American Tower at Goldman Sachs Conference: Growth Amid Challenges

On Wednesday, 10 September 2025, American Tower Corporation (NYSE:AMT) presented at the Goldman Sachs Communicopia + Technology Conference 2025. The discussion, led by CEO Steven O. Vondran, highlighted strategic priorities focusing on organic growth in core portfolios and developed markets. While the company reported positive developments in the U.S., Europe, and Africa, it acknowledged challenges in Latin America.

Key Takeaways

• American Tower emphasizes organic growth, with strong carrier activity in the U.S. and Europe.
• Strategic capital allocation prioritizes dividend payouts and internal CapEx programs.
• AI applications drive demand, particularly in CoreSite data centers.
• The company anticipates durable mid to upper single-digit growth over time.
• Challenges include Latin American market churn and refinancing headwinds.

Financial Results

• Dividend Policy: Committed to distributing 100% of taxable income, aligning with REIT requirements.
• Organic Tenant Billing Growth: Mid-single-digit growth in developed markets, slightly higher in emerging markets post-churn.
• AFFO Growth: Approximately 6%, bolstered by CoreSite and cost savings contributing an additional 2.5%.
• Core Growth Rate: Achieved an 8.5% growth rate.

Operational Updates

• Capital Allocation: Focus on tower builds in Europe and CoreSite investments for optimal returns.
• U.S. Carrier Deployments: Continued rollout of mid-band 5G, targeting near-total coverage.
• International Operations: Steady growth in Europe and Africa; Latin America faces carrier consolidation challenges.
• CoreSite: Increased demand from AI applications and enterprise inferencing models.
• EchoStar Agreement: Ongoing 15-year agreement, ensuring stable revenue streams.

Future Outlook

• Growth Projections: Targeting durable mid to upper single-digit growth.
• AI and 5G Expansion: Anticipated demand spikes due to AI and potential new tower deployments from spectrum auctions.
• Edge Compute: Plans to integrate compute capabilities at tower bases, enhancing customer interaction.

Q&A Highlights

• Timing Issue: Minor $5 million impact on a $10 billion P&L due to a carrier’s MLA timing.
• Guidance: 5% organic growth through 2027, with mid-single-digit growth expected beyond.
• Spectrum Auctions: New bands seen as complementary to 5G and future 6G development.

Readers are encouraged to refer to the full transcript for a detailed understanding of American Tower’s strategic directions and financial performance.

Full transcript - Goldman Sachs Communicopia + Technology Conference 2025:

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Good morning, everybody. Welcome to the Goldman Sachs Communication and Technology Conference. My name is James Edward Schneider. I’m the Towers Analyst here at Goldman Sachs Group. It’s my pleasure to welcome American Tower Corporation and President and CEO Steven O. Vondran to the stage today. Welcome, Steve.

Steven O. Vondran, President and CEO, American Tower Corporation: Thanks. Thanks for inviting us.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Thanks for being here. Maybe, Steve, just kind of starting out at a very high level, the company’s changed a little bit since you were here last. You sold India. Domestic market activity has improved a bit. The data center market continues to evolve. As you sit here today, in which segments of the business do you think are going to have the greatest change at this point a year from now?

Steven O. Vondran, President and CEO, American Tower Corporation: Yeah, thanks for the question. I think about how the business has changed in the last year. We laid out a number of strategic priorities, and those haven’t changed dramatically. When you think about how we’re going to drive the most value, focusing on organic growth in our core portfolio is what’s going to drive the most value out there. As we focus on the next year, we’re going to continue to focus on that organic growth. As you mentioned, the demand dynamics continue to improve. We’re seeing improved carrier activity in the U.S. We’re seeing healthy growth in Africa and Europe. Latin America is still a little bit challenged, but that existing portfolio of assets is still going to be the biggest growth driver we have, and there’s a lot of opportunity to create value on that portfolio.

