ATN International Inc.

11/06/2026 | Press release | Distributed by Public on 11/06/2026 13:11

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and Results of Operations (this "MD&A") is intended to help the reader understand the Company, our operations and our present business environment. This MD&A is provided as a supplement to - and should be read in conjunction with - our MD&A for fiscal year 2025, which can be found in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.
In addition, the following discussion and analysis of financial condition and results of operations are based upon our Consolidated Financial Statements and should be read in conjunction with these statements and notes thereto.
Overview
We are a leading provider of digital infrastructure and communications services with a strategic focus on rural and remote markets in the US, and internationally, including Bermuda and the Caribbean region.
We have developed significant operational capabilities and resources that enhance the performance of our local market operations. Our operating subsidiaries benefit from this shared expertise, which allows them to deliver improved service quality and achieve greater economies of scale than would typically be possible in the smaller markets we serve. We provide centralized management, technical, financial, regulatory, and marketing support to these operating subsidiaries and typically receive a management fee based on a percentage of their revenues. The intercompany fees are eliminated in our consolidated financial results.
We use the cash generated from our operations to repay debt and increase liquidity, reinvest our network and service operations, fund capital expenditures, return value to stockholders through dividends or share repurchases, and to pursue strategic transactions. We continuously evaluate both domestic and international opportunities that align with our long-term goal of generating sustained excess operating cash flows.
For additional information regarding our reportable segments and geographic distribution of revenues and assets, please refer to Notes 1 and 13 of the Consolidated Financial Statements included in this Report.
As of September 30, 2026, we offered the following services to our customers:
•Fixed Services. We provide fixed data and voice telecommunications services to business and consumer customers, including high-speed broadband and enterprise data solutions. In select markets, fixed services also include video offerings and revenue derived from support under certain government programs.
•Carrier Services. We offer infrastructure services to other telecommunications providers, including the leasing of critical network infrastructure such as transport facilities, wholesale roaming, site maintenance and international long-distance services.
•Mobility Services. We offer mobile communications services over our wireless networks, including voice, messaging and data services along with related equipment, such as handsets, to both business and consumer customers.
•Managed Services. We deliver information technology solutions, including network management, application support and infrastructure services to complement our telecommunications services in our existing markets for the purpose of supporting both enterprise and residential users.
Through September 30, 2026, we identified two operating segments to manage and review our operations, as well as to support investor presentations of our results. These operating segments are as follows:
•International Telecom. In our international markets, we offer fixed, carrier, mobility and managed services to customers in Bermuda, the Cayman Islands, Guyana and the US Virgin Islands.
•US Telecom. In the US, we offer fixed, carrier, and managed services to customers in Alaska and the western US.
The following chart summarizes the operating activities of our principal subsidiaries, the segments in which we reported our revenue and the markets we served as of and for the three months ended September 30, 2026:
International Telecom US Telecom
Services Markets Tradenames (1) Markets Tradenames
Fixed Services Bermuda, Cayman Islands, Guyana, US Virgin Islands One Communications, Logic, Brava US Alaska Communications, Commnet, Choice Wireless, Sacred Wind Communications, Ethos Broadband, Deploycom
Carrier Services Bermuda, Guyana, US Virgin Islands, Cayman Islands One Communications, Essextel, Logic, Brava US Alaska Communications, Commnet, Sacred Wind Communications
Mobility Services Bermuda, Guyana, US Virgin Islands One Communications, Brava N/A N/A
Managed Services Bermuda, Cayman Islands, US Virgin Islands, Guyana One Communications, Logic, Brava US Alaska Communications, Commnet
(1)During 2025, we unified branding across our networks, and we now sell Fixed and Mobility Services under the "One Communications" brand in Bermuda, Guyana and the US Virgin Islands. We refer to our business in Guyana as "OneGY," our business in Bermuda as "OneBM," and our business in the US Virgin Islands as "OneVI" throughout this Report.
Tower Portfolio Transaction
As previously disclosed, on February 11, 2026, through certain Commnet subsidiaries, we entered into a Purchase and Sale Agreement (the "Transaction Agreement") with EIP Holdings IV, LLC, an affiliate of Everest Infrastructure Partners, Inc. ("Everest"), to sell approximately 214 tower portfolio sites (representing the substantial majority of our Commnet tower portfolio and operations, the "Tower Portfolio") to Everest (the "Tower Portfolio Transaction") for up to $297 million in cash consideration, subject to certain adjustments and prorations (the "Aggregate Consideration").
On June 2, 2026 (the "Initial Closing Date"), we completed the initial closing of the Tower Portfolio Transaction (the "Initial Closing"), and we currently anticipate that we will complete the Tower Portfolio Transaction in one or more Subsequent Closings (as defined below) on or before June 2027. The Transaction Agreement sets forth certain conditions that must be satisfied prior to the conveyance of tower sites at a closing. In connection with the Initial Closing, we and Everest entered into an amendment to the Transaction Agreement to waive certain conditions to the Initial Closing and restate (i) the schedule of tower sites that were conveyed to Everest on the Initial Closing Date (the "Assigned Sites"), (ii) the list of tower sites that will be managed by Everest but still subject to certain managed site conditions prior to conveyance (the "Managed Sites"), and (iii) the list of tower sites that are still subject to certain managed site conditions and consideration has not been paid to date (the "Deferred Sites"). Everest will manage the Managed Sites until the conditions to their conveyance are satisfied, and such Managed Sites are transferred to Everest at one or more subsequent closings (each, a "Subsequent Closing"). At any Subsequent Closing at which one or more Deferred Sites are transferred, Everest will pay a portion of the Aggregate Consideration that is attributable to each Deferred Site. At the Initial Closing, we and Everest entered into, among other ancillary agreements, (i) the management agreement for the Managed Sites, (ii) master lease agreements, pursuant to which the Sale Site Subsidiary (as defined in the Transaction Agreement) will lease to the applicable Commnet Party the requisite ground, tower, or other space of the Assigned Sites (the "Leaseback") for our continued use, and (iii) a preferred backhaul agreement whereby Commnet and/or one or more of our affiliates will become the preferred backhaul provider for Everest with respect to the Assigned Sites.
At the Initial Closing, Everest paid us $267.7 million in aggregate cash consideration (the "Initial Closing Cash Consideration"), of which $153.4 million is attributable to the Assigned Sites and $114.3 million is attributable to the Managed Sites. Of the Initial Closing Cash Consideration, $255.7 million was recorded as sale consideration and $12.0 million of such amount was deferred (the "Deferred Amount") in advanced payments and deposits on our balance sheet as
it is subject to our completion of certain conditions related to the Managed Sites (the "Managed Sites Conditions"). During the three months ended September 30, 2026, we satisfied certain Managed Sites Conditions and recognized $0.8 million of the Deferred Amount, as sale consideration. We can receive up to an additional $29.6 million of the Aggregate Consideration at Subsequent Closings for the Deferred Sites when and if closing conditions are satisfied or otherwise waived.
Universal Service Fund and Other Domestic Funding Programs
In general, all telecommunications providers are obligated to contribute to the Universal Service Fund ("USF"), which is used to promote the availability of qualifying telecommunications and broadband service to low-income households, households located in rural and high-cost areas, and to schools, libraries, and rural health care providers. We contribute to the USF and also receive various forms of USF support. We are subject to audit by the Universal Service Administrative Company with respect to our federal contributions and our receipts of universal service funding. To our knowledge, as of the date of this Report, we were in compliance with, in all material respects, applicable federal and state USF assessment and support requirements.
USF High-Cost Support. The Federal Communications Commission's ("FCC") high-cost USF (or alternatives to former high-cost USF) mechanisms promote the deployment and operation of voice and broadband networks in areas where high costs would otherwise undermine the availability of service to consumers, including in rural, insular, and remote areas. High-cost support mechanisms generally include explicit conditions to deploy broadband to new locations and provide service meeting specified standards. We receive several forms of high-cost support, including but not limited to, as follows:
•As part of the Alaska Connect Fund ("ACF"), we receive $25.6 million per year and expect to continue receiving such annual funding until December 31, 2028. Beginning in 2029 and continuing through 2034, the amount of ACF support we receive will be determined by the FCC staff taking into consideration broadband deployment funded through the Broadband Equity Access and Deployment Program;
•As part of the Enhanced Alternative Connect America Model ("E-ACAM") funding available to our operations in the western US, we expect to receive $9.0 million annually through 2029, after which the funding will gradually increase to $13.0 million annually in 2038. This funding is subject to a requirement to deploy voice and broadband service at speeds of 100/20 Mbps to all required locations by the end of calendar year 2028;
•We expect to receive approximately $8.0 million per year in CAF II support in the rural southwest US until July 2028;
•We received approximately $5.5 million annually in the US Virgin Islands through December 31, 2025; and
•We receive state USF support in Alaska of approximately $2.5 million annually.
As of September 30, 2026, we were in compliance in all material respects with requirements associated with such funding. If we fail to meet these obligations or require substantial additional capital expenditures to meet the obligations in a timely manner, our revenue, results of operations and liquidity may be materially adversely impacted.
Construction Grants
We have also been awarded construction grants to build network connectivity for eligible communities. The funding of these grants, used to reimburse us for our construction costs, is generally distributed after we incur reimbursable costs. Once these projects are constructed, we are obligated to provide service to the participants. We expect to meet all requirements associated with these grants. As of September 30, 2026, we were awarded $98.6 million of construction grants that are pending completion.
During the nine months ended September 30, 2026, we disbursed capital expenditures of $15.0 million under these programs and received reimbursement of $10.8 million. These cash flows are classified as investing activities in our statement of cash flows.
In addition, we partner with tribal governments to obtain grants under various government grant programs including, but not limited to, the Tribal Broadband Connectivity Program ("TBCP") and the Rural Development Broadband ReConnect Program ("ReConnect"). These programs are administered by US government agencies to deploy broadband connectivity in certain underserved areas. We were identified as a sub recipient of grants under these programs totaling $114.9 million as of September 30, 2026. Through September 30, 2026, we received $43.9 million of funding under these programs and incurred $58.6 million on construction obligations. These amounts are recorded as operating cash flows in the Company's statement of cash flows.
Replace and Remove Program
In July 2022, we were approved to participate in the FCC's Secure and Trusted Communications Network Reimbursement Program (the "Replace and Remove Program"), designed to reimburse providers of advanced communications services for reasonable costs incurred in the required removal, replacement, and disposal of communications equipment and services in their networks that has been deemed to pose a national security risk. Pursuant to the Replace and Remove Program, our eligible subsidiaries were initially allocated up to approximately $207 million to replace, remove and securely destroy such communications equipment and services in our networks in the western US and in the US Virgin Islands; however, in December 2024, this program was fully funded for an increased allocation to the Company of an aggregate amount of approximately $517 million. The Replace and Remove Program requires each of our participating subsidiaries to complete the project no later than a specified deadline, which was recently extended through early May 2027.
As of September 30, 2026, we had incurred total expenditures of $244.8 million related to this project, of which $20.1 million were incurred in 2026. Of these total expenditures, $201.3 million was classified as capital.
