Uniti Group Inc. (UNIT) Q1 2026 Earnings Report, Transcript and Summary

Good morning and welcome to today's conference call to discuss the First Quarter 2026 Uniti Group's Earnings Conference Call. My name is Michelle and I'll be your operator for today. Today's call is being recorded and a webcast will be available on the company's Investor Relations website, investor.uniti.com beginning today and will remain available for 365 days. [Operator Instructions] It is now my pleasure to introduce Bill DiTullio, Uniti's Senior Vice President of Investor Relations and Treasury. Please begin.

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

Thanks, Bill. Good morning, everyone, and thank you for joining. Uniti is off to a great start in 2026 and we're executing well on our strategy as the premier insurgent fiber provider. We have a terrific embedded fiber base and are aggressively building more fiber to future-proof our network. We're continuously elevating our game from an operational excellence perspective and we're putting the customer first by being customer obsessed. For many years and continuing through today, we've been building fiber first or early into Tier 2 and 3 markets and that strategy has proven successful. We are consistently growing traditional wholesale and enterprise fiber revenue at 10% to 15% and now consumer fiber revenue at over 20% with an insurgent share taker mentality. Having fiber in unique locations is also advantageous from a long-haul wholesale perspective as we've been selling less competitive, but increasingly desired routes. Sometimes it's better to be fortunate than smart and our footprint happens to be located in or near markets that have power and land availability, which is giving us an outsized opportunity to build for the AI revolution. Fiber is clearly viewed as a mission-critical asset in a way that it has never been before. Plus in an increasingly converged world where there is less and less white space to build fiber first, our footprint and network grow in strategic significance every day. Our business is being fueled by twin engines, including the fiber-to-the-home build at Kinetic and the hyperscaler AI build at Fiber Infrastructure. We are well positioned strategically and we have the right assets, plan and team in place going forward. We demonstrated strong results in the first quarter by executing on that strategy. Total fiber revenue grew 15% year-over-year. Fiber revenue at Fiber Infrastructure grew 13% and we had the third highest quarter of bookings ever at Fiber Infrastructure. At Kinetic, we had the strongest quarter ever of gross adds and the highest number of homes constructed in nearly 4 years. Importantly, and back to my comments about being customer obsessed, we had the best quarter of consumer fiber churn ever at Kinetic. As highlighted on Slide 5, our priorities have not changed for the year. Despite some unprecedented winter storm activity during the first quarter, we're well on our way to ramping our fiber-to-the-home build at Kinetic targeting 450,000 to 500,000 new homes with fiber in 2026. In fact we built 45,000 new homes in March and another 45,000 new homes in April. In Fiber Infrastructure, we're continuing to benefit from all of the tailwinds driving wholesale fiber, including fiber-to-the-home, mobile wireless, satellite and of course hyperscaler and generative AI demand. For the hyperscalers, we foreshadowed even more activity in 2026 than last year and thus far, our expectations have been exceeded. Importantly, we are continuing to show solid lease-up on our new hyperscaler builds demonstrating our discipline in making investments in this space. At Uniti Solutions, we're seeing growing success in cross-selling products into our on-net fiber base at Uniti Fiber and Kinetic. Today, we estimate our managed services attachment rate to be below 0.1x at Uniti Fiber and we think it could be materially higher over time. Lastly, as Paul will comment on later, the ABS opportunity to fund our business cost efficiently also continues to grow. 2026 is an important inflection year for Uniti and in particular is a critical investment year at Kinetic. As such, showing progress towards key goals is critical and we previously committed to some milestones as highlighted on Slide 6 to demonstrate that progress. We achieved our first milestone during the fourth quarter of greater than 50% of Kinetic subs now on fiber. And in April, we achieved our second milestone of greater than 50% of Kinetic's consumer revenues on fiber. We remain very confident in the remainder of our milestones, including achieving consolidated revenue and EBITDA growth in 2027. Slide 7 shows we're well on our way to 3.5 million homes passed with fiber and 1.25 million fiber subs by the end of 2029 and we're also closer to 90% of our revenue coming from our core business. We are laser-focused on operational