The second kind of component when I think about that strategy is complementing that with investments predominantly in our developed markets. That’s one of the changes that you referenced. Previously, we were growing faster in our emerging markets. We’ve reallocated our capital planning toward developed markets. I’ll touch on a couple of those opportunities in a second. I just want to reiterate the rest of those strategic pieces. The third element has been cost control, and we’ve been very successful in bringing down SG&A. We also see an opportunity to bend the cost curve across some of our other expenses, and that’s something we’re going to be focused on. Complementing that with our balance sheet, we’ve done a lot of work on the balance sheet over the past year and a half, where we’ve taken our short-term debt down pretty dramatically. We’ve also brought our leverage down within our ratios.

We’ve made a lot of improvements to the overall company quality of earnings, and that’s been reflected in both the ratings upgrade on our debt and also in some of the results that you’re seeing coming out. When I think about what’s going to drive the investment for the next couple of years, some of the biggest opportunities we continue to see are in the tower space. We’re doing a significant number of build-to-suits in Europe, a few hundred build-to-suits in Europe. That’s a great place for us to invest. The second area that we’re excited about, the growth in is CoreSite. Because of the demand outstripping supply in all of our markets, because of the new impetus from AI, we see CoreSite having a lot of opportunity to continue to grow. We’re allocating more capital into that as well.

As I think about next year, I think towers are still going to continue to grow. We’re going to see more activity by carriers, and I think CoreSite is going to have that opportunity as well. You’ll probably see that capital allocation continue to follow that. Build-to-suits when we can get the right terms and conditions on the towers, and then continue to invest in CoreSite.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Very good. One of the initiatives I know you also have underway is to kind of take a harder look at your cloud space. Can you help investors understand the process you’re undertaking to optimize things?

Steven O. Vondran, President and CEO, American Tower Corporation: Sure. Over the past couple of years, we’ve been very successful in bringing down SG&A. If you think about the rotation in our investment philosophy, that’s helped with some of that. When you’re aggressively growing in markets, you need a larger team that’s invested in that growth. When we’ve pulled back on some of those emerging market investments, that let us right-size some of the teams there. That’s some of that savings. The rest of it has really come from taking a hard look at our global organization and saying, what can we do more efficiently? There were some low-hanging fruit. That was the first phase of it. As we look forward, it gets a little bit harder. I think we’ve picked most of the low-hanging fruit.

Not to say there’s not more work we can do in SG&A, but the incremental SG&A savings we’re going to get now will be driven by things like automation and some optimization of processes and things like that. Earlier this year, we named Bud Knoll as our global COO. The reason we did that is that we think looking across that global enterprise, there’s opportunities in the rest of the cost stack as well. There are pieces of that that you don’t have as much control over. Our land rents, you have some escalators that are contractually based there, but we have a program to buy those out. Utilities tend to fluctuate with inflation in the local geographies, but you can do some bulk purchasing. When you think about all those components of the direct cost stack, a lot of it’s fixed. Some of it’s variable.

Some of those fixed costs, you can do some longer-term planning around. I’ve asked Bud to take a look at that across the entire organization and bend the cost curve. It’s just a very simple formula. If we can grow those expenses slower than we’re growing the revenue, we’ll continue to get margin expansion. What I’m planning to do later this year is lay out how we’re going to bend that cost curve and what the timeline is, et cetera. Bud’s still working on it. This is not easy stuff, and it’s not instant. You’re not going to see.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: How long has it taken?

Steven O. Vondran, President and CEO, American Tower Corporation: Yeah, exactly. We do see some opportunity there as well. That’s how we’re looking at it. I want to also be clear, we can’t break the machine. We’re a great partner to our customers across the globe. The third rail issue I’ve given my team to look at on this is you’ve got to keep the customer service levels up. I believe that customers are willing to pay more for superior service, and we’ve proven that time and again. We’re not changing the way we service our customers or the way we maintain our assets. We’re just looking for efficiency in the process.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Great. Before we dive into business, I want to ask you one question on capital allocation. You’ve got a lot of options available to you: dividends, inorganic, organic, tower builds, M&A. Just give us some insight as to how you think about the different return hurdles for each of these, you know, international M&A and domestic ground lease purchases, build-to-suits you mentioned, and so on.

