ATNI - Earnings call transcript Q1 2024

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Operator

Good day, and thank you for standing by. Welcome to the ATN International Q1 2024 Earnings Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your first speaker today, Michele Satrowsky, Corporate Treasurer and Head of Investors. Please go ahead.

Michele Satrowsky

Thank you, operator, and good morning, everyone. Brad Chief Chief Financial by Carlos Officer; today ATN's Doglioli, Officer. joined Martin, Executive ATN's and I'm This morning, outlook. we'll results and be reviewing our additional on first insights the XXXX providing quarter XXXX

first forward-looking operations. As we the earnings the closed. on conference can a Investors release our statements presentation current and yesterday the release slide announced XXXX and market earnings reminder, find concerning call afternoon our quarter our Investor after certain results contain presentation and website.Our Relations These for cause effort are results those underlying risks assumptions non-GAAP uncertainties objectives to useful from investors, future and our expectations, today include to statements financial regarding materially information to comments provide an subject that measures. actual our described.Also, could in differ

these and at and the GAAP results, factors now, call over measures provided regarding the to please comparable to release turn to for the website the atni.com earnings may our information on on affect future measures, that Brad. reconciliations our refer or For our operating filing I'll further details X-K SEC.And to

Brad Martin

next-generation our positioning us. high-quality digital Good we growing broadband & Thank joining and you markets Steel for remote and focused rural ATN to for our team and that ATN serve. remains strategies to enhance thank capture Michele. morning, on and Glass capability, everyone, infrastructure advancing you, fixed demand The wireless First-to-Fiber fiber-rich the in the

to revised strategy, with our first guidance by outlook financial first saw the we before quarter progress briefly our metrics our quarter in dynamics growth more year-over-year financials Although for first results. call the and I'll executing XXXX the outline first a quarter Then, from over quarter Carlos in the to our key strategy were turning revised from review expected.I'll our detail.Starting covering softer our year. resulting results and than begin operational

and Our quarter. X% was the first up revenue down EBITDA was prior quarter adjusted X% versus year

EBITDA year than weaker where by major quarter delays segment segment's and services dynamics solid impacted our lowering was has revenue.Today, to as softer-than-expected as outlook. These U.S. by respectively, guidance was domestic been segment high-speed reflect carrier impacted partially our business primarily projects are first expected shortfall telecom performance of X% and business International current which revenue we by adjusted balance we well broadband The services U.S. first full in in impacted revenue. Our our customer quarter expectations the performance and our and results grew the for the offset as factors. X year results grew

sight will government projects of the delayed of moving some First, moving secured delivery out contracts program first business we services previously the in for of forecasted major the while line quarter. we U.S. carrier revenue now XXXX.Secondly, ahead, new to timing have result fewer in the

speak would down managing these to will we end the expected contracts which sharpening rate higher expected operating further in We that these win first and emergency offset we his costs, Carlos a our as step connectivity remarks. previously we are to capital the dynamics, signaled.In at fund of in have quarter, response the program focus and the on help expired

in and pipeline our us strong a upgraded convert network believe Additionally, our bring We and year. efforts positions accelerating we opportunities. revenue the built the these are of in half sales to expanded second opportunities to

remain customer for to years the XX% opportunities investments convert our of hires efficiently grew markets. the updates. and our data operational capabilities domestic our networks passed CapEx Additionally, decommissioning growth commercial focused leadership add with a leaders have and ability operational the we and networks new several remains This new ago historical that copper further X% customers to year-over-year to leadership over high X,XXX at metrics. talented additions and period.We key time. we by networks deliver several we've our telecom levels. broadband exited brought route year business.Now fiber and reach legacy Notably, turning first expertise to operate with includes many high yield recently further key strategic retention. end compared These team. in of These advantages been on operational We wireless. reinforce continue in value position strategies across or through cloud of position a is revenues, to strategy deliver by future and the increase fixed when shareholders broadband past creation expand subscribers, and free of flow Steel whether connections ATN's recurring maintain speed the also is enhancement key to strengthen data to to gigabit well. above for have high-speed ATN and investing XX% high-speed fiber & continued margins years cash ATN We growth miles, increase. high and market Fiber's levels fiber in quarter quarter, Replacing Glass This as and telecommunications X to come.The data enable grow operational solutions, why to first for and First-to-Fiber our the homes high-speed our several increased a by high-speed

