- Uniti raised its full year guidance for its Fiber Infrastructure business
- Its Kinetic average revenue per user (ARPU) in Q2 was down 2.6% year over year
- A TD Cowen analyst said broadband ARPU pressures are a concern for the entire broadband industry
Uniti Group reported Q2 2026 revenues of $909.7 million and said it expects full-year revenue in the range of $3.63 billion - $3.68 billion.
Uniti Group, which merged with Windstream in August 2025, reports its earnings in three primary business segments: i) Kinetic, which is its consumer broadband business including fiber to the home (FTTH); ii) Fiber Infrastructure, which includes transport network services and wholesale fiber; and iii) Uniti Solutions that offers managed services and enterprise technology.
The company raised its guidance for its Fiber Infrastructure business, expecting revenues to be $1 billion for the full year 2026. “The increase from our prior guidance range reflects the strong hyperscale and AI activity we saw in the second quarter,” said Uniti’s CFO Paul Bullington.
CEO Kenneth Gunderman said that although Uniti is building some new greenfield routes for hyperscalers, close to 80% of its hyperscaler business is selling access to existing infrastructure. “Having a previously-built robust fiber network in Tier 2 and Tier 3 markets is presenting us an opportunity to capture meaningful share of the generational demand as evidenced by a record quarter of new bookings,” said Gunderman.
Kinetic broadband business
The company continues to expect Kinetic revenues of $2.15 billion for the full year.
During Q2, it expanded its Kinetic fiber network to pass an additional 141,000 homes, ending the quarter with approximately 2.1 million homes passed. And it added 38,000 net new fiber subscribers in Q2, ending the quarter with 603,000 total fiber subscribers.
The company now passes 46% of its Kinetic consumer footprint with fiber.
“Given the accelerated pace of our fiber build, we are increasing our incremental homes passed with fiber target by 25,000 and now expect to reach 2.33 million to 2.38 million homes passed with fiber by the end of this year,” said Bullington. “This would bring fiber coverage within the Kinetic footprint to over 50%, a significant milestone in our goal to reach 3.5 million homes by the end of 2029.”
Kinetic ARPU concerns
One negative note is that Kinetic average revenue per user (ARPU) was down 2.6% year over year, and the company expects Kinetic ARPU to also be down in the low single digits year-over-year in the third quarter. But management said ARPU should stabilize in the fourth quarter with an expected increase of low single digits year-over-year.
President of Kinetic John Harrobin said ARPU has been impacted by promotions that cable started and which telcos have matched. He said Uniti was not going to chase unprofitable growth, but it was not going to cede the market either. “We've got tiers of pricing and cohorts that we adjust based on our performance, the strength of that market and the competitors' pricing. And we adjust that to be rational yet maintain our growth,” said Harrobin.
TD Cowen analysts led by Gregory Williams said, “Broadband ARPU pressures have been a concern for the entire broadband industry as we consider cable's repricing, FWA and now Starlink.” He noted that it could be hard to turn around two quarters of lower ARPU and still come out ahead in Q4.
“Longer term, we favor Kinetic's superior fiber position, product and unique footprint as management guides 2-3% long-term ARPU growth, though we model closer to the 1.5% levels,” wrote Williams.
The industry has been watching Uniti ever since there were rumors earlier this year that T-Mobile might be interested in purchasing its Kinetic assets. But there was no news on that front in its Q2 earnings.
Bullington did say that Uniti recently completed its second asset-backed security (ABS) transaction at Kinetic that will help fund its fiber build for the next year and also allow the company to potentially pay down up to $500 million of secured debt through asset sale offers that are currently ongoing.
“While ABS will be an important part of our strategy to fund the strategic investments we are making in our business, it's not the only source of capital we have at our disposal,” said Bullington. “For example, as has been our practice at Uniti, we are constantly evaluating our portfolio of assets for optimization.” This could include assets that are underutilized or fallow, assets that are outside of our prioritized footprint or assets for which it can receive premium valuation multiples.
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