Steven O. Vondran, President and CEO, American Tower Corporation: Sure. I’ll start with the dividend because it does take the largest share of our cash flow. As a real estate investment trust, we’re required to pay out 90% of our taxable income. The most tax-efficient way we believe to do that is to actually pay out 100% of our taxable income, and that’s been our policy. We did pause the dividend last year in terms of the growth because we thought it was more important to get within our leverage ratios than to keep increasing the dividend. We did restart growth this year on that. What we’ve indicated very clearly, I think, to people is you should expect the dividend to grow in line with AFFO per share roughly on a multi-year basis because that’s how our taxable income should grow, is in line with kind of AFFO growth. That’s how we think about the dividend.

Past the dividend, we really look at it and say we can either further delever, we can buy back our own stock, we can fund more internal CapEx, or we can do M&A. We’ve worked very hard to get the flexibility to make that a math-based exercise where Rod and I can sit down and look at it and say, what’s going to create the most shareholder return over the long term on that? There’s not really a preferential rank of those in terms of how we look at it. Right now, this year, the highest returns that we can drive on that additional cash is our internal CapEx program. We found opportunities to build towers in Europe to increase our investments in CoreSite. They’re going to give us better yields than the other alternatives there.

We have the flexibility to look at all those options every year to see what we’re going to do with that. That mix could change a little bit next year or it could stay the same.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Great. Maybe digging into your domestic tower business for a moment. You said on your Q2 call, application volume activity levels were strong. Services business, quite strong. That should lead to activity levels. I think you slightly lowered your organic growth guidance, which you attributed to timing. Maybe starting with the sort of activity levels, is this mainly a continuation of what we’ve seen on rural builds and mid-band 5G deployments, or is there anything else going on there?

Steven O. Vondran, President and CEO, American Tower Corporation: No, we continue to see the carriers invest in getting mid-band 5G rolled out ubiquitously across the portfolio, and it’s broad-based activity there. One of our carriers is kind of over 80% deployed, one’s kind of in that 75% range, and one’s still a little bit over half. There’s still a long way to go to get ubiquitous mid-band 5G coverage. We expect to continue to see that roll out until they all get into kind of the high 90s in terms of that coverage. We’re also seeing new colocations, and that comes really in three flavors that I would say. The first is fill-in sites, and that’s just kind of looking at the propagation of the networks. The 3.5 propagates a little bit differently than the lower bands do, so there will be some infill just to fill in holes in the network.

The second area is we’re still seeing efforts to increase coverage, kind of a paint-the-map approach. Some of that’s being driven by regulatory requirements that people signed up to, and then some of these competitive pressures. We do continue to see that kind of paint-the-map approach, slowly increasing the coverage of the terrestrial networks. The third element that we’re starting to see is densification because of capacity-driven constraints on the network. That’s a little bit harder for us to measure because carriers don’t always say that’s what this is for, but when we look back at 3G and 4G and where the cell splitting started there, we’re seeing activity in the same locations. We do feel like we’re on the cusp of a densification phase as well in terms of cell splitting and new colocations. It’s really all those things that are driving the increased application activity on the portfolio.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Very good. As for the downtick in guidance, it sounds like you’re confident that’s timing related, but we believe that’s being driven by AT&T and given your expertise of the MLA with that company. Maybe, does that kind of change how you’re thinking about doing an MLA with AT&T?

Steven O. Vondran, President and CEO, American Tower Corporation: It’s a $5 million change on a $10 billion P&L. I understand it’s important to people to telegraph. It’s timing. I think we’ve been very clear that there’s one carrier that’s not on the comprehensive MLA. That timing is variable based on when they sign things and when they commit. We thought the activity was going to happen earlier in the year. It’s going to happen later in the year. It’s not a question of if, it’s when. If you’re long on the stock and you’re looking at our portfolio, it’s a shift of $5 million on a $10 billion P&L. We feel very confident that that’s just a timing-related issue.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Yeah. OK, very good. U.S. carriers, I think, have upgraded more than 50% of their sites with 5G at this point. Verizon has publicly talked about 80% to 90% of CBMs finished by the end of this year. Given the size of your domestic business, with carrier CapEx seemingly not moving very much, may potentially plateau down for the next two years, what level of comfort should investors have in your ability to drive 5% organic growth long term?

