Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 30, 2026 · Beat 3 of last 6 quarters
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Uniti's record Fiber Infrastructure bookings — with more than 50% now lit/Waves capacity — signal the AI infrastructure cycle is pivoting from the dark-fiber construction phase into the inference/lease-up phase, where recurring revenue layers onto hyperscaler-built routes at a record 37% cash yield. The 1.3-petabyte Waves funnel and the 96 x 400-gig circuits sold to two customers in one quarter underscore how quickly connectivity demand is scaling in Tier 2/3 data-center markets. At the edge, Kinetic's accelerated 2026 build (475K-525K new fiber homes) extends that connectivity toward ~5 million endpoints, positioning Uniti for the distribution of inference workloads over the next several years.
Fiber Infrastructure posted record consolidated bookings MRR of ~$2.2M, almost 30% above the prior record, with more than half of bookings from Waves/lit capacity; the bookings mix was roughly 20% neo-clouds, 18% superscalers, 10% hyperscalers and 6% fiber-to-the-home providers. Kinetic added a record 38,000 net fiber subscribers and 141,000 new fiber passings in the quarter, ending at 603,000 subs and ~2.1M homes passed, with consumer fiber revenue up 19% YoY. Fiber Infrastructure revenue and adjusted EBITDA grew 10% and 20% YoY, respectively, while consolidated pro forma revenue and EBITDA declined 5% and 10% YoY as Uniti Solutions and legacy copper/TDM services continued to decline. Blended anchor lease-up cash yields reached a record 37%, and the company closed a second Kinetic ABS transaction while cutting its blended debt yield to ~6.5%, down 600 bps over three years.
Management raised full-year 2026 guidance across the board: consolidated revenue to ~$3.655B and adjusted EBITDA to ~$1.475B at the midpoint, with Fiber Infrastructure revenue and contribution margin raised to $1.0B and $575M and Uniti Solutions contribution margin up to $320M. Kinetic's new fiber home target was lifted to 475K-525K, homes passed to 2.33M-2.38M, and Kinetic net CapEx to ~$1.27B — a $100M increase that is mostly pull-forward of spending to accelerate 2027 passings. On ARPU, management guided to low-single-digit YoY declines in Q3 followed by stabilization and low-single-digit growth in Q4, with 2-3% annual ARPU accretion expected in 2027 and beyond as cable/promotional pressure eases. Demand tone was confident: Fiber Infrastructure bookings should trend 'up and to the right' over the next few years despite quarterly lumpiness, though some large dark fiber deals could slip from Q4 2026 into early 2027 on construction timing, not demand. Capital plans include a second Kinetic ABS transaction, potential paydown of up to $500M of secured debt, and $500M-$1B of noncore asset monetizations over the next 12-36 months.
“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%.”
on Record AI-driven wholesale demand
“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.”
on Waves lease-up inflection
“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.”
on Competitive moat on ARPU
Consumer fiber ARPU was down 2.6% — what is the long-term ARPU curve versus your prior 2-3% growth messaging? And does the $100M Kinetic CapEx raise with only 25,000 more homes imply cost per passing is going up, or is it just front-loading/warehousing costs?
John Harrobin said Fiber material costs will rise slightly in 2027 and beyond, so cost per passing should land at the upper end of the guided range, but long-term contracts and SKU flexibility shield Uniti from CPE memory-cost inflation. On ARPU, he confirmed a low-single-digit decline in Q3 before returning to positive growth in Q4, with 2-3% annual ARPU accretion in 2027 and beyond, noting pricing is managed through regional/cohort tiers and big cable competes in under 60% of Kinetic's fiber territory versus mid-80s to low-90s for peers. Paul Bullington added that the CapEx increase is largely a pull-forward of spending to accelerate 2027 passings, not a change in cost per pass.
Can you describe the demand funnel across the neo-cloud, superscaler and hyperscaler categories — is there differentiation in the type of projects they're pursuing?
Kenny Gunderman said the funnel is very strong across all segments and the quarter's bookings mix is a good representation of it. Hyperscalers anchor the ~$1.5B build-cycle revenue and are more dark fiber-oriented (enabling AI learning models), while neo-clouds and superscalers are the faster-growing component and are taking more Waves/lit capacity for inference — he said multi-terabit Waves packages are "more the norm than the exception" and the majority of the 1.3 PB funnel comes from neo-clouds. He reiterated that compute supply constraints keep customers investing to stay ahead of demand, and that lease-up on greenfield builds is driving high-margin, capital-efficient recurring revenue.
You mentioned some Fiber Infrastructure revenue could slip from Q4 into 2027 — is that driven by data center construction completion timing? And can you comment on contract terms for the Waves and dark fiber deals?
Kenny Gunderman said any slippage is a matter of weeks or a month, not quarters — a reflection of building hundreds of miles of 864-1728 strand-count fiber through multiple permitting authorities and contractors, not a demand or credit issue. On terms, dark fiber deals remain largely 10-20 year contracts, while lit/Waves deals are landing in the 3-5 year range, closer to 3 years, with Uniti pushing for longer terms and focusing intently on the credit quality of the new neo-cloud customer class.