Q4 2024 ATN International Inc Earnings Call
Okay.
Operator: Good day, and thank you for standing by. Welcome to the ATN International Q4 2024 earnings conference call and web At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session.
Good day, and thank you for standing by welcomed.
Welcome to the ATM International Q4, 'twenty 'twenty four earnings conference call and webcast.
Time, all participants are in a listen only mode.
After the Speakers' presentation there.
Operator: To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is ready. To withdraw your question, please press star 1 1 again.
He will be a question and answer session.
To ask a question during the session you will need to press star one on your telephone.
And you're an automated message advising your hand is raised.
To withdraw your question. Please press star one again.
Operator: Please be advised that today's conference is being I would now like to hand the conference over to your speaker today, Michele Satrowsky. Please go ahead.
Please be advised for today's conference is being recorded.
Speaker Change: I'd now like to hand, the conference over to your speaker today, Michelle such Ralsky. Please go ahead.
Michele Satrowsky: Thank you, Operator, and good morning, everyone. I'm joined today by Brad Martin, ATN's Chief Executive Officer, and Carlos Doglioli, ATN's Chief Financial Officer. This morning, we'll be reviewing our fourth quarter and full year 2024 results and providing our 2025 outlook.
Speaker Change: Thank you operator, and good morning, everyone I'm joined today by Brad Martin Atms, Chief Executive Officer, and Carlos Jos Leo Li Atms, Chief Financial Officer. This morning, we will be reviewing our fourth quarter and full year 2024 results and providing a 2025 outlook.
Michele Satrowsky: As a reminder, we announced our 2024 fourth quarter results yesterday afternoon after the market closed. Investors can find the earnings release and conference call slide presentation on our Investor Relations website. Our earnings release and the presentation contain certain forward-looking statements concerning our current expectations, objectives, and underlying assumptions regarding our future operations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described. Also, in an effort to provide useful information for investors, our comments today include non-GAAP financial measures.
Speaker Change: As a reminder, we announced our 'twenty 'twenty four fourth quarter results yesterday afternoon. After the market close enough.
Speaker Change: Investors can find the earnings release and conference call Slide presentation on our Investor Relations website.
Speaker Change: Our earnings release and the presentation contains certain forward looking statements concerning our current expectations objectives and underlying assumptions regarding our future operations.
Speaker Change: These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described.
Speaker Change: Also in an effort to provide useful information for investors. Our comments today include non-GAAP financial measures for details on these measures and reconciliations to comparable GAAP measures and for additional information regarding these factors that may affect our future operating results. Please refer to our earnings release on our website.
Michele Satrowsky: For details on these measures and reconciliations to comparable GAAP measures, and for additional information regarding these factors that may affect our future operating results, please refer to our earnings release on our website at ir.atni.com or the 8k filing provided to the SEC.
Speaker Change: I R. A T N I dot com or the 8-K filing provided to the SEC.
Brad Martin: Now, I'll turn the call over to Brad. Thank you, Michelle. Good morning, and thank you all for joining us today for ATN's fourth quarter and full year 2024 earnings I appreciate your time and continued interest in our company.
Brad Martin: Now I'll turn the call over to Brad.
Brad Martin: Thank you Michele good morning, and thank you all for joining us today for <unk> fourth quarter and full year 2024 earnings call.
Brad Martin: I appreciate your time and continued interest in our company.
Brad Martin: Before we begin, I want to recognize our teams across the organization for their hard work and dedication. Your focus and execution enabled us to make meaningful progress in 2024, despite some challenges in our U.S. operating market. 2024 was a year of strategic execution and disciplined investment. As the telecom industry continues to evolve, our approach remains focused on long-term value creation, operational efficiency, and financial disability. It also marked the final year of our three-year investment cycle in first to fiber and glass and steel. during which we accelerated capital expenditures beyond historic levels to fortify our market-leading position.
Brad Martin: Before we begin I want to recognize our teams across the organization for their hard work and dedication.
Brad Martin: They're focused execution enabled us to make meaningful progress in 2024, despite some challenges in our U S operating markets.
Brad Martin: 'twenty 'twenty four was a year of strategic execution and disciplined investments as.
Brad Martin: As the telecom industry continues to evolve our approach remains focused on long term value creation operational efficiency and financial discipline.
Brad Martin: It also marked the final year of our three year investment cycle and first to fiber in glass and steel.
Brad Martin: During which we accelerated capital expenditures beyond historic levels to fortify our market leading positions.
Brad Martin: In this period, we expanded our fiber route miles by 32 percent. doubled the number of broadband homes passed by high-speed services. and increase our high-speed capable customers by 44%. As we enter 2025, we will focus on utilizing our long-lived fiber assets to deliver fiber and fiber-fed services to the markets we serve. For 2024, we delivered results aligned with our revised expectations for the year, balancing growth in key areas with the necessary transition of our U.S. business. Full year revenue came in at $729 million with an adjusted EBITDA of $184 million. Strong cost discipline and operational efficiencies enabled us to increase cash flow from operations by 16% year-over-year, underscoring our focus on financial resilience and capital efficiency.
Brad Martin: In this period, we expanded our fiber route miles by 32%.
Double the number of broadband homes passed by high speed services and.
Brad Martin: And increased our high speed capable customers by 44%.
Brad Martin: As we enter 2025, we are focused on utilizing our long with fiber assets to deliver fiber and fiber fed services to the markets we serve.
Brad Martin: For 2024, we delivered results aligned with our revised expectations for the year balancing growth in key areas with the necessary transition of our U S business.
Brad Martin: Full year revenue came in at 729 million with an adjusted EBITDA of $184 million.
Brad Martin: <unk> cost discipline and operational efficiencies enabled us to increase cash flow from operations by 16% year over year.
Brad Martin: Underscoring our focus on financial resilience and capital efficiency.
Brad Martin: In 2024, our international segment continued to grow, reinforcing its role as a strong contributor to our overall business. Through these efforts and actions, which we will take into 2025, we will position ATN for long-term strength and resilience. In the U.S., we continue to move away from legacy technologies and consumer service offerings derived from those older technologies and toward enterprise and carrier-driven, fiber-based revenue streams and fiber-fed consumer services. This transformation is critical for building a stronger and more sustainable business. In the U.S., we invested in our infrastructure to expand our fiber network with a focus on higher-value markets that will drive long-term returns.
Brad Martin: In 2020 for our international segment continued to grow reinforcing its role as a strong contributor to our overall business.
Brad Martin: Through these efforts and actions, which will take into 2025, we will position HCN for long term strength and resilience.
Brad Martin: In the U S. We continue to move away from legacy technologies, and consumer service offerings derived from those older technologies and toward enterprise and carrier driven fiber based revenue streams and fiber fed consumer services.
Brad Martin: This transformation is critical for building, a stronger and more sustainable business.
Brad Martin: In the U S. We invested in our infrastructure to expand our fiber network with a focus on higher value markets that will drive long term returns.
Brad Martin: we exited lower margin services that no longer fit into our long-term strategy, allowing us to streamline operations and optimize our portfolio. And we have made key leadership changes to bring in experienced operators who understand how to drive efficiency and growth in our evolving market. While we expect this shift will result in short-term revenue decline, it positions us for long-term stability and higher margin growth. Our network expansion and enterprise and carrier-centered strategy will create a more durable and sustainable revenue base moving forward. In our international segment, we continue to deliver steady revenue growth and margin expansion in 2024, supported by strong demand for high-speed broadband and business solutions.
Brad Martin: We exited lower margin services that no longer fit into our long term strategy, allowing us to streamline operations and optimize our portfolio.
