ATNI - Earnings call transcript Q2 2024

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Operator

Good day, and thank you for standing by. Welcome to the ATN International Q2 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 speaker today, Michele Satrowsky, Corporate Treasurer and Head of Investor Relations. Please go ahead.

Michele Satrowsky

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

yesterday our find can earnings Investor release slide second announced Relations closed. call the we conference on reminder, the market a quarter As results presentation afternoon and website. after Investors XXXX our

to regarding those Our our financial measures. risks non-GAAP differ statements expectations, objectives current statements concerning earnings our These could that release and uncertainties effort for include materially results. underlying and the provide our assumptions cause presentation are to investors, operating contains information today useful subject described. In certain forward-looking results to future and comments actual an from

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

X held Lastly, a scheduling calls note. the has Historically, earnings end. quarter's weeks ATN after

forward, out QX a the during week earnings XX. we call the our will be call shifting and will Going of week October be

I'll Now, call Brad. to the over turn

Brad Martin

and leverage & over making line Thank morning, joining First-to-Fiber We're thank efforts customers term. operating everyone, efficiency, progress improve growth, Steel to Glass our to shareholders in the value you you, us. and our investments to our top for and Good Michele. drive deliver and long

toward goal. business Our the second quarter is performance that driving

the performance call to line strategy, strong and executing second Carlos enhanced margins, improve grew making ARPU, on second drive by from our notably to ATN in our declined to an and this at leverage our over managing growth operating year efforts. We have in adjusted with the anticipated begin mobile we we to year Telecom progress growth by by data, and covering shifting highlights sales our in to efficiency. Overall earlier decline grew our revenues, we an Telecom the remain quarter high-speed the supported and we Telecom full-year turning in in quarter, top and are are that was by the first-half to Connectivity with highlights reaffirming benefited higher the positioning and our mix teams, markets call remain bottom our we outlook. I'll of upgraded improve quarter quarter, of and business expiration growth review we delivering before the year-over-year, end last emphasis delivered our and Fund cost-management to the that these of program and prudently network, today operating Telecom the X% Based on products the Emergency International segment revenue, offset discussed. performance During our actions due win services and leadership. and year-over-year QX, line from on segment, primarily U.S. and progress more to detail. Starting EBITDA, XXXX revenue initiated in from with previously X% top enterprise adjusted services. We are confident our EBITDA localized from data, the plan, as guidance the International committed benefits financials International

the a we quarter, the sale an real the prudently. manage of completed the asset, estate of During commitment international result business long-standing to

and from causes year. advance second programs QX, addressed now these these team projects major the our progress been operating delays. efforts half top the impact in with accelerate progress further ATN good the sale delayed to the expand also revenue priority the made have quarter, the As of in shared that sharpened efforts capital in of upon efforts focus will the QX costs. carrier we financial were with our has having sharpen We Carlos conversion in to for of our and his last on cost-saving managing remarks. A and the

on keeping deliver We on deliveries schedules, the our track to and XXXX with and are running off us outlook.

connections our enhance Turning our is rural serve maximize now growing we is better in and in business, communities to of for ubiquitous market long strategic growth opportunities Glass reliable First-to-Fiber data demand and ATN's we abroad. Steel the investment over our mix that the quality, the high-speed the & and network. This the of operational highlights. remote defend and serve share, term. Through to ATN The important value, U.S. improve continue digital and grow customers, to fiber-rich longevity for our and incredibly the positioning of our strategies, execution and

As final move level to investment through the normalized scale more XXXX. of our begun levels approaching have of with we cycle, the investments spending the X-year we year goal our CapEx by of back

and focus year number our shareholder the in notable supporting with demonstrated already XXX,XXX, efforts up the investments our to drive progress have programs of high-speed operational potential enhanced strong, broadband free passed ATN's quarter, second the several helps supplement is growth U.S. in we delivered we We metrics. High-speed across more harvesting data of with assets. In focused metric us a further and drive sustainable Our ago. broadband durable by now same a the moderate aggressively made unlock revenues increased made and is homes more investments our network time, key while recurring higher-quality the flow, QX, expansion by to value. ultimately XX% from is team revenues, to on key infrastructure government-funded on CapEx pursuing full we margins to the customers cash as growth. At these than

strength with up also XXX,XXX, with compared continuous network, increasing We X% subscribers high-speed data last our with our high-speed year. onto subscribers conversion of saw