Steven O. Vondran, President and CEO, American Tower Corporation: When you think about the guidance we’ve given, the 5% was through 2027. Beyond that, what we’ve said is our algorithm supports mid-single digit. When you just look at the carrier deployments and what they’re doing, that CapEx funds a lot of things. It’s not all just the radio access network on towers. That’s also funding fiber and core and things like that. There is some flexibility within those budgets. Having said that, their CapEx budgets are still roughly $5 billion a year more than they were in 4G. There is a healthy CapEx budget that the carriers are spending on 5G. The thing that gives us comfort in knowing that we’re going to hit those kind of activity-driven milestones that we’re looking to hit is really what we’re seeing in terms of consumer behavior.

As the mobile data growth continues to grow at that kind of 15% to 20% in the U.S., a little bit faster than some of our other geographies, it’s the carrier behavior that we see, which is very consistent with what we saw in 3G and 4G. We feel confident they’re all going to get to that high 90% mid-band coverage. That’s coverage. That doesn’t give you necessarily the capacity to serve every person that is using the network. If you look at the handset penetration rates, we just got over 50% mid-band capable handsets kind of earlier this year, I believe, is the stat. There hasn’t been that much activity on the networks compared to like 4G, where the handset refresh rate was like 12 months. Now it’s closer to two years. All those demand dynamics are going to continue to drive investment because capacity will be constrained.

They will have to invest more. That’s what underlies our guide through 2027. That’s kind of what underlies our long-term algorithm guide as well.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Fair enough. EchoStar, I believe your current exposure is $200 million annualized.

Steven O. Vondran, President and CEO, American Tower Corporation: We haven’t been that specific. It’s about 4% of our U.S. revenue and about 2% of the global revenue.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: OK, fair enough. Maybe just help us understand the contracts you have in place with them and their ability to churn, and what years those renewals kind of come up, and how should we think about your overall churn profile over the next sort of five years plus?

Steven O. Vondran, President and CEO, American Tower Corporation: We signed an agreement in 2021. It’s a 15-year agreement. The comprehensive apportionment of that’s a shorter period. We haven’t been specific about that, but it’s shorter. The non-cancelable lease term goes through into 2036. We would expect to get paid through 2036 under that contract. That’s kind of our contractual position on that.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: OK, great. I don’t think we’re worried about 2037 yet. OK, can you maybe remind us, you know, just in principle, if you have a customer with, say, like a 700 megahertz antenna on your tower, they want to deploy a 600 megahertz antenna, would that be considered for you a colocation or an amendment? Maybe if you were to kind of change the type of antenna configuration, are there any kind of multi-band antennas that can accommodate both?

Steven O. Vondran, President and CEO, American Tower Corporation: The answer is it depends. It depends on who the carrier is, what they’re doing, and who their vendor is on it. There are multi-band antennas out there, but I don’t think we have enough information to speculate as to how that’s going to play out in terms of how you deploy it. Generally speaking, the lower the band, you optimize the wavelength with a longer antenna, but you can do suboptimal installations if you choose to do that. I don’t know yet how that’s going to play out. In terms of the monetization events for us, if they’re installing, generally speaking, if they’re installing new equipment, there’s usually some monetization opportunity. There are some substitution rights with certain limits on there. It depends on what they’re doing and what that equipment looks like and how it functions.

It’s just too early for us to tell what the opportunity set is there for us on that particular question.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: OK, fair. Maybe just sort of thinking a little bit longer term, you know, with the changes at the FTC, there seems to be more likelihood of a new spectrum auction coming up at some point in the next several years. You know, based on what you know about the potential spectrum that could be auctioned, do you see those bands as a driver for potential new tower deployments?

