Crown Castle Inc. Q4 FY2025 earnings call

• On track to close sale of small cell and fiber businesses in 2026, with ~60% of workforce moving with the sale, transitioning to a simpler US-only tower business. • Exercised right to terminate agreement with DISH after default, seeking to recover over $3.5 billion. • Announced restructuring plan to realign staffing levels, reducing tower and corporate workforce by ~20% to ~1,250 employees, aiming for $65 million annualized run rate operating cost reduction. • Capital allocation framework includes maintaining dividend at $4.25 until target payout ratio, investing $150M-$250M in net capital expenditures, utilizing cash flow for share repurchases while maintaining investment-grade credit rating, and using sale proceeds to keep leverage between 6-6.5 times, allocating ~$1B to share repurchases and ~$7B to repay debt. • Strategic priorities for the US tower business include investing in systems for better asset information and customer experience, streamlining and automating processes for operational effectiveness, and driving efficiencies across the business.

The fiber segment is reported as discontinued operations. The company's focus is on the tower business. Full-year 2025 results exceeded guidance midpoint across key metrics. For 2026, the outlook includes impact from DISH termination, small cell and fiber business sale closing, and cost reductions. However, detailed absolute financials and revenue contribution percentages for non-fiber segments beyond general remarks are not extensively broken down in the transcript for this specific reporting.

• 2026 outlook midpoint: site rental revenues $3.9B, adjusted EBITDA $2.7B, AFFO $1.9B. • Impacted by DISH termination ($220M churn in 2026), small cell and fiber sale closing assumed on June 30, and $65M annualized cost reduction. • Organic growth midpoint 3.3% excluding Sprint cancellations and DISH terminations in 2026; 3.5% if DISH revenues excluded from prior-year site rental billings. • AFFO guidance for twelve months following close reduced by $240M to $2.1B midpoint, offset by interest expense savings and growth in underlying business.

• Risk of DISH not fulfilling obligations to remove equipment after contract termination. • Uncertainty around remaining state and federal approvals for small cell and fiber business sale. • Potential challenges in spectrum deployment and regulatory compliance affecting operations.

Q: Ric Prentiss asked about DISH status, purchase price of fiber small cell transaction, buyback timing, and state/federal approvals.

A: Sunit Patel said DISH defaulted and they're enforcing rights to recover over $3.5B; purchase price of $8.5B remains, buyback details to be shared closer to closing; Chris Hillebrandt mentioned progress with teams and California being sensitive but hopeful to finish approvals.

Q: Michael Rollins asked about leasing environment and 2026 growth.

A: Chris Hillebrandt and Sunit Patel said market dynamics like spectrum availability and mobile data demand drive growth, 3.5% is a low point.

Q: Joshua Matthew Frantz asked about bridging 2026 leasing outlook and DISH contribution.

A: Sunit Patel said DISH contributed ~$50M to 2025 organic growth, 5G cycle and carrier activity continue.

Q: Michael J. Funk asked about DISH process and timing.

A: Chris Hillebrandt said legal strategy details not disclosed, but they're defending shareholder interests.

Q: Eric Luebchow asked about growth confidence and cost restructuring.

A: Sunit Patel and Chris Hillebrandt said visibility into leasing activity and SG&A cost savings from restructuring.

Q: Richard Choe asked about CapEx and leasing.

A: Sunit Patel said CapEx for ground lease buyouts, new towers, and systems; leasing activity mostly contracted.

Q: Nick Del Deo asked about '26 leasing forecast and contract lock-in.

A: Sunit Patel said ~80% of organic growth is contracted.

Q: Brandon Nispel asked about leasing cost timing and leverage.

A: Sunit Patel said cost reduction weighted to back half, leverage target 6-6.5 times remains.

Q: Brendan Lynch asked about long-term growth and software upgrades.

A: Sunit Patel said no specific long-term outlook, Chris Hillebrandt discussed spectrum deployment and software vs hardware needs.

Q: David Barden asked about DISH non-payment and spectrum auction impact.

A: Chris Hillebrandt said DISH responsible for removing equipment, spectrum auction challenges solvable with industry collaboration.

Q: Batya Levi asked about leasing slowdown and cost outlook.

A: Sunit Patel said slowdown in line with prior, cost reduction from investment in systems.

Q: Ari Klein asked about legal costs and share repurchase.

A: Sunit Patel said legal costs factored into guidance, capital allocation maintains leverage and shareholder returns.