Uniti Group Inc.

Good morning and welcome to today's conference call to discuss Unity's second quarter 2026 earnings results. My name is Jonathan and I will be your operator for today. Today's call is be recorded and a webcast will be available on the company's investor relations website, investor.unity.com, beginning today and will remain available for 365 days. At this time, all participants are in a listen-only mode. Participants on the call will have the opportunity to ask questions following the company's prepared comments. It is now my pleasure to introduce Bill DiTullio, Unity's Senior Vice President of Investor Relations and Treasury. Please begin.

Thanks, Jonathan. Good morning, everyone, and thank you for joining today's conference call to discuss Unity's second quarter 2026 results. Speaking on the call today will be Kenny Gunderman, our CEO, and Paul Bullington, Unity's CFO. John Harrobin, President of Kinetic, will also be joining us this morning during Q&A. Before we get started, I would like to quickly cover our Safe Harbor Statement. Please note that today's remarks may contain forward-looking statements. These statements include, but are not limited to, statements regarding Unity's fiber build strategy, the business's growth potential, our 2026 outlook, and other statements that are not historical facts. Numerous factors could cause actual results to differ materially from those described in the forward-looking statement. For more information on those factors, please see the section titled Safe Harbor Statement in the accompanying presentation in the Risk Factors section in our filings with the United States Securities and Exchange Commission. With that, I would now like to turn the call over to Kenny.