Steven O. Vondran, President and CEO, American Tower Corporation: Yeah, absolutely. When you look at the spectrum pipeline that’s being identified, some of it is to complement 5G, but they’re also identifying the future 6G bands. It’s critically important that the U.S. identify and clear that spectrum to drive 6G development. We don’t want to be behind the rest of the globe in terms of 6G. When you look at some of the things that are identified in the big beautiful bill, there are some things that are in kind of that 6 to 7 gigahertz band that we believe will be the 6G spectrum. It’s just around the corner. Those standards are supposed to be out in 2029. You’re looking at commercial deployments in 2030, 2031 potentially. Getting that spectrum identified, cleared, and sold is incredibly important. We think that’s a huge positive for the industry. When you look at the 5G spectrum, our customers need it.

The CTI put out a white paper that said that they needed 400 megahertz of additional mid-band spectrum by 2027. I think it’s 1,400 by 2032. If you’re going to get that type of spectrum in the hands of those carriers, you’ve got to start on it now. I’m excited to see the government taking proactive action on it. I think it’s going to take some time. Most of that spectrum has incumbents in it that you’re going to have to relocate. I don’t think there’s a lot of that spectrum that’s usable today. I think it’s very encouraging to see the government being proactive, identifying the bands, getting a plan in place to clear those and fill them.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: OK. Great. Moving international for a second, I think last quarter you increased your organic growth guidance in both Africa and Latin America. Maybe walk through these markets starting with Africa. I think the colo side and amendment side of business has been at a pretty attractive level. Churn has been better. What’s driving that trend? Can you maybe help us break down how investors should think about how that region should move in the out years?

Steven O. Vondran, President and CEO, American Tower Corporation: In Africa, we had some carrier consolidation churn. A lot of it was Celsi in South Africa. We are through the churn that we foresee happening there. Our exposure in Africa is by and large to the largest two players in each market there now. We have very little exposure to the smaller guys. Even if there’s additional consolidation, there’s a little bit of churn, but not a ton of churn there. We feel like we’re kind of through that in Africa. When you look at the carrier activity there, there’s a lot of demand in Africa. 5G is only being rolled out in the major cities right now. 4G is the bulk of what we’re seeing in terms of the activity, and most of that’s coverage related. When you think about the need for connectivity in Africa, it’s huge.

It’s not just driving telecommunications and email and people on social media. It’s banking. It’s telehealth. It’s fundamental to their economy. We see a tremendous amount of demand there. You’re seeing it reflected in the amendment and colocation activity. That market in general should continue to see a demand driver going out several years. When we pulled back on some of the investments there, it’s not because the market is not an attractive market. There are a lot of good demand drivers there. For us, this was really a strategic focus to get the emerging market exposure down because it injects a lot of volatility into the results. You do have FX headwinds that can be more or less in certain years. You do have more episodic events that you see there. When we think about Africa moving forward, we’re very encouraged by what we’re seeing there.

We just think we’ve invested enough and that we have a good, healthy portfolio there that’s going to see some nice growth. We just don’t want to increase our investments dramatically there because we think we need to right-size the exposure to the emerging markets.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Fair enough. Latin America, you know, leasing activities have been sluggish for a little while now. How are you thinking about how long we kind of hang out in this kind of low single-digit growth rate, and when can we start to see an improvement that more accurately reflects kind of the underlying trends in the market?

Steven O. Vondran, President and CEO, American Tower Corporation: Yeah, so the carrier consolidation churn in Latin America has been significant for a couple of years now, and that will at least last through 2027. We do think that we’ll be through the bulk of it by the end of 2027. In Brazil, in particular, we have OI churn. Some of it’s structured, some of it’s a remaining wireline business that will wind down, and that’s keeping Brazil constrained. In some of the smaller markets there, we’ve had other carrier consolidation that continues to ripple through the numbers. In Mexico, we’ve highlighted an issue in the past week that we have with a customer who’s not paying us right now. It’s part of a contractual dispute. When you look at all those things, we expect to be through those issues by 2028. When you think about the dynamics of the markets, we’re already seeing an improvement in Brazil.

