Array Q3 2026 Earnings: Site Rental Revenue Rises as EPS Falls

Array Digital Infrastructure (NYSE: AD) reported Q3 2026 operating revenue from continuing operations of $53.9 million, up 14% from $47.1 million a year earlier, while diluted EPS from continuing operations fell to $0.81 from $1.25. Site rental revenue remained the growth engine and adjusted OIBDA improved, but lower equity earnings, investment income and short-term imputed spectrum lease income reduced continuing-operations profit.

Core Financial Results

Revenue growth was led by site rental revenue, which rose 14% to $52.5 million, while services revenue increased 9% to $1.4 million. Because Array sold its wireless operations in August 2025, continuing operations provide the clearest comparison of the remaining tower-focused business.

The operating loss narrowed substantially, partly because the prior-year quarter included a $47.7 million license impairment. However, total other income fell 58%, and a smaller income tax benefit contributed to the 36% decline in continuing-operations net income attributable to shareholders.

Tower Business Performance

Site rental generated approximately 97% of quarterly operating revenue and accounted for most of the overall increase. Cost of operations rose 11%, slower than revenue, while selling, general and administrative expense declined 11% to $18.2 million.

Array ended the quarter with 4,455 towers, compared with 4,449 a year earlier. Colocations increased sequentially to 4,372 from 4,362 in Q2 and 4,290 in Q1, marking consecutive quarters of growth. The tenancy rate remained at 0.98 from Q2 and was above the normalized, DISH-excluded rate of 0.94 for Q3 2025.

The reported year-over-year colocation count is not directly comparable because Array began excluding DISH Wireless from this measure as of March 31, 2026. The sequential data and normalized tenancy rate therefore provide a clearer view of recent tower leasing trends.

Tower Operating Gains Did Not Offset Lower Non-Operating Income

Array’s underlying tower operations improved, as shown by higher revenue, lower SG&A expense and adjusted OIBDA rising to $18.3 million. Adjusted OIBDA excludes equity earnings and interest and dividend income, making it more focused on operating activities than adjusted EBITDA.

The broader earnings picture moved in the opposite direction. Equity in earnings of unconsolidated entities declined 41% to $41.0 million, interest and dividend income fell 50% to $4.4 million, and short-term imputed spectrum lease income dropped 75% to $7.7 million. Interest expense also increased 24% to $11.0 million.

As a result, income before taxes declined 16% despite the narrower operating loss. The income tax benefit was $30.1 million, compared with $62.7 million a year earlier, amplifying the decline in net income and EPS.

Nine-Month Cash Flow Reflects Spectrum Taxes and Capital Returns

The available cash flow figures cover the first nine months of 2026 rather than Q3 alone. Continuing operations used $188.2 million of operating cash, compared with generating $22.5 million in the prior-year period, while adjusted free cash flow was negative $162.0 million.

Cash income tax payments totaled $274.3 million, and Array said substantially all of those payments related to wireless spectrum license sales completed in 2026. Separately, the company received $2.19 billion from divestitures and paid $1.84 billion in dividends during the nine-month period.

Cash, cash equivalents and restricted cash increased by $120.2 million during the period to $233.6 million. Long-term debt, net, stood at $665.0 million on September 30, compared with $670.3 million at the end of 2025.

Approximately $30 million of additional 600 MHz and 700 MHz spectrum transactions remained pending. The transactions received regulatory approval on October 7 and are expected to close in 2026, subject to FCC finality and other customary conditions.

2026 Guidance

Array reaffirmed all of its full-year 2026 guidance ranges as of November 6, leaving its revenue, profitability and capital spending outlook unchanged.

The company did not provide GAAP net income guidance because it does not guide income taxes and said the potential tax impact could not be reasonably predicted.

Risks Investors Should Monitor

• Tenant concentration and leasing demand: Array depends on a limited number of tenants for a substantial share of revenue. Continued colocation growth is important to improving tower utilization and operating earnings.
• Volatility outside the tower business: Lower equity earnings and spectrum-related income were enough to offset operating improvement in Q3. These items can continue to create differences between tower performance, adjusted EBITDA and GAAP earnings.
• Pending spectrum transactions: The remaining transactions represent approximately $30 million but still require FCC finality and satisfaction of customary closing conditions.
• Cash generation and financing costs: Nine-month continuing-operations cash flow and adjusted free cash flow were negative, while quarterly interest expense increased 24%. The timing of tax payments, asset-sale proceeds and capital returns remains important to liquidity.

Summary

Array’s Q3 2026 results showed progress in its tower operations, with double-digit site rental revenue growth, sequential colocation gains and higher adjusted OIBDA. Those improvements did not translate into higher EPS because equity earnings, investment income, spectrum-related income and the tax benefit all declined. With full-year guidance unchanged, the main items to monitor are tower leasing momentum, cash flow following spectrum-related tax payments and completion of the remaining spectrum sales.