As of September 30, 2026, $13.2 million of capital expenditures was accrued and unpaid under the Replace and Remove Program. During the nine months ended September 30, 2026, we received $17.9 million of reimbursement under the program, of which $1.5 million was classified as operating cash inflows and $16.4 million was classified as investing cash inflows in our statement of cash flows. During the nine months ended September 30, 2026, we determined that reimbursement was not probable for $9.0 million of capital expenditures incurred under the Replace and Remove Program. As a result, we transferred $9.0 million to fixed assets. Except for this $9.0 million, the Company expects to be reimbursed, within the next twelve months, for all amounts spent.
Selected Segment Financial Information
Through September 30, 2026, the Company had the following two reportable and operating segments: (i) International Telecom and (ii) US Telecom.
Operating income is the segment measure of profit or loss reported to the chief operating decision maker for purposes of assessing the segments' performance and making capital allocation decisions. We believe operating income is a useful measure of our operating results as it provides relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends in a manner that is consistent with management's evaluation of business performance. Our chief operating decision maker is our Chief Executive Officer.
The following represents selected segment information for the three months ended September 30, 2026 and 2025 (in thousands):
For the Three Months Ended September 30, 2026
International
Telecom 		US
Telecom 		Total
Revenue
Communication Services
Mobility - Business $ 5,437 $ - $ 5,437
Mobility - Consumer 22,045 - 22,045
Total Mobility 27,482 - 27,482
Fixed - Business 18,760 30,476 49,236
Fixed - Consumer 40,684 21,521 62,205
Total Fixed 59,444 51,997 111,441
Carrier Services 3,928 31,449 35,377
Other 4,024 134 4,158
Total Communication Services Revenue 94,878 83,580 178,458
Construction - 435 435
Other
Managed Services 2,061 2,283 4,344
Total other revenue 2,061 2,283 4,344
Total Revenue 96,939 86,298 183,237
Operating Expenses by segment
Cost of communication services and other 32,514 46,449 78,963
Cost of construction revenue - 433 433
Selling, general and administrative 28,129 20,668 48,797
Stock-based compensation 122 56 178
Transaction-related charges - 528 528
Restructuring and reorganization expenses (35) 438 403
Depreciation and amortization 15,827 15,303 31,130
Amortization of intangibles from acquisitions 192 254 446
Loss on disposition of assets, transfers and contingent consideration 430 34 464
Total Operating Expenses by segment 77,179 84,163 161,342
Adjusted Income from operations by segment 19,760 2,135 21,895
Reconciliation of Adjusted Income from operations by segment to Income before income taxes
Adjusted unallocated Corporate expenses 8,954
Other income (expenses)
Interest income 1,822
Interest expense (10,569)
Other income 754
Other expense (7,993)
Income before income taxes 4,948
Other segment disclosures:
International
Telecom 		US
Telecom 		Total
Net (income) loss attributable to non-controlling interests (2,486) 3,897 1,411
For the Three Months Ended September 30, 2025
International
Telecom 		US
Telecom 		Total
Revenue
Communication Services
Mobility - Business $ 5,172 $ 9 $ 5,181
Mobility - Consumer 21,524 - 21,524
Total Mobility 26,696 9 26,705
Fixed - Business 18,663 29,935 48,598
Fixed - Consumer 42,714 23,164 65,878
Total Fixed 61,377 53,099 114,476
Carrier Services 3,334 30,739 34,073
Other 2,358 140 2,498
Total Communication Services Revenue 93,765 83,987 177,752
Construction - 1,115 1,115
Other
Managed Services 1,378 2,920 4,298
Total Other Revenue 1,378 2,920 4,298
Total Revenue 95,143 88,022 183,165
Operating Expenses by segment
Cost of communication services and other 34,051 43,799 77,850
Cost of construction revenue - 1,086 1,086
Selling, general and administrative 27,830 21,982 49,812
Stock-based compensation 141 28 169
Restructuring and reorganization expenses 577 344 921
Depreciation and amortization 14,198 17,886 32,084
Amortization of intangibles from acquisitions 238 974 1,212
Loss on disposition of assets, transfers and contingent consideration 16 1,540 1,556
Total Operating Expenses by segment 77,051 87,639 164,690
Adjusted Income from operations by segment 18,092 383 18,475
Reconciliation of Adjusted Income from operations by segment to Loss before income taxes
Adjusted unallocated Corporate expenses 8,645
Other income (expenses)
Interest income 157
Interest expense (11,628)
Other income 522
Other expense (10,949)
Loss before income taxes (1,119)
Other segment disclosures:
International
Telecom 		US
Telecom 		Total
Net (income) loss attributable to non-controlling interests (2,824) 3,234 410
A comparison of our segment results for the three months ended September 30, 2026 and 2025 is as follows:
International Telecom. Revenues within our International Telecom segment increased $1.8 million, or 1.9%, to $96.9 million from $95.1 million for the three months ended September 30, 2026 and 2025, respectively, primarily due to a $1.6 million increase in revenues from ancillary services, a $0.8 million increase in Mobility Services revenues, a $0.7 million increase in managed service revenue, and a $0.6 million increase in carrier service revenue. These increases are the result of an increase in subscribers, rates we charge our subscribers and equipment revenue within certain markets in this segment. These increases were partially offset by a $1.9 million reduction in Fixed Services revenue primarily due to a decline in the FCC's High-Cost Support Program in the US Virgin Islands which was terminated on December 31, 2025.
Operating expenses within our International Telecom segment increased by $0.1 million to $77.2 million from $77.1 million for the three months ended September 30, 2026 and 2025, respectively. The change was primarily driven by an increase in depreciation and amortization expense of $1.6 million offset by $1.5 million decrease in the cost of communication services and other. The increase in depreciation expense was driven by assets being placed into service and the decrease in cost of communication services and other was the result of a reduction in regulatory fees in certain markets and, to a lesser extent, the impact of certain cost savings initiatives that were implemented in the current and previous periods.
As a result, our International Telecom segment's operating income increased by $1.7 million, or 9.4%, to $19.8 million from $18.1 million for the three months ended September 30, 2026 and 2025, respectively.
US Telecom. Revenue within our US Telecom segment decreased by $1.7 million, or 1.9%, to $86.3 million from $88.0 million for the three months ended September 30, 2026 and 2025, respectively, as a result of a $1.1 million decrease in Fixed Services revenue driven by variable government support revenue as well as decreases in revenues from legacy services, and additional revenue declines of $0.6 million primarily due to decreased construction revenue as a result of fewer sites being completed in 2026 as compared to 2025. Carrier services revenue declines from the Tower Portfolio Transaction were offset by growth in carrier customer contracts.
Operating expenses within our US Telecom segment decreased by $3.4 million, or 3.9%, to $84.2 million from $87.6 million for the three months ended September 30, 2026 and 2025, respectively. This decrease was driven by a $1.2 million net reduction in cost of communications services and other, selling, general and administrative expenses, and depreciation and amortization expenses from the Tower Portfolio Transaction and cost savings initiatives. The cost of services and other increased due to the Tower Portfolio Transaction, however, these increases were offset by decreases in depreciation and amortization expense. Additionally, loss on dispositions of assets, transfers and contingent consideration decreased by $1.5 million and amortization of intangibles from acquisitions decreased by $0.7 million.
As a result of the above, our US Telecom segment's operating income increased $1.7 million to $2.1 million from $0.4 million for the three months ended September 30, 2026 and 2025, respectively.
The following represents a year over year discussion and analysis of our results of operations for the three months ended September 30, 2026 and 2025 (in thousands):
Three Months Ended
September 30, 		Amount of
Increase
(Decrease) 		Percent
Increase
(Decrease)
2026 2025
REVENUE:
Communication services $ 178,458 $ 177,752 $ 706 0.4 %
Construction 435 1,115 (680) (61.0)
Other 4,344 4,298 46 1.1
Total revenue 183,237 183,165 72 -
OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated):
Cost of communications services and other 78,963 77,850 1,113 1.4
Cost of construction revenue 433 1,086 (653) (60.1)
Selling, general and administrative 53,868 54,293 (425) (0.8)
Stock-based compensation 1,752 1,966 (214) (10.9)
Transaction-related charges 528 444 84 18.9
Restructuring charges 2,488 1,990 498 25.0
Depreciation and amortization 31,354 32,938 (1,584) (4.8)
Amortization of intangibles from acquisitions 446 1,212 (766) (63.2)
(Gain) loss on disposition of assets, transfers and contingent consideration 464 1,556 (1,092) (70.2)
Total operating expenses 170,296 173,335 (3,039) (1.8)
Income from operations 12,941 9,830 3,111 31.6
OTHER INCOME (EXPENSE):
Interest income 1,822 157 1,665 1,060.5
Interest expense (10,569) (11,628) 1,059 (9.1)
Other expense 754 522 232 44.4
Other expense, net (7,993) (10,949) 2,956 (27.0)
INCOME (LOSS) BEFORE INCOME TAXES 4,948 (1,119) 6,067 (542.2)
Income tax expense (benefit) (12,282) (5,052) (7,230) 143.1
NET INCOME (LOSS) 17,230 3,933 13,297 338.1
Net (income) loss attributable to noncontrolling interests, net of tax: 1,411 410 1,001 244.1
NET INCOME (LOSS) ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS $ 18,641 $ 4,343 $ 14,298 329.2 %
Communications Services Revenue
Mobility Services Revenue. Our Mobility Services revenue consists of revenue generated within our International Telecom segment by providing business and retail mobile voice and data services over our wireless networks, as well as through the sale and repair services of related equipment, such as handsets and other accessories, to our subscribers.
Mobility Services revenue increased by $0.8 million, or 3.0%, to $27.5 million for the three months ended September 30, 2026 from $26.7 million for the three months ended September 30, 2025 as result of an increase in subscribers, rates we charge our subscribers and equipment revenue within certain markets in this segment.
Mobility Services revenue within our International Telecom may continue to increase as a result of our continued network upgrades, marketing efforts and conversion of our current subscriber base to higher margin postpaid plans. Such increases may, however, be negatively impacted by increased competition and regulatory changes.
Fixed Services Revenue. Fixed Services revenue is primarily generated by broadband, voice, and video service revenues provided to retail and business customers over our wireline networks. Fixed Services revenue within our US Telecom segment also includes awards from the CAF II program, the E-ACAM program, and the Alaska USF. Within our International Telecom segment, Fixed Services revenue included funding, through December 31, 2025, under the FCC's High-Cost Program in the US Virgin Islands.
Fixed Services revenue decreased by $3.1 million, or 2.7%, to $111.4 million from $114.5 million for the three months ended September 30, 2026 and 2025, respectively. This decrease primarily pertained to a decrease in Fixed Services revenue from consumer customers and consisted of the following:
•International Telecom. Within our International Telecom segment, Fixed Services revenue decreased by $2.0 million, or 3.3%, to $59.4 million from $61.4 million for the three months ended September 30, 2026 and 2025, respectively. This decrease was primarily a result of the FCC's High-Cost Support Program in the US Virgin Islands being terminated on December 31, 2025, as well as increased competition in certain markets.
•US Telecom. Fixed Services revenue within our US Telecom segment decreased by $1.1 million, or 2.1%, to $52.0 million from $53.1 million for the three months ended September 30, 2026 and 2025, respectively. This decrease was primarily the result of decreases in certain variable government support revenue and decreases in revenues from legacy services.
Fixed Service Revenue in our International Telecom segment may increase in future periods as demand increases for broadband and other data services from consumers, businesses and governments. However, such increases may be offset by declines from legacy product revenues and increased competition.
