ATN International, Inc.

Thank you for standing by, and welcome to ATN International's fourth quarter and four-year 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Justin Benincasa, Chief Financial Officer. Please go ahead.

Thank you, Operator, and good morning, everyone. This morning, we'll be reviewing our fourth quarter and full year 2023 results and providing additional insights on 2024. I'm joined today by Brad Martin, ATN's Chief Executive Officer, and Carlos Dalioli, ATN's incoming chief financial officer, and Michael Pryor, ATN's executive chairman, who will be available for the Q&A portion of the call. As a reminder, we announced our 2023 fourth quarter and full year 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 forward-looking statements concerning our current expectations, objectives, and underlying assumptions regarding our future operating results. 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. For details on these measures and reconciliations to comparable gap measures and further information regarding the factors that may affect our future operating results, please refer to our earnings release on our website at atni.com for the 8-K filing provided to the SEC.

And now I'll turn the call over to Brad. Thank you, Justin. Good morning, everyone, and thank you for joining us. It's a pleasure to be here for my first earnings call as ATN CEO. I'll begin covering highlights from our Q4 and fiscal year 2023 performance and progress executing our strategy. Following that, Justin will review our financials in more detail and provide an update on our 2024 guidance. This is a significant time in ATN's journey. We've entered the third and final year of our strategic investment plan to expand the reach capability of our high-speed networks and to bring more high-speed data services to remote and underserved consumers and businesses. The investments we are making position ATN to continue delivering high-quality, reliable services to our customers while providing a solid foundation for growing high-speed data subscribers and recurring revenues, expanding free cash flows, and delivering sustainable value creation for our stakeholders in the years ahead. As a result, ATN today is a stronger, more resilient company. We concluded a solid 2023 with a strong fourth quarter executing on our first to fiber and glass and steel investment strategy our continued conversion of customers to our high speed networks and focus on margin improvement contributed to subscriber growth higher revenue and margin expansion in fact both the quarter and the year we achieved single digit revenue growth and double digit expansion of adjusted EBITDA Justin will expand more on our financial results shortly But first, I'd like to start with four key points that frame our 2023 performance and the opportunities ahead for ATM. First, in 2023, we executed several important strategic milestones that are key to our success going forward. We advanced our FIRSA fiber and glass and steel investment strategy by adding fiber-rich digital infrastructure in the markets we serve. In May, we announced our long-term agreement with Verizon We have made strong progress towards our multi-year effort to transition our large carrier customers from legacy wholesale roaming services to carrier managed services that provide ATN with greater revenue stability. We completed the integration of SacredWinds, a core addition to our operations, and expanded our business and retail broadband operations domestically. In 2023, we also completed initiatives to right-size operations to better support the business into the future. These actions are now complete in the US and essentially completed internationally. All in all, we have enhanced our capabilities to better serve our customers and provide high quality, reliable products and services for the coming years. As a result of these combined efforts, ATN is operating from a strong and scalable foundation as we enter 2024. Second, our first of fiber and glass and steel infrastructure investments are yielding results across key operational metrics. Expanding high-speed network reaching capabilities provides a solid foundation for delivering strong recurring revenues, durable free cash flow, and shareholder value over the long term. Since launching our strategy at the start of 2022, we've increased high-speed broadband subscribers by 39%, nearly doubled broadband homes passed by high-speed data services, and expanded our fiber network reach by nearly 50%. Third, Our performance validates ATN's strong market position. As we have said before, we play directly into what is unquestionably one of the world's most durable secular growth drivers, the need to be connected anytime and everywhere. Our network's reliability, consistency, and efficiency has improved customer satisfaction as exemplified by strong subscriber growth and low churn. Our deeply embedded relationships with local communities, customers, enterprises, governments, and carriers continue to position ATN with an essential competitive advantage. And fourth, as we look to 2024 and beyond, we're committed to managing our balance sheet to maximize cash flow expansion and to realize the full benefits of our investments