Brad Martin: And we have made key leadership changes to bring in experienced operators, who understand how to drive efficiency and growth are evolving markets.
Brad Martin: While we expect the shift will result in short term revenue decline it positions us for long term stability and higher margin growth.
Brad Martin: Our network expansion and enterprise and carrier centered strategy will create a more durable and sustainable revenue base moving forward.
Brad Martin: In our international segment, we continue to deliver steady revenue growth and margin expansion in 2024 supported by strong demand for high speed broadband and business solutions.
Brad Martin: With International Segment Adjusted EBITDA growing 10% year-over-year, business service revenue increasing 6%, and with business mobility revenue increase of 21%, we are well-positioned to enter 2025 with a strategy focused on the following. growing broadband penetration by increasing connectivity across our markets with a focus on high-value customer segments. Improving operational efficiencies by managing costs effectively, ensuring that revenue growth translates into stronger margins and improved operational free cash flow. and Expanding Fiber and Business Mobility Services. We continue to develop and strengthen our competitive position in market leadership. This performance serves as a blueprint for success as we transition our US business to a similarly efficient high-value model.
Brad Martin: With International segment, adjusted EBITDA growing 10% year over year business service revenue increasing 6%.
Brad Martin: With business mobility revenue increase of 21%, we are well positioned to enter 2025 with a strategy focused on the following.
Brad Martin: Growing broadband penetration by increasing connectivity across our markets with a focus on high value customer segments.
Improving operational efficiencies by managing cost effectively ensuring that revenue growth translates into stronger margins improved operational free cash flow.
Brad Martin: And expanding fiber and business mobility services, we continue to develop and strengthen our competitive position.
Brad Martin: And market leadership.
Brad Martin: This performance serves as a blueprint for success as we transition our U S business to similarly efficient high value model.
Brad Martin: As we continue to expand our infrastructure and optimize operations internationally, our investments in high-speed broadband, fiber, and next-generation connectivity are supporting digital transformation across the Caribbean region. The expansion of reliable, high-capacity networks not only strengthens our market position but also plays a critical role in fostering economic growth, innovation, and accessibility, in line with the broader goal of creating a more digitally inclusive and globally competitive curriculum.
Brad Martin: As we continue to expand our infrastructure and optimize operations internationally, our investments in high speed broadband fiber and next generation connectivity are supporting digital transformation across the Caribbean region.
Brad Martin: The expansion of reliable high capacity networks, not only strengthens our market position, but also plays a critical wall and fostering economic growth innovation and accessibility in line with the broader goal of creating a more digitally inclusive and globally competitive Caribbean.
Brad Martin: In the U.S. markets, one of our unique strengths is our ability to secure government funding to accelerate fiber expansion. We and our partners have been awarded more than $370 million in government grants, which will support fiber deployments in key markets. These investments enable network expansion with lower capital intensity, creating long-term optionality for growth. They also reinforce ATN's role as a key provider of broadband infrastructure, particularly in underserved markets. This funding is a major differentiator that allows us to grow in a financially disciplined way while supporting our long-term infrastructure strategy. In 2025, we will complete a substantial portion of these grant-funded projects, positioning us for monetization in 2026 and beyond.
Brad Martin: In the U S markets one of our unique strengths is our ability to secure government funding to accelerate fiber expansion.
Brad Martin: We and our partners have been awarded more than $370 million in government grants, which will support fiber deployments in key markets.
Brad Martin: These investments enable network expansion with lower capital intensity, creating long term optionality for growth.
Brad Martin: They also reinforce Atms role as a key provider of broadband infrastructure, particularly in underserved markets.
Brad Martin: This funding is a major differentiator that allows us to grow in a financially disciplined way, while supporting our long term infrastructure strategy.
Brad Martin: In 2025, we will complete a substantial portion of these grant funded projects positioning us to monetization in 2026 and beyond.
Brad Martin: ATN has a clear strategy built around three key strengths. First, fiber and fiber-fed telecom services. We invest in high-value fiber infrastructure as the foundation for long-term growth to support the growing demand for high-speed broadband services. Secondly, enterprise and carrier solutions. We enable higher margin business-driven service revenues with fiber-led technology services and local market expertise. And finally, we're optimizing operations and capital allocation while leveraging government grants to enhance operational free cash flow and shareholder value with durable assets and revenues. This approach positions us for consistent performance and long-term value creation.
Brad Martin: HCN has a clear strategy built around three key strengths first fiber and fiber fed telecom services, we invest in high value fiber infrastructure as the foundation for long term growth to support the growing demand for high speed broadband services.
Secondly, enterprise and carrier solutions, we enable higher margin business driven service revenues with fiber led technology services and local market expertise.
Brad Martin: And finally, we are optimizing operations and capital allocation, while leveraging government grants to enhance operational free cash flow and shareholder value with durable assets and revenue streams.
Brad Martin: This approach positions us for consistent performance and long term value creation.
Brad Martin: Looking ahead to 2025, our strategic focus remains clear. Maintaining our strong competitive position in our international markets with fiber and fiber fed solutions, while also advancing our cost optimization efforts to increase free cash flow. leveraging our government-funded projects to expand infrastructure while we continue to optimize our U.S. business for more durable revenue sources and sustainable free cash. and maintaining a prudent capital allocation strategy with an objective to use the increased cash flows to return value to shareholders. While we expect some near-term variability as we complete this transition, our focus remains on strengthening our core operations, enhancing efficiency, and expanding operating cash flow in the years ahead.
Brad Martin: Looking ahead to 2025, our strategic focus remains clear.
Brad Martin: Maintaining our strong competitive position in our international markets with fiber and fiber fed solutions, while also advancing our cost optimization efforts to increase free cash flow.
Brad Martin: Leveraging our government funded projects to expand infrastructure, while we continue to optimize our U S business for more durable revenue sources and sustainable free cash flow.
Brad Martin: And maintaining a prudent capital allocation strategy with an objective to use the increased cash flows to return value to shareholders.
Brad Martin: While we expect some near term variability as we complete this transition our focus remains on strengthening our core operations enhancing efficiency and expanding operating cash flow in years ahead.
Brad Martin: Carlos will provide more detail on the financial outlook. We remain confident that our disciplined execution and strategic investments will position ATN for long-term success.
Brad Martin: Carlos will provide more detail on the financial outlook, we remain confident that our disciplined execution and strategic investments to position ATM for long term success.
Carlos Doglioli: And with that, I'll hand the call over to you, Carlos. Thank you, Brad.
Carlos: And with that I'll hand, the call over to you Carlos.
Carlos Doglioli: Good morning, everyone. And thanks for joining us today. Today, I'll walk you through our fourth quarter and full year results. as well as our financial outlook for 2020.
Carlos: Thank you Brad.
Carlos: Good morning, everyone and thanks for joining us today.
Today, I'll walk you through our fourth quarter and full year results as.
Carlos: As well as our financial outlook for 2025.
Carlos Doglioli: Before getting to that, I want to reiterate Brad's comments that 2024 was a year of disciplined execution as we navigated challenges while remaining focused on long-term value creation. For the full year, our international telecom segment achieved modest year-over-year revenue growth. However, on a consolidated basis, revenues were impacted by the sunset of a significant program in our U.S. telecom sector.
Speaker Change: Before getting to that I want to reiterate brad's comments at 234 was a Europe disciplined execution as we navigated challenges while remaining focused on long term value creation.
Speaker Change: For the full year, our international Telecom segment achieved modest year over year revenue growth.