excellence, customer obsession, intensely growing our fiber business and executing on our strategy of building fiber into unique locations, including overbuilding legacy networks and moving customers on to our own fiber. All of this combined with aggressively managing out of legacy services will lead to growth. As I mentioned earlier, Kinetic consumer fiber churn was a bright spot for the quarter as highlighted on Slide 8. We were very candid when our merger closed that consumer fiber churn was too high and it was going to be a big focus area. We followed through on that promise and expect there's room for further improvement. We believe with the various actions we've taken to date plus future planned actions, we will bring Kinetic fiber churn down to industry-leading levels just like those we've had at Uniti for years. We're also using best practices brought over from Frontier, Ziply and others led by John Harrobin's team. Managing churn effectively is a team effort and we've actually made it a company-wide metric for our incentive bonus plan as a result. Turning to Fiber Infrastructure on Slide 9. The opportunity in wholesale fiber right now is generational in nature and we're extremely well positioned with the right strategy, leadership, assets to capture our share in both dark fiber and waves. There has never been a better time to be a wholesale fiber provider. Although we are building substantial amounts of new fiber, especially for the hyperscalers, we're doing it profitably and our scaled national footprint gives us terrific lease-up potential driving our blended anchor lease-up yields to 35%. Importantly, although we're building some attractive new greenfield routes for hyperscalers, close to 80% of our hyperscaler business actually includes selling all or at least partial existing infrastructure. As such, the combined IRRs on the hyperscaler deals sold to date is approximately 30%. As I mentioned last quarter, we expect to build approximately 6,000 new route miles of fiber and we expect to get close to $1 billion of cumulative nonrecurring cash revenue by 2028. Over the next 3 years, a meaningful portion of our economics is supported by executed contracts, including 100% of the economics included in our 2026 guidance. On the other side of this 3-year time horizon, we not only expect more fiber builds to come, but importantly, we expect to really ramp the lease-up of these builds. This will lead to additional nonrecurring cash revenue and up to $500 million of recurring annual cash revenue. As a result, we expect to achieve a total return on our capital of 2x to 4x. We've often stated that the current build phase for hyperscalers is exciting, but we have also said that the inference phase is the most exciting. When the inference phase fully ramps, a more expansive group of customers will be using AI and will need highly reliable, low latency, ultra-high bandwidth connectivity and the mission-critical advantages of fiber will really rise above all other technologies. Fixed wireless, LEO and even cable remain somewhat competitive today at the edge. But over time, that will dissipate. Customers large and small will demand fiber at the edge, which brings into focus our 5 million connected endpoints and provides us an opportunity to win back share from these other technologies. All of this edge demand will drive substantially more traffic on to our wholesale network. As such, we are not only working hard to prepare for the inference phase by building fiber to more homes and businesses as well as upgrading our towers and small cells, but importantly, we're preparing to become more of a share taker in the waves market. As illustrated on Slide 11, the waves market is projected to grow at close to 10% a year and we believe that could be conservative. Uniti has less than 5% waves market share today, which is similar to our other fiber products where we are an insurgent share taker. We recently launched FastWaves, a product which has substantially faster turn-up intervals than we've had in the past. We're not enabling waves capability all across the country. We're being selective about where we like waves and we're focusing on routes that are unique to Uniti that give us a competitive advantage. These routes are particularly enhanced by the unique build cycle that we're currently undertaking for the hyperscalers. As we complete long-haul builds that connect Tier 2 and 3 markets, we expect the hyperscalers to be increasingly large wave customers eventually pivoting away from the current dark fiber-intensive build cycle and becoming more regular wave customers. As an example and we think a leading indicator, in May we sold a 20-terabit wave package for a hyperscaler, the single largest lit bandwidth order in Uniti's history. And there are an increasing number of deals like this in our sales funnel. With that, I'll turn the call over to Paul.

