TDS · Communication(telephone communications (no radiotelephone)) · 10 years of annual accounts filed with the SEC · latest fiscal year ended 2025-12-31
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Telephone & Data Systems Inc reported revenue of $1.1 billion in fiscal 2025, after shrinking 16.0% a year over the previous 9 years. Its operating margin narrowed from 2.1% in 2016 to -9.1%. Of the $10.3 billion its operations generated over 10 years, 78.8% went back into the business and 9.5% to dividends; the share count rose 6.8%. On the accounting screens, it passes 5 of 7 Piotroski tests, its Altman Z'' of 2.36 is in the grey zone and its Beneish M-score is below the -1.78 line; 1 of the six cross-checks between its statements fires.
Revenue, fiscal 20251.1B-16.0% a year over 9 years
Operating margin-9.1%gross margin —
Return on invested capital—
Free cash flow after stock pay172.2M16.1% of revenue
Net debt ÷ EBITDA—net debt —
Piotroski F-score5/7tests of improvement passed
Is it growing?
Revenue and the operating income it turns into. Growth that does not reach operating income is growth bought with margin.
RevenueOperating income
-2.0B02.0B4.0B6.0B
2016Revenue 5.2BOperating income 108.0M
2017Revenue 5.0BOperating income -108.0M
2018Revenue 5.0BOperating income 205.0M
2019Revenue 5.1BOperating income 179.0M
2020Revenue 5.1BOperating income 259.0M
2021Revenue 5.2BOperating income 261.0M
2022Revenue 5.3BOperating income 122.0M
2023Revenue 1.2BOperating income -682.6M
2024Revenue 1.2BOperating income -191.3M
2025Revenue 1.1BOperating income -97.4M
2016201720182019202020212022202320242025
Compound growth a year
3 yrs
5 yrs
9 yrs
Revenue
-41.3%
-26.9%
-16.0%
Free cash flow per share
—
-0.1%
+2.8%
Dividend per share
-17.7%
+1.7%
+2.6%
Shares
+1.3%
+0.6%
+0.7%
Falling shares are buybacks: each remaining share owns more of the company.
Does it earn more than its capital costs?
Margins say how much of each sale is kept; return on invested capital says how much the business earns on the money it needs to operate. Growth only creates value when that return is above the cost of the capital.
Needs a cost of capital, which comes from the valuation below.
Return on equity
-0.1%
Return on assets
-0.1%
Asset turnover
0.13×
Overheads (SG&A)
40.6% of revenue
Is the profit cash, and where does the cash go?
Net income is an accounting opinion; free cash flow is what was left in the bank after investing. Stock-based pay does not leave the bank — shareholders pay it through dilution — so it is shown taken off as well.
Net incomeFree cash flowAfter stock-based pay
-1.0B-500.0M0500.0M1.0B
2016Net income 43.0MFree cash flow 146.0MAfter stock-based pay 104.0M
2017Net income 153.0MFree cash flow 91.0MAfter stock-based pay 45.0M
2018Net income 135.0MFree cash flow 241.0MAfter stock-based pay 187.0M
2019Net income 121.0MFree cash flow 59.0MAfter stock-based pay 0
2020Net income 226.0MFree cash flow 194.0MAfter stock-based pay 141.0M
2021Net income 156.0MFree cash flow -28.0MAfter stock-based pay -77.0M
2022Net income 62.0MFree cash flow -6.0MAfter stock-based pay -48.0M
2023Net income -500.0MFree cash flow 498.1MAfter stock-based pay 478.5M
2024Net income -27.7MFree cash flow 780.4MAfter stock-based pay 762.1M
2025Net income -6.2MFree cash flow 199.4MAfter stock-based pay 172.2M
2016201720182019202020212022202320242025
Where 10 years of operating cash went, 2016–2025
10.3B generated by the business. Each band is its share of that total.
Reinvested in the business 79%8.1B
Acquisitions 0%0
Dividends 9%973.7M
Share buybacks 2%178.9M
Kept, or used to pay down debt 10%1.0B
Over the same years it paid 410.1M in stock. The share count rose 6.8%. The buybacks did not even cover what was handed out in stock.
Per share
Earnings per shareFree cash flow per shareDividend per share
$-5.00$0.00$5.00$10.00
2016Earnings per share $0.39Free cash flow per share $1.32Dividend per share $0.59
2017Earnings per share $1.37Free cash flow per share $0.81Dividend per share $0.62
2018Earnings per share $1.18Free cash flow per share $2.11Dividend per share $0.63
2019Earnings per share $1.04Free cash flow per share $0.51Dividend per share $0.65
2020Earnings per share $1.97Free cash flow per share $1.69Dividend per share $0.68
2021Earnings per share $1.34Free cash flow per share $-0.24Dividend per share $1.03
2022Earnings per share $0.54Free cash flow per share $-0.05Dividend per share $1.32
2023Earnings per share $-4.43Free cash flow per share $4.42Dividend per share $1.35
2024Earnings per share $-0.24Free cash flow per share $6.86Dividend per share $0.92
2025Earnings per share $-0.05Free cash flow per share $1.68Dividend per share $0.74
2016201720182019202020212022202320242025
Shares outstanding
Diluted shares
110.0M112.0M114.0M116.0M118.0M120.0M
2016Diluted shares 111.0M
2017Diluted shares 112.0M
2018Diluted shares 114.0M
2019Diluted shares 116.0M
2020Diluted shares 115.0M
2021Diluted shares 116.0M
2022Diluted shares 114.0M
2023Diluted shares 112.8M
2024Diluted shares 113.7M
2025Diluted shares 118.6M
2016201720182019202020212022202320242025
How strong is the balance sheet?