subscribers, build optimize older and important to out technology. note as our our also network, we are footprint broadband we is next-generation we it network legacy overall that Regarding as decommissioning network intentionally

a networks. subscriber on churn are broadband legacy design, by we result, As these seeing low-speed

segment. Notably, segment, International a EBITDA which closer represents benefited X%, from by our about mix ARPU. we highlights taking positive shift grew grew as and operational International international the $X.X passed by by high-speed the gigabit-capable million adjusted same X% In growth Telecom broadband revenue, data Telecom ATN's homes. with includes Now, half the international quarter, in within subscribers This our segment. period, growing by look homes of of several XXX,XXX grew at core data sales grew increased we year-over-year we high-speed X%. to high-value the at Starting close areas second

in brand side business solutions completed Brava, the markets. of our business On QX, our the launch we across international new

international and grew revenue fixed International and mobility business We with while revenue increased overall Solutions, flat which international over was converting slightly, XX% subscriber mentioned. XX% year-over-year. In is also made approaching growth business Business increased again year-over-year just customers once growth revenue mobility of we growth I international improving progress year-over-year, margin quality by the of relatively up churn higher year-over-year our demonstrated for revenue business This revenue was to services. mobility, X% the base by

and adoption the subscribers future. investments these Additionally, to prepaid postpaid data of position trends deployed maximize X% and we XG mobile QX networks, the by favorable number year-over-year. and In the into increased returns we these ATN data plans new QX, on

primarily churn our subscribers. Finally, customers, I margin in that ARPU which lowest non-plan mobility voice prepaid to and want are is note the

other half Turning Telecom accounts for ATN's of U.S. to our which the revenue. segment,

carrier leveraging broadband on uptake, Our funding, enterprise high-speed supporting and focus grant the in driving transitions, U.S. our business expanding remains opportunities.

the the homes operational the more close by important to within Additionally, XX% homes. by quarter, we year-over-year markets. XXX,XXX to high-speed in our passed second At milestones than U.S. of increased continue several we broadband data U.S. advance

temporary to to QX ACP expect the expiration minimal considered have be expected, the working from revenue net-neutral from was plan. headwinds Connectivity programs ATN's Affordable been As continue we efforts government guidance, impact full-year and mitigation the to and rolling impact in profitability. our to of these The our Program immaterial our and are off to

I for to XXXX Carlos, call that unchanged. want the remain reiterate priorities turning to Before our

the high-value We assets are while our margins. focused protect business operations opportunities grow convert and to leveraging upgraded prudently localized to on revenue and managing network

as over and want extend team their leverage for time. I the And As and their we the of gratitude to our our combination partners internal well continued sheet balance lowering to expansions to final through work investment continue our managing but funding. and of complete a hard goal as CapEx to my plan, grant trust of are the government for our we dedication, bringing prudently targeted are support. network and we down, support with ATN year customers

We shareholders over to our growth in achieve you, long ability the Carlos. our deliver and are our with I'll for confident sustainable goals hand that, for over term. And XXXX to call the

Carlos Doglioli

us Thank you, Brad. Good thanks everyone, for and morning, joining today.

investments operating efficiency grow the highlighted, making of also improving progress made to key areas the the revenues efforts in we leverage business. our Brad have As while to we're in

remain Our performance forward. these committed moving demonstrates and these efforts against objectives, to second we progress quarter advancing

period was in company Total revenue Let's compared our review quarter with same of down million X% second the $XXX.X financials. XXXX.

the step $XX.X expenses quarter of in increase Telecom QX non-core the program strong occurred in Telecom discontinuation International fixed the high-speed primarily our primarily income across efforts. The operations, of was Emergency data revenue were performance a due Fund segment, cost to a $X.X was International we the anticipated, XXXX. by quarter, in April. In in the gain and lower on second a management early growth. Operating in asset by specifically $XX.X the the versus the million million As Connectivity in were million due revenue real subscriber to segment. SG&A of sale driven down encouraged our of estate

share. Adjusted quarter operating the share, million, a lower the improvement. Net from the income amortization revenue. of year's $X $X.X loss Additionally, million income in and million reflecting operating $X.XX X% and which reductions. second more gain up expense lower per $XX.X the net was expense period, for than $XX.X with and This to the was depreciation offset and $X.XX reflecting of year-ago decrease contributed expenses, prior EBITDA the compares million per

our International segments Revenues the performance, X% at beginning now million. Looking increased $XX.X with to segment.