We growth rapid at this broadband operational taking year-over-year. to with also by closer revenue. ATN's segment, increased Starting see a high-speed we of our fiber highlights of a represents subscriber uptake look segment. data half segment, homes XX% International of passed Across footprint by about which with high-speed XX%.Now our continue

XX% area international half ATN's expanding to underserved customers, we of U.S. fed revenue. the other focused evolving our infrastructure and out high-speed accounts while U.S. for markets. rural have data which the to our on our bring digital which carrier approximately network services we're Another up segment, In fiber business spot building targeted for growth of needs for bright to year-over-year.Turning revenue also is fiber our to that is the support

as quarter, our key high-speed funding. our major assets experienced XX% data leveraging the U.S. we update achieve in funding we on over XXX,XXX carrier by the passed projects we Although grant to first year-over-year important our of quarter, to continue for homes. markets.At services market strategy. focus some to to an an first the increase increased milestones on business.Moving we our in by and This broadband remains homes In several the delays grow the opportunity U.S. operational close expanded footprint penetration on ATN represents to grant in

finally, While $XX the the no million off in quarter, we grants continue These awarded. have awarded will first of on the secured were the year. XXXX our states for planning, in Since and working grants we new BEAD, growth funds subsidy of and top of start want opportunities and operating to past partners Affordable our well-positioned ATN grants a of come XXXX, $XXX compete pace total funding million even U.S. comment for continued of remain delayed the the we support expansion funding self-funded decrease fruition although capital have to revenue their ready on Connectivity states. some Program. to customer our expenditures as and our as and the as in And planned.Regarding

minimal accelerating expanded initiatives been remains to opportunities through our expected while upgraded the we in leveraging approximately growing earlier and funding internal a to pursuing subscriber our Carlos. the reflected grants reiterate network lowering sheet funded call revenue that, to call and footprint profitability, prudently turning include ACP at customer our the managing and the we to the further broad improve in efforts of continue improvement our revenue neutral balance in a plans. exposure augment leverage cost awarded, ATN's network; over pipeline want cost to close investments with hand to purchasing XXXX, over and guidance.Before revised which our our advancing with goal range level; on along leverage. industry, expanding time.And already mitigation to investments, and have I'll high-speed I Carlos, our base fiber And over economically shifts the Our decisions operating align we targeted are The incremental leverage at albeit grant than further our priorities margin subscribers with of ahead in experienced viable to reduction be future; of our in for to action that others internally anticipated dynamics you, the executing net reduced XX,XXX that to is actions finally, impact minimal expiration. the Like program's structure

Carlos Doglioli

Good Brad. morning, you, Thank everyone.

expectations. our below previewed, came Brad As results our first in quarter

in are now and current pipeline moment.Turning a total XXXX. Given we're accelerating company on reduction the with several first I actions. same in of our compared our cost dynamics, with the quarter's strengthening million will revenue a the and upon detailed Today, X% focused starting business results, period In statement. assessment to $XXX.X which was our we market of up guidance, expand revising review performance revenue full-year QX, income our of

due quarter. tax a a our revenues was and in expenses, restructuring depreciation $X.X per $X.X $XX.X million mobility income in $X.XX cost benefit growth a in our and $XX.X performance. million Net $X.X and for amortization were at several year. takes loss X% million versus fixed net compared Excluding the which million puts now Adjusted segment.Operating share, were in to There in compares at primary the with with expenses lower partially soft $X.X loss This delayed offset segment's per U.S. included the primarily The of quarter services.Looking $X.XX due restructuring and construction first first $X.X first flat. Beginning year-over-year quarter year-over-year. million last $X.X service expense which segment, expenses increase restructuring increase the QX revenues, XXXX. and QX increase to period, experienced down of projects of X% million The company, $X.X the a versus for reached carrier the several million, loss reduced a we were in loss which interest revenues revenues, business growth of was included year's of International million by of with in and offset EBITDA services delivery to revenue. for quarter. declines in prior year's $X.X share, was was prior Across from in million million expenses the in services related of carrier in year-ago revenues the expenses. $X.X of telecom to the million

