality of the customer, we're trying to put ourselves in their shoes about what they're using the Fiber for. And so we're pushing for longer-term deals. They're pushing for shorter-term deals, and we're landing, I'd say, at a place where we're very comfortable from a credit quality perspective. So generally, lit deals, Waves deals are in the 3- to 5-year range. And I'd say we're closer to the 3-year range, in some cases; a little shorter, in some cases, a little higher. But we're very comfortable with the terms that we're inking and we're very comfortable thus far with the credit quality of the customers that we're signing up deals with. Operator: This does conclude the question-and-answer session of today's program as well as today's program. Thank you, ladies and gentlemen, for your participation. You may now disconnect. Good day. Before you buy stock in Uniti Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Uniti Group wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $399,724!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,374,595!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 8, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Uniti (UNIT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Record Fiber Infrastructure bookings, exceeding the previous record by almost 30%, were driven by robust demand from hyperscalers and neo-clouds preparing for Agentic AI adoption. Management attributes the 10% year-over-year total fiber revenue growth to an 'insurgent share taker' mentality, prioritizing being first-to-market in Tier 2 and Tier 3 metro areas. The strategic pivot from a build-heavy cycle to a lease-up phase is evidenced by over 50% of new bookings being Waves or lit capacity rather than dark fiber. Kinetic's record net fiber subscriber adds and home construction pace reflect a 'move in haste' strategy to capture market share before competitors in underserved footprints. Managed services attachment rates grew to 16% of new bookings, supporting a strategy to enhance margins and customer loyalty by cross-selling into the existing on-net fiber base. Management noted that while cable and fixed wireless remain competitive at the edge, fiber's superior latency and reliability are expected to drive long-term share gains as usage becomes mission-critical. Increased 2026 fiber home construction targets to a range of 475,000 to 525,000, aiming to surpass 50% fiber coverage within the Kinetic footprint by year-end. Net CapEx guidance for Kinetic was raised by $100 million to $1.27 billion to support an accelerated build plan for 2027, reflecting front-loaded design and permitting costs. Management expects approximately $1.5 billion in revenue from AI-related build cycles over the next few years, with an additional $500 million in high-margin recurring revenue sitting on top. Consumer Fiber ARPU is projected to decrease low single digits in Q3 due to retention initiatives but is expected to stabilize and grow low single digits in Q4 2026. The company anticipates fiber services will overtake legacy copper and TDM services as the majority of total revenue by the end of 2026. Management identified $500 million to $1 billion in noncore, underutilized assets for potential monetization over the next 12 to 36 months to optimize the portfolio. A potential for 'lumpy' revenue recognition in H2 2026 was flagged, as large hyperscaler dark fiber deals may slip from Q4 2026 into early 2027 due to permitting or construction timelines. The company successfully lowered its blended cost of debt by 600 basis points over three years to approximately 6.5% through strategic ABS transactions and debt maturity extensions. Anticipated slight increases in fiber material costs starting in mid-2027 are expected to push cost-per-passing metrics toward the upper end of management's guided range. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects 2% to 3% ARPU accretion in 2027 and beyond, despite near-term pressure from cable promotions and retention efforts. Uniti's limited overlap with 'big cable' (less than 60% of territory) provides a buffer compared to peers with 80-90% overlap. Hyperscalers primarily drive the dark fiber build cycle for AI learning models, often acting as anchor tenants for new routes. Neo-clouds and superscalers are emerging as higher-growth components, demanding multi-terabit Waves packages for AI inference and compute reselling. Dark fiber deals remain long-term (10-20 years), while lit services and Waves packages typically range from 3 to 5 years. Management is prioritizing credit quality and 'use-case' analysis when signing shorter-term deals with the newer class of neo-cloud customers. Management confirmed there are very few restrictions on leasing fiber to additional tenants, as the network is designed as shared infrastructure. The strategy focuses on lighting unique routes where Uniti has a competitive advantage on quality rather than competing on price in Tier 1 markets.