in the years ahead. While we plan to continue to invest in our network expansion this year, we will move down the other side of our three-year investment bell curve. As we dial back internally funded capital spending, we continue to leverage our upgraded network footprint and available grant funding to augment network expansions and continue to grow our subscriber base and recurring revenue. Additionally, we will continue to advance margin improvement initiatives to manage run rate operating costs. All in all, these actions position ATN to reap the full benefits of our network investment in the years ahead, including accelerated cash flow generation and subscriber revenue growth at higher incremental margins. Let's turn to operational wins. Providing high-speed connectivity to more customers in as many remote and underserved regions as possible is core to our mission and strategy. In Q4, we continue to make great progress on this front in both the U.S. and international markets. We exited 2023 with 20% more high-speed broadband subscribers and 33% more broadband home paths by high-speed data services compared to the prior year. We also have had great success scaling our fiber footprint. Fiber has many advantages. It is more energy efficient, requires less maintenance, and provides superior customer experience. As we replace and decommission legacy copper networks with fiber networks, we are positioning ATN to deliver higher margin revenue over time. We exited 2023 with 11,650 fiber route miles, an 11% year-over-year increase. and increased our fiber homes past footprint by 32%. Now taking a closer look at operational highlights by segment. Starting with our international segment, which represents about half of ATN's revenue and includes operations in Bermuda and the Caribbean, where we operate in fast-growing markets like Cayman Islands and Guyana. Across this segment, we continue to see rapid uptake of high-speed broadband with high-speed data subscriber growth of 20% year-over-year. Additionally, we have seen strong mobile subscriber growth, which grew 8% in 2023, behind investments in network core upgrades, densification, and 5G rollouts. We remain optimistic about the growth in free cash flow expansion opportunities across our international markets as we continue to benefit from networking and operating investments, traffic market tailwinds, and our unique value propositions. Our U.S. segment, which serves rural communities in the West and Southwest, as well as urban and rural areas of Alaska, accounts for the other half of ATN's revenue. In Q4, we achieved several key operational milestones in the U.S. as we advanced our domestic strategy to increase broadband homes passed by high-speed data and pivot away from our legacy wireless wholesale roaming business by meeting our carrier customers' evolving business We expanded our middle and last mile fiber networks and advanced the capacity and reach of our next generation fixed wireless network, enabling 7% year-over-year growth on recurring business data revenue. In the U.S., we continue to pursue grant funding to augment our fiber and fixed wireless high-speed network expansion in rural areas, including parts of Alaska, Arizona, Nevada, and New Mexico. In Q4, we were recipients of nearly $4 million in federal grants bringing total awarded grants to us and our partners to $91.2 million in 2023. Also in Q4, we renewed our agreement with the Alternative Connect America Model Program, or ACAM, locking in the continuation of the subsidy funding to serve locations in New Mexico in the amount of $118 million over the next 15 years. As it relates to grants and external funding, I want to clarify a few key points. One of our core competencies at ATN is our deep understanding of the mechanics of grants and third-party funding. We have a long track record of using discretion to ensure the grants we participate in are economically viable. Second, the network builds funded by these and future grants are expected to extend over the next several years. As a result, these funds will support our continued network expansion and customer and revenue growth, even as the pace of our self-funded capital decreases as planned. And third, ATN is well positioned to compete for the $4.2 billion of B telecom infrastructure funding allocated to the six states that we operate in. We're actively working in jurisdictions on opportunities that align with our business strategy. In conclusion, our strategy to expand high-speed network reach capabilities while managing costs through margin improvement initiatives positions ATN to reap the benefits of our investment for years to come. Looking ahead to 2024, it's all about continued execution of our plan. Our priorities remain to continue growing high-speed data network subscriber base and expanding our fiber footprint through targeted internal funded investments, albeit at a slower pace as we come down the backside of our three-year investment bell curve, to pursue economically viable grants to augment these internal investments, to advance margin improvement initiatives, and to manage our balance sheet to maximize cash flow and increase shareholder value. And with that, I'll hand the call back to you, Justin.