Speaker Change: However on a consolidated basis revenues were impacted by the Sunset of a significant program in our U S Telecom segment.
Carlos Doglioli: In light of these dynamics, we took proactive steps and implemented cost containment measures to limit negative cash flow outcomes.
Speaker Change: In light of these dynamics, we took proactive steps and implemented cost containment measures to limit negative cash flow outcomes.
Carlos Doglioli: With that, let's now review our P&L results for the fourth quarter and the full year 2024 in more detail. Total company revenue for the fourth quarter was $180.5 million, down 9% when compared with the same period in 2023. The step down reflects the overall revenue decline in the U.S. telecom segment, due in part to the impact of the conclusion of the Emergency Connectivity Fund, and to a lesser extent, the Affordable Care Program, as well as lower legacy wholesale roaming revenues, as we transition that service to the carrier services model. Additionally, in 2024, construction revenue was lower compared with the previous year.
Speaker Change: With that let's now review, our P&L results for the fourth quarter and the full year 2024 in more detail.
Speaker Change: Total company revenue for the fourth quarter was at $885 million down 9% when compared with the same period in 2033.
Speaker Change: The step down reflects the overall revenue decline in the U S. Telecom segment due in part to the impact of the conclusion of the emergency activity Pan.
Speaker Change: And to a lesser extent, the affordable care program as well as lower legacy wholesale roaming revenues.
As we transition that service to the carrier services model.
Speaker Change: Additionally, in 2024 construction revenue was lower compared with the previous year.
Carlos Doglioli: For the full year, revenue total $729.1 million, representing a 4% decrease from 2023 due to the factors previously mentioned. Operating income in the fourth quarter increased to $8.7 million versus operating income of $3.3 million in Q4 of 2025. The year-over-year increase was primarily due to a $6.6 million reduction in restructuring expenses. and a $5.8 million reduction in cost of services partially offset by the impact of lower revenue.
For the full year.
Speaker Change: Revenue totaled $729 1 million, representing a 4% decrease from 223 due to the factors previously mentioned.
Speaker Change: Operating income in the fourth quarter increased to $8 7 million versus operating income of $3 3 million in Q4 of 2023.
Speaker Change: The year over year increase was primarily due to a $6 6 million reduction in restructuring expenses.
Speaker Change: And a $5 8 million reduction in cost of services, partially offset by the impact of lower revenue.
Carlos Doglioli: Full year operating loss for 2024 was $0.8 million versus a full year operating income of $13.2 million in 2023. The loss in 2024 was driven primarily by the year-over-year revenue decline and the $35.3 million goodwill impairment charge taken earlier in the year. Net income for the fourth quarter was $3.6 million, or $0.14 per share. This compares with a prior year's net loss of $5.8 million, or $0.46 per share. The year-over-year increase in net income was primarily driven by an $8.9 million tax benefit.
Speaker Change: Full year operating loss for 234 was <unk> 8 million.
Speaker Change: Versus our full year operating income of $13 2 million in 2023.
Speaker Change: The loss in 2024 was driven primarily by the year over year revenue decline and the $35 3 million goodwill impairment charge taken earlier in the year.
Speaker Change: Net income for the fourth quarter was $3 6 million or <unk> 14 per share.
Speaker Change: This compares with a prior year's net loss of $5 8 million or <unk> 46 cents per share.
Speaker Change: The year over year increase in net income was primarily driven by an $8 9 million tax benefit.
Carlos Doglioli: Full year 2024 net loss was $26.4 million, or $2.10 per share, compared to a net loss of $14.5 million, or $1.25 per share the previous year. The increase in full-year net loss reflects the goodwill impairment charge of $35.3 million. Adjusted EBITDA for the fourth quarter was $46.2 million. down 9% from the yearboard period, primarily as a result of the decline in U.S. telecom revenue. Full year 2024 adjusted EBITDA decreased to $184.1 million down from $189.5 million in the prior year.
Speaker Change: Full year 2024, net loss was $26 4 million or $2.10 per share compared to a net loss of $14 5 million or one daughter on 25 per share the previous year.
Speaker Change: The increase in full year net loss reflects the goodwill impairment charge of $35 3 million.
Speaker Change: Adjusted EBITDA for the fourth quarter was $46 2 million.
Speaker Change: Down 9% from the year ago period, primarily as a result of the decline in U S Telecom revenues.
Speaker Change: Full year 2024, adjusted EBITDA decreased to $184 1 million down from $89 5 million in the prior year.
Carlos Doglioli: Looking now at the segment's performance.
Speaker Change: Looking now at our segment's performance.
Carlos Doglioli: Beginning with our international segment. Q4 revenues of $94.8 million were essentially flat compared with the fourth quarter of the previous year. International revenue for the full year 2024 was up nearly 2% to $377.5 million, driven by high speed data subscriber and fixed revenue growth. Adjusted EBITDA for the international segment increased 4.8% for the quarter and 9.7% for the full year Demand for high-speed broadband services and operational improvements contributed to the quarter.
Speaker Change: Beginning with our international segment.
Speaker Change: Q4 revenues of $94 8 million were essentially flat compared with the fourth quarter of the previous year.
Speaker Change: International revenue for the full year of 284 was up nearly 2% to $377 5 million driven by high speed data subscriber and fixed revenue growth.
Speaker Change: Adjusted EBITDA for the International segment increased four 8% for the quarter and nine 7% for the full year.
Speaker Change: Demand for high speed broadband services and operational improvements contributed to the quarter.
Carlos Doglioli: In our domestic segment, fourth quarter revenues were $85.8 million, down 18% year-over-year. I'm down 10% for the full year. As previously mentioned, revenue was impacted by the conclusion of the ECF and ACP government programs and lower construction revenue. The revenue decline led to a decrease in adjusted EBITDA for the domestic segment, down 29% for the quarter and 20% for the full year.
Speaker Change: In our domestic segment fourth quarter revenues were $85 8 million down 18% year over year.
Speaker Change: And down 10% for the full year.
Speaker Change: As previously mentioned revenue was impacted by the conclusion of the ECF on ACP government programs and lower construction revenue.
Speaker Change: The revenue decline led to a decrease in adjusted EBITDA for the domestic segment down 29% for the quarter and 20% for the full year.
Carlos Doglioli: Moving on to the balance sheet and cash flow highlights. We ended the year with a net debt ratio of 2.54 times on total debt outstanding of $557.4 million. Our net cash provided by operating activities was strong at $129.2 million for the year ended 2024, up from $111.6 million in 2023. This was driven primarily by improvements in working capital and gains realized from asset disposition. Turning now to capital expenditures, CapEx for the year totaled $110.4 million, a net of $108.5 million in reimbursable capital expenditures. This compares to $163.3 million, a net of $32.9 million in reimbursable capital expenditures in the prior year.
Speaker Change: Moving onto the balance sheet and cash flow highlights.
Speaker Change: We ended the year with a net debt ratio of 254 times on total debt outstanding of $557 4 million.
Speaker Change: Our net cash provided by operating activities was strong at $129 2 million for the year ended 2024.
Speaker Change: From a high of $11 6 million in 2023.
Speaker Change: This was driven primarily by improvements in working capital and gains realized from asset dispositions.
Speaker Change: Turning now to capital expenditures Capex for the year totaled $110 4 million net.
Speaker Change: The $8 $5 million in Reimbursable capital expenditures.
Speaker Change: This compares to $163 3 million net of $32 $9 million in Reimbursable capital expenditures in the prior year.
Carlos Doglioli: Notably, beginning in 2024, we dialed down the capital intensity of our business as planned. marking the conclusion of our three-year investment strategy. We continue to see government support as a key factor in enhancing our infrastructure in rural U.S. markets.