Thank you, Kenny. Starting on Slide 13, I'd like to review key first quarter highlights for both Kinetic and our Fiber Infrastructure segment. We saw another strong quarter with significant progress made across several fronts. Starting with Kinetic, we expanded our fiber network to pass an additional 88,000 homes with fiber, our highest level of new passings in almost 4 years ending the quarter with approximately 1.94 million homes passed with fiber. Kinetic also added 30,000 net new fiber subscribers during the first quarter ending the quarter with 564,000 total fiber subscribers. As Kenny mentioned earlier, we had the highest quarter on record for fiber gross adds and total Kinetic fiber subscribers grew 22% from the prior year period. Kinetic Consumer Fiber revenue grew 26% year-over-year during the quarter. This growth is being driven by strong adoption of our fiber-to-the-home product bolstered by the performance of the various marketing initiatives at Kinetic that target both our newer and more seasoned cohorts. At Fiber Infrastructure, we recorded consolidated bookings MRR of approximately $1.6 million, the third highest level on record. Slide 14 highlights the sustained momentum we are seeing within Kinetic Fiber. We achieved fiber penetration of 29.1% during the quarter, which was up 20 basis points sequentially and 120 basis points year-over-year. Fiber ARPU also continued its positive trend increasing 5% year-over-year. These trends support higher lifetime value per passing and improving returns on our incremental capital spend for fiber. Turning to Slide 15. The strong improvement in our cohort fiber penetration is being driven by highly targeted marketing, customer experience and customer retention initiatives being deployed by the Kinetic team. Penetration levels in our year 1 2025 cohort are now exceeding year 2 penetration rates in the prior year cohort and year 3 penetration rates in our older cohorts. We expect to maintain or improve this trajectory going forward and the team is now focusing on executing a deeper, more sophisticated playbook to increase penetration in our older cohorts. Given our current trajectory, we remain confident that our 40% terminal penetration target is very achievable and perhaps conservative given Kenny's comments earlier about winning back share from alternative technologies. Slide 16 lays out our key targets for Kinetic in 2026. We remain on target to reach 2.3 million to 2.35 million homes passed with fiber by the end of this year, which would bring fiber coverage within the Kinetic footprint to over 50%, a significant milestone in our goal to reach 3.5 million homes by the end of 2029. We also expect to end the year with between 675,000 and 700,000 fiber subs and realize $635 million to $655 million of consumer fiber revenue in 2026, an increase of roughly 25% to 30% from the prior year. Slide 17 provides a pro forma view of Uniti's consolidated results for the first quarter. Consolidated pro forma revenue and adjusted EBITDA were up 1% and 10% year-over-year, respectively, during the quarter primarily driven by the hyperscaler AI deals that were recognized during the quarter and partially offset by the continued declines at Uniti Solutions and in legacy copper and TDM services. This was the first quarter as a combined company that we achieved both top line and EBITDA growth, a significant first step in our goal to achieve full year growth by 2027. Kinetic fiber-based revenue, inclusive of consumer, business and wholesale services grew 16% year-over-year. As we continue to execute on and accelerate our fiber overbuild plan, fiber services at Kinetic will deliver consistent strong growth quarter-over-quarter. In addition to the information provided in our earnings materials, we have also included supplemental pro forma financial information on our Investor Relations website. Slide 18 demonstrates that the growth in each of our core fiber lines of business has been very strong and we expect that growth to continue given the superior nature of fiber as a service. With this pace of growth, we expect fiber to overtake legacy services as the majority of our revenue by the end of 2026. Please turn to Slide 19 and I'll now cover our full year 2026 outlook for the combined company. Beginning with Kinetic, we continue to expect revenues and contribution margin to be $2.15 billion and $905 million, respectively, at the midpoint. We expect to deploy approximately $1.2 billion of net CapEx at the midpoint of our guidance