We’re seeing three well-capitalized customers. They’re starting to accelerate their investments in the market. We think that market’s going to continue to accelerate and get better over time. Mexico is a market that still needs to figure out how to get spectrum in the hands of the customers. They don’t have the 5G spectrum deployed in a way that they can build robust networks. We’re expecting that to get fixed in the next couple of years, and you should see some acceleration in Mexico. With the smaller countries, it’s a mixed bag on 5G. Latin America in general is going to be challenged for us in the next couple of years. We’ve tried to telegraph very clearly low single-digit growth because of the carrier consolidation churn that we’re seeing there. We do think we’ll be through that and we’ll see an acceleration in 2028 and beyond.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Great. Maybe ending up on Europe, you reiterated your organic growth guidance there. I think a lot of investors have been surprised at the durability of growth there. Maybe unpack for us what’s happening on the ground and in which countries are you seeing the most demand or the most interesting trends happening?

Steven O. Vondran, President and CEO, American Tower Corporation: Sure. This all comes back to being very selective about the portfolios you buy and making sure the terms and conditions are right. We’ve talked a lot about why we didn’t go bigger into other countries in Europe. For us, Europe means Spain, Germany, and France. When you look at the Telefónica portfolio, the Telesius deal that we did, most of the revenue comes from the anchor tenant Telefónica. As you’ve had some churn there, we have a lot less exposure to that than other people do because there’s not as much third-party revenue in that portfolio. We are seeing healthy demand drivers because they’re the market leader. When you think about other carriers deploying to try to get parity, they’re trying to get parity to Telefónica because they’re a market leader. For us, the demand is really coming in predominantly Spain and Germany.

France has got healthy growth, but it’s a much smaller market for us. It’s largely driven by the same things that’s driving the U.S. It’s mid-band 5G coverage. Europe is just a little over 50% in terms of their mid-band coverage. They have a stated goal of getting more ubiquitous coverage by 2030, and they’re a little bit behind on that. That’s going to continue to be a demand driver for us. You are seeing new colocations and build-to-suits as well that we’re doing in those markets. That’s predominantly driven by trying to get better coverage in smaller towns. The networks in Europe are much more skewed toward the population centers. There have been government incentive programs out there.

Some of it’s tied to the spectrum licenses and some of it’s just tied to incentives to get better 5G coverage in the more, I won’t say rural areas, but the less urban areas of Europe. Those are really the demand drivers driving the new colocations. In Germany, we do have one and one is still building, kind of very methodically building their network. From our perspective, we see these growth trends as being durable because our churn will continue to be low and they’re going to continue to build out 5G. That’s going to be a good driver for us going forward.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Got it. Data centers and CoreSite. We cannot get through one of these presentations at this conference without talking about AI. Let me get right to it. We’ve started to see AI inferencing pick up as a business among many of your customers. I think it stands to reason that CoreSite should benefit from that. How do you think that plays out and when would you expect to see CoreSite benefit more directly from the inference market?

Steven O. Vondran, President and CEO, American Tower Corporation: We’re benefiting directly today. If you look at the new business funnel that’s coming in, we have a lot of AI applications coming in. It comes in a couple of different flavors. The AI companies want to host their distribution in a highly interconnected ecosystem. You’ll see them put kind of some smaller installations in just to get connectivity to their customer base in there. The other thing that we’re seeing is the enterprise customer that’s been our bread and butter customer for a long time. They’re also building their own inferencing models. This is something we didn’t, even six months ago, we didn’t think this was really going to be that material. Now, I think it’s going to be huge.