Speaker Change: Notably beginning in 'twenty 'twenty, four we dialing down the capital intensity of our waste in first line.
Speaker Change: Marking the conclusion of our three year investment strategy.
Speaker Change: We continue to see government support as a key factor in enhancing our infrastructure in rural U S markets.
Carlos Doglioli: We return capital to our shareholders through $14.7 million in dividends and $10 million in stock repurchases during 2024.
Speaker Change: We returned capital to our shareholders through $14 $7 million in dividends and $10 million in stock repurchases during 2024.
Carlos Doglioli: With that, let's move to our Outlook for 2025. In 2025, our priority is to stabilize the U.S. telecom segment and continue expanding margins in our international segment with the goal of enhancing cash flow generation and strengthening ATN's long-term profitability. We expect modest international revenue growth, while domestic revenue will continue to reflect the shift from legacy services to a longer-term competitive position anchored in enterprise and carrier services. Adjusted EBITDA for the international segment is expected to expand alongside revenue growth and cost efficiency. While domestic profitability will be temporarily impacted as we focus on solidifying the foundation of our business for future opportunities.
Speaker Change: With that.
Speaker Change: Let's move to our outlook for 295.
Speaker Change: In 2025, our priority is to stabilize the U S Telecom segment and continue expanding margins in our international segment with.
Speaker Change: With the goal of enhancing cash flow generation and strengthening Atms long term profitability.
Speaker Change: We expect modest international revenue growth.
Speaker Change: While domestic revenue will continue to reflect the shift from legacy services.
Speaker Change: Longer term competitive position and Guardian enterprise and carrier services.
Speaker Change: Adjusted EBITDA for the International segment is expected to expand alongside revenue growth and cost efficiencies.
Speaker Change: While domestic profitability will be temporarily impacted as we focus on solidifying the foundation of our business for future opportunities.
Carlos Doglioli: Turning to our Outlook for 2025, we expect... full-year revenue in 2025 to be in line with 2024, excluding construction revenue. adjusted EBITDA to be essentially flagged with last year. capital expenditures in the range of 90 to 100 million net of reimbursement. Net debt ratio to remain in line with prior year with a slight potential improvement exiting 2025 compared with 2024. We continue to monitor net debt ratio with the objective to bring down leverage closer to 2x over the medium term.
Speaker Change: Turning to our outlook for 2025, we expect.
Speaker Change: Full year revenue in 2025 to be in line with 224, excluding construction revenues.
Speaker Change: Adjusted EBITDA to be essentially flat with last year.
Speaker Change: Capital expenditures in the range of $90 million to $100 million net of reimbursements.
Speaker Change: Net debt ratio to remain in line with prior year with a slight potential improvement exiting 'twenty, 25% compared with 24.
Speaker Change: We continue to monitor net debt ratio with the objective to bring down leverage closer to two X over the medium term.
Carlos Doglioli: Before handing the call back to Brad, let me provide some insight into how we expect the quarters to play out in 2025. In the first quarter, we expect adjusted EBITDA to be relatively flat to slightly down compared with last year. with restructuring and reorganization charges in an amount similar to the amount taken last year. We expect a more consistent, linear improvement as the year progresses, with the second half contributing the majority of our annual results. The expected quarterly cadence reflects continued growth in our international segment muted by the business transition underway in our domestic segment under new leadership.
Before handing the call back to Brad.
Brad Martin: Let me provide some insights into how we expect the quarters to play out in 2025.
Brad Martin: In the first quarter, we expect adjusted EBITDA to be relatively flat to slightly down compared with last year.
Brad Martin: With our restructuring and reorganization charges in an amount similar to the amount taken last year.
Brad Martin: We expect a more consistent linear improvement as the year progresses.
Brad Martin: For the second half contributing the majority of our annual results.
Brad Martin: The expected quarterly cadence reflects continued growth in our international segment muted by the business transition underway in our domestic segment under new leadership.
Carlos Doglioli: In summary, as we enter 2025, our focus remains on improving cash flow, driving operational efficiencies and transitioning to more sustainable recurring revenue streams. We are confident that these efforts will support long-term shareholder value creation.
Brad Martin: In summary, as we enter 2025, our focus remains on improving cash flow driving operational efficiencies and transitioning to more sustainable recurring revenue streams.
Brad Martin: We are confident that these efforts will support long term shareholder value creation.
Carlos Doglioli: Thank you again for your time today.
Brad Martin: I will now hand the call back over to Brad. Thanks, Carlos.
Brad Martin: Thank you again for your time today, I will now hand, the call back over to Brian.
Brad Martin: Before we wrap up, I want to reiterate our core message. We are focused, disciplined, and executing on our strategy. We've taken meaningful steps to position the business for long-term success, balancing strategic investment with the financial discipline to drive operational efficiency and future growth.
Brian: Thanks Carlos.
Speaker Change: Before we wrap up I want to reiterate our core message, we are focus discipline and executing on our strategy.
Speaker Change: We are taking meaningful steps to position the business for long term success balancing strategic investment with the financial discipline to drive operational efficiency and future growth.
Brad Martin: Are U.S. businesses evolving, aligning with the increasing need for enterprise and carrier solutions? Our international operations continue to deliver, reinforcing our ability to scale and optimize in key markets. Our infrastructure investments, backed by government funding, provide opportunities for sustainable expansion with lower capital intensity. The strength of our strategy lies in execution and adaptability. Our focus remains the same, building a resilient, high-performing business that delivers long-term value.
Speaker Change: Our U S businesses evolving aligning with the increasing need for enterprise and carrier solutions.
Speaker Change: Our international operations continued to deliver reinforcing our ability to scale and optimize in key markets.
Speaker Change: Our infrastructure investments backed by government funding provide opportunities for sustainable expansion with lower capital intensity.
Speaker Change: The strength of our strategy lies in execution and adaptability.
Speaker Change: Our focus remains the same building a resilient high performing business that delivers long term value.
Brad Martin: Thank you for your time and continued support. We appreciate your interest in ATN, and we look forward to keeping you updated on our progress.
Speaker Change: Thank you for your time and continued support we appreciate your interest in ATM and we look forward to keeping you updated on our progress.
Operator: With that, operator, we'd like to open it up for questions. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.
Speaker Change: With that operator, we'd like to open it up for questions.
As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again, please standby, while we compile the Q&A roster.
Hamed Khorsand: Our first question comes from Hamed Khorsand with BWS Financial. Your line is open. Hi, good morning. First question I had was about the capital expenditure budget. Last year you had been mentioning that your target was going to be 10 to 15% revenue. This time around it's a little bit higher on the initial guidance.
Ahmed: Our first question comes from Ahmed.
Corson: Corson with Gws financial your line is open.
Speaker Change: Hi, good morning.
Speaker Change: First question I had was about the.
Speaker Change: Capital expenditure budget.
Speaker Change: Last year, you had been mentioning that your target was going to be 10% to 15% of revenue. This time around it's a little bit higher on the initial guidance.
Carlos Doglioli: Is there additional projects you're taking for 25? what your goals are.
Speaker Change: Is there additional projects you are taking.
Speaker Change: 25 can you just explain what your goals are.
Carlos Doglioli: Hi Hamed, this is Carlos. Thanks for the question. We believe that the guidance is in line with those expectations. of 10-15%. As we mentioned, we've been scaling back CAPEX. In 2024, it was close to 30% lower than the previous year. 2025, we're expecting continuous improvement along those lines. And a major dynamic, too, is the reimbursable CapEx to grant all of the grants that we have participation in. Got it.
