Mixed Q2: Loss, Growth, Outlook
Uniti Group Posts Q2 Loss While Fiber Expands And Outlook Improves.
Anonymous
Key Points
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Kinetic delivered $539 million in Q2 revenue with $350.9 million of capital expenditures, as it achieved record fiber expansion by passing 141,000 homes and adding 38,000 net fiber subscribers in the quarter, supported by a blended anchor lease-up yield of about 37%.
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Fiber Infrastructure revenue was $234.1 million in Q2, with capital expenditures of $77.2 million and upfront payments of $9.7 million, while bookings-based MRR reached about $2.2 million, up roughly 30% from the prior record.
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Management lifted the 2026 outlook for Fiber Infrastructure revenue to roughly $1 billion at the midpoint and reiterated a broader 2026 revenue target of about $3.63–$3.68 billion, with the potential for around $500 million of recurring infrastructure revenue.
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Near-term ARPU pressure persists, with fiber ARPU down 2.6% year over year and expected to fall modestly in Q3 due to promotions and rate-plan timing, though management expects stabilization and low-single-digit growth in Q4; fiber material costs may rise from mid-2027 onward.
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Analysts pushed back on the stock, with targets ranging from about $7.50 to $12 and ratings spanning Hold to Buy; the consensus target was around $11.14, reflecting mixed views on the earnings and outlook.
Uniti Group posted a net loss of $155.9 million, or 68 cents per share, in the second quarter of 2026 — far worse than the 43 cents per share analysts expected, according to Arkansas Online. Revenue came in at $909.7 million, up sharply from $301 million a year ago, after the company completed its $13.4 billion merger with Windstream in 2025.
Shares fell sharply after hours and opened lower the next day, according to NWA Online. Despite the headline loss, management pointed to record fiber bookings and booming demand from hyperscalers — the giant cloud companies like Amazon and Microsoft — as signs of long-term strength.
Record Fiber Bookings Drive Infrastructure Optimism
Uniti's Fiber Infrastructure unit brought in $234.1 million in revenue during Q2. Bookings-based monthly recurring revenue hit roughly $2.2 million — up about 30% from the prior record, according to Yahoo Finance. The company spent $77.2 million on capital expenditures in that segment, plus $9.7 million in upfront payments.
Management raised its 2026 Fiber Infrastructure revenue target to around $1 billion at the midpoint. The company also flagged potential recurring infrastructure revenue of around $500 million. Uniti said hyperscaler demand — orders from massive cloud companies building huge data centers — is at record levels, fueling that optimism.
Kinetic Division Passes 141,000 Homes, Adds 38,000 Subscribers
Uniti's Kinetic division, which runs fiber-to-the-home service, posted $539 million in Q2 revenue. It passed 141,000 additional homes with fiber and added 38,000 net fiber subscribers in the quarter, according to Seeking Alpha. Capital spending for Kinetic reached $350.9 million in the period.
The division achieved a blended anchor lease-up yield of about 37%, a measure of how efficiently it fills newly built fiber routes with paying customers. Management called the construction pace a record and said favorable build economics support continued expansion.
ARPU Pressure Clouds Near-Term Revenue Picture
Fiber ARPU — the average revenue per user — fell 2.6% year over year. Management warned it could slip further in Q3 due to promotions and the timing of rate-plan changes. That is a drag on near-term earnings even as the subscriber count grows, according to Yahoo Finance.
Management expects ARPU to stabilize and grow at a low single-digit rate in Q4. The company also flagged that fiber material costs could rise from mid-2027 onward. Legacy copper and other older services continued to shrink, putting further pressure on overall margins.
Analysts Split on Stock With Targets From $7.50 to $12
Wall Street reactions were mixed. Analyst price targets ranged from about $7.50 to $12, with ratings spanning Hold to Buy, according to NWA Online. The consensus target sat around $11.14, reflecting uncertainty about how quickly Uniti can convert fiber growth into profits.
TipRanks noted shares surged on the record bookings news before giving back gains. The company's 2026 total revenue target of $3.63 billion to $3.68 billion was reiterated. The big question for investors is whether subscriber growth and hyperscaler deals can outpace the losses from shrinking copper services.
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