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SEC filingArray Digital Infrastructure's Q1 2026 revenue surged 93% YoY to $52.0M, driven by the T-Mobile Master License Agreement, but net income of $180.0M was heavily boosted by a $156.6M gain on spectrum license sales.
Array Digital Infrastructure reported a transformative Q1 2026. Total operating revenues surged 93% year-over-year to $52.0M, driven primarily by the newly executed T-Mobile Master License Agreement (MLA), which added a minimum of 2,015 towers under long-term leases and approximately 1,800 towers on an interim basis. Site rental revenue more than doubled to $51.0M. However, this was partially offset by a $4.4M decline in revenues from DISH Wireless, including a $2.9M write-off of contractual assets as DISH claimed its obligations were excused.
Cost of operations increased 33% to $21.6M, reflecting higher property taxes, insurance, maintenance, and ground rent tied to the expanded tower portfolio. Selling, general and administrative expenses fell 56% to $12.7M due to reduced overhead and employee costs following the wireless business sale. The standout was a $156.6M gain on the sale of certain 3.45 GHz and 700 MHz spectrum licenses to AT&T, which closed in January 2026 for $1.018B. Additionally, short-term imputed spectrum lease income of $34.2M was recognized from the T-Mobile spectrum lease agreements.
Operating income swung to a profit of $160.8M from a loss of $29.6M in the prior year. Net income from continuing operations reached $180.0M, up from $5.5M, yielding basic EPS of $2.08 versus $0.05. Excluding the substantial one-time gains, underlying profitability improved significantly as demonstrated by Adjusted OIBDA of $17.8M (versus -$17.4M last year).
Cash and cash equivalents more than doubled to $253.6M from $113.4M at year-end 2025, bolstered by $1.018B in proceeds from the AT&T spectrum sale, partially offset by a special dividend of $885.5M paid in February 2026. Total assets declined to $3.96B from $4.68B due to the derecognition of spectrum assets sold. Long-term debt remained stable at $668.5M (net). Equity dropped sharply from $2.57B to $1.87B, primarily reflecting the dividend distribution. The company maintained compliance with its debt covenants (Consolidated Leverage Ratio not to exceed 3.50x and Interest Coverage Ratio not below 3.00x).
Net cash provided by operating activities from continuing operations improved to $24.5M from a use of $71.2M in the prior year, driven by higher net income adjusted for non-cash items and favorable working capital changes, including accruals for taxes on the spectrum gain. Investing activities generated $1.004B, almost entirely from the AT&T divestiture. Financing outflows of $887.8M were dominated by the special dividend. Capital expenditures from continuing operations were $8.6M, focused on tower maintenance and land purchases. The company expects full-year capex of $25M-$35M.
Management attributes the revenue surge to the T-Mobile MLA, with approximately 2,015 committed colocations and interim leases on up to 1,800 sites. However, revenue from interim leases is expected to decline as T-Mobile cancels them. The DISH Wireless situation remains a headwind, with future revenue recognized only on a cash basis. The strategic alternatives review continues, with pending spectrum sales to Verizon ($1.0B, expected Q2/Q3 2026) and T-Mobile ($74.8M, closed May 5, 2026). A non-binding proposal from parent TDS to acquire outstanding shares was received on May 7, 2026, adding significant uncertainty. The company expects to pay ~$130M in income taxes related to the AT&T gain in Q2 2026.
The company operates as a single reportable segment. Equity in earnings of unconsolidated entities contributed $40.4M (up 12% YoY), reflecting investments in wireless operating companies managed by Verizon and AT&T. The short-term spectrum lease income will reverse as leases are terminated; effective April 1, 2026, $11.7M of future income will be reclassified to discontinued operations. The company recorded a $65.8M liability for estimated decommissioning costs related to the T-Mobile asset sale. Stock-based compensation was $0.2M in Q1 2026, down from $1.0M in Q1 2025.