Closing of AT&T Transaction and Balance Sheet Strengthening
Sold fiber-to-the-home business to AT&T for $5.75B (net proceeds ~$4.8B); used proceeds to pay off $4.8B super-priority bonds and reduce total debt to under $13B. Net leverage reduced by ~1.0x to ~3.8x trailing-12-month adjusted EBITDA; annual interest expense reduced roughly $500M–$1B (management cited ~45% reduction and nearly $1B lower over 12 months).
Large Prefunded Capacity-Funding (PCF) Pipeline
Signed nearly $13B of PCF deals to date (including ~$4.5B over the last 12 months and ~$2.5B in Q4). PCF deals are largely prefunded (management indicated ~90% cash upfront / ~10% on completion) and will expand network to an estimated 58 million fiber miles by 2031.
CapEx Intensity Reduction
Sale reduces annual CapEx by over $1B; full-year 2026 CapEx guidance cut to $3.2B–$3.4B from ~ $4B in the prior year. Management estimates underlying non-PCF CapEx nearer to ~$2B, representing roughly a 25% reduction in capital intensity versus 2024/2025 levels.
Improving Financial Guidance and Cash Flow Outlook
Company guides to adjusted EBITDA of $3.1B–$3.3B in 2026 (management expects an inflection to EBITDA growth in 2026) and free cash flow of $1.2B–$1.4B for 2026. Net cash interest expense guidance for 2026 is $650M–$750M (a reduction of >$550M at midpoint vs. 2025).
Cost Savings & Modernization Progress
Exceeded cost-reduction target with over $400M of run-rate savings at year-end 2025; targeting an additional $300M in 2026 to reach $700M run-rate and on track for a $1B run-rate target by 2027. Launched phase one of a new ERP to reduce systems complexity.
Product & Customer Adoption Momentum
Strong digital adoption metrics in Q4: active customers up ~29% quarter-over-quarter, services sold up ~26% QoQ, and continued NAS growth (rising ports per customer). Announced 900 off-net ports sold to date and strong IP demand within North American enterprise.
Operational Wins on Network Build and Partnerships
Reached 2025 goal of implementing 17 million intercity fiber miles; announced network upgrades (400G routes across 36 routes, metro expansion) and expanded priority fiber supply partnership with Corning to support AI backbone demand.
Debt Refinancing and Capital Structure Simplification
Completed seven refinancing transactions totaling >$11B, eliminated the second-lien layer at one level, and reduced debt tranches outstanding by ~10 (16 including super-priority paydown), materially smoothing maturities and improving financial flexibility.