Thank you, Bill. Good morning, everyone, and thank you for joining. Unity posted another terrific quarter of results as we continue to execute well on our strategy as the premier insurgent fiber provider. were consistently growing wholesale, enterprise, and consumer fiber revenue at 10% to 20% with an insurgent share-taker mentality. Our strategy of being first with fiber to metro and wholesale markets, along with a mission-critical and future-proof technology, positions us for many years of predictable execution and value creation for our shareholders. Demand for fiber is continuing to accelerate, and hyperscalers and neoclouds are leading the way. We posted a record quarter of new bookings at Fiber Infrastructure, exceeding our previous record by almost 30%. Demand was strong across virtually all categories, reinforcing the benefit of our robust, diversified customer base, especially at Unity Wholesale. The use of agentic AI is now upon us and growing. As has proven typical with AI adoption, both the timeline and TAM appear ahead of our prior expectations. Near term agentic AI use cases with measurable ROIs such as customer service agents, cybersecurity threat hunting and mitigation, and automation of corporate functions are only a precursor to more bandwidth intensive functions like physical robotics, autonomous driving, personal AI agents, scientific research, and many others. Unity is building the infrastructure to enable this growth and benefit our shareholders. This growth started and continues with dark fiber networks in Tier 2 and 3 markets with fiber strand counts of 50 to 100 times previous levels and is now evolving to lit wave packages at the same 50 to 100 times prior levels. These wholesale investments by our hyperscaler neocloud customers are a precursor to enabling greater agentic AI usage by our enterprise and residential customers, and we've seen estimates of dramatic multiplier effects on broadband usage as a result. Distribution of inference to the edge requires low latency and high bandwidth connectivity, highlighting the significant benefit of our 5 million future-proofed connected endpoints at Unity, including fiber to the home, on-net buildings, and data centers, towers, and small cells. Fixed wireless, LEO, and even cable remain somewhat competitive today at the edge, but over time, as usage, reliability, and latency become more mission critical, customers large and small will demand fiber at the edge. presenting us an opportunity to win back share from these other technologies. In short, Unity is well positioned strategically. We have the right assets, plan, and team in place going forward. Now we have to execute. Our results indicate we're doing just that. Total fiber revenue grew 10% year over year and fiber revenue at fiber infrastructure grew 6%, right in line with our expectations and demonstrating the robust demand we're seeing. In addition to the record bookings of fiber infrastructure, we had the strongest quarter ever of net ads at Kinetic, and just as importantly, the number of new fiber homes constructed. As we've been foreshadowing for some time, we really hit our stride for the fiber building in the second quarter, and we fully expect that momentum to continue. Our footprint at Kinetic has substantial opportunities to build first, and there are increasingly fewer skilled footprints like ours in the country. We're moving in haste to take advantage of this benefit. To that end, as highlighted on slide five, our priorities have not changed for the full year. Building off the momentum in the kinetic build engine, we're now raising our expectations on new fiber homes constructed this year to 475,000 to 525,000. We also continue to lean into this generational opportunity of fiber infrastructure, which I'll comment further on in a moment. At Unity Solutions, we're seeing growing success in cross-selling products into our on-net fiber base at Unity Fiber and Kinetic. Today we estimate our managed services attachment rate to be only around 6% excluding voice, but we're growing that materially as during the quarter about 16% of new bookings came with a managed services product. We believe selling more products to on-net customers will not only lead to greater sales, but enhanced margins and more loyal customers. 2026 is an important inflection year for Unity and the terrific industry tailwinds we just discussed are fueling that pivot. We previously committed to some key milestones as highlighted on slide six and we're demonstrating progress towards our goals. Convergence offerings and new initiatives from Big Cable are having an expected impact on ARPU across the industry and we've seen some near-term pressure. However, we expect ARPU to stabilize industry-wide and at Kinetic, especially given the favorable competitive dynamics in our markets and the upsell opportunities that exist in our base. The current industry dynamics suggest it has never been more important to build fiber first or early, and that's exactly what we're doing now at an accelerated pace. Slide 7 shows that we're well on our way to 3.5 million homes passed with fiber and 1.25 million fiber subs, and we're closer to 90% of our revenue coming from our core business. We remain focused on operational excellence, customer obsession, and together with executing on our strategy of building fiber into unique locations, progress on our key KPIs will remain up and to the right. Driving lower churn is critically important to driving higher customer lifetime value, and we are very pleased with our plan and progress there, as highlighted on slide eight. Our fiber churn at Kinetic this quarter is the best second quarter churn we've ever seen, and we believe that with the various actions we've taken to date, plus future planned actions, we'll bring Kinetic fiber churn down to industry-leading levels. Managing churn effectively is a team effort, and we've actually made it a company-wide metric for our incentive compensation plan as a result. Turning to fiber infrastructure on slide nine, having a previously built robust fiber network in tier two and three markets is presenting us an opportunity to capture meaningful share of the generational demand as evidenced by a record quarter of new bookings. Importantly, over 50% of the new bookings this quarter were waves or lit capacity as opposed to dark fiber, reinforcing the pivot from the build cycle to more lease up and inference. As we've previously pointed out, we expect approximately $1.5 billion of revenue in the next few years as we build profitably to enable AI learning. However, the truly exciting opportunity for Unity is the approximately $500 million of recurring revenue that will sit on top of those new builds, and we're starting to realize that recurring revenue now. We've also said that we expect that broadband usage to come from a diversified base of customers and during the quarter, we demonstrated a healthy mix of demand across our key customer segments, including about 20% from neoclouds, 18% from superscalers, 10% from hyperscalers and 6% from fiber-the-home providers. A special thank you to Mike Friloux, Greg Ortyl and the terrific sales leaders at Unity Wholesale and our world-class network and service delivery teams under the leadership of Eric Daniels and Kathy De La Garza, following through for our customers. With that said, our funnel of opportunities is even more exciting, so we expect continued positive momentum. As a reminder, while quarterly bookings and wholesale will always be lumpy given the nature of the customer base, the general trend over the next few years should be up and to the right. As slide 10 illustrates, we're building our fiber network profitably and strategically. Although we're building some attractive new greenfield routes for hyperscalers. Close to 80% of our hyperscaler business actually includes selling all or at least partial existing infrastructure, leveraging heavily the previously built network. Make no mistake, this is a big advantage for Unity from a cost and time to deploy perspective as evidenced by our blended anchor lease up cash yields of 37%, the highest we've ever seen. Turning to slide 11, during the quarter, we sold more waves than ever, and as a result, waves were the single biggest product contributing to our record bookings. As a reminder, we're not enabling waves capability all across the country. We're focusing on routes that are unique to Unity that give us a competitive advantage. Our pre-existing routes are enhanced by the unique build cycle that we're currently undertaking for the hyperscalers as we strategically expand our connectivity among unique markets. Highlights in the quarter were a 20 terabit wave package connecting a neocloud from a data center in a tier two market back to a large metro and an 18 terabit wave package sold to a superscaler out of another major data center in a tier two market. To put this in perspective, that's 96 400 gig waves sold as lease up in one quarter to just two customers over fiber recently built into new data centers. and there's more to come as our current waste funnel represents approximately 1.3 petabytes of traffic and the vast majority of this funnel consists of relatively new customers. As we see it today, the demand appears staggering. With that, I'll turn the call to Paul.