Record Level of New Bookings at Fiber Infrastructure Updates Full Year 2026 Outlook Net Loss of $155.9 Million for the Second Quarter Consolidated Revenue and Adjusted EBITDA of $909.7 Million and $357.1 Million, Respectively, for the Second Quarter LITTLE ROCK, Ark., July 30, 2026 (GLOBE NEWSWIRE) -- Uniti Group Inc. (“Uniti” or the “Company”) (Nasdaq: UNIT) today announced its results for the second quarter 2026. Key highlights during the quarter on a pro forma basis included: Consolidated Fiber Revenue Grew 10% Year-over-Year in the Second Quarter Kinetic Consumer Fiber Revenue Grew 19% Year-over-Year in the Second Quarter Kinetic Consumer Fiber Net Adds of ~38,000; Most Ever in a Quarter Kinetic Consumer Fiber Premises Constructed of 141,000; Highest Level on Record Fiber Infrastructure New Bookings Monthly Recurring Revenue of ~$2.2 Million; Highest Ever on Record “We had a record-breaking quarter at Uniti on several fronts, highlighted by our highest level of new bookings MRR at Fiber Infrastructure of $2.2 million, an almost 30% increase from the previously highest reported level. Our robust bookings continue to be fueled by the strong demand we are seeing from hyperscalers and neocloud providers for both dark and lit wave solutions. At Kinetic, we saw the most consumer fiber net adds and fiber premises constructed ever on record, reinforcing the significant progress we are making on our fiber-to-the-home build while remaining on track to pass 3.5 million homes with fiber by the end of 2029. With respect to our balance sheet, we continue to be active in the asset securitization market with our recently completed $1.1 billion transaction at Kinetic. To date, we have successfully raised almost $3 billion through asset securitizations. While we expect to continue to be active in this market, we will also take a balanced approach to raising capital through traditional debt markets and/or monetizing non-core assets,” commented Kenny Gunderman, President and Chief Executive Officer of Uniti. QUARTERLY RESULTS Consolidated revenues for the second quarter of 2026 were $909.7 million. Consolidated net loss and Adjusted EBITDA were $155.9 million and $357.1 million, respectively, for the same period, achieving Adjusted EBITDA margins of approximately 39%. Kinetic contributed $539.0 million of revenues and $228.4 million of contribution margin for the second quarter of 2026, achieving margins of approximately 42%. Kinetic’s capital expenditures during the quarter were $350.9 million. Fiber Infrastructure contributed $234.1 million of revenues and $121.8 million of contribution margin for the second quarter of 2026, achieving margins of approximately 52%. Fiber Infrastructure’s capital expenditures during the quarter were $77.2 million and upfront payments received from customers were $9.7 million. Uniti Solutions contributed $182.5 million of revenues and $91.8 million of contribution margin for the second quarter of 2026, achieving margins of approximately 50%. Uniti Solutions’ capital expenditures during the quarter were $6.8 million. FINANCING TRANSACTIONS On July 15th, Uniti completed its previously announced offering of $1.1 billion aggregate principal amount of secured fiber network revenue term notes (collectively, the “Notes”). The Notes have a weighted average coupon rate of approximately 6.180% and will be secured by certain residential fiber network assets and related customer agreements in the States of Texas, Arkansas, Kentucky, Ohio, Georgia, Iowa, Alabama, Florida, North Carolina and Oklahoma. Uniti intends to use the net proceeds of the offering of the Notes for general corporate purposes, which may include success-based capital expenditures and/or repayment of outstanding debt. On July 23rd, Uniti issued a prepayment notice to the lenders of its senior secured term loan due 2032 to prepay up to $167,791,000 principal amount on July 30, 2026 (the “Term Loan Prepayment Offer”). Concurrently and in connection with the Term Loan Prepayment Offer, Uniti commenced asset sale offers to purchase up to $332,209,000 aggregate principal amount of the 4.750% Senior Secured Notes due 2028 and 7.500% Senior Secured Notes due 2033 (the “Asset Sale Offers”). The Asset Sale Offers will expire at 5:00 p.m., New York City time, on August 20, 2026, unless extended. In the event any lenders decline to accept their pro rata portion of the Term Loan Prepayment Offer, Uniti intends to utilize any such declined prepayment amounts to increase the size of the Asset Sale Offers. FULL YEAR CONSOLIDATED 2026 OUTLOOK The Company is updating its 2026 outlook primarily for business unit level revisions, the recently completed Kinetic asset securitization, and transaction related and other costs incurred to date. This outlook excludes any impact from other future acquisitions, capital market transactions, and future transaction-related and other costs not mentioned herein. The Company’s consolidated outlook for 2026 is as follows (in millions): CONFERENCE CALL Uniti will hold a conference call today to discuss this earnings release at 8:30 AM Eastern Time (7:30 AM Central Time). The conference call will be webcast live on Uniti’s Investor Relations website at investor.uniti.com. Those parties interested in participating via telephone may register on the Company’s Investor Relations website or by clicking here. A replay of the call will also be made available on the Investor Relations website. ABOUT UNITI Uniti (Nasdaq: UNIT) is a premier insurgent fiber provider dedicated to enabling mission-critical connectivity across the United States. We build, operate, and deliver fast and reliable communications services, empowering more than a million consumers and businesses in the digital economy. Our broad portfolio of services is offered through a suite of brands: Uniti Wholesale, Kinetic, Uniti Fiber, and Uniti Solutions. Visit us online at www.uniti.com. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions and management’s current expectations with respect to the future, involve certain risks and uncertainties, and are not guarantees. These forward-looking statements include, but are not limited to, statements regarding Uniti’s fiber build strategy, businesses growth potential, integration of Uniti and Windstream, capital allocation and financing plans, and 2026 outlook. The words “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” “predicts” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Uniti may not actually achieve the plans, intentions or expectations disclosed in its forward-looking statements, and you should not place undue reliance on the forward-looking statements. Future results may differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that Uniti makes. These forward-looking statements involve risks and uncertainties, known and unknown, that could cause events and results to differ materially from those in the forward-looking statements, including, without limitation: unanticipated difficulties or expenditures relating to the merger of Uniti and Windstream; competition and overbuilding in consumer service areas and general competition in business markets; risks related to the Company’s indebtedness, which could reduce funds available for business purposes and operational flexibility; rapid changes in technology, which could affect its ability to compete; risks relating to information technology system failures, network disruptions, and failure to protect, loss of, or unauthorized access to, or release of, data; risks related to various forms of regulation from the Federal Communications Commission, state regulatory commissions and other government entities and effects of unfavorable legal proceedings, government investigations, and complex and changing laws; risks inherent in the communications industry and associated with general economic conditions; and additional risks set forth in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings with the U.S. Securities and Exchange Commission. The discussion of such risks is not an indication that any such risks have occurred at the time of this filing. Uniti does not assume any obligation to update any forward-looking statements. NON-GAAP PRESENTATION This release and today’s conference call contain certain supplemental measures of performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). Such measures should not be considered as alternatives to GAAP. Further information with respect to and reconciliations of such measures to the nearest GAAP measure can be found herein. NON-GAAP FINANCIAL MEASURES We refer to EBITDA and Adjusted EBITDA in our analysis of our results of operations, which are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). While we believe that net income, as defined by GAAP, is the most appropriate earnings measure, we also believe that EBITDA and Adjusted EBITDA are important non-GAAP supplemental measures of our operating performance. We define “EBITDA” as net income, as defined by GAAP, before interest expense, provision for income taxes, depreciation and amortization, and costs incurred as a result of the early repayment of debt, including early tender and redemption premiums and the write off of unamortized deferred financing costs. We define “Adjusted EBITDA” as EBITDA before stock-based compensation expense and the impact, which may be recurring in nature, of incremental acquisition, pursuit, transaction and integration costs (including unsuccessful acquisition pursuit costs), and costs associated with litigation claims made against us, and costs associated with the implementation of our enterprise resource planning system, (collectively, “Transaction Related and Other Costs”), goodwill impairment charges, gains or losses on retirements and dispositions of assets, gain on settlement of preexisting relationships in connection with our merger with Windstream, severance costs, amortization of non-cash rights-of-use assets, costs associated with the termination of related hedging activities, changes in the fair value of financial instruments, and other similar or infrequent items (although we may not have had such charges in the periods presented). We believe EBITDA and Adjusted EBITDA are important supplemental measures to net income because they provide additional information to evaluate our operating performance on an unleveraged basis. In addition, Adjusted EBITDA is calculated similar to defined terms in our material debt agreements used to determine compliance with specific financial covenants. Since EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, they should not be considered as alternatives to net income determined in accordance with GAAP. Further, our computations of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies. INVESTOR CONTACTS: Paul BullingtonSenior Executive Vice President, Chief Financial Officer & [email protected] Bill DiTullioSenior Vice President, Investor Relations & [email protected] MEDIA CONTACTS: Scott L. MorrisAssociate Director, Media & External [email protected] Brandi StaffordVice President, Corporate [email protected]

