Atn International’s Mixed Earnings Call: Growth Amid Challenges

Atn International, Inc. ((ATNI)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Atn International, Inc. painted a mixed picture of the company’s current standing. While there were notable achievements in improving cash flow and the performance of the international segment, challenges such as a decline in revenue and struggles within the domestic segment were also highlighted. The company’s strategic focus on expanding broadband services and government-funded projects offers a promising outlook for future growth.

Cash Flow and Operational Efficiency Improvements

During the earnings call, Atn International reported a significant increase in cash from operations, which rose by 55% to $35.9 million. This improvement reflects the company’s disciplined approach to cost controls and capital allocation, marking a positive step towards enhancing operational efficiency.

International Segment Performance

The international segment of Atn International showed robust performance with an 11% year-over-year increase in adjusted EBITDA. This growth was driven by improved operating efficiency and a steady demand for high-speed broadband and business services, underscoring the segment’s vital role in the company’s overall performance.

Expansion in Broadband Services

Atn International has made significant strides in expanding its broadband services, with the number of broadband homes passed by high-speed data services increasing by 11% year-on-year to reach 427,000 households. This expansion is a key component of the company’s growth strategy.

Progress on Government-Funded Projects

The company is advancing approximately $370 million in government-funded broadband infrastructure projects, with more than half expected to be completed by 2025. This progress is crucial for Atn International’s long-term growth and its commitment to expanding broadband access.

Revenue Decline

Despite these achievements, Atn International faced a 4% year-over-year decline in total revenue, amounting to $179.3 million. This decrease was largely attributed to the wind-down of COVID-era government subsidy programs, which had previously bolstered revenues.

Domestic Segment Challenges

The domestic segment experienced significant challenges, with revenue down by 9.5% year-over-year and adjusted EBITDA decreasing by 15.4%. These declines were primarily due to the conclusion of the Emergency Connectivity Fund and Affordable Care Program, highlighting the segment’s vulnerability to changes in government funding.

Net Loss for the Quarter

Atn International reported a net loss for the first quarter of $8.9 million, or $0.69 per share, compared to the prior year’s net loss of $6.3 million and $0.50 per share. This increase in net loss reflects the financial pressures faced by the company amid declining revenues.

Forward-Looking Guidance

Looking ahead, Atn International reaffirmed its 2025 outlook, emphasizing a 2% growth in adjusted EBITDA and a 55% increase in cash from operations to $35.9 million. The company plans to continue its strategic expansion, including increasing broadband homes passed and growing its high-speed subscriber base. Atn International remains focused on executing its $370 million government-funded broadband projects, with over half expected to complete in 2025. Despite a 4% decline in total revenue, the company maintains a strong financial position and anticipates a larger share of its annual results to materialize in the second half of 2025.

In conclusion, Atn International’s earnings call highlighted both the challenges and opportunities facing the company. While revenue declines and domestic segment struggles present hurdles, improvements in cash flow, international segment performance, and strategic broadband expansion offer a promising path forward. The company’s commitment to leveraging its fiber infrastructure and executing government-funded projects is expected to drive long-term shareholder value.