Speaker Change: Okay.
Carlos: Hi, Helane this is Carlos thanks for the question.
Carlos: We believe that.
Carlos: The guidance is in line with.
Carlos: That those.
Carlos: Those expectations.
Carlos: 10, 10% to 15%.
Carlos: Thats.
Carlos: And as we as we mentioned.
Carlos: We have been scaling back capex in 'twenty 'twenty four it was.
Carlos: Close to 30% lower than the previous year.
Carlos: <unk>.
Carlos: For 2035, we're expecting continued improvement along those lines.
Carlos: And a major.
Carlos: Now how many of the major dynamic too as the Reimbursable capex to grid.
Carlos: The grants that we have participation.
Hamed Khorsand: And then the other question I had was, you've given a lot of stats over the years about homes past, but it sounds like you're changing focus to enterprise and carrier. Are there any statistics you can provide as to what kind of, you know, traction you're getting on that front, how many customers you're gaining and so forth?
Carlos: Got it and then.
Speaker Change: The other question I had was you've given a lot of stats over the years about homes passed but it sounds like youre changing focus to enterprise and carrier are there any statistics that you can provide as to what kind of.
Traction youre getting on that front, how many customers you're gaining and so forth.
Brad Martin: So, Hamed, this is Brad. You know, there is, you know, there has been a focus on enterprise and carrier for a long time, and that really has been the core of our U.S. markets, you know, for many years. Internationally, it's a more, you know, spread customer base between consumer, enterprise, carrier, and wholesale. So, from a go forward, even in 24, we did see enterprise growth internationally. There's a lot of our stronger performing areas, about 6.5% growth in our business. Our business base, we did see about 2.7% quarter-over-quarter subscriber growth in business, customers internationally in Q4, so it is a key area for international, which does have a broader consumer segment.
Brad Martin: So yes this is Brad.
Brad Martin: There is there has been a focus on enterprise and carrier for a long time and that really has been the core of our U S markets.
Brad Martin: For many years.
Brad Martin: Internationally, it's a more <unk>.
Brad Martin: Fred.
Brad Martin: Base between consumer enterprise carrier and wholesale.
Brad Martin: So from a from a go forward even in 'twenty four.
Brad Martin: We did.
Brad Martin: See enterprise growth internationally.
Brad Martin: As one of our stronger performing areas above six 5%.
Brad Martin: Growth in our business are.
Brad Martin: Our business base.
Brad Martin: We did see.
Brad Martin: About two 7% quarter over quarter subscriber growth in business.
Brad Martin: Our customers internationally.
Brad Martin: In Q4, so it is a key area.
Brad Martin: For international which does have a broader consumer segment.
Brad Martin: And then on a go forward for enterprise and wholesale U.S. markets, an important dynamic that we are working with is that we are seeing increasing pipeline demand for additional capacity. in the form of a backhaul. and even demand for things like spectrum are increasing, so something that we again have been working with many years in our U.S. markets and we'll continue to monitor for the best outcomes for the business.
Brad Martin: And then on a go forwards for enterprise and wholesale U S markets.
Brad Martin: An important dynamic that we are working working with is that we are seeing.
Increasing pipeline demand for additional capacity and.
Brad Martin: In the form of a backhaul.
Brad Martin: And.
Brad Martin: Even even demand for things like spectrum.
Brad Martin: Our increasing so something that we again have been working with for many years, our U S markets and we'll continue to monitor for the best outcome for the business.
Hamed Khorsand: Okay, and then the last question is on the international side and mobile, you saw more prepaid subscribers drop off this past quarter. Was that competition or was just the consumer changing their habits? How many phones do they have? Yeah, this is primarily competition. That's primarily in our largest market in Guyana. We've talked previously on calls. There was a new 5G entrance that came into the market about 18 months ago and did have an impact on the prepaid segment. The prepaid segment, where the impact was, was really for your pay-as-you-go prepaid voice customers. So these are our lowest ARPU customers in that market.
Brad Martin: Okay and then last question is on the international side and mobile.
Brad Martin: You saw more.
Brad Martin: Prepaid subscribers drop off this past quarter was that competition or which is the consumer changing their habits.
Brad Martin: How many phones they have.
Brad Martin: Yes. This is primarily competition, that's primarily in our largest market in Guyana.
Brad Martin: Talked previously on calls there was a new <unk> entrants that came into the market.
Brad Martin: About 18 months ago.
Brad Martin: And had it did have an impact on the prepaid segment in the prepaid segment, where the impact was was really for you pay as you go prepaid voice customers. So these are our lowest <unk>.
Brad Martin: We have seen significant growth in our data plans.
Brad Martin: Customers in that market.
Brad Martin: Did we have seen significant growth in our data plans as part of our strategy net market as Guyana has been growing macroeconomically is provide us effectively get to the higher value plans into the higher value customer base and we have continued to see good movement.
Hamed Khorsand: Part of our strategy in that market, as Guyana has been growing macroeconomically, is to provide, is to effectively get to the higher-value plans and to the higher-value customer base. And we have continued to see good movement with some significant improvements in our data plan subscribers of about 26% year-over-year. Great, thank you. Thank you.
Brad Martin: With some significant improvements in our data plan subscribers.
Brad Martin: Was about 26% year over year.
Speaker Change: Great. Thank you.
Rick Prentiss: Our next question comes from Rick Prentiss with Raymond James and Associates. Your line is open. Hey, good morning, guys. Morning, Ray. Hey, a couple questions for you. Obviously, going deeper into the carrier managed services. I think I heard you just mentioned to me the backhaul side of it. What specific services are you guys looking to do there? Is it also maybe dark fiber? And you mentioned spectrum demand. How do you monetize spectrum demand on that carrier managed services side? So, Rick, part of our carrier-managed services offering is inclusive of some of our Spectrum assets. So, we do have the ability to lease our Spectrum assets.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Ric Prentiss with Raymond James and Associates. Your line is open.
Ric Prentiss: Hey, good morning, guys.
Speaker Change: Good morning, Eric Hey, Hey, a couple of questions for you, obviously going deeper into the carrier managed services I think I heard you just mentioned I mean, the backhaul side of it.
Speaker Change: What specific services are you guys looking to do there or is it also maybe dark fiber.
Speaker Change: And you mentioned spectrum demand.
Speaker Change: How do you monetize spectrum demand on that carrier managed services side.
Speaker Change: Yeah.
Speaker Change: So Rick part of our part of our carrier managed services offering is inclusive of some of our spectrum assets. So we do have we do have the ability to lease our spectrum assets, it's about relatively lower component of that business, but.
Rick Prentiss: It's a relatively lower component of that business. But carrier-managed services is inclusive of lit services, dark services, tower lease, tower service maintenance, backhaul services. And in some cases, we actually do leverage our Spectrum with the carriers that are Spectrum holdings, and that's primarily in the back. Okay. Has there been any thoughts about maybe trying to monetize the spectrum through a sale? We've seen a similar now glass and steel company, TDS US Cellular, sold their wireless operations, sold chunks of spectrum, not just in wireless to T-Mobile, but to Verizon and AT&T. Any thoughts about would there be more value created by selling the asset rather than leasing the asset on spectrum or on some of the consumer markets?
Speaker Change: But carrier managed services.
Speaker Change: Inclusive of <unk>.
Speaker Change: Lit services Dark services tower lease tower service maintenance.
Speaker Change: Backhaul services.
Speaker Change: And in some cases, we actually do leverage our spectrum.
