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SEC filingArray Digital Infrastructure's Q2 2025 revenue declined 1% to $916M as wireless losses offset tower growth, but net income surged 77% to $31M, driven by lower taxes and higher equity earnings.
For the three months ended June 30, 2025, Array Digital Infrastructure reported total operating revenues of $916 million, a 1% decline from $927 million in the prior-year quarter. The decrease was driven by the Wireless segment, where revenues fell 1% to $888 million, largely due to a 2% drop in retail service revenues ($652 million vs $666 million) as average postpaid and prepaid connections decreased. Equipment sales also slipped 2% to $180 million on lower upgrade volumes. The Towers segment provided offsetting growth, with revenues rising 7% to $62 million, fueled by new colocations, escalators, and inbound application revenue.
Operating income edged down 4% to $35 million from $36 million, as higher selling, general and administrative expenses ($328 million vs $322 million) and system operations costs ($183 million vs $180 million) offset a $4 million net gain on license sales and exchanges. Below the operating line, equity in earnings of unconsolidated entities increased to $42 million (from $38 million), boosted by a $20 million contribution from the Los Angeles SMSA Limited Partnership. Interest expense remained flat at $45 million. Income tax expense plunged 73% to $4 million due to excess stock compensation deductions, resulting in net income attributable to Array shareholders of $31 million, up 77% from $17 million. Basic EPS rose to $0.37 from $0.20.
Total assets at June 30, 2025 stood at $10,377 million, modestly lower than the $10,449 million at December 31, 2024. Cash and cash equivalents jumped to $386 million from $144 million, reflecting strong operating cash flows and reduced capital spending. Licenses remained largely unchanged at $4,583 million. On the liability side, current liabilities decreased to $808 million from $884 million, primarily due to lower accounts payable and accrued compensation. Long-term debt, net, was $2,819 million, compared to $2,837 million at year-end 2024, as $12 million was repaid during the period. Total equity rose to $4,614 million from $4,592 million, driven by retained earnings growth and share repurchases.
For the six months ended June 30, 2025, cash provided by operating activities totaled $485 million, slightly below $516 million in the same period last year. This decrease occurred despite higher net income ($52 million vs $42 million) as changes in working capital (inventory and receivable reductions) were partially offset by lower distributions from unconsolidated entities ($88 million vs $80 million) and increased tax payments. Capital expenditures dropped sharply to $147 million (cash basis) from $270 million, reflecting the winding down of the 5G rollout. Free cash flow (non-GAAP) rose to $318 million from $226 million, underpinned by the capex reduction. Financing activities used $93 million, including $36 million for tax withholdings on stock-based awards, $21 million for share repurchases, and $20 million for software licenses. The company ended the period with $401 million in cash, cash equivalents, and restricted cash, compared to $159 million at the start of the year.
Management noted that the wireless operations were sold to T-Mobile on August 1, 2025, subsequent to the quarter-end, for $2,629 million in cash. The transaction triggered a debt exchange that reduced outstanding senior notes by $1,680 million and a repayment of $863 million in term loans and export credit financing on August 4. A special dividend of $23.00 per share was declared on August 1, payable August 19. Looking ahead, the company expects to record exit and disposal costs and a loss on the transaction, along with decommissioning costs for towers and equipment. The pending sale of certain spectrum licenses to Verizon ($1,000 million, book value $586 million) and AT&T ($1,018 million, book value $860 million) remain subject to regulatory approval. Array also completed the acquisition of King Street Wireless and Sunshine Spectrum in July 2025, which will result in a $50 million discrete tax benefit. The strategic alternatives review continues for remaining spectrum assets.
Wireless segment operating income fell 27% to $34 million for the six months, while Towers operating income improved 2% to $42 million. The company incurred $22 million in strategic alternatives review expenses year-to-date. Equipment installment plan receivables decreased to $957 million net from $1,028 million at year-end, with write-offs of $37 million. The allowance for credit losses stood at $75 million. In the Towers segment, the number of owned towers increased to 4,418, and colocations rose 6% to 2,527, pushing the tenancy rate to 1.57 from 1.55. Subsequent to the quarter, the Master License Agreement with T-Mobile secures long-term tower lease revenue on a minimum of 2,015 towers. The company’s effective income tax rate fell sharply due to excess stock compensation deductions and the expected benefit from acquired deferred tax assets.