experienced revenues. Higher from year-over-year expansion to several EBITDA quarter investments increase technology past first data adjusted subscriber in the benefits and International and XX% the in efforts of the year million. that $XX.X last year-over-year restructuring strong to efforts increase X% quarters in revenue a led segment of the network high-speed growth, the to executed the fixed resulting and Our contributed

EBITDA in down Revenue-related expectations. Adjusted XXXX. In benefit of Program, lower restructuring were throughout as million, efforts to QX with million, efforts. expected the as to $XX.X continue year. well costs mobility, in partially offset Domestic the cost-management to of compared segment expect wind Connectivity as discontinuation Emergency the the the benefit by a well restructuring $XX.X X% Fund from the We associated line segment, of more year was down the headwinds X% revenues program, the prior were due Domestic the impact for revenue, de-emphasis recently-initiated with down Connectivity prior our Affordable year-over-year of as came the the with and the which from reduction

on the in X.XXx of total cash to with first outstanding by million. $XX.X quarter sheet Moving expense provided interest debt in flow a primarily balance for of the prior was by million on higher $XXX half net driven debt ended cash versus activities of of a the the XXXX prior operating increase associated year period, We level with down EBITDA $XX.X debt-to-adjusted Net and highlights. from period. million, an year ratio

expenditures. capital net million, of totaled reimbursable to months million $X now expenditures. in of expenditures reimbursable year of of to million capital the the Turning net the first capital million, CapEx This prior $XX.X year. compares $XX.X in during X $XX.X

buybacks. Transitioning returned During and million $X.X in and share guidance. management shareholders QX, to capital through cost now $X.X in to we our million dividends

efforts, areas beyond. focus improvement for margin our at XXXX ATN and are X in of Looking there

of late benefit XXXX the that is out year. rolled realizing this first the The QX cost-cutting from and in programs were

mentioned, benefits second year. we QX half As benefits derive of these from the further we in to the and expect programs, had in

The current will management cost that continue of will structure our and has opportunity, these guidance. of pursue yield area third efficiency. actions our the efforts cost to year, continued the operating near-term second longer-term which to in opportunity we savings to environment. believe reflected which is also shift are We our operational throughout is better In with parallel, align team strategy the for continue our area

beyond. improvement lasting Here, we XXXX are and identifying margin structural and drive costs further in operational streamline opportunities to

our on full to streams area. this year XXXX we reaffirming given guidance. has finalize in margin identifying profitable efforts our team XXXX that, progress to revenue look made to forward and improvement Our outlook sharing coming to let's advance QX continue Today, grow our the results the and progress are our months. With plans our more good opportunities, opportunities. detail our and in We in made move we

with the for We EBITDA revenues of full expect to in full million million million of range range the to million $XXX continue $XXX $XXX $XXX for in adjusted year, the to continue in the to the year, X.X. expenditures the lastly, of capital a X.XX of to to net year we exit amounts. And range million debt net reimbursed to of $XXX $XXX expect million, ratio

debt working needs above term the driven could to due range timing short by to it of continue move the ratio monitor the in the reimbursements. as We net capital

closer medium Our improved is the objective Xx focused leverage initiatives over strategic our to remains to on bring down term. In performance. execution driving closing,

We our XXXX for foundation and your solid expect a call executing hand you to to deliver outlook for providing attention. over I'll strategy, on now future continue our the Brad. growth. Thank back

Brad Martin

the for deliver and believe years exceptional achieve XXXX communities right our Thanks, partners, strategy employees, customers, ATN place our have local we to to outlook Carlos. value We for position for shareholders, and to come. in

like and open questions. talented and commitment us our in customers, grow creation position critical our mission to I'd cash up and to team, expansion value profitable connectivity our that, flow Our to for to enhanced footprint, it markets, for provide operator, our shareholders. With deliver growth,

Operator

question Rick from first our comes James. And Instructions] Prentiss Raymond of [Operator

Ric Prentiss

X sorry of the we was estate, non-strategic. buildings? The -- yeah, Is talking real thinking I assets questions. that million other towers? think, Are of estate was are you're mentioned $XX you What type there couple monetize? non-core -- could you it sale, international A that? asset real And

Brad Martin

Yes.

piece It's undeveloped property. land. an of piece that was really Rick, So of a

shareholder we're some So context portfolio asset on at maximize looking the always give asset. our routinely Look, to to you value.