as we accelerate our fiber build. At Fiber Infrastructure, we still expect revenues and contribution margin to be $975 million and $560 million, respectively, at the midpoint for full year 2026. Our outlook for net CapEx at Fiber Infrastructure this year remains $140 million at the midpoint of our guidance and represents a capital intensity of approximately 14%. As a reminder, we expect the revenue from large sales-type lease dark fiber deals to be lumpy and come in unevenly during 2026. More specifically, a significant portion of this revenue was recognized in the first quarter and the bulk of the remaining amount is still expected to be recognized later in the year, most likely the fourth quarter. Given the inherent variability of the hyperscaler sales-type lease revenue and in an effort to provide better guidance, we have included quarterly ranges for our 2026 outlook for total revenue and adjusted EBITDA. Please also note that as has always been our practice, our net CapEx reporting offsets our gross CapEx by upfront payments received in an IRU arrangement as the cash received will offset a significant portion of the CapEx relating to these sales-type lease arrangements. Turning to Uniti Solutions. We expect revenues and contribution margin of $700 million and $310 million at the midpoint. As we've mentioned several times before, Uniti Solutions is not core to our go-forward Fiber Infrastructure strategy. However, this business does generate meaningful predictable cash flow. While we expect revenue and EBITDA to continue to decline at a midteens pace year-over-year over the next few years, a crucial part of our strategy is to retain the most profitable portion of this business while winding down low-value legacy and TDM services. Altogether, we continue to expect consolidated revenue and adjusted EBITDA of approximately $3.63 billion and $1.45 billion at the midpoint of our 2026 outlook with consolidated net CapEx of about $1.4 billion. Finally, I'd like to provide some brief comments on our capital structure. Since announcing our agreement to merge with Windstream, we have successfully executed on a series of planned actions that were systematically implemented to extend our debt maturities, lower our overall cost of debt, establish access to new debt markets and optimize our mix of secured and unsecured debt and drive meaningful interest expense savings. Slide 20 highlights partially as a result of these actions the blended yields on our debt have improved significantly, falling an impressive 600 basis points over the past 3 years from around 12.5% in February of 2023 to around 6.5% today on a blended basis. We continue to believe that Uniti has significant and growing access to ABS capacity and that ABS will play an increasing role in our capital structure given its competitive cost advantage. As a result, I expect us to continue to be active in the ABS market this year. However, as I've said many times previously, we intend to be balanced in our approach and maintain a healthy mix of both ABS and non-ABS debt in our capital structure. While ABS will be an important part of our strategy to fund the strategic investments we are making in our business, it is not the only source of capital we have at our disposal. For example, as has been our practice at Uniti, we are constantly evaluating our portfolio of assets for optimization. Optimization opportunities could include assets that are underutilized or fallow, assets that are outside of our prioritized footprint or assets for which we can receive premium valuation multiples. As we mentioned last quarter, we believe there are $500 million to $1 billion of noncore assets that we could monetize. As Slide 21 shows between excess fiber, noncore and nonclustered assets in operations such as select nonclustered kinetic and non-Southeast fiber infrastructure markets as well as spectrum and other real estate assets, we believe the opportunity exists to generate material proceeds over the next 12 to 36 months. It is important to note that the monetization of these assets would have a negligible effect on our adjusted EBITDA as many of them are underutilized today and currently produce minimal to no cash flow for the business. To be clear, any divestiture would be entirely opportunistic. And while we haven't announced any transactions yet, we have made significant progress on multiple deals. So hopefully, more to come on that in the coming months. With that, we'd be happy to take your questions. Operator?