Within our US Telecom segment, we expect Fixed Services revenue to increase as a result of an increase in government grants and our deployment of fiber and fiber-fed broadband access to both consumers and businesses. However, such increases may be offset by declines from legacy product revenues and increased competition.
Carrier Services Revenue. Carrier Services revenue is generated by both our International Telecom and US Telecom segments. Within our International Telecom segment, Carrier Services revenue includes international long-distance services, roaming revenues generated by other carriers' customers roaming into our retail markets, transport services and access services provided to other telecommunications carriers. Within our US Telecom segment, Carrier Services revenue includes services provided under the Network Build and Maintenance Agreement with AT&T Mobility, LLC ("AT&T") that we subsequently amended in May 2026 (the "FirstNet Agreement") and Carrier Managed Services Master Agreement that we subsequently amended in May 2026 (the "Verizon CMS Agreement") with Cellco Partnership d/b/a Verizon Wireless ("Verizon"), wholesale roaming revenues, the provision of network switching services, lease revenue and other services provided to other carriers.
Carrier Services revenue increased by $1.3 million, or 3.8%, to $35.4 million from $34.1 million for the three months ended September 30, 2026 and 2025, respectively. The increase within our segments consisted of the following:
•International Telecom. Within our International Telecom segment, Carrier Services revenue increased by $0.6 million, or 18.2%, to $3.9 million from $3.3 million for the three months ended September 30, 2026 and 2025, respectively, primarily as a result of one-time carrier fees and an increase in roaming revenues in some of our international markets.
•US Telecom. Carrier Services revenue within our US Telecom segment increased by $0.8 million, or 2.6%, to $31.4 million from $30.7 million for the three months ended September 30, 2026 and 2025, respectively. This increase was primarily the result of rate increases from certain carrier customers offset by a reduction of cell site rental revenue as a result of the Tower Portfolio Transaction.
Within our International Telecom segment, we expect Carrier Services revenue to remain consistent.
Within our US Telecom segment, Carrier Services revenue may increase as we continue to expand our carrier service business, however, such increases may be offset by decreases from the Tower Portfolio Transaction.
Other Communications Services Revenue. Other Communications Services revenue includes project-related revenue generated within both our International and US Telecom segments and ancillary services that the operations within our International Telecom segment provided to its retail subscribers. Other Communications Services revenue increased $1.7 million, or 68.0%, to $4.2 million from $2.5 million for the three months ended September 30, 2026 and 2025, respectively, as a result of an increase in revenue from ancillary services in our International Telecom segment.
Other Communication Services revenue may increase in future periods as the demand for ancillary services increases.
Construction Revenue. Construction revenue represents revenue generated within our US Telecom segment for the construction of network cell sites related to the FirstNet Agreement. During the three months ended September 30, 2026 and 2025, Construction Revenue decreased to $0.4 million from $1.1 million, respectively, as a result of a decrease in the number of sites completed during 2026 as compared to 2025.
As of September 30, 2026, we had substantially completed the build of AT&T's network under the FirstNet Agreement and do not expect to record any significant construction revenue in future periods.
Other Revenue
Managed Services Revenue. Managed Services revenue is generated within both our International and US Telecom segments and includes network, application, infrastructure, and hosting services.
Managed Services revenue was $4.3 million for both the three months ended September 30, 2026 and 2025. Changes within Managed Services revenue within our segments consisted of the following:
•International Telecom. Managed Services revenue in our International Telecom segment increased $0.7 million, or 50.0%, to $2.1 million from $1.4 million for the three months ended September 30, 2026 and 2025, respectively. This increase was driven by the timing of certain customer agreements.
•US Telecom. Within our US Telecom segment, Managed Services revenue decreased $0.6 million, or 20.7%, to $2.3 million from $2.9 million for the three months ended September 30, 2026 and 2025 respectively. This decrease was driven by the timing of certain customer agreements.
Managed Services revenue may increase in both our US and International Telecom segments as a result of our efforts to sell certain Managed Services solutions to primarily business customers in all of our markets.
Operating Expenses
Cost of communication services and other. Cost of communication services and other are charges that we incur for voice and data transport circuits, internet capacity, video programming costs, access fees we pay to terminate our calls, telecommunication spectrum fees and direct costs associated within our managed services businesses. These costs also include expenses associated with developing, operating, upgrading and supporting our telecommunications networks, including the salaries and benefits paid to employees directly involved in the development and operation of those businesses, as well as credit loss allowances and the cost of handsets and customer resale equipment incurred by our retail businesses.
Cost of communication services and other increased by $1.1 million, or 1.4%, to $79.0 million from $77.9 million for the three months ended September 30, 2026 and 2025, respectively. The net increase in cost of communication services and other, within our segments, consisted of the following:
•International Telecom. Within our International Telecom segment, cost of communication services and other decreased by $1.6 million, or 4.7%, to $32.5 million from $34.1 million, for the three months ended September 30, 2026 and 2025, respectively. This decrease was the result of a reduction in regulatory fees in
certain markets and to a lesser extent the impact of cost savings initiatives that were implemented in the current and previous periods.
•US Telecom. Cost of communication services and other within our US Telecom segment increased by $2.6 million, or 5.9%, to $46.4 million from $43.8 million for the three months ended September 30, 2026 and 2025, respectively. Such increase was the result of the timing of certain costs to fulfill customer contracts and the impact of the Tower Portfolio Transaction, which resulted in increased tower site expenses.
Cost of communication services in our International Telecom segment may decrease as a result of the ongoing cost reduction initiatives that commenced in previous periods, but such decrease may be partially offset by future costs necessary to support future revenue growth and inflationary pressure.
We expect that the cost of communication services, within our US Telecom segment, will increase as a result of costs necessary to support future revenue growth and inflationary pressure. However, the impact of our cost reduction initiatives that commenced in previous periods may partially offset those increases.
Cost of construction revenue. Cost of construction revenue includes the expenses incurred in connection with the construction of and the delivery to AT&T of cell sites in accordance with our FirstNet Agreement. During the three months ended September 30, 2026 and 2025, cost of construction revenue decreased to $0.4 million from $1.1 million, respectively, as a result of a decrease in the number of sites completed during 2026 as compared to 2025.
As of September 30, 2026, we had substantially completed the build of AT&T's network under the FirstNet Agreement and do not expect to record any significant cost of construction revenue in future periods.
Selling, general and administrative expenses. Selling, general and administrative expenses include salaries and benefits we pay to sales personnel, customer service expenses and the costs associated with the development and implementation of our promotional and marketing campaigns. Selling, general and administrative expenses also include salaries, benefits and related costs for general corporate functions including executive management, finance and administration, legal and regulatory, facilities, information technology and human resources as well as internal costs associated with our performance of due-diligence and integration related costs associated with acquisition activities.
Selling, general and administrative expenses decreased by $0.4 million, or 0.7%, to $53.9 million from $54.3 million for the three months ended September 30, 2026 and 2025, respectively. The decrease in selling, general and administrative expenses, within our segments, consisted of the following:
•International Telecom. Within our International Telecom segment, our selling, general and administrative expenses increased by $0.3 million, or 1.1%, to $28.1 million from $27.8 million for the three months ended September 30, 2026 and 2025, respectively, as a result of an increase in marketing and personnel costs in certain markets, partially offset by the impact of certain cost containment initiatives that were implemented in the current and previous periods.
•US Telecom. Selling, general and administrative expenses decreased within our US Telecom segment by $1.3 million, or 5.9%, to $20.7 million from $22.0 million, for the three months ended September 30, 2026 and 2025, respectively, as a result of the timing of certain expenses and certain cost containment initiatives that were implemented in the current and previous periods.
•Corporate Overhead. Selling, general and administrative expenses within our corporate overhead increased by $0.6 million, or 13.3%, to $5.1 million from $4.5 million, for the three months ended September 30, 2026 and 2025, respectively, as a result of the timing of certain professional fees and employee costs.
Selling, general and administrative expenses in all our segments may decrease as a result of the ongoing cost reduction initiatives that commenced in previous periods, but such decrease may be partially offset by future inflationary pressure and the timing of expenses.
Stock-based compensation. Stock-based compensation represents a non-cash expense related to the amortization of grants of equity awards to employees and directors.
Stock-based compensation decreased by $0.2 million to $1.8 million from $2.0 million for the three months ended September 30, 2026 and 2025, respectively, as a result of the impact of certain reductions in force during the three months ended September 30, 2026.
Transaction-related charges. Transaction-related charges include the external costs, such as legal, tax, accounting and consulting fees directly associated with acquisition and disposition-related activities and certain financing activities that are expensed as incurred. Transaction-related charges do not include employee salary and travel-related expenses incurred in connection with acquisitions or dispositions or any integration-related costs.
We incurred $0.5 million and $0.4 million of transaction-related charges during the three months ended September 30, 2026 and 2025, respectively. These costs were incurred in connection with the Tower Portfolio Transaction.
Restructuring and reorganization expenses. In our efforts to advance our cost management actions to drive higher operating efficiencies and margins, we incurred certain restructuring and reorganization expenses, primarily related to our organizational structure and business operating model reviews as well as employee severance, totaling $0.4 million and $2.1 million within our US Telecom segment and Corporate and Other segment, respectively, during the three months ended September 30, 2026.
We incurred restructuring and reorganization expenses of $0.6 million, $0.3 million and $1.1 million within our International Telecom segment, US Telecom segment and Corporate and Other segment, respectively, during the three months ended September 30, 2025.
Increases and decreases in restructuring and reorganization expenses within each segment were a result of the timing and magnitude of actions initiated by management to review our organizational structure and employee severance.
Depreciation and amortization expenses. Depreciation and amortization expenses represent the depreciation and amortization charges we record on our fixed assets.
Depreciation and amortization expenses decreased by $1.5 million, or 4.6%, to $31.4 million from $32.9 million for the three months ended September 30, 2026 and 2025, respectively. The decrease in depreciation and amortization expenses within our segments consisted primarily of the following:
•International Telecom. Depreciation and amortization expenses increased within our International Telecom segment by $1.6 million, or 11.3%, to $15.8 million from $14.2 million, for the three months ended September 30, 2026 and 2025, respectively. The increase was the result of the segment placing completed assets into service in recent periods.
•US Telecom. Depreciation and amortization expenses decreased within our US Telecom segment by $2.6 million, or 14.5%, to $15.3 million from $17.9 million, for the three months ended September 30, 2026 and 2025, respectively. The decrease was the result of the segment's reduction in capital expenditures, certain assets becoming fully depreciated in recent periods, and the conclusion of the recording of depreciation expense related to assets that were sold in connection with the Tower Portfolio Transaction.
•Corporate Overhead. Depreciation and amortization expenses decreased within our corporate overhead to $0.2 million from $0.9 million, for the three months ended September 30, 2026 and 2025, respectively, primarily as a result of assets becoming fully depreciated in recent periods.
We expect depreciation and amortization expenses to remain consistent in future periods.
Amortization of intangibles from acquisitions. Amortization of intangibles from acquisitions include the amortization of customer relationships and trade names related to our completed acquisitions.
Amortization of intangibles from acquisitions decreased by $0.8 million to $0.4 million from $1.2 million for the three months ended September 30, 2026 and 2025, respectively, as a result of certain assets being fully amortized in previous period.