So that's in had for multiple place consistently doing. This something we're process quarters. that been

helpful. hopefully So that's

Ric Prentiss

But the sale on stock going maybe inform what we stock buyback? asset is. high, the stock was returns Yes, And buyback so of thinking pacing kind forward think million the you're about it the standpoint? $XX from buyback of the Or shareholder did should how help stock why also price?

Carlos Doglioli

this so Carlos. I is guess Rick, --

So the going not real been The sale X estate connected. were processes that quarters. a for process necessarily had was several on

came it quarter. fruition beginning -- just of to the the was it at So

So sale. instituted happened. estate program been also buyback real that's how independently those X And of things that had the share

Ric Prentiss

pacing thinking leverage authorized And about remind us the and what's on given that you're program left of the targets? how

Carlos Doglioli

don't So on. else there's But $XX another have comment million. anything point, at I to this

Ric Prentiss

Okay. That's go is to this absent the is is fine. future years? into as reimbursement. revenue construction. look construction of revenue And net The left obviously, How much the year CapEx there we

Brad Martin

component, be So they to continue will Rick. a

continuation. to some that But some a off will continue the still we will revenue So to to be that finish But it's -- that year. definitely not has expect at been. we something we same see throughout construction programs be we -- it have scale it are the

Carlos Doglioli

like you that is think -- Yes, on know, Cash is it's impacting. the as I minimum. yes, margin I say not -- would

helps. I But $X think we see it around like million. anyway, I hope that

Ric Prentiss

does, public take equity recently, as private a and a does. you work EQT, in And Lumos. T-Mobile T-Mobile It about company, Infrastructure stake it get in and with seen seen company involved get we've We've obviously, multiples involved private and Metronet. multiples, with think big infrastructure KKR

multiples. still updated the at venturing? private out above thoughts well As there, you they're joint to any public private look Because multiples world possibly like seem

Brad Martin

we Steel. have the is So Rick, think something yes, mentioned you Glass we in really strategy activity with that is the aligned just &

much been & mobile and what into operations. Look, our not -- is First-to-Fiber we processes. fiber our doing to where Steel up larger in going buying we very backs those something, again, are and companies have in aligned comment I'm Glass providers with So on our

that We're we can Board routinely we are we -- confirm moves very for And right opportunities. strategic in And generate our are shareholder opportunities type as have at always our Our value. strategy best those considers of the see something we're what certainly looking the continued to that strategy. shareholders. confident

Ric Prentiss

where you kind how fiber this But in the just do it of strategic thought It higher Okay. happening of, a U.S. maybe the little Europe. forward? in be a little strategic to with can seen thought is broadband think convergence process on broader just U.S. and Maybe play in we've seems be wireless

Brad Martin

Yes.

with So follow mobility I well trends, our this look certainly in mobile. success -- those markets do seeing you're mean, operators we and offer certainly we cable delivering as international solutions. the where We some

providing address. are strategy really But something on can base as trends go-to-market those see customer we again, that and your the in So certain areas. that depends value it you

of will that distinct operating of mentioned and rural We markets those are some just cable our of operators markets in. are the some say some and from I the bit a -- competitors

something see advantage there's we're watching as markets. actually that see we trend in our So closely we of value that something some of and taking there and we're

Operator

Hamed next of [Operator comes Instructions] And BWS from our Khorsand question Financial.

Hamed Khorsand

little Could So first with more international is gravitating the to service? a you about that customer that off, on the gains, that being of your international why side talk a high-speed consumer markets? the function data economies in of stronger bit the just is

Brad Martin

tailwinds, solutions with there the a demand, there. pretty these and on First-to-Fiber, are so and yes, the the strategy mix. economic a markets, is these be ahead in to operate it that we've where consumer that We to is we're in most strategy fixed oil markets. markets. But example, lead it's Guyana, we've -- for we leading made our line So with in taken that great really strong of in discoveries in Hamed lot for the on enterprise the based and of deployment in that investments markets And

lives it's great There having is in when to is mean, So place combination tailwinds, a But ubiquitous. markets. to right these of broadband homes something that the absolutely to some I but being it the can us broadband of able it's meet solution on service gigabit X. really you a great for does demand infrastructure really needs. bring change capacity execute market the generally the are economic

