American Tower Corporation Q4 FY2025 earnings call

Durable Revenue Growth

• Mobile data consumption growth, 5G adoption, fixed wireless access, and AI are driving revenue growth. In the U.S., carriers are shifting to capacity-oriented 5G activity, and internationally, rising data consumption drives network investment. Data center business benefits from hybrid/multi-cloud and AI-related demand.

Operational Efficiency

• Over the past 3 years, cost structure improved through centralizing regional groups, divesting noncore units, and automating leasing. Future efforts include managing land expense, global unified sourcing, accelerating standard maintenance adoption, and simplifying technology platforms to drive tower cash EBITDA margin expansion.

Capital Allocation

• Remain disciplined, back to target leverage range. Plan to deploy most growth CapEx to developed tower markets and CoreSite, and continue share repurchases with flexibility to use capital for internal CapEx, M&A, share repurchases, or delevering.

For the full year, attributable AFFO per share as adjusted grew 8%, including over 13% growth in the fourth quarter. The tower business was underpinned by robust leasing demand, with the U.S. market expected to deliver mid-single-digit organic growth as carriers densify networks for 5G and beyond, and international tower portfolio to grow faster as less mature portfolios lease up. The data center business saw double-digit growth due to strong demand for hybrid and multi-cloud deployments and positive pricing, with CoreSite's AI-ready platform supporting mid-teens or higher stabilized yields on new deployments.

Organic Tenant Billings Growth

• 2026 consolidated organic tenant billings growth expected at ~1% (~4% excluding DISH churn). U.S. and Canada ~0.5% (~4.5% excluding DISH churn). Africa and APAC ~8.5%, Europe ~4%, LatAm ~-3%.

Property Revenue

• Expected ~1% organic tenant billings growth complemented by ~2,000 new tower sites construction and ~13% growth in U.S. data center business. Property revenue expected to grow ~3% excluding noncash straight-line and FX impacts.

Adjusted EBITDA

• Expected to grow ~2% excluding net straight line and FX impacts, ~5% excluding DISH churn impact. Cash adjusted EBITDA margins expected at 66.8%, down 20 basis points.

AFFO

• Attributable AFFO per share as adjusted expected to grow ~1% year-over-year, ~5% excluding DISH churn and other impacts.

Capital Allocation

• Dividend expected to grow ~5%, $1.9 billion in capital deployments with ~85% to developed market platforms.

• DISH default negatively impacts 2026 outlook.
• Elevated consolidation-related churn in Brazil leads to LatAm organic growth decline in 2026, with acceleration expected in 2027.

Q: On the domestic side, can you provide a bit more color on the pacing of activity that you're seeing from the carriers as we enter a lower contracted revenue cycle that you had under the holistic deals in the prior terms? And are you seeing a change in the amendment versus densification activity today? And maybe just to compare that 2.5% leasing growth guidance for '26, how does that compare to '25 if we exclude DISH?

A: Steven Vondran and Rodney Smith responded on leasing trends, amendment vs densification activity, and comparison of 2026 and 2025 leasing growth excluding DISH.

Q: Hope you're doing okay with the snowstorm. Obviously, crazy up there in the Northeast. I want to start on the DISH. Appreciate it's out of the guidance. We had taken it out of our numbers as well. Can you provide us the amount owed? Like Crown Castle mentioned that they're owed $3.5 billion when they terminated the agreement with DISH. Are you able to tell us how much is owned and that you're looking at trying to work out a payment from them?

A: Steven Vondran and Rodney Smith responded on DISH's owed amount, litigation efforts, and capital allocation related to potential DISH collections.

Q: The margin guidance for cash margins to go up by 200 to 300 basis points by 2030, how much of that is just organic from the natural operating leverage in the business? And then how much is represented by the acceleration of the activities that you outlined earlier?

A: Rodney Smith and Steven Vondran responded on margin expansion, organic growth, and cost management efforts contributing to margin expansion.

Q: First, I was hoping you could expand a bit on two of the tower revenue growth drivers you highlighted, fixed wireless and AI. So with fixed wireless, are you seeing the carriers invest behind it as the primary motivating factor for work on a site versus it piggybacking mobile-led deployments both in the U.S. and overseas? And what AI use cases do you see as most promising for driving wireless traffic growth?

A: Steven Vondran responded on fixed wireless and AI's impact on wireless traffic growth.

Q: I was wondering if you could maybe just elaborate on the cost reduction program. Maybe specifically talk about what -- it sounds like many of the actions you mentioned, Rod, would be things you would have done in normal course already. So I'm trying to understand, are you basically saying or is the message that you'll be able to sort of achieve this 50 basis points on average per year in spite of some of the cost headwinds and margin headwinds that you mentioned earlier? Or is there something sort of above and beyond that? And would you expect any nonlinearity in achievement of those?

A: Rodney Smith responded on cost reduction program, cost management mindset, and margin expansion efforts.

Q: I guess regarding capital allocation, we talked a lot about returning capital and making new investments. But something we haven't talked about for a while, Steve, was kind of the pivot away from emerging markets. And I think the term of art is called capital recycling. And if you go to Slide 11 and you kind of look at that left-hand side, it looks like there's a lot of markets that are small enough to be distractions and that money could be put to a higher and better use. So if you could kind of talk to us a little bit about what the strategy there is at this stage, whether currencies and market valuations have perhaps stopped you from doing things or if things are on the burner. And then I guess my next question is a little offbeat. But for the last 5 years, if anyone asked, hey, how's satellite going to affect the terrestrial wireless business, you'd roll your eyes and you'd say, it's never going to have an impact. But now that you're starting to talk about 2030 margin expansion, 2030 6G is a driver and the reality that these LEO constellations are going to evolve over the next 5 years in material ways, how do you kind of get comfort right now looking into 2030 that this kind of evolution of connectivity, towers in the sky, so to speak, isn't an equivalently disruptive -- an equivalent to, say, the AI evolution, which you also expect to happen in the next 5 years?

A: Steven Vondran and Rodney Smith responded on emerging market strategy, capital recycling, and satellite impact on terrestrial wireless business.

Q: Can you guys hear me? Great. So two questions. Obviously, the U.S. ex DISH is pretty steady. I guess if we could remove DISH from like the last 3 years, it still seems like colo and amendment activity is down. Is that right? And just to nitpick a little bit, why is the second half of the year lower than the first half? And how should we be thinking about that in terms of the exit rate? How should that inform our view in terms of 2027? And then separately, in Africa, one of your largest customers just announced their intent to acquire some towers for their own. Sort of how you're thinking about that in terms of your view when one of your largest customers now wants to own a captive tower portfolio? How does that impact your growth expectations for that market?

A: Steven Vondran and Rodney Smith responded on U.S. colo/amendment activity, year-to-year pacing, and Africa customer acquisition impact.

Q: Rod, maybe just to follow up on that commentary there. That was very helpful in kind of framing out the longer-term outlook. You previously guided to 5% organic growth through 2027. Obviously, with DISH not in the picture now, that is coming down a little bit. How should we think about that long-term growth going forward, we get back into about 4.5%, and that's what you're suggesting for this year? Should we anticipate that, that continues out into the future as well?

A: Steven Vondran responded on long-term organic growth outlook.

Q: I wanted to ask a follow-up on the data centers. What kind of renewal pricing are you seeing and overall pricing for new business? And then back to the tower business, if you can give us a sense of what kind of pipeline of applications you are seeing? And has that shifted at all? And at some point, do you see it kind of inflecting higher?

A: Steven Vondran responded on data center pricing and tower application pipeline.