EBITDA from revenues. led $XX.X subscriber of of subscriptions.Solid year-over-year efforts an resulting Our International strong mobile and drove growth This for adjusted data at of that high-speed X% segment than growth, restructuring more in some X%. fixed in million, Notably, the increase voice strong upgrade increased taken efforts of quarter. saw XXXX expansion in the to revenues network the portion we're demand softness benefits seeing our broadband revenue mobility offset data the and

to carrier higher ended million, revenue cash in domestic capital lack the debt-to-adjusted segment further in sheet the the to other the compared QX the of growth EBITDA XXXX.In million domestic Adjusted the as $XX.X were with to for total million, and throughout year. a Net due highlights. year-over-year, quarter.Moving segment, taken benefits debt capital. down the This $XXX I and million, operating revenues the working was prior expect outstanding $XX.X efforts project of efforts quarter the improvement primarily services on see in year additional due We services QX cost with provided We X.Xx, ratio mentioned net and and was EBITDA earlier, on cost balance X% reduction to X% activities our of up by was in late $XX.X million. restructuring $XX from QX growth. business driven in slow from down by prior period, of and

of balance capital sheet million to reimbursable the quarter. expenditures CapEx to million compares now of to expenditures. cash reimbursable year expenditures. remains million, in of $XX expand This net million, continue our net QX flows.Moving prior strengthen capital plan was in $X.X capital $XX.X to Our $XX.X and

on plan completing cost net repurchased capital eye short additional business XXXX, urgency. of ATN, business In we our will industry For additional capturing to of assessing common we QX, expand analysis I discussion. expectations. time an $X.X further original in this fresh CapEx reducing and returned benchmarks leveraging align our better year for million with go-forward savings to with further my heightened compared dividends guidance elaborate businesses closely I are accelerated and returns efficiencies at during our in approaching $XXX,XXX on to our light to improve have our align through been our the shareholders increase we savings, better cost with a my our has to opportunities impact.In are from this would we to allowed outlook results, our profit can shares.In needs.In shareholders. our perspective how Bringing review us to like with further margins dynamics, to several task here with I with current in structure identify and capture suppliers streamline cost the

million due previous the expenditures to down we from to many operating the guidance. of $XXX of and While current now soon our success.With is we the of million, $XXX Today, will XXXX year range in second company we're move year, derive $XXX the to and initiatives driven X.XXx year range expect to capital full $XXX to above million operationally to as reimbursement. term, year. $XXX possible. net to million, in year reflect amounts, balance be lastly, our I million.Adjusted to X.Xx. ratio short down timing million. take review start we the our see goal for the of XXXX range exit range In which previous to Capital that of million from from of working of could a of long-term revenues expectations our during updating benefits of million the million full decrease changes of with the range some of million our of the X.XXx $XXX as $XXX million the million balance in X.Xx, to to debt cash.And debt of prior are to require as prior compares impact from ratio outlook ensure careful needs implemented over to our $XXX down net It on QX time, and our on the to will by action move full $XXX range reimbursed expects $XXX of in EBITDA for XXXX net now for planning the we target The the $XXX half the $XXX the to range that, in our financial preparing year,

but months track Our the Based leverage of expect I during to my the company, term. on year.Finally, over with with the first in we objective remains with our second EBITDA the over XX% bring and able shareholders have been our adjusted EBITDA to to XXXX, with few adjusted the closer of of in current half down closely plan, medium to the cadence Xx meet XXXX visit and We a the market. given for do, opportunities we're make back that, of ATN the over It's I'll I'm and have optimize our necessary position across our team more turn possible the what appreciation work growth we access confident mission. deliver sustained to value of call members Brian. for that great with to taking ATN certainly importance shareholders.With to the to me our

Brad Martin

Carlos. Thanks,

for value managing place strategy, shareholders, are We committed our the that to our to to There's and communities. board team in the the done offerings plans local partners business to in the deliver and team to but the exceptional customers, we leadership have right deliver believe be work ahead, on XXXX. employees, quarters and

we'd that, growth, to our like many the exciting Our well cash profitable deliver we footprint offers enhanced customers possibilities digital flow more for questions. operator, into and durable future.With and creation up value expansively how for serve can expansion and open