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record quarter of new bookings at fiber infrastructure, exceeding previous record by almost 30%. Total fiber revenue grew 10% year-over-year, with strong demand across wholesale, enterprise, and consumer segments. Kinetic achieved its strongest quarter ever for net fiber subscriber additions and new fiber homes constructed. Over 50% of new bookings were for lit wave capacity, signaling a pivot from build cycle to lease-up and inference. Blended Anchor Lisa cash yields reached 37%, the highest ever, driven by profitable and strategic fiber builds. Consumer fiber ARPU decreased 2.6% in Q2 due to new customer volume, rate plan adjustments, and retention initiatives. Consolidated pro forma revenue and adjusted EBITDA declined 5% and 10% year-over-year, respectively, due to legacy service declines. Some large hyperscale dark fiber deals may slip from Q4 2026 into early 2027, causing potential revenue lumpiness. Kinetic faces near-term ARPU pressure from cable repricing and fixed wireless competition, though less impacted than peers. Net CapEx guidance increased by $100 million to $1.27 billion, partly due to front-loaded costs for accelerated 2027 builds. Warning! GuruFocus has detected 8 Warning Signs with UNIT. Is UNIT fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more color on the consumer fiber ARPU trajectory, which was down 2.6% in Q2, and your expectations for the third and fourth quarters? How do you think about the ARPU curve longer-term given competitive pressures from cable, fixed wireless, and Starlink?A: John Harroin, President of Kinetic: We expect a slight decrease year-over-year next quarter, then a return to positive growth in the fourth quarter. Our annual forecast still shows 2% to 3% ARPU accretion in 2027 and beyond. The cost of retention is in response to competitive promotions from cable and telcos. We are fortunate that we only compete with cable in less than 60% of our fiber territory, compared to mid-80s to low-90s for peers. We are being smart about it, using regional tiers of pricing and cohorts adjusted based on market strength and competitor pricing, to maintain growth without chasing unprofitable business. Q: On the kinetic side, you raised CapEx by $100 million and the fiber home deployment target by 25,000. Does this imply cost per home pass is going up due to rising equipment costs, or is it due to front-loading costs?A: John Harroin, President of Kinetic: We've seen a slight increase in our cost of fiber expected in the outer years (2027 and beyond), so we will come in at the upper end of our cost-per-passing range. We are not impacted by CPE memory charge issues due to long-term contracts and volume. Paul Bollington, CFO: A lot of that CapEx is a pull-forward to accelerate 2027 growth. These builds are front-loaded from a CapEx standpoint with design, permitting, and construction starting on homes to be passed in future periods. The cost-to-pass range still holds. Q: Can you discuss the demand funnel or pipeline you see from the three different customer categories: NeoCloud, superscalers, and hyperscalers? Is there any differentiation in the projects they are looking at?A: Kenny Gunderman, CEO: The funnel is very strong across all customer segments. Hyperscalers are more focused on building new fiber (dark fiber) for learning models, which is a large part of the $1.5 billion build cycle. NeoClouds and superscalers are emerging faster than expected, using that fiber for inference and selling compute capacity. They are taking more waves and lit capacity. The majority of our funnel is coming from the NeoCloud group, with multi-terabit wave packages becoming the norm, driving terrific margins in a capital-efficient way. Q: On the lease-ups, are there any restrictions on what you can charge new tenants, such as most-favored-nation clauses for anchor tenants? And on wavelengths, do you offer waves between any endpoint a customer wants, or just between certain pops or data centers?A: Kenny Gunderman, CEO: We have very few limitations or restrictions on what we can do with the fiber we build. It's a shared infrastructure asset, and customers understand we need to lease it up for acceptable returns. On waves, we are selectively lighting routes where we have a right to win on network quality and uniqueness, not on price. The hyperscaler build is accelerating our wave strategy because we are building new fiber in tier 2 and 3 markets, creating embedded wave opportunities. The two big wave packages this quarter are examples of dark fiber recently built connecting data centers, now being leased up to wave customers. Q: You mentioned that some fiber infrastructure revenue could slip from Q4 2026 into 2027. Is the driver of that data center construction completion timing, or other factors? Also, can you comment on the terms (number of years) for waves and dark fiber deals?A: Kenny Gunderman, CEO: On the slippage, it's a reality of building hundreds of miles of new fiber with high strand counts through multiple permitting authorities and contractors. It's not a reflection of the quality of the book of business, but a matter of weeks or a month, not quarters or years. On terms, dark fiber deals for hyperscalers are largely 10 to 20-year deals. Lease-up and wave deals are generally shorter, in the 3 to 5 year range, sometimes closer to 3 years. We are very focused on the credit quality of these new NeoCloud customers and are comfortable with the terms we are inking. Q: What drove the record quarter of new bookings at Fiber Infrastructure, and can you elaborate on the mix of demand across customer segments?A: Kenny Gunderman, CEO: Demand was strong across virtually all categories, reinforcing our diversified customer base. The mix included about 20% from NeoClouds, 18% from superscalers, 10% from hyperscalers, and 6% from fiber-to-the-home providers. Importantly, over 50% of new bookings were