We expect that amortization of intangibles from acquisitions will continue to decrease in future periods as such assets continue to amortize.
(Gain) loss on disposition of assets, transfers and contingent consideration. During the three months ended September 30, 2026, we recorded a net loss on the disposition of assets and transfers of $0.5 million primarily relating to the disposal of certain assets in our International Telecom segment.
During the three months ended September 30, 2025, we recorded a net loss on the disposition of assets of $1.6 million primarily in connection with the revaluation of contingent consideration relating to a prior year's acquisition within the US Telecom segment.
Interest income. Interest income represents interest earned on our cash, cash equivalents, restricted cash and short-term investment balances. Interest income was $1.8 million and $0.2 million for the three months ended September 30, 2026 and 2025, respectively. Such increase was the result of an increase in our cash and cash equivalents due to the proceeds received from the Tower Portfolio Transaction invested in higher yielding cash and cash equivalent investments.
Interest expense. We incur interest expense on the 2023 CoBank Credit Facility, the 2024 Alaska Credit Facilities, the FirstNet Receivables Credit Facility, the IDB Credit Facilities, the Sacred Wind Term Debt and the OneVI Debt (each as defined below). In addition, interest expense includes commitment fees, letter of credit fees and the amortization of debt issuance costs.
Interest expense decreased to $10.6 million from $11.6 million for the three months ended September 30, 2026 and 2025, respectively. We used a portion of the proceeds from the Tower Portfolio Transaction to reduce our outstanding debt balances, which in turn reduced our interest expense during the three months ended September 30, 2026.
Interest expense in future periods will fluctuate based on changes in our debt balances and external interest rates.
Other income (expense). For the three months ended September 30, 2026 and 2025, other income was $0.8 million and $0.5 million, respectively. During the three months ended September 30, 2026, we recorded a gain of $1.6 million related to the settlement of pension obligations, which was offset by expenses of $0.6 million primarily related to foreign currency transactions. During the three months ended September 30, 2025, we recorded a gain of $1.3 million from the settlement of an insurance claim, which was partially offset by losses on foreign currency transactions.
Income taxes. Our effective tax rates for the three months ended September 30, 2026 and 2025 were (248.2)% and 451.5%, respectively.
We recorded an income tax benefit of $12.3 million in relation to a pretax income of $4.9 million for the three months ended September 30, 2026. The effective tax rate for the three months ended September 30, 2026 was primarily impacted by the following items: (i) the mix of income generated among the jurisdictions in which we operate, (ii) the exclusion of losses in Alaska and the US Virgin Islands due to valuation allowance positions placed on certain deferred tax assets that are not expected to be realized based on the weight of positive and negative evidence, and (iii) discrete items including a $12.2 million benefit related to the deemed liquidation of a controlled foreign corporation, a $0.6 million expense for interest on prior years uncertain tax positions and a $0.2 million expense associated with stock option shortfalls.
We recorded an income tax benefit of $5.1 million in relation to a pretax loss of $1.1 million for the three months ended September 30, 2025. The effective tax rate for the three months ended September 30, 2025 was primarily impacted by the following items: (i) the mix of income generated among the jurisdictions in which we operate, (ii) net expense related to valuation allowances placed on certain deferred tax assets that are not expected to be realized based on the weight of positive and negative evidence, and (iii) a discrete item consisting of a $0.6 million expense for interest on prior years uncertain tax positions.
Our effective tax rate is based upon estimated income before provision for income taxes for the year, composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for potential tax consequences, benefits and/or resolutions of tax contingencies. Our consolidated tax rate will continue to be impacted by any transactional or one-time items in the future and the mix of income in any given year generated among the jurisdictions
in which we operate. While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from our accrued positions as a result of uncertain and complex application of tax law and regulations. Additionally, the recognition and measurement of certain tax benefits include estimates and judgments by management. Accordingly, we could record additional provisions or benefits for US federal, state, and foreign tax matters in future periods as new information becomes available.
Net (income) loss attributable to noncontrolling interests, net of tax. Net (income) loss attributable to noncontrolling interests, net of tax reflected an allocation of $1.4 million and $0.4 million of losses generated by our less than wholly owned subsidiaries for the three months ended September 30, 2026 and 2025, respectively. Changes in net (income) loss attributable to noncontrolling interests, net of tax, within our segments, consisted of the following:
•International Telecom. Within our International Telecom segment, net (income) loss attributable to noncontrolling interests, net of tax decreased by $0.3 million, or 10.7%, to an allocation of $2.5 million of income from an allocation of $2.8 million of income for the three months ended September 30, 2026 and 2025, respectively. The decrease was the result of decreased profitability at certain less than wholly owned subsidiaries.
•US Telecom. Within our US Telecom segment, net (income) loss attributable to noncontrolling interests, net of tax increased by $0.7 million to an allocation of $3.9 million of losses from an allocation of $3.2 million of losses for the three months ended September 30, 2026 and 2025. The increase was primarily the result decreased profitability at certain less than wholly owned subsidiaries.
Net income (loss) attributable to ATN International, Inc. stockholders. Net income (loss) attributable to ATN International, Inc. stockholders was income of $18.6 million for the three months ended September 30, 2026 as compared to $4.3 million for the three months ended September 30, 2025.
On a per diluted share basis, net income was $1.09 per diluted share for the three months ended September 30, 2026 as compared to a net income of $0.18 per diluted share for the three months ended September 30, 2025. Such per share amounts were negatively impacted by accrued preferred dividends of $1.7 million and $1.6 million for the three months ended September 30, 2026 and 2025, respectively.
The following represents selected segment information for the nine months ended September 30, 2026 and 2025 (in thousands):
For the Nine Months Ended September 30, 2026
International
Telecom 		US
Telecom 		Total
Revenue
Communication Services
Mobility - Business $ 15,774 $ - $ 15,774
Mobility - Consumer 65,205 - 65,205
Total Mobility 80,979 - 80,979
Fixed - Business 56,403 90,613 147,016
Fixed - Consumer 124,147 65,829 189,976
Total Fixed 180,550 156,442 336,992
Carrier Services 11,674 96,131 107,805
Other 10,839 442 11,281
Total Communication Services Revenue 284,042 253,015 537,057
Construction - 1,215 1,215
Other
Managed Services 5,150 6,538 11,688
Total Other Revenue 5,150 6,538 11,688
Total Revenue 289,192 260,768 549,960
Operating Expenses
Cost of communication services and other 99,116 135,723 234,839
Cost of construction revenue - 1,423 1,423
Selling, general and administrative 84,008 66,292 150,300
Stock-based compensation 375 84 459
Transaction-related charges - 8,663 8,663
Restructuring and reorganization expenses 974 1,209 2,183
Depreciation and amortization 43,391 48,004 91,395
Amortization of intangibles from acquisitions 673 763 1,436
Gain on disposition of assets, transfers and contingent consideration (243) (229,460) (229,703)
Total Operating Expenses 228,294 32,701 260,995
Adjusted Income from operations by segment 60,898 228,067 288,965
Reconciliation of Adjusted Income from operations by segment to Income before income taxes
Adjusted unallocated Corporate expenses 24,603
Other income (expenses)
Interest income 2,456
Interest expense (31,915)
Other expense (3,225)
Other expense (32,684)
Income before income taxes 231,678
Other segment disclosures:
International
Telecom 		US
Telecom 		Total
Net (income) loss attributable to non-controlling interests (8,236) (8,913) (17,149)
For the Nine Months Ended September 30, 2025
International
Telecom 		US
Telecom 		Total
Revenue
Communication Services
Mobility - Business $ 14,879 $ 64 $ 14,943
Mobility - Consumer 64,181 - 64,181
Total Mobility 79,060 64 79,124
Fixed - Business 55,572 88,027 143,599
Fixed - Consumer 128,919 68,083 197,002
Total Fixed 184,491 156,110 340,601
Carrier Services 10,660 89,772 100,432
Other 6,186 314 6,500
Total Communication Services Revenue 280,397 246,260 526,657
Construction - 4,377 4,377
Other
Managed Services 4,136 8,590 12,726
Total other revenue 4,136 8,590 12,726
Total Revenue 284,533 259,227 543,760
Operating Expenses
Cost of communication services and other 102,768 130,471 233,239
Cost of construction revenue - 4,770 4,770
Selling, general and administrative 82,839 67,057 149,896
Stock-based compensation 498 155 653
Restructuring and reorganization expenses 3,468 2,835 6,303
Depreciation and amortization 44,729 54,020 98,749
Amortization of intangibles from acquisitions 740 2,924 3,664
Loss on disposition of assets, transfers and contingent consideration 429 4,562 4,991
Total Operating Expenses 235,471 266,794 502,265
Adjusted Income (loss) from operations by segment 49,062 (7,567) 41,495
Reconciliation of Adjusted Income (loss) from operations by segment to Loss before income taxes
Adjusted unallocated Corporate expenses 28,765
Other income (expenses)
Interest income 561
Interest expense (36,388)
Other expense (2,637)
Other expense (38,464)
Loss before income taxes (25,734)
Other segment disclosures:
International
Telecom 		US
Telecom 		Total
Net (income) loss attributable to non-controlling interests (6,605) 11,709 5,104
A comparison of our segment results for the nine months ended September 30, 2026 and 2025 is as follows:
International Telecom. Revenues within our International Telecom segment increased $4.7 million, or 1.7%, to $289.2 million from $284.5 million for the nine months ended September 30, 2026 and 2025, respectively, primarily due to a $4.6 million increase in revenues from ancillary services and a $4.0 million increase across Mobility, Carrier and Managed Services revenues. These increases are the result of an increase in subscribers, rates we charge our subscribers and equipment revenue within certain markets in this segment. These increases were partially offset by a $3.9 million reduction in Fixed Services revenue primarily due to a decline in the FCC's High-Cost Support Program in the US Virgin Islands, which was terminated on December 31, 2025.
Operating expenses within our International Telecom segment decreased by $7.2 million, or 3.1%, to $228.3 million from $235.5 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease was primarily driven by a $2.5 million reduction across cost of communication services and selling, general and administrative expenses, which was the result of lower regulatory fees in certain markets and, to a lesser extent, certain cost savings initiatives that were implemented in the current and previous periods. Additionally, depreciation and amortization expenses decreased $1.3 million as a result of a reduction in capital expenditures in recent periods. Lastly, restructuring and reorganization expenses decreased $2.5 million due to the timing and magnitude of the actions initiated by management to review our organizational structure and employee severance.
As a result, our International Telecom segment's operating income increased $11.8 million, or 24.0%, to $60.9 million from $49.1 million for the nine months ended September 30, 2026 and 2025, respectively.
US Telecom. Revenue within our US Telecom segment increased by $1.6 million, or 0.6%, to $260.8 million from $259.2 million for the nine months ended September 30, 2026 and 2025, respectively, primarily as a result of a $6.4 million increase in Carrier Services revenue due to growth in carrier customer contracts and the transition of legacy roaming arrangements to carrier service management contracts, partially offset by declines in revenue from the Tower Portfolio Transaction. These increases were offset by a $5.2 million decline across construction revenue and Managed Services revenue as a result of a decrease in the number of sites and Managed Services contracts completed in 2026 as compared to 2025.