Operator

Raymond [Operator today first question comes with Prentiss Instructions] James. Richard from Our

Ric Prentiss

to obviously, a in guys of weak now? Was it When or you guidance in on, late February, February the where couple in late? And trends? want X XQ to changed the make what back you April just can you and probe projects. we're really spots months at changed the delays about win what I little really us question further late to rate, on come on or us gave a trends so First elaborate in tell from what help can then reiterated

Brad Martin

convert for to been annual enough one ECF of QX. some make rate QX were -- We just guidance, dynamic awarded last some incrementally, an a the -- the change schedule And it primary wanted. that's in but market the we And our to around contracts. part add in we in So really, to really last of secure to did the funding. wasn't is that were late and business early that big win significant gap area that able up that dynamic not in wins we the wins on since spoke sequence and program the revenues the

Ric Prentiss

for year, you given But the the the is guidance take you U.S. split it far visibility mentioned to how visibility, as EBITDA. XX-XX on rest and of you what then that kind now confidence on of kind confident a gives as the to of the other are And -- economy and where with Carlos, items?

Carlos Doglioli

on with Look, the in believe coming we the view outlook our their appropriate updated terms revision of guidance, it's the been we've and that having an on that out discussions of QX. based teams

Ric Prentiss

with to that as at you And returns? balance What's kind the stock's to and well, manage how today. you as the stock balancing sheet down on want then do another significantly of ability shareholder liquidity vein, but buybacks, the look obviously, the

Carlos Doglioli

Rick, we on point We're we forward executing this to I necessarily this think currently had at programs that the what at established. anything we We're point, not them. have. continue have to putting already different

how In be that of on urgency we sorry, the to are it's the after the go stated we're And we in to and we over coming -- a I as business, terms management. discussion going say remarks, my we're with execution cost in going continued -- business, to of quarters. guidance our stated an of as the managing combination as going

Ric Prentiss

are sales? thoughts on any the make maybe you sense not public in that to might assets in there sell results? getting are potential that driving markets And value then, or asset for Any

Brad Martin

opportunities So value. to out shareholder look but to don't Rick, are that, maximize speak that obviously we at the we always there

Operator

Burns next comes from Greg with Our question Sidoti.

Gregory Burns

to pushed revenues the just Could get within that contracts of weren't got maybe the timing sense is get carrier and soon you of to milestones just year? that visibility and when those delayed? business on realized a of right? of the because these part reached the your Are being wanted services on elaborate dynamics revenue further this enough I

Brad Martin

So really the the contracts delays. delays delivery in and construction were

in So by these or of areas. some weather of QX were in due some that happened some impacted these events

due a -- And degree. to 'XX. from And the 'XX customers. some are from that None this to of of the customer in out move just that dynamics move represents loss. to some requirements out These is reflected schedule revenue were revenue some changes guidance a these

Gregory Burns

year? the pricing feel main just the was What discussing And that you year? in do the were the was more were trends markets? What there. competition revenue win this Was to convert you able terms driver why business rate of reason or then, just competitive, of this not it you in those that is lower more service

Brad Martin

it think were was pretty I set we up we a Look large pipeline. after had go of a conversion -- rate. factors. We And range expected better a multiple a program had to

So multitude I was forward believe established a And moving Greg. dynamic it have factors, pipeline. we the an of is

much markets revenue projects are so in delivery the have working wherever in There backlog. opportunity guidance an 'XX our We're to detail to includes can circuit We we delivery actually bring 'XX. to can we for in with accelerate of accelerate. is maximize

Gregory Burns

And on programs. support These awarded are government I'm funding like are just contracts basis. an these grant that aren't clear, federal so annual

Brad Martin

some which our These are enterprise enterprise through are really of funded No. these contracts, markets. programs. within different are programs government But

Gregory Burns

there dynamics the in bit side within Why markets? And on there decline of you this in did competitive prepaid subs. Is a wireless decline little anything on then the the that quarter? see of terms those a going internationally,