Speaker Change: With that with the carriers that our spectrum holdings and Thats, primarily in the southwest.
Speaker Change: Okay.
Speaker Change: Has there been any thoughts about maybe trying to monetize the spectrum through a sale we've seen.
Speaker Change: So we're now glass and steel company Tds U S cellular sold their wireless operations.
Speaker Change: Sold chunks of spectrum, not just in wireless to T mobile, but Verizon and AT&T any thoughts about would there be more value created by <unk>.
Speaker Change: Selling the asset rather than leasing the asset spectrum or on some of the consumer markets.
Brad Martin: Yes, so Rick, we continuously evaluate our portfolio of assets to get enhanced shareholder value in the long run. That's inclusive of underutilized spectrum or infrastructure. And then that's something that, again, we did announce a small spectrum deal this past year. But it is something we're evaluating and see if we get to try to, again, bring higher shareholder value. Okay.
Yes, so it's Rick we continuously evaluate our portfolio of assets to get enhance shareholder value in the long run that's inclusive of underutilized spectrum or infrastructure.
Speaker Change: That's something that again, we did announce a small spectrum deal this past year.
Speaker Change: But it's something we're evaluating.
Speaker Change: And see if we try to again bring higher shareholder value.
Rick Prentiss: When you, Carlos, I think you mentioned some restructuring charges. Was that comment restructuring charges just 1Q25 would look like the restructuring 1Q24? Or was it that restructuring charges in 25 will resemble more like what 24 costs like? We mentioned the restructuring charges that we currently expect for Q1, Rick, which, you know, we expect them to be, you know, a similar size to what we had in Q1 of prior year. That was the reference. Okay, I think for the year, maybe the total restructuring charges in 2014 were more like 8 million versus 1Q last year was like a million.
Speaker Change: Makes sense okay.
Speaker Change: When you Carlos I think you mentioned some restructuring charges was that comment restructuring charges. Just <unk> 25 will look like the restructuring of <unk> 24 or was it that restructuring charges and 25 will resemble more like 24 costs were.
Speaker Change: We mentioned the restructuring charges that we currently expect for Q1.
Speaker Change: Rick.
Speaker Change: We expect them to be.
Speaker Change: Similar size to what we had in Q1 of prior year that was the reference.
Speaker Change: Okay.
Speaker Change: I think for the year, maybe the total restructuring charges of 24 more like $8 million versus <unk> last year was like $1 million at ballpark it was a.
Carlos Doglioli: Was that that ballpark? It was a little over a million in Q1, yes. Okay.
Speaker Change: Little over $1 million in Q1, yes, Thats correct.
Rick Prentiss: You mentioned shareholder returns, managing cost-cutting, managing CapEx, etc. How should we think about how shareholder returns might manifest itself? Okay, I think Rick, you know, when you look at the way we've been managing the capital intensity of the business, we feel that as we've been navigating some of the challenges that we faced in the U.S. and at the same time continuing to improve business profitability and margins in international as we grow revenues there steadily. We feel that we've been very prudent and improving. to continue to move along the lines of that spectrum, you know, kind of now after we've finished our three-year investment strategy.
Speaker Change: Okay.
Speaker Change: You mentioned shareholder returns managing cost cutting managing capex et cetera, how should we think about how shareholder returns might manifest itself.
Speaker Change: Okay, I think Rick when you look at the way we've been managing the capital intensity of the business, we feel that as we've been navigating.
Speaker Change: Mitigating some of the challenges that we face.
Speaker Change: In the U S and at the same time continuing to improve.
Speaker Change: <unk>.
Speaker Change: The business profitability in margins in international as we grow revenues they are steadily.
Speaker Change: We feel that.
Speaker Change: We've been very early on improving.
Speaker Change: Cash flow through the reduction of our all of our Capex.
Speaker Change: Spend so we feel that we continue to move along the lines of that spectrum.
Speaker Change: Now after we bought any stock your investment strategy.
Carlos Doglioli: And we believe that that will allow us to improve cash flow over time and also move down our leverage over time. As we've said, you know, our goal is to try to move it down to the two times over the medium-term. And shareholder value, looking at potential dividend increases, potential stock buyback, what, when we say improve shareholder value, is it just increasing free cash flow or is it actually kind of enumeration back? Yeah, no, so the, in terms of the dividends or the shared buyback, those are the purview of the, of the board. So, But our commitment from an operational perspective is to make sure that we, you know, we lower, we improve our cash flow through improving EBITDA margin, you know, improving EBITDA in general, and then reduce the capital intensity of the business.
Speaker Change: And we believe that that will allow us to.
Speaker Change: Improved cash flow over time.
Speaker Change: And I would also move down our leverage.
Speaker Change: Over time as we've said our goal is to try and move it down to that two times.
Speaker Change: Over the medium term.
Speaker Change: And shareholder value looking at potential dividend increases potential stock buyback.
Speaker Change: Well, let me say improve shareholder values are just increasing free cash flow or is it actually.
Speaker Change: Okay deterioration back yes, so the in terms of the dividend. So the share buybacks. So those are the purview of the board so.
Speaker Change: But our.
Speaker Change: Our our commitment from an operational perspective.
Speaker Change: Just to make sure of that.
Speaker Change: We we lower.
Speaker Change: We improve our cash flow through improving EBITDA margin.
Improving EBITDA in general and then reduce the capital intensity of the basis I think when as we do that.
Carlos Doglioli: I think, you know, as we do that, we'll be able to drive leverage down and have obviously optionality that the board can leverage.
Speaker Change: We will be able to drive that leverage.
Speaker Change: Leverage down on.
Speaker Change: And have a <unk>.
Speaker Change: Obviously optionality that broadband.
Rick Prentiss: Okay, last one for me is on the balance sheet. Speaking of leverage, remind us of what your maturity schedule looks like and kind of what your thoughts are on gross debt, not just net debt and leverage. So I think at this point we just refinanced Alaska this last year. The current maturity is our facility in the Virgin Islands, which I think it's mid-time to next year. So we'll continue to monitor how we go about managing our maturity as we go through the year.
Speaker Change: What kind of leverage.
Speaker Change: Okay and last one for me is on the balance sheet speaking of leverage.
Speaker Change: Remind us of what your maturity schedule looks like and kind of what your thoughts are on gross debt not just net debt and leverage.
Speaker Change: So I think at this point, we just refinanced.
Scott: I'll ask Scott.
Scott: Last year, the current maturity ASR, our facility and the Virgin Islands, which I think it's that meet need time to next year. So we'll continue to monitor how we go about.
Scott: Managing our maturity as we go through the year.
Rick Prentiss: Okay, we're good, thanks guys. Thank you.
Speaker Change: Okay very good thanks, guys.
Operator: As a reminder, to ask a question, please press star 11 on your telephone. Again, that is star 11 to ask a question.
Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone again that is star one wanted to ask a question.
Greg Burns: Our next question comes from Greg Burns with Sidoti, your line is open. Good morning. In the U.S. segment, how much is that business?
Greg Burns: Our next question comes from Greg Burns with Sidoti Your line is open.
Greg Burns: Good morning.
Greg Burns: In the U S segment, how much of that business.
Brad Martin: would you characterize as kind of legacy, revenue streams, How fast is it declining, and do you have plans on maybe converting that to maybe contracts like you signed with AT&T and Verizon, or is that just going to... have structurally declined over the next couple of years. Yes, so we do point out, in fact, you can see in our mobiles, in our financials, our mobile business in the U.S., you can see the decline from 23 to 24. That's one of the primary areas we just exited out of our retail mobile operations in the Southwest. And I think, as you know, we participate in the Remove and Replace Program.