[Operator Instructions] And the first question is going to come from Frank Louthan with Raymond James.

Couple of quick questions, if I can. What are you seeing from a competitive standpoint either from FWA or satellite? And then can you just clarify, it seems that you had quite a beat in the quarter, but did not really raise the guidance. Just walk us through what's playing into that variability, what kind of was pulled forward in the quarter? And I appreciate the quarterly layout for the guidance, but why the pace of that, just to be clear, on what you're seeing there? I assume that the Q1 upside you probably had some idea of going into the quarter when you gave the initial guide, but walk us through what's impacting that?

Frank, it's Kenny. I'll take your second question and then I'll ask John to chime in on the first one. Yes, look, we're very excited about the results of this quarter. It's in line with our plan. It's very much expected and hopefully foreshadowed with respect to our guidance that there'd be some lumpy quarters from a revenue and EBITDA perspective because of the large hyperscaler deals that were in our funnel and frankly, fully contracted. And so coming into the year, we have a schedule laid out of which deals should hit in which quarter and thus the quarterly guidance to help give you some idea of what that cadence should look like. So the quarter is not a surprise for us although I'd say probably a little bit better than planned not really because of the hyperscaler deals, but because of some of the other areas of the business where we're outperforming. And when you look out for the rest of the year, to be candid, yes, our business is tracking ahead of the midpoint. And so we're feeling optimistic about where the business is heading from a trajectory point of view and we debated raising guidance. But we ultimately decided to stick with where we are because some of these larger deals can kind of move around a month here or a month there, which can sway performance or sway quarterly results, if you will. But with that said, with respect to the optimism in the business and actually what's in the funnel and what's contracted and we're in the process of turning up, I would say we're more optimistic about the business than we were before and we're more optimistic about the upside in the plan relative to the midpoint. So I think you're hitting on a good theme, Frank, and you're directionally thinking about it the right way. And ultimately, a lot more good things to come in the coming months and quarters.

And Frank, you asked about FWA and LEO. In our fiber markets, we had record top line growth and record churn so we're not seeing an impact of their efforts in our fiber markets. In our copper markets, we do see it a little bit. Nothing changed this past quarter with respect to FWA. But for the first time this past quarter, we did see a pop in LEO activity and we see that in our churn figures in our copper markets this past quarter. I think it's a combination of their aggressive promotion on rates and also free equipment and the timing of our price increases. So it's kind of a double whammy there in our copper markets. We know that we're building fiber as fast as we can everywhere and this is why. So we view that LEO churn as temporary churn in some respects because we know when we build fiber in those markets, we'll get that back. As Kenny alluded to before, when we come with fiber, we see the benefits of that. And we even see it in some of our early RDOF markets that we've built out that didn't have a provider before. We do win customers from Starlink there. So I hope that answers your question.

Great. And was the price increase just on copper or was it across the board for Internet?

So we did a price increase in copper in late 4Q and we'll do another one in the coming months. And we did a January and February 1 fiber increase in our fiber business.

And the next question will come from Gregory Williams with TD Cowen.

Great. Two questions, if I may. First one, I'm not asking on any specific conversations of deals, but I'm curious to hear your thoughts if you'd sell Kinetic assets sooner rather than later. In the past you mentioned waiting until you approach 3.5 million homes to extract more value. Just wondering if that calculus has changed at all. And just second question, are you seeing any delays in your customers accepting orders or are you seeing any rising cost of equipment because some of your peers were saying so last week.

So Greg, I'll take a couple of those and I may ask Paul to jump in as well. But we're not really seeing any delays on orders I think and I assume you mean on customers turning up circuits and not really any delays there. I think we always get a deployment schedule with our customers and occasionally the schedule might slip a little bit here and there, but nothing material. I think on equipment costs, we are seeing some higher costs in customer CPE a little bit and we're also seeing some higher costs in conduit pricing a little bit from the higher cost from resin, if you will. But the reality is we're not -- we bake a lot of that into our guidance for the year. So those expectations are fully baked into what our expectations were coming into the year. And we, frankly, have plenty of inventory that we don't really see any impact from it beyond that. And I think although we're not the biggest in the industry, we're of scale. So when it comes to getting in line with our vendors and having leverage with our vendors when it comes to pricing on equipment costs and timelines on getting equipment, we may not be at the front of the line, but we're pretty high up in the line to get whatever it is we need. With respect to Kinetic, look, there's no hard and fast timeline for us. And Greg, you know from our history, we're always active in the M&A market and we've bought and sold assets over the years, including at times when assets were strategic to our business. So going back over the years, we've sold our tower business. We've sold fiber operations in the Northeast and the Midwest. And so there's no timeline on execution there. We're very focused on achieving shareholder value as soon as we possibly can and if M&A is a tool for us to do that, then we're absolutely open-minded to that in the near term.

And the next question is going to come from Richard Choe with JPMorgan.