Hamed Khorsand

entire was front, decline from ECF the related Okay. And a on the program? then to standpoint, U.S. revenue comparison QX the

Carlos Doglioli

revenues around was like I early we've the by basis, ended QX. and over -- of It $XX that. was that annualized an majority driven it believe, of million it on that signaled Hamed, -- was

basis, was an million, it $XX million annualized like $XX think on so. I

Hamed Khorsand

Okay.

was mean, map underpinnings market to million in the I $X out, there -- or was I since if that it declined right? actually better so, the U.S. only So

Brad Martin

our Hamed, there Yes. in that Net market. ECF in program, growth space, of enterprise that was

that So revenue was performance. a contributor significant to

Hamed Khorsand

last question is any was, My of? more could savings you advantage Okay. there take cost

Carlos Doglioli

I Hamed. hear you, me. couldn't Excuse

Sorry.

Hamed Khorsand

of? savings, take advantage is you cost From cost more to More there could that cuts come?

Carlos Doglioli

our think the expectations of and you numbers see I the the reflected in impact on for half Look, efforts second at the the when the you and that these can guidance incremental half, you look first improvement. margin compare

Operator

Burns last question Our from of Greg comes Sidoti.

Gregory Burns

your in U.S. ability And investments the of we headwind? a the talk place that you your at of customer older in you how do the the decommissioning could initiatives some when just to drive that The have many quarters adoption you in being to broadband maybe monetize broader the increased foresee mentioned churn from more look about in networks, that market? U.S., in you or some programs growth

Brad Martin

yes deployments impacted remarks, rationalizing are we by -- in technologies. the new mentioned the prepared some as churn, network doing and of we're So that network. where my the is areas there are And our intentional new new with overbuilds I

in So we're overbuilding in not. certain areas other we're areas,

may where quarters. a of do as network. And be more So bit a is headwind see that impact significant QX. as We that QX, be to other sense, in expect a in many business we do couple another There minimal telecom well. it operators do was to decommissioning for expect we makes ACP from little

closely ACP. that is on performing in expectations as we It's talk. our our guidance. And we're to we watching are that So actually something

the we have we've is technologies. and published, on we broadband. that's look, are churn some opportunity legacy And something -- we can see stats technologies, the legacy of some DSL that where that got really have counterpoint we but on penetrate you the have to really And the the to churn networks we wireless -- legacy and from building. fixed been see So -- the that it's

Gregory Burns

that forward-looking gives could U.S.? anything us the the any you the maybe year there or maybe like so over business broadband Are funnel share or you confidence the in growth next the in or from opportunity metrics with potential

Brad Martin

markets major think our the assets to look, But segments, consumer in is funnel that we leveraging There appropriate. both is don't We in the So encouraged share look, about expand specifics. we certainly enterprise, serve. and here we've guidance -- we we are definitely are built. forward opportunity

investments are a to useful, maybe are the us -- and we million So have which is we of -- again, continuing our earnings in starting programs. And give are are that to one And the reimbursable pickup point programs. have is we year-over-year. $XX government-funded see CapEx made something that that really that. our confidence significantly make are stated reimbursable, in as we as net release, in up say about These we in

grant that future. programs us significant that is to capital And starting expand we're an So to overall our make to for see programs and profile. contribution opportunity we've starting reimbursable the government-funded to discussed continue to into these

Gregory Burns

be the subscriber from wireless going Great. then there going coming to is side, on and ARPU Okay. growth And internationally, more forward? expansion growth

Brad Martin

Yes.

that's mix be a will we're those data of markets. investments made of intentional. the the that pleased we're networks that a both. is our We've it support can And very look, trends in and seeing for adoption movements we That significant those -- with been period We market. time. take So have leverage and something in upgraded

that but are is numbers of prepaid growth The quality those is subscriber do, we what -- higher postpaid we That's voice subscriber and only. this want the evidence streams. to counts on plan revenue trend. published So a get aggregate prepaid churn really good are that. numbers And exactly

revenue So and very low ARPU minutes overall very These of subscribers. use. are low

Operator

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

Brad Martin

in Well, ahead. months everyone, with for you thank you, of speaking joining the to look many We forward today.

So for thank talk we'll and time, you again your soon.

Operator

for and This conference Thank disconnect. call. concludes now participating, today's may you you

ATN International (ATNI) 25 Jul 242024 Q2 Earnings call transcript