Uniti Group (NASDAQ:UNIT) executives used the company’s fourth-quarter and full-year 2025 earnings call to frame 2025 as a “landmark year,” emphasizing the closing of its merger with Windstream and an accelerated push to expand fiber-to-the-home at Kinetic while pursuing large-scale wholesale fiber opportunities tied to hyperscalers and AI-related demand.
Management highlights merger integration and early operating momentum
Chief Executive Officer Kenny Gunderman said Uniti closed its “transformative merger with Windstream,” which he said created a scaled national wholesale fiber footprint and improved the company’s ability to compete for large fiber infrastructure deals. He also said the company had lowered its cost of capital through several asset-backed securities (ABS) transactions and had “reignited” fiber builds at both Kinetic and the Fiber Infrastructure business.
Kinetic fiber build ramps, with 2026 targets outlined
Chief Financial Officer Paul Bullington said Kinetic expanded its fiber network to pass an additional 80,000 homes in the fourth quarter—its highest level of new passings in more than three years—ending 2025 with about 1.9 million homes passed with fiber. Kinetic ended the quarter with 535,000 fiber subscribers after adding 28,000 net new fiber subscribers.
Bullington said Kinetic consumer fiber revenue rose 24% year-over-year in the quarter, and total Kinetic fiber subscribers increased 20% from the prior-year period. Kinetic’s fiber penetration was 29% in the fourth quarter, up 30 basis points sequentially and 150 basis points year-over-year, while fiber ARPU increased 5% year-over-year.
Looking ahead, management reiterated that 2026 will be a major investment year at Kinetic. Bullington said the company is targeting:
- 2.3 million to 2.35 million homes passed with fiber by the end of 2026
- 675,000 to 700,000 fiber subscribers by the end of 2026
- $635 million to $655 million of consumer fiber revenue in 2026 (roughly 25% to 30% higher than the prior year)
On build economics, Bullington said cost per passing is expected to be in the $900 to $1,000 range going forward, with a blended cost of $800 to $900 per passing over the life of the program.
During Q&A, Kinetic President John Harrobin said the company expects fiber passings to increase each quarter through 2026 and said he was confident the company is on track for 2.3 million homes passed by year-end. Harrobin also discussed ARPU strategy, saying he views 2% growth as the expectation for the coming year and 2% to 3% as a more durable level, driven by “inflationary price ups,” moving customers up the speed ladder, and selling value-added services. He noted the company introduced 2-gig service in late 2025 and said about 40% of the fiber base is on gig-plus speeds.
Fiber Infrastructure: hyperscaler build and “lumpy” accounting impacts
Management repeatedly emphasized demand from hyperscalers and AI-related connectivity needs. Gunderman described the wholesale fiber opportunity as “generational” and said the company is building inside or strategically expanding from its existing footprint rather than constructing “one-off networks.” He also said the company’s blended anchor lease-up cash yields reached 34%, which he called the highest the company has seen.
Bullington reported Fiber Infrastructure consolidated bookings MRR of about $1.7 million in the fourth quarter, tying the company’s highest level on record. On a pro forma basis, Fiber Infrastructure revenue grew 6% year-over-year in the fourth quarter, while Kinetic fiber-based revenue (including consumer, business, and wholesale) grew 16% year-over-year.
Gunderman said over the next three years the company expects to build about 6,000 new route miles of fiber and expects nearly $1 billion of cumulative non-recurring cash revenue and up to $25 million of recurring cash revenue by 2028. He also said Uniti expects additional non-recurring cash revenue of about $500 million after 2030 and expects a total return on capital of 2x to 4x.
Executives spent part of the call explaining how some large hyperscaler deals will be recognized under GAAP. Bullington said certain dark fiber hyperscaler IRU arrangements are expected to be accounted for as sales-type leases, meaning the present value of lease payments is recognized as a one-time amount of revenue and EBITDA when the fiber route is delivered. He warned that revenue from these deals will be “lumpy” in 2026, with a significant portion expected to be recognized in the first quarter and most of the remainder later in the year, “most likely the fourth quarter.”
In Q&A, Bullington acknowledged some one-time hyperscaler revenue in the fourth quarter of 2025 and said comparisons could be more difficult as one-time items move between periods. Gunderman added that the company is not changing accounting policies, but rather applying GAAP based on deal structure, and argued that showing revenue up front for sales-type leases provides better visibility into underlying economics than amortizing everything into monthly recurring revenue metrics.
2026 outlook, balance sheet actions, and non-core asset monetization
Bullington provided a full-year 2026 outlook at the segment and consolidated levels. At the midpoint, the company expects:
- Kinetic: $2.15 billion of revenue and $905 million of contribution margin; approximately $1.2 billion of net CapEx
- Fiber Infrastructure: $975 million of revenue and $560 million of contribution margin; $140 million of net CapEx (about 14% capital intensity)
- Uniti Solutions: $700 million of revenue and $310 million of contribution margin; management reiterated the segment is not core but generates “meaningful, predictable cash flow,” while revenue and EBITDA are expected to decline at a mid-teens pace year-over-year for the next few years
Consolidated results at the midpoint of guidance call for revenue of about $3.63 billion, adjusted EBITDA of about $1.45 billion, and consolidated net CapEx of about $1.4 billion.
On capital structure, Bullington said blended yields on the company’s debt have improved by 560 basis points over three years—from around 12.5% in February 2023 to about 6.9% currently. He cited the company’s inaugural ABS financing at Kinetic and said a January $1 billion add-on to its 8 5/8% unsecured notes allowed Uniti to retire a $500 million term loan with similarly priced unsecured debt. Bullington said the company intends to use most of the remaining proceeds to “opportunistically reduce other debt in the near term,” and expects ABS to become a growing part of the capital structure while maintaining a mix of ABS and non-ABS debt.
Bullington also said the company sees $500 million to $1 billion of non-core assets that could potentially be monetized over the next 12 to 36 months, including excess fiber, non-core and non-clustered assets, select non-clustered Kinetic and non-Southeast Fiber Infrastructure markets, as well as spectrum and certain real estate assets. He stressed that any divestitures would be opportunistic and that Uniti is not running a formal sale process.
Separately, Gunderman addressed questions about EchoStar’s public force majeure stance affecting infrastructure providers, saying Uniti is in dialogue with the company but views EchoStar’s position as inappropriate. Gunderman said Uniti’s revenue exposure to DISH is under 1% and that guidance assumes no recurring revenue from DISH in 2026.
About Uniti Group (NASDAQ:UNIT)
Uniti Group Inc is a real estate investment trust that owns, operates and acquires communications infrastructure assets across the United States. Established in September 2015 through a spin-off from Windstream Holdings, Uniti Group focuses on leasing fiber, small cell networks, cell towers and related infrastructure to service providers, wireless carriers and other enterprises requiring high-capacity connectivity. The company’s assets are designed to support the growing data demands of residential, business and governmental customers, with an emphasis on long-term contractual lease arrangements.
Uniti’s portfolio encompasses an extensive fiber network that spans metropolitan and rural markets, as well as a portfolio of wireless towers and small cell nodes that facilitate mobile network densification and help carriers deploy 5G services.
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