Operating expenses within our US Telecom segment decreased $234.1 million to $32.7 million from $266.8 million for the nine months ended September 30, 2026 and 2025, respectively. This decrease was primarily related to the $230.4 million gain recorded in connection with the Tower Portfolio Transaction, a reduction in the cost of construction revenue and the impact of certain cost savings initiatives that were implemented in the current and previous periods. These decreases were partially offset by increases in this segment's leasing costs, as a result of the impact of the Tower Portfolio Transaction.
As a result of the above, our US Telecom segment's operating income (loss) increased to income of $228.1 million from a loss of $7.6 million for the nine months ended September 30, 2026 and 2025, respectively.
The following represents a year over year discussion and analysis of our results of operations for the nine months ended September 30, 2026 and 2025 (in thousands):
Nine Months Ended
September 30, 		Amount of
Increase
(Decrease) 		Increase
Percent
(Decrease)
2026 2025
REVENUE:
Communication services $ 537,057 $ 526,657 $ 10,400 2.0 %
Construction 1,215 4,377 (3,162) (72.2)
Other 11,688 12,726 (1,038) (8.2)
Total revenue 549,960 543,760 6,200 1.1
OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated):
Cost of communication services and other 234,839 233,239 1,600 0.7
Cost of construction revenue 1,423 4,770 (3,347) (70.2)
Selling, general and administrative 165,362 165,684 (322) (0.2)
Stock-based compensation 5,085 6,556 (1,471) (22.4)
Transaction-related charges 7,681 2,072 5,609 270.7
Restructuring and reorganization expenses 6,797 8,727 (1,930) (22.1)
Depreciation and amortization 92,669 101,327 (8,658) (8.5)
Amortization of intangibles from acquisitions 1,436 3,664 (2,228) (60.8)
(Gain) loss on disposition of assets, transfers and contingent consideration (229,694) 4,991 (234,685) (4,702.2)
Total operating expenses 285,598 531,030 (245,432) (46.2)
Income from operations 264,362 12,730 251,632 1,976.7
OTHER INCOME (EXPENSE):
Interest income 2,456 561 1,895 337.8
Interest expense (31,915) (36,388) 4,473 (12.3)
Other expense (3,225) (2,637) (588) 22.3
Other expense, net (32,684) (38,464) 5,780 (15.0)
INCOME (LOSS) BEFORE INCOME TAXES 231,678 (25,734) 257,412 (1,000.3)
Income tax expense (benefit) 31,396 (9,019) 40,415 (448.1)
NET INCOME (LOSS) 200,282 (16,715) 216,997 (1,298.2)
Net (income) loss attributable to noncontrolling interests, net of tax: (17,149) 5,104 (22,253) (436.0)
NET INCOME (LOSS) ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS $ 183,133 $ (11,611) $ 194,744 (1,677.2) %
Communications Services Revenue
Mobility Revenue. Mobility Services revenue increased by $1.9 million, or 2.4%, to $81.0 million for the nine months ended September 30, 2026 from $79.1 million for the nine months ended September 30, 2025 as result of an increase in subscribers, rates we charge our subscribers and equipment revenue within certain markets in this segment.
Fixed Revenue. Fixed Services revenue decreased by $3.6 million, or 1.1%, to $337.0 million from $340.6 million for the nine months ended September 30, 2026 and 2025, respectively. This decrease primarily pertained to a decrease in Fixed Services revenue from consumer customers and consisted of the following:
•International Telecom. International Telecom. Within our International Telecom segment, Fixed Services revenue decreased by $3.9 million, or 2.1%, to $180.6 million from $184.5 million for the nine months ended
September 30, 2026 and 2025, respectively. This decrease was primarily a result of the FCC's High-Cost Support Program in the US Virgin Islands being terminated on December 31, 2025.
•US Telecom. Fixed Services revenue within our US Telecom segment increased by $0.3 million, or 0.2%, to $156.4 million from $156.1 million for the nine months ended September 30, 2026 and 2025, respectively. This increase was primarily the result of increased in Fixed Services revenue from certain government support programs
Carrier Services Revenue. Carrier Services revenue increased by $7.4 million, or 7.4%, to $107.8 million from $100.4 million for the nine months ended September 30, 2026 and 2025, respectively. The increase within our segments consisted of the following:
•International Telecom. Within our International Telecom segment, Carrier Services revenue increased by $1.0 million, or 9.3%, to $11.7 million from $10.7 million for the nine months ended September 30, 2026 and 2025, respectively, primarily as a result of an increase in roaming revenues in some of our international markets.
•US Telecom. Carrier Services revenue within our US Telecom segment increased by $6.3 million, or 7.0%, to $96.1 million from $89.8 million, for the nine months ended September 30, 2026 and 2025, respectively. This increase was primarily the result of growth in carrier subscriber contracts and the transition of legacy roaming arrangements to carrier service management contracts, partially offset by decreases in tower site revenue from the Tower Portfolio Transaction.
Other Communications Services Revenue. Other Communications Services revenue increased $4.8 million, or 73.8%, to $11.3 million from $6.5 million for the nine months ended September 30, 2026 and 2025, respectively, as a result of an increase in revenue from ancillary services in our International Telecom segment.
Construction Revenue. During the nine months ended September 30, 2026 and 2025, Construction Revenue decreased to $1.2 million from $4.4 million, respectively, as a result of a decrease in the number of sites completed during 2026 as compared to 2025.
Other Revenue
Managed Services Revenue. Managed Services revenue decreased by $1.0 million, or 7.9%, to $11.7 million from $12.7 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease within our segments consisted of the following:
•International Telecom. Managed Services revenue in our International Telecom segment increased $1.1 million, or 26.8%, to $5.2 million from $4.1 million for the nine months ended September 30, 2026 and 2025, respectively. The increase was primarily driven by the timing of completion of customer contracts.
•US Telecom. Within our US Telecom segment, Managed Services revenue decreased $2.1 million, or 24.4%, to $6.5 million from $8.6 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease was primarily driven by the timing of completion of customer contracts.
Operating Expenses
Cost of communication services and other. Cost of communication services and other increased by $1.6 million, or 0.7%, to $234.8 million from $233.2 million for the nine months ended September 30, 2026 and 2025, respectively. The net increase in cost of communication services and other, within our segments, consisted of the following:
•International Telecom. Within our International Telecom segment, cost of communication services and other decreased by $3.7 million, or 3.6%, to $99.1 million from $102.8 million, for the nine months ended September 30, 2026 and 2025, respectively. This decrease was the result of the reduction of regulatory fees in certain markets and, to a lesser extent, the impact of cost savings initiatives that were implemented in the current and previous periods.
•US Telecom. Cost of communication services and other within our US Telecom segment increased by $5.2 million, or 4.0%, to $135.7 million from $130.5 million for the nine months ended September 30, 2026 and 2025, respectively. Such increase was the result of the timing of costs to fulfill customer contracts and the impact of the Tower Portfolio Transaction, which resulted in increased tower site expenses.
Cost of construction revenue. During the nine months ended September 30, 2026 and 2025, cost of construction revenue decreased to $1.4 million from $4.8 million, respectively, as a result of a decrease in the number of sites completed during 2026 as compared to 2025.
Selling, general and administrative expenses. Selling, general and administrative expenses decreased by $0.3 million, or 0.2%, to $165.4 million from $165.7 million for the nine months ended September 30, 2026 and 2025 respectively. The net decrease in selling, general and administrative expenses, within our segments, consisted of the following:
•International Telecom. Within our International Telecom segment, our selling, general and administrative expenses increased by $1.2 million, or 1.4%, to $84.0 million from $82.8 million for the nine months ended September 30, 2026 and 2025, respectively, as a result of an increase in marketing and personnel costs in certain markets.
•US Telecom. Selling, general and administrative expenses decreased within our US Telecom segment by $0.8 million, or 1.2%, to $66.3 million from $67.1 million, for the nine months ended September 30, 2026 and 2025, respectively, primarily as a result of certain cost containment initiatives that were implemented in the current and previous periods.
•Corporate Overhead. Selling, general and administrative expenses within our corporate overhead decreased by $0.7 million, or 4.4%, to $15.1 million from $15.8 million, for the nine months ended September 30, 2026 and 2025, respectively, as a result of the timing of certain professional fees and employee costs.
Stock-based compensation. Stock-based compensation decreased to $5.1 million from $6.6 million for the nine months ended September 30, 2026 and 2025, respectively, as a result of the impact of certain reductions in force during the nine months ended September 30, 2026.
Transaction-related charges. We incurred $7.7 million and $2.1 million of transaction-related charges during the nine months ended September 30, 2026 and 2025, respectively. The increase was the result of the timing of our transaction-related charges and was primarily the result of costs incurred in connection with the Tower Portfolio Transaction during the nine months ended September 30, 2026.
Restructuring and reorganization expenses. In our efforts to advance our cost management actions to drive higher operating efficiencies and margins, we incurred certain restructuring and reorganization expenses, primarily related to our organizational structure and business operating model reviews as well as employee severance, totaling $1.0 million, $1.2 million and $4.6 million within our International Telecom segment, US Telecom segment and Corporate and Other, respectively, during the nine months ended September 30, 2026.
We incurred restructuring and reorganization expenses of $3.5 million, $2.8 million and $2.4 million within our International Telecom segment, US Telecom segment and Corporate and Other segment, respectively, during the nine months ended September 30, 2025.
Increases and decreases in restructuring and reorganization expenses within each segment were a result of the timing and magnitude of actions initiated by management to review our organizational structure and employee severance.
Depreciation and amortization expenses. Depreciation and amortization expenses decreased by $8.6 million, or 8.5%, to $92.7 million from $101.3 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease in depreciation and amortization expenses, within our segments, consisted primarily of the following:
•International Telecom. Depreciation and amortization expenses decreased within our International Telecom segment by $1.3 million, or 2.9%, to $43.4 million from $44.7 million, for the nine months ended September
30, 2026 and 2025, respectively. The decrease was the result of this segment's reduction in capital expenditures and certain assets becoming fully depreciated in recent periods.
•US Telecom. Depreciation and amortization expenses decreased within our US Telecom segment by $6.0 million, or 11.1%, to $48.0 million from $54.0 million, for the nine months ended September 30, 2026 and 2025, respectively. The decrease was the result of this segment's reduction in capital expenditures, certain assets becoming fully depreciated in recent periods, and the conclusion of the recording of depreciation expense related to assets that were sold in connection with the Tower Portfolio Transaction.
•Corporate Overhead. Depreciation and amortization expenses decreased within our corporate overhead to $1.3 million from $2.6 million, for the nine months ended September 30, 2026 and 2025, respectively, primarily as a result of additional assets becoming fully depreciated in recent periods.
Amortization of intangibles from acquisitions. Amortization of intangibles from acquisitions decreased by $2.3 million to $1.4 million from $3.7 million for the nine months ended September 30, 2026 and 2025, respectively, as a result of certain assets being fully amortized in previous periods.
(Gain) loss on disposition of assets, transfers and contingent consideration. During the nine months ended September 30, 2026, we recorded a net gain on the disposition of assets and transfers of $229.7 million. Of this net gain, $229.5 million was recognized within our US Telecom segment and was primarily related to the $230.4 million gain on the Tower Portfolio Transaction, while the remaining $0.2 million gain was recorded in the International Telecom segment.