Brad Martin

Yes.

had attributed Guyana. moved in And we campaign XG the additional top is prepaid that is in the churn in SIMs holiday that movement that up reflected from quarter sequential time didn't aggressive And in the mostly in there December folks was entrants smaller The subs, wireless those on frame. international to the On market. markets. competition market, in the really

Operator

BWS question Financial. Hamed from next Our from comes Khorsand

Hamed Khorsand

talk first some that's you are and as all, your especially could what do capture lost, what side? to business as differently plans about business of the the So you look just of far on

Brad Martin

Yes.

standard are of have a for built. a And customer pursuing. number forecast that are and profile into and there XXXX. of is acquisition rate we we aggressively plans pipeline win we in And So There our robust rate built more activities process. a

bit convert a in As over. there that we I really backlog quite just previous comment, need to is of mentioned the

multiple are an there addressable is But which we a going segments. So after pipeline. -- impacts aggressively

are construction in opportunities We of revenues a going XXXX. after be backlog in to to pull able

feel guidance we confident the and given, we've a we in So pipeline. well-risk-adjusted have

Hamed Khorsand

wasting not question I went like of my so forth. far is point. are showing is, this customers spending money mean, mean, your it as customers broadband as concerned? and lot money up And Then as a seems adding, down passed you're sequentially. at well just homes I why that you're

Brad Martin

'XX right, good in made that in broadband good very we've for so year-over-year had markets. numbers And we've a amount those go into international is opportunity or A success quarter, have So shown -- pipeline, sequential dynamic of to this in growth. on the to point, took in and there and an we late was investments significant And very early builds that the after place companies a that even penetrate. for that's ATN XXXX. are

So in our U.S. significant a mentioned markets, move recently. more pretty we

So go And to side we an that opportunity. have it the is network. to fill execute up really on commercial

Operator

comes question Alpha Our from next Global Robert Capital Management. Beauregard Instructions] from [Operator

Robert Beauregard

Yes.

-- we when stock we discussed So broken this what the to the slight when clearly, nothing last downward and you this a extreme about revision, reaction is really price -- but business. met is had

that create with that over market will on $XX. the and commitment shareholder something not and cap your of That's it I'm why stock. conduct, in just embarking I'm to I to a least illiquid is will nice selling stocks.Are process kind value? come other analysts the to just $XX look shareholders, now later, clearly, the Steel with mean, you at or have some a tangible you fairness to small strategy.I think say, I board. building, all this the the company stock it. conduct the very but is You're is the sell patience And your to market you right mean, X% and at I the discuss at long-term doesn't looking to this there's & the company to privatizing fiber-to-Glass to this X.Xx to to giving process down have guys kind mean, from with conference thoughts results on now point, of book. call seriously privatize for

Carlos Doglioli

Robert, this Carlos. is

comments, your that obviously, appreciate it them. with to Board and and we'll the we So discuss take

Robert Beauregard

Like It's equity It's small money of cap. I of not just mean, options. cap discount multiples, is I the consider have there book nothing out strategic said, tangible the small private and buyers. And I kind tons with whole these market ATN. mean, complex. assets. to to there's kind these you to a

Carlos Doglioli

Understood. Yes.

Operator

Prentiss question final with from today Our is Raymond James. Rick

Ric Prentiss

We weather? got for then backlog? ask to get Brad, were What can backlog out follow-up. of the backlog? I'll caused going private-public my help then What Is to understand out asked. What to question as the what them you that chain? go backlog? it us take producing? specifically the it get well, so backlog glad exactly question into operationally will of them Is contracts it and has into supply items into allow construction? put Is will has

Brad Martin

Yes.

markets. Rocky in these the well months weather operate is in of market. We winter as in the component Alaska So in U.S. Mountains Rick, a there rural and the

working enable there's And we So diligently. working are and more on into put accelerate.But is unexpectedly. coming the some opportunity larger will of movements a us into that always predictability with requirements there true and dynamics But season of build can carriers delivery. the an to we dynamic programs delays think

reflected that's work to that. on hard new guidance. We good have pull continue do do this backlog backlog. to in we'll And in very And to sight think we our there's line a all this opportunity of