Greg Burns: Would you characterize as kind of legacy.
Greg Burns: Revenue streams.
Greg Burns: And.
Greg Burns: Okay.
Greg Burns: How fast is declining and do you have plans on maybe converting that to.
Greg Burns: Maybe contracts like you signed with AT&T and Verizon or is that just going to kind.
Greg Burns: Structurally decline over the next couple of years.
Greg Burns: Yes, so we do point out.
Greg Burns: In fact, you can see in our mobile and our financials, our mobile business in the U S. You can see the decline from 23 to 24.
Greg Burns: That's one of the primary areas, we just exited out of our retail mobile operations in the <unk>.
Greg Burns: Southwest.
Greg Burns: And I think.
Greg Burns: As you know we participated in the remove and replace program. We did have and if you look at our top while our topline total broadband customers that number has declined in the past year, partially due to the shutdown of some of that legacy.
Brad Martin: We did have, and if you look at our top line total broadband customers, that number has declined in the past year, partially due to the shutdown of some of that legacy, we'll call it mobile broadband customers. This was legacy LTE in the Southwest. So, relatively small, Greg, in the overall total revenues, because we've been making this transition. We still have legacy copper, like any major operators across the country. So, moving towards copper shutdown is obviously a key initiative. We have that in the U.S., we have that internationally. That's an important dynamic for cost optimization into the future.
Greg Burns: We call it mobile broadband customers as legacy LTE in the southwest so relatively.
Greg Burns: Small Greg.
Greg Burns: And the overall total revenues because we've been making this transition.
Greg Burns: We still have our legacy copper like any major.
Greg Burns: Operators.
Greg Burns: Across the across the country so moving towards.
Greg Burns: Copper shutdown is obviously a key initiative.
Greg Burns: Have that in the U S. We added internationally.
Greg Burns: That's an important dynamic for cost optimization into the future.
Carlos Doglioli: Okay, um, and then... When we look at, I guess, the profitability of the... U.S. Telecom segment next year. Is it just a function of the declining revenue that profitability is coming down or are you making incremental investments? You know, what's driving the decline in EBITDA next year? I think that that's that's a big driver. Greg, this is Carlos. So yeah, the revenue decline, this is the driver of the of the reduced profitability.
Greg Burns: Okay.
Greg Burns: And then.
Greg Burns: When we look at the I guess the profitability of the.
Greg Burns: U S Telecom segment next year or is it just a function of the declining revenue that profitability is coming down or are you, making incremental investments.
Greg Burns: What's driving the decline in EBITDA next year.
Greg Burns: Thanks Scott.
That's a big driver Greg This is Carlos.
Greg Burns: So yes, the revenue decline.
Greg Burns: Yes.
Greg Burns: It's a driver of the reduced profitability.
Brad Martin: Okay, um, and then in terms of maybe monetizing the The Capital Investments you've made over the last three years, you know, what kind of investments or changes are you putting in place to accelerate the monetization of that and drive more? Fiber Services and Broadband Growth. So that's part of the transition that we referenced in our U.S. markets. We obviously had some challenges within the 24 cycle. We are making investments in those markets. These are businesses in transition. What we put forth for a plan for 25, we believe, reflects the right expense model to get these businesses ready for scale.
Greg Burns: Okay.
Greg Burns: And then in terms of maybe monetizing the.
Greg Burns: The capital investments you've made over the last three years, what kind of investments or changes are you putting in place too.
Greg Burns: Accelerate the monetization of that and drive more.
Fiber services and broadband growth.
Greg Burns: Okay.
Greg Burns: So that's part of the transition that we referenced in our U S markets.
Greg Burns: We obviously had some challenges.
Greg Burns: Within the 24 cycle, we are making investments.
Greg Burns: In those markets. These are businesses in transition.
When we put forth for a claim for 25, we believe reflects the the rights expense model to get these businesses ready for scale.
Brad Martin: A key dynamic for our U.S. markets, obviously, is participation in grant programs. As we stated, we have won a significant amount of grant program money for build subsidies between 22 and 24. We continue to – we intend to continue to participate in those programs, programs like BEAD, which is starting to come to light in some of our operating states. Those are important dynamics to really focus on fiber and fiber fed telecom services on the consumer side. And, again, some of the legacy technologies were in areas that had a lot of service subsidies like ACP, which went away this past year.
Greg Burns: A key dynamic for our U S markets, obviously is participation in grant programs as.
Greg Burns: As we've stated we have won a significant amount of grant grant program money for build subsidies between 'twenty to 'twenty four.
Greg Burns: We continue to do we intend to continue to participate in those programs programs like beads, which is starting to come to light in some of our operating states. Those are important dynamics to really focus on fiber and fiber fed telecom services on the consumer side.
Greg Burns: And again some of the legacy technologies.
Greg Burns: Were in areas that that had a lot of service subsidies like ACP, which went away. This past year, so focusing our commercial efforts on where we can have the most success and the best overall returns.
Brad Martin: So focusing our commercial efforts on where we can have the most success and the best overall returns is an important shift in our U.S. markets. for Consumer.
Greg Burns: As an important shift in our U S markets for.
Brad Martin: And it's really continuing to grow and expand our enterprise and carrier revenue streams. Okay, great.
Greg Burns: For consumer and then it's really continuing to.
Greg Burns: To grow and expand our enterprise and carrier.
Greg Burns: Revenue streams.
Carlos Doglioli: And then just lastly, just from a modeling perspective, what drove the decline in depreciation quarter over quarter? And is that a good number to model against going forward? I think the driver has been the less capex over the last several quarters. OK, so the 33. Million numbers, the good, uh... I guess it's a good number to model going forward into 25? Yeah.
Speaker Change: Okay, Great and then just just lastly, just from a modeling perspective, what drove the decline in depreciation.
Greg Burns: Quarter over quarter.
Speaker Change: This last quarter.
Speaker Change: And is that a good number to model against going forward.
Speaker Change: I think.
Speaker Change: The driver it's been less capex over last several quarters.
Speaker Change: Okay. So the 33.
Speaker Change: Million numbers.
Speaker Change: I guess, a good number to model going forward into 'twenty.
Greg Burns: Okay, all right, thank you. Thank you.
Yes.
Speaker Change: Okay alright, thank you.
Speaker Change: Okay.
Rick Prentiss: Our next question comes from Rick Prentiss with Raymond James and Associates. Your line is open. Yeah, hey guys figured calls almost done ask maybe a few more if I can. One question, you know, visibility. Obviously, last year, there was some some bumps along the way. How visible do you think this business is? I would assume that the carrier and managed solutions is a more visible business and maybe the consumer side, but help us understand your comfort and visibility and what you've been providing today in the last Yeah, Rick, so we obviously are, you know, there are major trends that we are seeing, you know, getting confirmed through pipeline development, as I mentioned earlier, for carrier demand for effective bandwidth.
Speaker Change: Thank you art.
Ric Prentiss: Our next question comes from Ric Prentiss with Raymond James and Associates. Your line is open.
Ric Prentiss: Yeah, Hey, guys figures calls almost on asking maybe a few more if I can.
Speaker Change: What are the question visibility obviously last year there was some some bumps along the way.
Ric Prentiss: Visible do you think this business is I would assume that the.
Ric Prentiss: Carrier and managed solutions is more visible business and maybe the consumer segment, but help us understand your comfort and visibility in what we're providing today and last night.
Speaker Change: Yes, Brett. So so we obviously are there are major trends that we are seeing getting confirmed through pipeline development.