waves or lit capacity, reinforcing the pivot from the build cycle to lease-up and inference. The funnel of opportunities is even more exciting, and we expect continued positive momentum. Q: Can you provide more detail on the $500 million to $1 billion of non-core assets you mentioned for potential monetization? What types of assets are these, and what is the timeline?A: Paul Bollington, CFO: These include excess fiber, non-core and non-clustered assets and operations such as select non-clustered Kinetic and non-southeast Fiber Infrastructure markets, as well as spectrum and other real estate assets. Many are underutilized today and produce minimal cash flow. We believe the opportunity exists to generate material proceeds over the next 12 to 36 months, and we are making progress on several potential transactions. Q: How do you view the competitive dynamics from fixed wireless, LEO, and cable at the edge, and how does that impact your strategy for fiber-to-the-home?A: Kenny Gunderman, CEO: Fixed wireless, LEO, and cable remain somewhat competitive today at the edge. However, as usage, reliability, and latency become more mission critical, customers will demand fiber at the edge. This presents an opportunity for us to win back share from these other technologies. Our 5 million future-proofed connected endpoints, including fiber-to-the-home, are a significant benefit for distributing inference to the edge. Q: What is the outlook for Kinetic's fiber penetration and subscriber targets for 2026?A: Paul Bollington, CFO: We are increasing our incremental homes passed with fiber target by 25,000, now expecting to reach For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Uniti Group Inc.? Here are five stocks we like better. Record fiber demand: Uniti reported record second-quarter fiber infrastructure bookings, nearly 30% above its prior record, driven by hyperscalers, neocloud providers and AI-related connectivity needs. Fiber infrastructure revenue rose 6%, while the company raised its 2026 midpoint guidance to $1 billion. Kinetic fiber expansion accelerated: Kinetic passed a record 141,000 additional homes and added 38,000 net fiber subscribers, ending the quarter with 2.1 million homes passed and 603,000 subscribers. Uniti raised its 2026 construction target to 475,000–525,000 homes and expects consumer fiber revenue of $635 million–$655 million. Higher investment and financing activity: Uniti increased its 2026 Kinetic capital-expenditure outlook by $100 million to approximately $1.27 billion, partly to pull forward 2027 expansion. The company also completed a second asset-backed securities transaction and expects to monetize $500 million–$1 billion of non-core assets over the next 12–36 months. Uniti Group (NASDAQ:UNIT) reported record fiber infrastructure bookings and accelerated fiber construction in the second quarter of 2026, as management pointed to rising demand from hyperscalers, neocloud providers and other customers deploying artificial intelligence-related infrastructure. Chief Executive Officer Kenny Gunderman said total fiber revenue increased 10% from a year earlier, while fiber infrastructure revenue rose 6%, in line with company expectations. He described the quarter as a record for new fiber infrastructure bookings, exceeding the prior record by nearly 30%. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Management said demand was broad-based across its wholesale customer base. During the quarter, approximately 20% of fiber infrastructure bookings came from neocloud customers, 18% from superscalers, 10% from hyperscalers and 6% from fiber-to-the-home providers. Gunderman said AI adoption is expanding the need for high-bandwidth, low-latency connectivity, with near-term applications including customer-service automation, cybersecurity and corporate-function automation. He said future uses such as robotics, autonomous driving and scientific research could require still greater network capacity. → 3 Value ETFs to Consider as Growth Stocks Lag Behind Uniti is seeing increased demand for both dark fiber and lit wave services. More than half of second-quarter fiber infrastructure bookings were for waves, or lit capacity, rather than dark fiber. Gunderman said wave services were the largest individual product contributor to the company’s record booking level. The company highlighted two large wave packages sold during the quarter: a 20-terabit package connecting a neocloud customer from a Tier 2 market data center to a large metro area, and an 18-terabit package sold to a superscaler from another Tier 2 market data center. Together, those transactions represented 96 400-gigabit waves, according to management. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Gunderman said Uniti’s current waves sales funnel represents roughly 1.3 petabytes of traffic, with most of that opportunity involving relatively new customers. He also said nearly 80% of the company’s hyperscaler business uses all or part of Uniti’s preexisting network, contributing to blended anchor lease-up cash yields of 37%, the company’s highest level to date. During the question-and-answer session, Gunderman said hyperscaler projects generally involve new fiber construction, route interconnections or overbuilds and tend to emphasize dark fiber. By contrast, neocloud and superscaler customers are increasingly using lit capacity for inference workloads and compute services. He said large dark-fiber agreements generally run for 10 to 20 years, while lit and wave contracts are typically shorter, often in the three- to five-year range and closer to three years in many cases. The company is focused on customer credit quality as it pursues these newer categories of customers, he said. At Kinetic, Uniti’s consumer fiber business, the company passed an additional 141,000 homes with fiber during the quarter, its highest quarterly level on record. Kinetic ended the period with about 2.1 million homes passed with fiber, representing 46% of its consumer footprint. Kinetic added 38,000 net fiber subscribers in the quarter, also a record, ending with 603,000 fiber subscribers. Total fiber subscribers increased 25% from the prior-year period, while consumer fiber revenue rose 19% year over year. Fiber penetration reached 29%, up 90 basis points from a year earlier. Chief Financial Officer Paul Bullington said newer customer cohorts are achieving stronger penetration rates than earlier cohorts did at comparable stages, supporting management’s view that its 40% terminal penetration target is achievable and potentially conservative. Uniti raised its 2026 target for incremental fiber homes passed by 25,000 and now expects to construct 475,000 to 525,000 new fiber homes during the year. The company expects to end 2026 with 2.33 million to 2.38 million homes passed with fiber, or more than 50% of the Kinetic footprint, and with 675,000 to 700,000 fiber subscribers. Management expects Kinetic consumer fiber revenue of $635 million to $655 million for 2026, representing growth of roughly 25% to 30% from the prior year. Consumer fiber average revenue per user was affected during the quarter by new-customer volume, the timing of rate-plan adjustments and retention efforts, Bullington said. Uniti expects fiber ARPU to decline by low single digits year over year in the third quarter before stabilizing and rising by low single digits in the fourth quarter. Kinetic President John Harrobin said the company’s longer-term forecast still calls for 2% to 3% annual ARPU growth beginning in 2027. He said Kinetic faces large cable competitors in less than 60% of its fiber territory, compared with a mid-80% to low-90% exposure cited for certain peers. The company is using different pricing tiers and customer cohorts to respond to competitive promotions while maintaining subscriber growth, he said. Uniti increased its Kinetic net capital expenditure outlook by $100 million to approximately $1.27 billion at the midpoint. Bullington said the higher spending does not solely reflect the 25,000 additional homes in the 2026 construction target, as a substantial portion is being pulled forward to support 2027 expansion. Harrobin said the company expects a modest increase in fiber-material costs beginning around mid-2027, which could place its cost per passing toward the upper end of its previously communicated range. However, he said Uniti does not expect to be affected by customer-premises-equipment memory-chip constraints because of long-term supply contracts, scale and flexibility across equipment models. On a pro forma basis, Uniti said second-quarter consolidated revenue declined 5% year over year and adjusted EBITDA fell 10%, primarily because of declines in Uniti Solutions and legacy copper and TDM services. Kinetic fiber-based revenue, including consumer and wholesale services, grew 12%, while fiber infrastructure revenue and adjusted EBITDA increased 10% and 20%, respectively. For 2026, Uniti maintained midpoint expectations for Kinetic revenue of $2.145 billion and contribution margin of $905 million. It raised fiber infrastructure midpoint guidance to $1 billion of revenue and $575 million of contribution margin, citing strong hyperscale and AI-related activity. The company expects Uniti Solutions to generate $700 million in revenue and $320 million in contribution margin at the midpoint. Consolidated guidance calls for approximately $3.655 billion of revenue, $1.475 billion of adjusted EBITDA and $1.525 billion of net capital expenditures. Bullington cautioned that large dark-fiber sales can be uneven between quarters. Uniti expects limited large-deal contribution in the third quarter, with a significant portion anticipated in the fourth quarter, though some transactions could shift into early 2027 due to the timing of major construction projects. Separately, Bullington said Uniti recently completed its second Kinetic asset-backed securities transaction, which is intended to help fund fiber construction over the next year and could support repayment of up to $500 million of secured debt through ongoing asset sale offers. The company also said it sees potential to monetize $500 million to $1 billion of non-core assets over the next 12 to 36 months, with minimal expected impact on adjusted EBITDA because many of those assets are underutilized or generate little cash flow. Uniti Group Inc is a real estate investment trust that owns, operates and acquires communications infrastructure assets across the United States. Established in September 2015 through a spin-off from Windstream Holdings, Uniti Group focuses on leasing fiber, small cell networks, cell towers and related infrastructure to service providers, wireless carriers and other enterprises requiring high-capacity connectivity. The company's assets are designed to support the growing data demands of residential, business and governmental customers, with an emphasis on long-term contractual lease arrangements. Uniti's portfolio encompasses an extensive