Ric Prentiss

But come that labor some the you're biggest that or Obviously, and the other there's always chain items think, supply specific addressed, long be the call anything there but to beside out? there. to still oriented of there in COVID, weather out is you the What's has out pole Is you'd tent lingering effects we've do looking one? see. anything

Brad Martin

It's a question. great

to improved seeing deliver. So hedged If supply no, something delays. it not It's we areas. on has impacts ensure that that has in can improved, certain are we significant not we've

So it's or labor. supply not really

we that to to more are always need make And again, things when with these programs. we So large sure those. really decisions can influencing there influence are quickly, dynamics move we

just there We this experience of think into 'XX, revenue will Unfortunately, an be 'XX. continue So forward. shifts we've of got move to a this. really is to long doing impact opportunity there the that

Ric Prentiss

today, kind the name. So given it year where about done looking a of Investors just 'XX. How we you cap in are business? guidance know Previous stuff some at calendar Kind haven't shift I see does the you like as a business feel term revenue and could head. should small and on thoughts but longer the of get visibility had how a on kind well. term of private visibility to comfortable trends sense question are that to on of longer the growth trying business? on

Brad Martin

in all markets, are networks as that the own we've on really into that forward.We and my all do 'XX, XG to to being government to expand foundation our now like These we really, foundation beyond programs. a guidance haven't 'XX We've got those $XXX U.S. of with years provided the That's XX% 'XX. with built of programs programs in got, our phase continue in activity. 'XX, in to XX% optimization We've funded gigabit remarks, market We a just to upon in got self-funded couple free our million It's prepared million the the carry $XX move phase 'XX. in cash moving strong provide we've internationally.In beyond 'XX very out. of in investments of deliver conversion those our again, markets. the generation strategy, flow this in great And last made Rick, Continue in So well to was awarded. of mentioned we leadership, later as to will really year some here is broadband. wholesale. investment strategy 'XX. rolled international positions into our But our Rick. solutions markets, strategy this

to total that great the total X of very infrastructure, serve. we areas is deliver addressable our in value, our strategy to taking in our that addressable do opportunity share it. I U.S. value think And good to a We've telecommunications to continue and be of to to to the really of great a got is We've all to on delivery stakeholders. able deliver markets execute. opportunity.And We foundation that have overall value shareholder large we've for a more market got ahead focus us. got customers, Building

Carlos Doglioli

I transitioning. with just focus the going want prior when CapEx certainly compared We've when of generation. business, we're the that. look we're you think aligned to cash think on add, And years, at I to at it's you look Rick, said level I to

are place more from XX% financial with perspective, bumps pointing to our levels those there look So leverage, signaled Xx normalized at when also CapEx talked look already mid some all of cash And framework that of We've long-term.We revenues. when even to elements the in over between more term I at you about and you a there's longer you of we're transition, are it when a think closer XX% and think generation committed we're in that couple about time. down our to experiencing road. the bring elements, here though to those

is I've I currently going we element the all on opportunities. at in the the my coming the EBITDA. margins be to closely margin focus improvement mentioned remarks, think the that's been have in XXs to other the of adjusted piece that months.As complete, focused I and for We're

we are additional financial room find And to critical. It's certainly all there's little And where shareholders. take short time, those to more that's there's that there. improvement we're room There to a there. strength opportunities. that but the improve there's So for understand going return might term things

Ric Prentiss

capital echo today. earlier. Robert's names But And All just small comments like right. it's down from XX liquid Comcast to X% not

and right time delays competition when cap even when are markets in is tough So large having there's public some there companies now stuff. a or the

you're focusing Glad as the well. on you well pretty the wish cash as flow. okay, margins So

Operator

like our back you Brad closing now would very Martin session. for to question-and-answer concludes This much. Thank I remarks. it turn to

Brad Martin

all Take Thank you for you to with your Thank We joining speaking forward ahead. in for again the care. months today. you look time.

Operator

in conference. does Thank you the program. today's for This participation conclude your

good disconnect. day. You Have may now a

ATN International (ATNI) 25 Apr 242024 Q1 Earnings call transcript