I wanted to follow up a little bit on the hyperscale opportunity in your kind of pipeline or backlog. Kind of how should we think about how much revenue we will be hitting this year versus the next few years given what you have signed? But I guess more importantly, each of the trends that we've seen from the hyperscaler AI build has been a lot bigger than anyone expected and it looks like it's ramping up in fiber, but the real kind of deals to be signed are coming down the pipeline. Can you give us a little color on what you're seeing there and what you think will come down the pipeline for the next few years?

Richard, I'll start on that one and then ask Paul to chime in. But yes, look, I think we've said this probably 3 or 4 quarters in a row that we continue to be surprised to the upside on activity among the hyperscalers and in AI in general. And I constantly remind myself not to conflate hyperscalers with AI because they're obviously highly correlated, but they're different. Hyperscalers are building today to enable AI, which is really going to come in full force when the inference phase hits. And I say that because with respect to demand, we're seeing it growing every month, every quarter. We continue to have a lot of conviction with respect to what we gave as the multiyear guidance last quarter and, as I mentioned in my response to Frank earlier today, continue to have very strong conviction about what we expect to see this year. And I'll let Paul comment a little bit on those numbers in a second. But ultimately, we've talked about how hyperscalers used to buy 12 to 24 strands and now they're buying 864 to 1,728 and extra conduits. That 50x to 100x to 200x multiplier on what they're buying is terrific and that's not a fiber package for 10 years. That's a fiber package for a period of time and we're seeing them come back and buying more on top of that in the near term. And we've actually had hyperscalers tell us that their 10-year plan, if there is one, it starts to reach 7,500 to 10,000 strand miles of fiber over a 10-year period. And I'm not sure that's the limit, frankly, and that's just 1 customer. So that's before you ever even get into lease-up. And as we've said, this build cycle is exciting for us because we're building strategic network. And as I said in my prepared remarks, 80% of what we're doing with the hyperscalers is either connected to our existing network or it's selling existing infrastructure. And if you think about that, what that basically means is we're building contiguous network. So even when we're building greenfield, we're building contiguous network that's attached to the rest of our network and that's all to set us up for the lease-up phase and the inference phase and as we foreshadowed, that's what we think will be the most exciting phase of opportunity for us. And we specifically called out this quarter a 20-terabit wave package that we signed in the quarter. That's 50 400-gig waves. So back to that 50x to 100x multiplier that we're seeing in dark fiber, we're now starting to see that in lit fiber. And that's when you get beyond the lumpy onetime revenue items and start getting into the recurring revenue, which is extremely exciting and value accretive to us. So all of that back to your question, I think you're right that the opportunity is continuing to grow. We continue to see it. And as I mentioned with respect to our outlook for the rest of the year, we're more optimistic about the plan for the rest of the year than we were coming into the year. It's just the timing related to some of these deals is a little bit hard to predict especially this early in the year. So with that, Paul, I'll turn it over to you.

Yes, I'll just add a little bit to that, Richard. So as you said, Kenny, we continue to be more and more optimistic and more and more excited as we see the demand really continue to grow in the space. With regard to your question, Richard, specifically about this year and sort of over the coming years, we have laid out in a pretty detailed slide sort of our overall view of how this revenue can grow over the next several years from a 2026 standpoint -- and I would refer you to that slide. But from a 2026 standpoint, we haven't given specific guidance on the hyperscaler onetime sales-type lease dark fiber revenue. But we have given guidance of that Fiber Infrastructure business year-over-year and we've said that most of that growth year-over-year is really being driven by this hyperscaler dark fiber opportunity. I will say in the first quarter of this year, we expected -- as we've said, we expected to have an outsized amount of that onetime dark fiber sales-type lease revenue show up. We had about $70 million of that revenue in our first quarter numbers. And then we've laid out kind of quarterly for the rest of the year that guidance so you can see that lumpiness and better know how to expect that revenue to show up over the rest of the year. But we would expect it to be sort of front-end loaded in the first quarter with that result I just mentioned and then more back-end loaded in the back half of the year. And as we move forward, going forward we expect for the next 3 years really to have similar type of revenue and we think optimistically growing revenue for the sales-type lease revenue kind of year-over-year as we go through the next 3 years before we get to more of the inference phase that Kenny was talking about where we think the revenue is going to really start showing up in terms of recurring revenue as well as hopefully additional sales-type lease onetime revenue going forward.