Ric Prentiss: As I mentioned earlier for your carrier demand for for effective bandwidth.
Brad Martin: So that is something that the industry has been expecting. We believe that in the areas we operate is a combination of the work been done by some of our carrier partners for success around, with their success they've had around fixed wireless. Again, we partner with some of the larger carriers in our regions to be able to deliver to deliver those services on a wholesale basis. So that's, again, a good confirmation from a visibility perspective that we continue to drive. Ultimately, we are continuing to move in our U.S. markets. There are things that are somewhat less predictable.
Ric Prentiss: So that is something that the industry has been expecting we believe that in the areas. We operate as a combination of the work been done by some of our carrier partners.
Ric Prentiss: For success around.
Ric Prentiss: Their success of catamaran fixed wireless.
Ric Prentiss: Again, we partner with some of the larger carriers in our regions to be able to deliver.
Ric Prentiss: To deliver those services on a wholesale basis. So that's again a good confirmation on from a visibility perspective that we continue to drive.
Ric Prentiss: Ultimately.
Ric Prentiss: We are continuing to move in our U S markets here there are things that are that are.
Brad Martin: Some of the government dynamics, tariffs, as you know, are something that's been an evolving dynamic for most businesses. We're obviously monitoring that very closely and looking at where those impacts could be. We think it's relatively immaterial based on the good work of our distributors and our supply chains. But generally, those are the things that certainly keep us up as some dynamics are out of our control. We just have to manage those, and that's what every business has. But again, we are still seeing growing demand for, you know, high-speed data, fiber, fiber-fed services in the enterprise and in the consumer, even albeit in our U.S.
Somewhat less predictable some of the government dynamics.
Ric Prentiss: Tariffs as you know are something that's been evolving.
Ric Prentiss: Dynamic for most businesses, we're obviously monitoring that very closely.
Ric Prentiss: And looking at where were those impacts could be we think it's relatively immaterial based on good work of our distributors and our supply chains.
Ric Prentiss: But generally those are the things that that certainly keep us.
Ric Prentiss: Keep us up is some dynamics out of our control.
Ric Prentiss: We just have to manage those and that's what every business estimators.
Ric Prentiss: But again, we are still it's still seeing growing demand for high speed data fiber fiber fed services in the enterprise.
Ric Prentiss: And in the consumer.
Brad Martin: markets, our high-speed data consumer broadband base actually grew 20% over 2024, albeit a very small relative base in comparison to our international. So, again, we definitely are seeing the demand. Being able to execute some of the major fiber programs we have in process, that is key. And as you know, as those programs gain momentum and get off the ground, which is something that we saw through the 24th period, things start going a little more smoothly, things start going a little more on track. And that's what we're looking to see, and it will help us with predictability here in 25 years.
Ric Prentiss: Even albeit in our U S markets, our high speed data consumer broadband base actually grew 20% over 2024, albeit a very small relative base in comparison of international. So again, we definitely are seeing the demand.
Ric Prentiss: Being able to execute some of the major fiber programs you have in process.
Ric Prentiss: That is key and as you know as those programs gained momentum and get off the ground, which is something that we saw through the B 24 period things start going a little more smooth things start going even more attractive.
Ric Prentiss: That's what we're looking to see if it will help us with predictability here 25 and beyond.
Rick Prentiss: Okay.
Carlos Doglioli: And then Carlos, you mentioned one of the main goals in 25 is to stabilize the U.S. domestic business. Should we imply with that that you're hoping to maybe return to some growth prospects as you look into 26 and beyond, that this is the year to kind of stabilize and create a good table and set stage to go forward? That is the expectation, Rick. And I think, as Brad mentioned, throughout the call, we also believe that some of the changes that we made in the US are going to solidify their knowledge of the business and be able to drive the business forward as they continue to take hold of the management of the entity.
Speaker Change: Okay, and then Carlos you mentioned one of the main goals in 25 years to stabilize.
Speaker Change: The U S domestic business.
Speaker Change: Should we imply with that that you were hoping to maybe return to some growth prospects as you look into 'twenty and beyond that this is the year to kind of stabilize and create a good table then.
The stage to go forward.
Speaker Change: Medici expectation Rick.
Speaker Change: I think as Brian mentioned.
Speaker Change: On the call.
Speaker Change:
Speaker Change: We also believe that some of the changes that we've made in the U S are going to be.
Speaker Change: B.
Speaker Change: Our next solely by their knowledge of the basis and be able to drive the business forward.
Speaker Change: They continue to take hold of the management of the entity.
Rick Prentiss: Right. Okay.
Rick Prentiss: And then, Brad, you mentioned Shining Down Copper, obviously a key initiative for a lot of telcos out there. It's a very costly product out there. How much The cost in advance of getting to the other side of that is, you know, is it a fast process to say, you know, by 26 or 27, we can be shutting down some copper and then see some margin improvement. I'm just trying to think of the timeframe to get the legacy copper behind you. Yeah, a difficult one to answer directly, Rick, in that it does vary a lot by markets.
Speaker Change: Alright, great, Okay and then.
Speaker Change: Brad you mentioned shutting down copper, obviously, a key initiative for a lot of telcos out there, it's very costly product out there.
Speaker Change: How much.
Speaker Change: Costs in advance of getting to the other side of that isn't it a fast process to say by 26 or 27 week can be shutting down some some copper and then see some margin improvement I'm just trying to think of the timeframe to get the legacy copper behind you.
Speaker Change: Yes, it's a difficult one to answer directly recognize it does vary a lot by markets. We will be for example by end of this year about a third of our copper exchanges shut down in Guyana.
Brad Martin: We will be, for example, by end of this year, about a third of our copper exchanges shut down in Guyana. Alaska, in our U.S. markets, a lot of those will depend upon bead outcomes. It will be one of the primary ways in which we will replace some of that copper infrastructure. We have a very large copper plant in Alaska. That will be the longest. But I think in generally, like most telecom companies, we are targeting this by 2030. We expect to see some progress there. And we'll continue to see where some of these infrastructure investment programs land.
Speaker Change: Alaska and our <unk>.
Speaker Change: U S markets a lot of those will depend upon bead outcomes will be one of the primary ways, which we will replace that some of that copper infrastructure.
Speaker Change: We have a very large copper plant, Alaska that will be the longest but I think in generally like most telecoms.
Speaker Change: Telecom companies, Yes, we are targeting this by.
Speaker Change: By 2030, we expect to make some to see some progress there.
Speaker Change: And we will continue to see where some of these infrastructure investment program planned.
Brad Martin: That will be a pretty important determinant. and it does feel like there's support in Washington. AT&T is obviously making a big regulatory push as well.
Speaker Change: That will be a pretty important determinant of that.
Speaker Change: Yes, it does feel like there's support in Washington, AT&T is obviously, making a big.
Speaker Change: That's their enrollees.
Operator: Okay, thanks guys. Yep, thank you. Thank you. I'm showing no further questions at this time.
Speaker Change: Regulatory question as well, okay. Thanks, guys.
Speaker Change: Thank you.
Speaker Change: Thank you I'm.
Brad Martin: I would now like to turn it back to Brad Martin for closing remarks. Well, thank you all for joining us today. We look forward to continuing our discussions with many of you in the coming months. Appreciate your time and support. Have a great day. This concludes today's conference. Thank you for participating. You may now disconnect.
Speaker Change: I'm showing no further questions at this time I would now like to turn it back to Brad Martin for closing remarks.
Yeah.
Speaker Change: Well. Thank you all for joining US today, we look forward to continuing our discussions with many of you in the coming months I. Appreciate your time and support of a great day.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].