fiber network that spans metropolitan and rural markets, as well as a portfolio of wireless towers and small cell nodes that facilitate mobile network densification and help carriers deploy 5G services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Uniti Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Total Fiber Revenue Growth: 15% year-over-year. Fiber Infrastructure Revenue Growth: 13% year-over-year. Kinetic Consumer Fiber Revenue Growth: 26% year-over-year. Homes Passed with Fiber: 1.94 million homes by the end of the quarter. Net New Fiber Subscribers: 30,000 added during the first quarter. Total Fiber Subscribers: 564,000 at the end of the quarter. Fiber Penetration Rate: 29.1% during the quarter. Fiber ARPU Growth: 5% year-over-year. Consolidated Pro Forma Revenue Growth: 1% year-over-year. Adjusted EBITDA Growth: 10% year-over-year. 2026 Revenue Guidance: $3.63 billion at the midpoint. 2026 Adjusted EBITDA Guidance: $1.45 billion at the midpoint. 2026 Net CapEx Guidance: Approximately $1.4 billion. Debt Yield Improvement: Blended yields improved by 600 basis points over three years. Warning! GuruFocus has detected 13 Warning Signs with UNIT. Is UNIT fairly valued? Test your thesis with our free DCF calculator. Release Date: May 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Uniti Group Inc (NASDAQ:UNIT) reported a strong start to 2026 with significant growth in fiber revenue, including a 15% year-over-year increase in total fiber revenue. The company achieved its third-highest quarter of bookings ever at Fiber Infrastructure, indicating strong demand and execution. Kinetic had its strongest quarter ever of gross adds and the highest number of homes constructed in nearly four years, demonstrating robust growth in consumer fiber. Uniti Group Inc (NASDAQ:UNIT) is strategically positioned to benefit from the AI revolution, with its fiber network located in markets with power and land availability. The company is successfully managing churn, with Kinetic reporting the best quarter of consumer fiber churn ever, reflecting improved customer retention efforts. Despite strong quarterly performance, Uniti Group Inc (NASDAQ:UNIT) did not raise its full-year guidance, citing potential variability in large deal timing. The company faces competitive pressures in its copper markets from fixed wireless access (FWA) and low Earth orbit (LEO) satellite providers, impacting churn. Uniti Solutions, a non-core segment, continues to experience revenue and EBITDA declines at a mid-teens pace year-over-year. The company is experiencing some higher costs in customer CPE and conduit pricing, although these have been factored into their guidance. Uniti Group Inc (NASDAQ:UNIT) acknowledges that the timing of large hyperscaler deals can be unpredictable, potentially affecting quarterly results. Q: What are you seeing from a competitive standpoint, either from FWA or satellite? And why didn't you raise guidance despite a strong quarter? A: Kenneth Gunderman, CEO: We're excited about the quarter's results, which were expected due to large hyperscaler deals. The business is tracking ahead of the midpoint, and while we debated raising guidance, we decided to maintain it due to potential variability in deal timing. Paul Bullington, CFO: In fiber markets, we saw record growth and churn, with no significant impact from FWA or LEO. In copper markets, there was a slight impact from LEO due to aggressive promotions, but we view this as temporary as we continue to build fiber. Q: Are you seeing any delays in customer orders or rising equipment costs? A: Kenneth Gunderman, CEO: We're not seeing significant delays in customer orders. There are some higher costs in customer CPE and conduit pricing, but these were anticipated and included in our guidance. We have sufficient inventory and leverage with vendors to manage these costs effectively. Q: How should we think about the hyperscaler opportunity and revenue expectations for this year and beyond? A: Kenneth Gunderman, CEO: Demand from hyperscalers and AI continues to grow, and we have strong conviction in our multiyear guidance. Hyperscalers are purchasing significantly more fiber, and we expect this trend to continue. Paul Bullington, CFO: We had about $70 million in hyperscaler revenue in Q1, with expectations for more in the back half of the year. We anticipate similar or growing revenue from hyperscalers over the next three years before the inference phase ramps up. Q: How much lower can you bring your weighted average cost of debt? A: Paul Bullington, CFO: Our last ABS deal had a blended coupon of about 5.7%, and we aim to continue lowering our cost of capital by adding more ABS and refinancing other high-yield debt. The trend has been positive, and we expect it to continue as long as market conditions hold. Q: What are your plans for Kinetic churn, and what initiatives are in place to reduce it? A: Kenneth Gunderman, CEO: We're focused on reducing churn to industry-leading levels, leveraging successful strategies from Frontier. John Harrobin, President of Kinetic: We've implemented mechanisms to resolve customer pain points, leading to record low churn and improved efficiency. We aim to continue this trajectory, with churn improvements expected to widen year-over-year. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a 'twin engine' strategy: the Kinetic fiber-to-the-home build and the Fiber Infrastructure hyperscaler/AI build, resulting in 15% year-over-year total fiber revenue growth. Management attributed the record quarter for Kinetic gross adds and the highest home construction in four years to a 'customer-obsessed' strategy and an insurgent share-taker mentality in Tier 2 and 3 markets. The company is leveraging its unique footprint near land and power availability to capture outsized opportunities in the AI revolution, particularly for long-haul wholesale routes. Strategic positioning in an increasingly converged world is enhanced by the lack of white space for new fiber builds, making Uniti's existing network more mission-critical for hyperscalers. Operational excellence initiatives, including best practices from industry veterans, led to the best quarter of consumer fiber churn ever at Kinetic. Management highlighted that 80% of hyperscaler business utilizes existing infrastructure, driving high blended anchor lease-up yields of 35% and combined IRRs of approximately 30%. Uniti expects 2026 to be a critical inflection and investment year, targeting 450,000 to 500,000 new fiber home passings at Kinetic to reach a total of 3.5 million by 2029. The company anticipates a transition from the current dark fiber-intensive build cycle to an 'inference phase' where hyperscalers become regular wave customers, driving higher recurring revenue. Management projects cumulative nonrecurring cash revenue to reach nearly $1 billion by 2028, with up to $500 million of recurring annual cash revenue thereafter. Guidance for 2026 assumes continued lumpiness in revenue recognition due to the timing of large hyperscaler sales-type leases, with significant activity expected in the fourth quarter. The strategic roadmap includes achieving consolidated revenue and EBITDA growth by 2027 as fiber services overtake legacy copper and TDM revenue. Management identified $500 million to $1 billion of noncore assets for potential opportunistic monetization over the next 12 to 36 months, including spectrum and underutilized real estate. The company successfully lowered its blended debt yield by 600 basis points over three years to approximately 6.5% through aggressive use of the ABS market and debt maturity extensions. Unprecedented winter storm activity in the first quarter was noted as a challenge, though the company maintained its ramp-up schedule for fiber construction. Uniti Solutions is being strategically managed as a non-core asset, with plans to wind down low-value legacy services while retaining profitable cash-flow-generating segments. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management reported record top-line growth and churn in fiber markets, indicating no material impact from FWA or LEO satellite competitors in those areas. A temporary 'pop' in LEO activity was observed in copper markets due to aggressive promotions and Uniti's own price increases, but management expects to win these customers back once fiber is deployed. Hyperscalers are increasing order sizes by 50x to 200x, moving from 12-24 strands to over 1,700 strands plus extra conduits. The company signed its largest lit bandwidth order ever (a 20-terabit wave package), signaling a shift toward high-margin recurring revenue as the AI inference phase begins. Management acknowledged higher costs for customer equipment and conduit (due to resin prices) but stated these costs are fully baked into 2026 guidance. Uniti maintains sufficient inventory and scale to ensure they remain 'high up in the line' with vendors for necessary equipment. Churn reduction of 14% year-over-year is being driven by resolving customer pain points at the start of the relationship, with early-life churn down 20%. Improved service quality has led to record lows in trouble tickets and truck rolls, which management noted as a key driver for future margin efficiency.

Gogo (GOGO) came out with quarterly earnings of $0.07 per share, missing the Zacks Consensus Estimate of $0.09 per share. This compares to earnings of $0.18 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -22.22%. A quarter ago, it was expected that this in-flight internet provider would post earnings of $0.02 per share when it actually produced a loss of $0.01, delivering a surprise of -150%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Gogo, which belongs to the Zacks Wireless National industry, posted revenues of $226.32 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 2.75%. This compares to year-ago revenues of $230.31 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Gogo shares have lost about 7.7% since the beginning of the year versus the S&P 500's gain of 7.6%. While Gogo has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Gogo was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.10 on $228.21 million in revenues for the coming quarter and $0.42 on $925.46 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Wireless National is currently in the bottom 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Uniti Group (UNIT), has yet to report results for the quarter ended March 2026. The results are expected to be released on May 11. This real estate investment trust is expected to post quarterly loss of $0.42 per share in its upcoming report, which represents a year-over-year change of -625%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Uniti Group's revenues are expected to be $916.33 million, up 211.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Gogo Inc. (GOGO) : Free Stock Analysis Report Uniti Group Inc. (UNIT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research