During the nine months ended September 30, 2025, we recorded a net loss on the disposition of assets of $5.0 million. Of this net loss, $0.4 million and $4.6 million were recognized within our International and US Telecom segments, respectively. Within the US Telecom segment, we recorded the revaluation of contingent consideration relating to a prior year's acquisition within that segment and losses related to transferring certain government support obligations.
Interest income. Interest income was $2.5 million and $0.6 million for the nine months ended September 30, 2026 and 2025, respectively. Such increase was the result of an increase in our cash and cash equivalents due to the proceeds received from the Tower Portfolio Transaction. In addition, such proceeds are being invested in higher yielding cash and cash equivalent investments.
Interest expense. Interest expense decreased to $31.9 million from $36.4 million for the nine months ended September 30, 2026 and 2025, respectively. We used a portion of the proceeds from the Tower Portfolio Transaction to reduce our outstanding debt balances, which in turn reduced our interest expense during the nine months ended September 30, 2026. In addition, a decline in interest rates also reduced such expense during the nine months ended September 30, 2026.
Other expense. For the nine months ended September 30, 2026, other expense was $3.2 million of expense primarily related to a $2.7 million loss from our noncontrolling investments, $1.8 million in losses on foreign currency transactions, which were partially offset by gains of $1.3 million primarily related to the settlement of certain pension obligations in our US Telecom segment.
For the nine months ended September 30, 2025, other expense was $2.6 million of expense primarily related to losses on foreign currency transactions and a non-operating employee-related matter net of insurance proceeds.
Income taxes. Our effective tax rates for the nine months ended September 30, 2026 and 2025 were 13.6% and 35.0%, respectively.
We recorded an income tax expense of $31.4 million in relation to a pretax income of $231.7 million for the nine months ended September 30, 2026. The effective tax rate for the nine months ended September 30, 2026 was primarily impacted by the following items: (i) the mix of income generated among the jurisdictions in which we operate, (ii) the exclusion of losses in Alaska and the US Virgin Islands due to valuation allowance positions placed on certain deferred tax assets that are not expected to be realized based on the weight of positive and negative evidence, and (iii) discrete items including a $12.2 million benefit related to the deemed liquidation of a controlled foreign corporation, a $4.0 million net benefit from the reversal of an unrecognized tax position due to a statute of limitations expiration, net of interest on prior
years uncertain tax positions, a $0.6 million expense associated with stock option shortfalls, and a $0.8 million expense associated with a return to provision adjustment related to tax returns filed in Guyana.
We recorded an income tax benefit of $9.0 million in relation to a pretax loss of $25.7 million for the nine months ended September 30, 2025. The effective tax rate for the nine months ended September 30, 2025 was primarily impacted by the following items: (i) the mix of income generated among the jurisdictions in which we operate, (ii) net expense related to valuation allowances placed on certain deferred tax assets that are not expected to be realized based on the weight of positive and negative evidence, and (iii) discrete items including a $4.9 million benefit from the reversal of an unrecognized tax position due to a statute of limitations expiration, a $1.8 million expense for interest on prior years uncertain tax positions, a $0.5 million expense associated with stock option shortfalls, and a $1.0 million benefit from the release of a capital loss carryover valuation allowance based on our conclusion that it was more likely than not that this deferred tax asset would be realized in the future.
Our effective tax rate is based upon estimated income before provision for income taxes for the year, composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for potential tax consequences, benefits and/or resolutions of tax contingencies. Our consolidated tax rate will continue to be impacted by any transactional or one-time items in the future and the mix of income in any given year generated among the jurisdictions in which we operate. While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from our accrued positions as a result of uncertain and complex application of tax law and regulations. Additionally, the recognition and measurement of certain tax benefits include estimates and judgments by management. Accordingly, we could record additional provisions or benefits for US federal, state, and foreign tax matters in future periods as new information becomes available.
Net (income) loss attributable to noncontrolling interests, net of tax. Net (income) loss attributable to noncontrolling interests, net of tax reflected an allocation of $17.1 million of income and $5.1 million of losses generated by our less than wholly owned subsidiaries for the nine months ended September 30, 2026 and 2025, respectively. Changes in net (income) loss attributable to noncontrolling interests, net of tax, within our segments, consisted of the following:
•International Telecom. Within our International Telecom segment, net (income) loss attributable to noncontrolling interests, net of tax increased by $1.6 million, or 24.2%, to an allocation of $8.2 million of income from an allocation of $6.6 million of income for the nine months ended September 30, 2026 and 2025, respectively. The increase was the result of increased profitability at certain less than wholly owned subsidiaries.
•US Telecom. Within our US Telecom segment, net (income) loss attributable to noncontrolling interests, net of tax was an allocation of income of $8.9 million for the nine months ended September 30, 2026 as compared to an allocation of losses of $11.7 million for the nine months ended September 30, 2025. The increase was primarily the result of the gain recognized on the Tower Portfolio Transaction.
Net income (loss) attributable to ATN International, Inc. stockholders. Net income (loss) attributable to ATN International, Inc. stockholders was income of $183.1 million for the nine months ended September 30, 2026 as compared to a loss of $11.6 million for the nine months ended September 30, 2025.
On a per diluted share basis, net income was $11.52 per diluted share for the nine months ended September 30, 2026 as compared to a loss of $1.06 per diluted share for the nine months ended September 30, 2025. Such per share amounts were negatively impacted by accrued preferred dividends of $5.0 million and $4.5 million for the nine months ended September 30, 2026 and 2025, respectively.
Regulatory and Tax Issues
We are involved in a number of regulatory and tax proceedings. A material and adverse outcome in one or more of these proceedings could have a material adverse impact on our financial condition and future operations. For discussion of ongoing proceedings, see Note 14 to the Consolidated Financial Statements in this Report.
One Big Beautiful Bill Act
In July 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the US. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company reflected the impact of the enacted provisions in its financial statements for the nine months ended, September 30, 2026, which were determined to be immaterial. The Company will continue to evaluate the impact of the OBBBA provisions effective in future years on the Company's financial statements and related disclosures.
Liquidity and Capital Resources
Historically, we have met our operational liquidity needs and have funded our capital expenditures and acquisitions through a combination of cash-on-hand, internally generated funds, borrowings under our credit facilities, proceeds from dispositions, and seller financings. We believe our current cash, cash equivalents, short term investments and availability under our current credit facilities will be sufficient to meet our cash needs, for at least the next twelve months, for working capital and capital expenditure requirements.
Total liquidity. As of September 30, 2026, we had approximately $351.5 million in cash, cash equivalents, and restricted cash. Of this amount, $115.2 million was held by our foreign subsidiaries and is indefinitely invested outside the US. In addition, we had approximately $537.5 million of debt, net of unamortized deferred financing costs as of September 30, 2026. How and when we deploy our balance sheet capacity, including the availability under our various credit facilities (as further described below), will figure prominently in our longer-term growth prospects and stockholder returns.
Uses of Cash
Acquisitions and investments. We have historically funded our acquisitions with a combination of cash-on-hand, borrowings under our credit facilities as well as equity investor and seller financings.
We continue to explore opportunities to expand our telecommunications business or acquire new businesses in the US, the Caribbean and elsewhere. Such acquisitions may require external financing. While there can be no assurance as to whether, when or on what terms we will be able to acquire any such businesses or make such investments, such acquisitions may be completed through the issuance of shares of our capital stock, payment of cash or incurrence of additional debt. From time to time, we may raise capital ahead of any definitive use of proceeds to allow us to move more quickly and opportunistically if an attractive investment materializes.
Cash provided by (used in) financing activities. During the nine months ended September 30, 2026, we used $48.2 million of cash for financing activities as compared to $1.2 million for the nine months ended September 30, 2025.
This $47.0 million change in cash provided by (used in) financing activities was primarily related to the repayment of $48.5 million of our debt, funded by the proceeds from the Tower Portfolio Transaction. In addition, we increased the cash used to pay dividends to our stockholders by $1.4 million and to repurchase our common stock from employees to satisfy certain tax withholding obligations of $1.1 million. These increases in cash outflows were reduced by an increase of $3.9 million in receipts of funds payable to customers.
Working Capital. We have funded our working capital needs through a combination of internally generated funds and borrowings under our credit facilities. Pursuant to the FirstNet Agreement, AT&T has the option to repay construction costs, with interest, over an eight-year period. To fund the working capital needs created by AT&T's option to extend its payment terms, we completed the Receivables Credit Facility, as discussed below, on March 26, 2020.
For the nine months ended September 30, 2026, we spent approximately $66.4 million for capital expenditures and $34.8 million for capital expenditures that are reimbursable under certain government programs. For the nine months ended September 30, 2025, we spent approximately $60.9 million for capital expenditures and $67.3 million for capital
expenditures that are reimbursable under certain government programs. The following shows our capital expenditures, by operating segment, for these periods (in thousands):
Capital Expenditures
Nine months ended September 30, International
Telecom 		US
Telecom 		Corporate and
Other (1) 		Consolidated
2026 $ 30,293 $ 70,915 $ 7 $ 101,215
2025 30,241 97,987 - 128,228
(1)Corporate and other items refer to corporate overhead costs and consolidating adjustments and have been presented for reconciliation purposes to consolidated amounts.
We are continuing to invest in our telecommunication networks along with our operating and business support systems in many of our markets. For the year ending December 31, 2026, such investments are expected to total approximately $105 million to $115 million of non-reimbursable capital expenditures and will primarily relate to network expansion and upgrades which are expected to further drive subscriber and revenue growth in future periods.
Income taxes. We have historically used cash-on-hand to make payments for income taxes. Our policy is to allocate capital where we believe we will get the best returns and to date has been to indefinitely reinvest the undistributed earnings of our foreign subsidiaries. As we continue to reinvest our remaining foreign earnings, no additional provision for income taxes has been made on the accumulated earnings of foreign subsidiaries.
Dividends. For the nine months ended September 30, 2026, our Board of Directors declared $13.2 million of dividends to our stockholders, which included a $0.29 per share dividend declared on September 23, 2026 and paid on October 9, 2026. We have declared quarterly dividends since the fourth quarter of 1998.
Stock Repurchase Plan. On August 5, 2026, our Board of Directors announced that it has authorized the repurchase of up to $30 million of our common stock, from time to time, on the open market or in privately negotiated transactions (the "2026 Repurchase Plan"). Our previous repurchase plan, announced in 2023, had $15 million available to repurchase shares of our common stock. We did not repurchase any of our common stock during either the three or nine months ended September 30, 2026 or 2025.
Sources of Cash
Cash provided by operations. Cash provided by operating activities was $76.7 million for the nine months ended September 30, 2026 as compared to $97.7 million for the nine months ended September 30, 2025. The decrease of $21.0 million was primarily related to changes in our net income and working capital.
Cash provided by (used in) investing activities. During the nine months ended September 30, 2026, investing activities provided $205.8 million of cash as compared to the nine months ended September 30, 2025 when we used $66.1 million of cash for investing activities.
This $271.9 change in cash provided by (used in) investing activities was primarily related to the Tower Portfolio Transaction, which generated $267.7 million in sales proceeds. In addition, we recorded an increase in capital expenditures of $5.5 million and a decrease in reimbursable amounts disbursed for government capital programs of $32.5 million. Proceeds from the sale, strategic investments, spectrum and other assets also increased by $12.0 million. Offsetting these increases was a reduction in the amount we were reimbursed for government capital programs of $34.0 million.