It's nice to see it hitting the lit services too.

And the next question will come from Brendan Lynch with Barclays.

Kenny, maybe to follow up on some of your comments on Kinetic churn. One question would just be how much lower do you think you can bring those to think you referenced industry-leading levels. So what would that mean in terms of a percentage, maybe what your percentage target is and what some of the initiatives are to bring this down lower?

Brendan, I'll really quickly comment and then I'll turn it over to John because he's obviously leading this effort. But John was at Frontier when they had industry-leading levels and so that's part of what's leading us towards concluding that. And look, I think at the end of the day, fiber is becoming more and more mission-critical. As we've said, John mentioned that we're winning back share from some of the other technologies where we've lost in the past. And so I think in addition to the various efforts that we have ongoing and that John has proven successful at Frontier, the fact that the industry is moving in our direction is helping tremendously. But with that, I'll ask John to comment on the specifics.

Yes. We're encouraged by the first quarter results. I mean down 14% year-over-year at record levels and we talked last quarter about the actions we were taking to achieve that. And when you look at that juxtaposed with our early life customer churn, these are the customers that first sign up with us, we see even a larger improvement in those customers down 20% year-over-year. And that's a good sign for the health of the long-term customer relationship because we get it right at the beginning, we know that will carry forward for the customer's life. We put in place a bunch of mechanisms to identify and resolve customer pain points and this is not only driving our loyalty, but also our overall efficiency. When you think about it, when -- like last quarter we actually beat just slightly our record from last quarter. So we don't list it as a record because it's kind of a tie. But a record for trouble tickets and truck rolls, right? Not only is that great for the customer, but it means we're more efficient. We're rolling less trucks. We have the highest installed completion rates that we've ever had meaning we don't have to invest in the cost of going out to the customer's location again. We have the lowest repeat rates that we've ever had in terms of our service and repair function. That means we save on those secondary truck rolls. And our transfer rates are at their lowest in all-time history. So that is not only durable in terms of solving customer problems by the way we went about that, but also it makes us more efficient. So I think we'll see the improvement continue and what I mean by improvement, churn is a seasonal game, right? One quarter and fourth quarter are a little bit lower than other quarters and this past quarter we improved churn by 24 basis points, 25 basis points. Our objective and our expectation is to widen that improvement year-over-year for the next couple of quarters, but it will follow seasonal patterns.

Okay. Great. Maybe 1 for Paul. Considering where you have been able to issue ABS debt, your optimal mix between secured and unsecured debt, how much lower do you think you can bring your weighted average cost down?

That's a great question. ABS, we printed that last deal at a blended coupon of about 5.7%. So with an all-in sort of blended yield of 6.5%, we're really driving down towards that level. But I think as we add some additional ABS into the mix, which I mentioned in my prepared remarks we'd like to do, I think we can certainly continue to drive that down. The ABS market continues to I think really hang in there well. I think we're off of the March tights in the market a little bit, but not a whole lot. So I think as we continue to add ABS, the benefit to our cost of capital, comparative advantage there is super strong. But I wouldn't -- while we're excited about ABS, I think we're very excited about how our debt in the other markets have performed. And I think as we get opportunities to refinance our other high yield debt, our loan debt, we think we're going to continue to be able to push that cost of debt down as well at least at current market rates. And so I think that is as just an important piece of how we continue to drive net interest savings and our cost of capital is being able to continue to access the other markets in addition to ABS successfully. So not a specific answer to your question. I mean some of that's going to be certainly market dependent. But in the current market today, I think we can -- I've been really pleased. Every deal that we've done over the last couple of years, we've hit a new low mark and the trend keeps going down. And I expect that trend to continue as long as markets can hold, which obviously we can't control that. But from our perspective and what we're doing in the market, I really like the trend.

[Operator Instructions] At this time, I am showing no further questions. This will conclude today's conference call and thank you for participating. You may now disconnect.