Debt is not bad in itself; debt the business cannot service in a bad year is. Net debt is debt minus cash, and below zero the company holds more cash than it owes.
Net debt ÷ EBITDA
—
Interest coverage
-1× operating income ÷ interest
Current ratio
2.10 current assets ÷ current liabilities
Cash conversion cycle
— collects in 23d
Three classic screens of the accounts
Each asks a different question of the same statements — is it improving, does it look like a company heading for distress, do the accounts resemble ones that were manipulated. None is a verdict; each shows what moves it.
Piotroski F-score
Is the business improving? Nine yes-or-no tests, this year against last.
5of 7 tests passed
✕ProfitableReturn on assets above zerofailed
✓Cash from operationsOperating cash flow above zeropassed
✓Profitability improvedReturn on assets higher than a year beforepassed
✓Profit backed by cashOperating cash flow above net income (low accruals)passed
–Less long-term debtLong-term debt as a share of assets fell — not reportedno data
✓More liquidCurrent ratio higher than a year beforepassed
✕No new sharesShare count did not growfailed
–Better gross marginGross margin higher than a year before — not reportedno data
✓Sells more per assetAsset turnover higher than a year beforepassed
Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.
Altman Z''-score
Does the balance sheet look like those of companies that went bankrupt?
2.36grey zone
1.12.6
Working capital ÷ assets 0.06 × 6.56+0.38
Retained earnings ÷ assets 0.20 × 3.26+0.66
Operating income ÷ assets -0.01 × 6.72-0.08
Equity ÷ liabilities 1.34 × 1.05+1.40
Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.
Beneish M-score
Do the accounts resemble those of companies that manipulated their earnings?
-2.56below the -1.78 line
-1.78
Receivables vs sales 1.32+1.22
Gross margin slipping 1.00 (not reported, set to 1)+0.53
Soft assets 0.81+0.33
Sales growth 0.91+0.81
Slower depreciation 0.97+0.11
Overheads vs sales 0.98-0.17
Profit not in cash -0.07-0.33
Leverage rising 0.66-0.22
Where it misleads: fast growth and acquisitions. Sales growth carries a heavy weight, so a company growing 50% a year scores like a suspect without having done anything. It is a screen from a 1999 study, not an accusation.
Where the statements disagree
Cross-checks between the income statement, the balance sheet and the cash flow for the latest year, each with the benign reading and the worrying one.
Receivables are growing 20% against revenue growing -9%.
Benign
A shift towards larger customers on longer terms, or sales concentrated at the end of the period.
Worrying
Sales are being made on looser credit, or revenue has been booked that may never be collected.
What is it worth, under which assumptions?
A company is worth the cash it will generate, brought back to today. This model projects revenue with growth that fades over the years, applies a free cash flow margin, and discounts the result at the cost of capital. Every assumption says where it came from, and all of them can be changed.
With a free cash flow margin at or below zero in year ten, the business never generates cash for its owners and a DCF says nothing useful. Set a positive margin for year ten to see what it would take.
What it has filed lately
The last twelve months at the SEC, most important first: annual and quarterly reports, events, large holders and insiders.
Every Form 4 filed in the last twelve months, read line by line: 6 filings by 4 people. Open-market purchases and sales are counted apart from awards, option exercises and shares withheld for taxes.
Bought on the open market—none in the period
Sold on the open market$3.0M1 sale(s) by 1 insider(s)
Under pre-arranged plans0%of the sales followed a 10b5-1 plan set months earlier
A Form 4 says what happened, when, how many shares and at what price. It does not say why: a sale can be diversification, a tax bill or a plan fixed months earlier, and an award is pay, not a purchase. Nothing here is a reason to buy or sell anything.
Which large funds report holding it
From the Form 13F of the 28 institutions followed on this site, as of the end of their last reported quarter. A 13F is filed up to 45 days later and shows only long positions in US-listed shares.
Accounts from the company's own SEC filings; lines some companies do not report are shown as a dash rather than estimated. The risk-free rate is the 10-year US Treasury yield. A DCF is a way of making assumptions explicit, not a forecast: it states what the company would be worth if the assumptions held. The scores are screens that point where to look, not verdicts. Nothing here is a recommendation to buy or sell.