2023 CoBank Credit Facility
On July 13, 2023, we, along with certain of our subsidiaries as guarantors, entered into a Credit Agreement (as may be amended from time to time, the "2023 CoBank Credit Agreement") with CoBank, ACB ("CoBank") and a syndicate of other lenders (the "2023 CoBank Credit Facility"). On July 10, 2024, we amended the 2023 CoBank Credit
Agreement to add certain subsidiaries as guarantors and to provide further flexibility in order to accept certain grant and government program obligations.
The 2023 CoBank Credit Facility provides for a five-year $170 million revolving credit facility (the "2023 CoBank Revolving Loan") and a six-year $130 million term loan facility (the "2023 CoBank Term Loan"). We may use (i) up to $25 million under the 2023 CoBank Revolving Loan for letters of credit, and (ii) up to $20 million under a swingline sub-facility.
The 2023 CoBank Term Loan has scheduled quarterly principal payments in the amounts set forth below, with the outstanding principal balance maturing on July 13, 2029. The 2023 CoBank Revolving Loan may be repaid at any time on or prior to its maturity on July 13, 2028. All amounts outstanding under the 2023 CoBank Credit Facility will be due and payable upon the earlier of the maturity date or the acceleration of the loans and commitments upon an event of default.
2023 CoBank Term Loan Quarterly Payment Dates 2023 CoBank Term Loan Quarterly Repayments
December 31, 2023 - June 30, 2025 $812,500 (2.5% per annum)
September 30, 2025 - June 30, 2026 $1,625,000 (5% per annum)
September 30, 2026 - June 30, 2029 $2,437,500 (7.5% per annum)
Amounts borrowed under the 2023 CoBank Credit Facility bear interest at a rate equal to, at our option, either (i) the secured overnight financing rate ("SOFR") as administered by the Federal Reserve Bank of New York plus an applicable margin ranging between 2.00% to 3.75% for the 2023 CoBank Term Loan and 1.75% to 3.50% for 2023 CoBank Revolving Loan or (ii) a base rate plus an applicable margin ranging from 1.00% to 2.75% for the 2023 CoBank Term Loan and 0.75% to 2.50% for the 2023 CoBank Revolving Loan. Swingline loans bear interest at the base rate plus the applicable margin for base rate loans. The applicable margin is determined based on the Total Net Leverage Ratio (as defined in the 2023 CoBank Credit Agreement). We also pay a fee ranging from 0.25% to 0.50% on the average daily unused portion of the 2023 CoBank Credit Facility over each calendar quarter.
The 2023 CoBank Credit Agreement contains a financial covenant (as further defined in the 2023 CoBank Credit Agreement) that imposes a maximum Total Net Leverage Ratio of 3.25 to 1.0, measured quarterly, as well as customary representations, warranties and covenants, including covenants limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes. The 2023 CoBank Credit Agreement provides for events of default customary for credit facilities of this type, including but not limited to non-payment, defaults on other debt, misrepresentation, breach of covenants, representations and warranties, insolvency and bankruptcy.
We capitalized $4.5 million of fees associated with the 2023 CoBank Credit Facility, which are being amortized over the life of the debt and $1.9 million were unamortized as of September 30, 2026.
In connection with the Tower Portfolio Transaction, on February 11, 2026, we entered into a Consent Agreement (the "Consent") with CoBank, as Administrative Agent, and the Lenders and Voting Participants (constituting Required Lenders (as defined in the 2023 CoBank Credit Agreement)) party thereto, in connection with the 2023 CoBank Credit Agreement. Pursuant to the terms of the Consent, the Required Lenders consented to: (i) the consummation of the Tower Portfolio Transaction; (ii) the distributions of the Net Cash Proceeds (as defined in the 2023 CoBank Credit Agreement) from the Tower Portfolio Transaction to the Company and the minority shareholders of the Commnet Parties; (iii) the Net Cash Proceeds received from the Tower Portfolio Transaction being applied to the repayment of the outstanding 2023 CoBank Revolving Loan rather than the 2023 CoBank Term Loan; and (iv) to the extent that there are Net Cash Proceeds remaining after repaying the outstanding 2023 CoBank Revolving Loan, such Net Cash Proceeds being used by the Company and its subsidiaries for working capital and general corporate purposes. The Consent further provides for the release of the Liens (as defined in the 2023 CoBank Credit Agreement) on the assets being sold in connection with the Tower Portfolio Transaction.
As of September 30, 2026, we had $115.4 million outstanding under the 2023 CoBank Term Loan and no outstanding borrowings under the 2023 CoBank Revolving Loan. We had $170.0 million of remaining availability under the 2023 CoBank Revolving Loan and were in compliance with all financial covenants as of September 30, 2026.
We entered into a two-year, forward starting one-month floating to fixed SOFR interest rate swap agreement effective November 13, 2023, which matured on November 13, 2025. The non-amortizing notional amount of $50.0 million had a fixed SOFR rate of 4.896%.
Letter of Credit Facility
On November 14, 2022, we entered into a General Agreement of Indemnity to issue performance Standby Letters of Credit on behalf of us and our subsidiaries. As of September 30, 2026, $39.0 million of Standby Letters of Credit had been issued to benefit the CAF II program under this agreement.
2024 Alaska Credit Facility
On August 29, 2024, Alaska Communications entered into a Credit Agreement (the "2024 Alaska Credit Agreement") with Bank of America, N.A., as administrative agent, and a syndicate of lenders (the "2024 Alaska Credit Facility"), to provide debt financing in the form of a $300 million, five-year secured term loan facility (the "2024 Alaska Term Facility") and a $90 million revolving facility (the "2024 Alaska Revolving Facility"). The maturity date for the 2024 Alaska Credit Facility is August 29, 2029. The debt is secured by certain assets of Alaska Communications and is not guaranteed by us.
The 2024 Alaska Term Facility proceeds were used (a) to refinance Alaska Communications' outstanding indebtedness under the Credit Agreement entered into by Alaska Communications with Fifth Third Bank, National Association, as administrative agent, and a syndicate of lenders on December 23, 2022 (the "2022 Alaska Credit Facility"), (b) to pay fees and expenses associated with the completion of this transaction, and (c) for general corporate purposes.
Proceeds from the 2024 Alaska Revolving Facility are used, subject to certain limitations, (a) to issue letters of credit to replace or backstop existing letters of credit of Alaska Communications and (b) for working capital purposes, capital expenditures and other general corporate purposes.
The 2024 Alaska Credit Facility also provides for incremental term loans ("Incremental Term Loans") up to an aggregate principal amount of the greater of $91 million and Alaska Communications' trailing consolidated twelve-month EBITDA (as defined in the 2024 Alaska Credit Agreement), subject to Alaska Communications meeting certain conditions.
In connection with the 2024 Alaska Credit Facility, we incurred $6.9 million of fees and rolled over $2.1 million of fees for the 2022 Alaska Credit Facility to be amortized over the life of the debt. As of September 30, 2026, we had $5.3 million of unamortized fees associated with the 2024 Alaska Credit Facility.
Principal payments on the 2024 Alaska Credit Facility are due quarterly commencing in the fourth quarter of 2026 in quarterly amounts as follows:
2024 Alaska Term Facility Quarterly Payment Dates 2024 Alaska Term Facility Quarterly Principal Repayments
December 31, 2026 - September 30, 2027 $1,8750,000 (2.5% per annum)
December 31, 2027 - June 30, 2029 $3,750,000 (5% per annum)
Alaska Communications may prepay all revolving loans under the 2024 Alaska Revolving Facility at any time without premium or penalty, subject to certain notice requirements and balance restrictions.
Amounts outstanding under the 2024 Alaska Credit Facility bear an interest rate equal to, at our option, either (i) the SOFR plus an applicable margin ranging between 3.00% to 4.50% or (ii) a base rate plus an applicable margin ranging from 2.00% to 3.50%. Swingline loans bear interest at the base rate plus the applicable margin for base rate loans. We also pay a fee ranging from 0.25% to 0.40% on the average daily unused portion of the 2024 Alaska Credit Facility over each calendar quarter.
Alaska Communications is required to maintain financial ratios, including (a) a maximum Consolidated Net Total Leverage Ratio (as defined in the 2024 Alaska Credit Agreement) of 4.75:1.00, stepping down to 4.50:1.00 beginning with the third quarter of 2027, and stepping down to 4.25:1.00 beginning with the third quarter of 2028; and (b) a minimum
Consolidated Fixed Charge Coverage Ratio of not less than 1.25:1.00. The 2024 Alaska Credit Agreement contains customary covenants restricting the incurrence or assumption of debt, granting or assuming liens, declaring dividends and making other restricted payments, making investments, dispositions, engaging in transactions with affiliates, changes to the nature of business, modifying organizational documents and material agreements, entering into sale and leaseback transactions, amending or making prepayments on certain subordinated debt, and entering into mergers and acquisitions. The 2024 Alaska Credit Agreement contains usual and customary affirmative and negative covenants of the parties for credit facilities of this type or as otherwise deemed appropriate by the administrative agent, subject to customary exceptions and materiality standards.
As of September 30, 2026, $300.0 million was outstanding under the 2024 Alaska Term Facility, $29.0 million was outstanding under the 2024 Alaska Revolving Facility, $0.6 million letters of credit were issued, and $60.4 million was available under the 2024 Alaska Revolving Facility. As of September 30, 2026, Alaska Communications was in compliance with all financial covenants.
Alaska Interest Rate Swap Agreements
In November 2023, Alaska Communications entered into two forward starting one-month floating to fixed SOFR interest rate swap agreements. The total non-amortizing notional amount of the agreements is $200 million, with fixed SOFR rates of 4.8695% and 4.8980%. These swap agreements matured on June 30, 2025.
On September 26, 2025, Alaska Communications entered into four forward starting one-month floating to fixed SOFR interest rate swap agreements. The total non-amortizing notional amount of the four agreements was $200 million, with fixed SOFR rates ranging from 3.43% to 3.45% and have a maturity date of September 30, 2027. The swap agreements had a fair value of $2.0 million and $(0.5) million as of September 30, 2026 and December 31, 2025, respectively.
FirstNet Receivables Credit Facility
On March 26, 2020, we entered into a $75.0 million delayed draw receivables credit facility with CoBank (the "Receivables Credit Facility"). The receivables financed and sold under the secured Receivables Credit Facility relate to the obligations of AT&T under the FirstNet Agreement.
On December 27, 2024, CoBank amended the Receivables Credit Facility and extended the delayed draw period to December 31, 2025. There were no further extensions of the draw period.
Interest on the loans accrue at a fixed annual interest rate ranging from 3.21% to 7.13%.
The Receivables Credit Facility contains customary events of termination, representations and warranties, affirmative and negative covenants and events of default customary for facilities of this type.
As of September 30, 2026, $34.1 million was outstanding under the Receivables Credit Facility, of which $9.1 million was classified as being current and $25.0 million was classified as long-term. In addition, $0.8 million of the fees associated with the Receivables Credit Facility were capitalized and are being amortized over the life of the debt and $0.2 million were unamortized as of September 30, 2026.
IDB Credit Facilities
On May 8, 2025, OneGY entered into a Credit Agreement (the "2025 IDB Credit Agreement") with Inter-American Investment Corporation ("IDB Invest") to provide (the "2025 IDB Credit Facilities") a Revolving Credit Commitment of $10.0 million (the "2025 IDB Revolving Facility") and Term Loan Commitment of up to $30.0 million (the "2025 IDB Term Loan"). The debt is denominated in US dollars and secured by certain assets of OneGY and is not guaranteed by us.
Beginning in the second quarter of 2027, amounts drawn on the 2025 IDB Term Loan must be repaid in quarterly principal payments in US dollars in the amounts set forth below, with the outstanding principal balance maturing on the
tenth anniversary of the effective date. The 2025 IDB Revolving Loan may be repaid at any time on, or prior to, its maturity of 360 days after the first disbursement date.
2025 IDB Term Loan Semiannual Payment Dates 2025 IDB Term Loan Semiannual Repayments
June 22, 2027 - December 22, 2030 5.0% per annum
June 22, 2031 - December 22, 2034 7.5% per annum
Amounts borrowed under the 2025 IDB Credit Facilities bear interest at a rate equal to SOFR plus an applicable margin of 2.4% for the 2025 IDB Revolving Facility and 3.0% for the 2025 IDB Term Loan. In the case of the 2025 IDB Term Loan, there is a prepayment fee equal to 1% until the first anniversary from the effective date, 0.5% until the second anniversary from the effective date, and 0.0% thereafter.
The 2025 IDB Credit Agreement contains financial covenants that impose on OneGY: 1) a maximum Net Financial Debt to EBITDA Ratio; 2) a maximum Debt to Equity ratio; and 3) a minimum EBITDA to Net Financial Expense Ratio (each as defined in the 2025 IDB Credit Agreement), as well as customary representations, warranties and covenants. The 2025 IDB Credit Agreement provides for events of default customary for credit facilities of this type, including but not limited to non-payment, defaults on other debt, misrepresentation, breach of covenants, representations and warranties, insolvency and bankruptcy.
OneGY capitalized $1.1 million of fees associated with the 2025 IDB Credit Facilities, which are being amortized over the life of the debt and $1.1 million were unamortized as of September 30, 2026.
As of September 30, 2026, there was $4.0 million outstanding under the 2025 IDB Revolving Facility and $20.0 million outstanding under the 2025 IDB Term Loan. As of September 30, 2026, OneGY was in compliance with all financial covenants.
Sacred Wind Term Debt
Our subsidiary, Sacred Wind, has a term debt facility (the "Sacred Wind Term Debt") with the Administrator of the Rural Utilities Service ("RUS"). The Sacred Wind Term Debt is secured by substantially all of the assets of Sacred Wind and is non-recourse to us.
The Sacred Wind Term Debt contains certain restrictions on the declaration or payment of dividends, redemption of capital stock or investment in affiliated companies without the consent of the RUS noteholders. The agreements also contain a financial covenant that Sacred Wind was not in compliance with as of December 31, 2024. Sacred Wind submitted a corrective action plan to comply with the financial covenant by December 31, 2028. The corrective action plan was accepted by the RUS and, as of September 30, 2026, we were in compliance with that corrective action plan.
As of September 30, 2026, $18.7 million was outstanding under the Sacred Wind Term Debt. Of that amount, $3.7 million was current and $15.0 million was long term.
The Sacred Wind Term Debt carries fixed interest rates ranging from 0.88% to 5.0% and are to be repaid in equal monthly installments covering principal and interest beginning after date of issue and expiring by 2035.
USVI Debt
We, and certain of our subsidiaries, entered into a loan agreement (the "OneVI Debt Agreement") for a $60.0 million loan (the "OneVI Debt") with National Cooperative Services Corporation ("NCSC") on July 1, 2016. The OneVI Debt Agreement contains customary representations, warranties, and affirmative and negative covenants (including limitations on additional debt, guaranties, sale of assets and liens) and a financial covenant that limits the maximum ratio of indebtedness to annual operating cash flow to 3.5 to 1.0 (the "OneVI Net Leverage Ratio"). On May 5, 2022, the Net Leverage Ratio was amended to 7.0 to 1.0 through the original maturity date. This covenant is tested on an annual basis at the end of each fiscal year, and we were in compliance with the financial covenant as of December 31, 2025. Interest was paid quarterly at a fixed rate of 4.0% per annum through June 30, 2026. The debt is secured by certain assets of the OneVI subsidiaries and is guaranteed by us.
On November 5, 2025, we and certain of our subsidiaries (the "OneVI Borrowers") amended the OneVI Debt Agreement (the "OneVI Debt Amendment") to extend the maturity date of the OneVI Debt Agreement from July 1, 2026 to July 1, 2035 (the "Extended Maturity Date"). In accordance with the OneVI Debt Amendment, on July 1, 2026, the OneVI Borrowers elected a variable rate, which is NCSC's standard variable rate of interest for long-term loans and subject to change monthly. Additionally, under the OneVI Debt Amendment, the OneVI Borrowers have the option to convert all or a portion of principal outstanding as of the date specified in the Conversion Notice (as defined in the OneVI Debt Agreement), to NCSC's standard fixed interest rates for long-term loans at any time thereafter without a fee.
Additionally, in accordance with the OneVI Debt Amendment, the OneVI Debt became subject to a quarterly repayment schedule beginning on July 1, 2026.
OneVI Debt Agreement Quarterly Payment Dates OneVI Debt Quarterly Repayment
September 30, 2026 - June 30, 2029 $1,125,000 (8% per annum)
September 30, 2029 - June 30, 2032 $1,150,000 (10% per annum)
September 30, 2032 - June 30, 2034 $2,250,000 (15% per annum)
September 30, 2034 - June 30, 2035 $2,625,000 (18% per annum)
The OneVI Debt Amendment includes financial covenants by the OneVI Borrowers that impose a maximum ratio of indebtedness to annual operating cash flow of 5.00 as of December 31, 2026, 4.75 as of December 31, 2027, and 4.50 times as of December 31, 2028 and each year thereafter. Additionally, the OneVI Borrowers are to maintain a minimum fixed charge cover ratio of 1.25 to begin December 31, 2026, tested annually thereafter through the Extended Maturity Date.
As of September 30, 2026, $58.9 million of the OneVI Debt was outstanding. Of that amount, $4.5 million was current and $54.4 million was long term.
Debt Maturity
The table below summarizes the annual maturities of our debt instruments (amounts in thousands):
Customer
US International Corporate and Total Receivable
Amounts Maturing During Telecom Telecom Other (1) Debt Credit Facility
October 1, 2026 through December 31, 2026 $ 2,822 $ 5,125 $ 2,438 $ 10,385 $ 2,982
Year ending December 31, 2027 13,098 6,500 9,750 29,348 9,208
Year ending December 31, 2028 18,858 6,500 9,750 35,108 9,657
Year ending December 31, 2029 306,749 7,250 93,437 407,436 6,274
Year ending December 31, 2030 3,172 8,000 - 11,172 2,989
Thereafter 2,987 49,500 - 52,487 2,957
Total 347,686 82,875 115,375 545,936 34,067
Debt Discounts (5,413) (1,097) (1,916) (8,426) (155)
Book Value as of September 30, 2026 $ 342,273 $ 81,778 $ 113,459 $ 537,510 $ 33,912
(1)Corporate and other items refer to corporate overhead costs and consolidating adjustments and have been presented for reconciliation purposes to consolidated amounts.
Factors Affecting Sources of Liquidity
Internally generated funds. The key factors affecting our internally generated funds are demand for our services, competition, regulatory developments, economic conditions in the markets where we operate our businesses and industry trends within the telecommunications industry.
Restrictions under 2023 CoBank Credit Facility. Our 2023 CoBank Credit Facility contains customary representations, warranties and covenants, including covenants limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes.
In addition, the 2023 CoBank Credit Facility contains a financial covenant that imposes a maximum ratio of indebtedness to EBITDA. As of September 30, 2026, we were in compliance with all of the financial covenants of the 2023 CoBank Credit Facility.
Capital markets. Our ability to raise funds in the capital markets depends on, among other things, general economic conditions, the conditions of the telecommunications industry, our financial performance, the state of the capital markets and our compliance with SEC requirements for the offering of securities. In August 2025, we filed a new "universal" shelf registration statement with the SEC to register potential future offerings of up to $300 million of our securities.
Foreign Currency
We translate the assets and liabilities of our foreign subsidiaries from their respective functional currencies, primarily the Guyana Dollar, to US Dollars at the appropriate rates as of the balance sheet date. Changes in the carrying value of these assets and liabilities attributable to fluctuations in rates are recognized in foreign currency translation adjustment, a component of accumulated other comprehensive income on our balance sheet. Income statement accounts are translated using the monthly average exchange rates during the year. Monetary assets and liabilities denominated in a currency that is different from a reporting entity's functional currency must first be remeasured from the applicable currency to the legal entity's functional currency. The effect of this remeasurement process is reported in other income within our income statement. During the three months ended September 30, 2026 and 2025, we recorded $0.7 million and $0.6 million, respectively, in losses on foreign currency transactions. For the nine months ended September 30, 2026 and 2025, we recorded $1.8 million and $1.6 million, respectively, in losses on foreign currency transactions. We will continue to assess the impact of our exposure to the Guyana Dollar.
Inflation
Several of our markets have experienced increases in operating costs, some of which we believe are attributable to inflation. If inflation continues or worsens, it could negatively impact us by increasing our operating expenses. Inflation may lead to cost increases in multiple areas across our business, for example, rises in the prices of raw materials and manufactured goods, increased energy rates, as well as increased wage pressures and other expenses related to our employees. In particular, where we have agreed to undertake infrastructure build-outs on a fixed budget for our carrier customers or by accepting government grants, inflation may result in build costs that exceed our original budget given the long delays experienced in procuring equipment and materials due to global supply chain delays. To the extent that we are unable to pass on these costs through increased prices, revised budget estimates, or offset them in other ways, they may impact our financial condition and cash flows.
Tariffs
The US government has imposed tariffs on goods imported from various countries to the US, which have been modified, expanded, and in some cases eliminated since that time. Our business is not currently subject to these tariffs. Countries subject to such tariffs or other trade restrictions and other changes in trade policy by the US may, in the future, impose reciprocal or retaliatory tariffs and other trade measures that may impact our business. We are actively monitoring the tariff developments and analyzing the potential impacts on our businesses, cost structures, supply chain and broader economic environment. We are also working closely with our strategic suppliers to manage their potential impact.
The previously implemented tariffs did not have a material impact on our financial condition or results of operations during the three or nine months ended September 30, 2026. However, due to the uncertainty with respect to such tariffs and their evolving nature, we cannot predict the impact, if any, they may have on our business or results in the future.
Availability Under Credit Facilities
In addition to future internally generated funds, we had the following available to us under our credit facilities, as defined below, as of September 30, 2026 and may be able to raise funds in the capital markets by making an offering under our universal shelf registration.
Available as of
Credit Facility September 30, 2026 (in
millions)
2023 CoBank Credit Facility $ 170.0
2024 Alaska Revolving Facility 60.4
2025 IDB Term Loan 10.0
2025 IDB Revolving Facility 6.0
Total available $ 246.4
Critical Accounting Estimates
There were no changes to critical accounting estimates from those disclosed in "Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates" of our Annual Report on Form 10-K for the year ended December 31, 2025.
Recent Accounting Pronouncements
See Note 2 to the Consolidated Financial Statements included in this Report.
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