A company that wants to use cloud tools, that wants to use an LLM to train their own inferencing model but use their data, needs to be highly interconnected right at the source of those cloud on-ramps. The AI companies are putting their own kind of a version of an on-ramp in those same facilities, which is CoreSite, and that’s going to continue to feed that ecosystem. We’re seeing that today. We’re seeing enterprises that say, OK, I’ve got my data in-house here. I’ve got my machine learning module here. I want to put my GPU stack for my inferencing model right next to it. We’re seeing a lot of demand for that right now, and that’s got a very long tail to it. I think you’re going to continue to see CoreSite experience elevated demand for the foreseeable future. AI is a huge driver of that.

I also think when you think about the interconnection ecosystem, it’s even more valuable today than we thought it was three years ago when we bought it because that same distribution hub is what has to be used to get to the population centers for the AI inferencing models. At one point, we thought inferencing might sit closer to the LLMs. It’s not going to. That’s not where they want to put it. They need to put it near the population. I’m very excited about what that means for CoreSite, its growth trajectory. That’ll actually spill over to the wireless networks too because as we start using our phones for more and more AI applications, that’ll put demand on the network. It’s a game changer.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Yeah. I think that, you know, that sort of edge compute thesis was part of your rationale for doing CoreSite in the beginning. You know, has that kind of played out as you thought, or do you think that we’re now kind of like finally catching up to fulfill that thesis? Have you actually had any discussions with your customers about putting compute at the base of your towers?

Steven O. Vondran, President and CEO, American Tower Corporation: It is later than we thought it was going to be, but yes, I think we’re starting to get there now. We are having discussions with customers about it. It’s still in the early stages, though. There are still some technological things that have to be figured out to make it work. That is why we built a small facility in Raleigh at the base of a tower, to set up a playground so that you can have customers come in there and interact together in a way they never have before because they’ve got to figure out some challenges in their networks to make it work. Again, I look at that as a matter of when, not if. It’s not happening as fast as we thought, but it’s going to play out over time.

Even without the edge compute, you are still going to see demand on the wireless networks from AI. Today, it’s text and cell photos. It’s not a high bandwidth driver. As AI evolves into video applications and things like facial recognition technology and wearables and things like that, that’s going to require so much upload capacity that the networks don’t have today. That is going to be a driver. When? I don’t know, but it’s coming.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Yeah, fair enough. A couple of financials to round this out. With the potential churn from Sprint coming and whatever other events are on the horizon, how should investors think about the growth algorithm for the company financially over the medium and long term? In other words, X% top line growth translates to, you know, Y EBITDA and FFO.

Steven O. Vondran, President and CEO, American Tower Corporation: Yeah, let me just run through the elements of the algorithm for you on that because it’s a little complicated. To be clear, we’re past Sprint churn. The last tranche was at the end of Q3 last year. Once we get to Q4, we’re clean this year on Sprint churn, finally. When you think about that long-term algorithm, the mid-single digit growth, you know, OTBG in the developed markets, plus slightly higher in the emerging markets once we get past the churn. If you just think about it, we actually put a chart out this year, how it affected this year. That’s kind of where we were this year. That led to about 6% growth in AFFO. CoreSite and a little bit of savings added another 2.5%. The core growth rate of the business was about 8.5% this year. That’s kind of what that algorithm over time should give you.

Mid-single digit growth in the developed markets, a little bit better in the emerging markets. CoreSite, you know, growing faster but being a smaller piece, a little bit of cost savings. We had some headwinds this year. Those headwinds are going to persist for a little while. Refinancing is going to be a headwind for us for a couple of years. If you look at the debt that we have to refinance next year, it’s a similar level than it was this year. I’m not going to speculate what interest rates are, but if you assume similar headwinds, you’re going to have kind of a similar kind of deduction from AFFO that we had this year. 2027, it’s a little bit higher because we have some asset-backed securities for renewal. Once you get to 2028, a lot of what you’re refinancing has already been refinanced in 2023.

Those headwinds will die out in a constant interest rate environment. Interest rates get better, it’s a little bit better, worse, a little bit worse. I’m not going to speculate on that. FX continues to be volatile. When we kind of put that chart out, the Q4 chart that we put out in Q1, it was, I think we were anticipating headwinds, call it 2.5%, 3%, somewhere in that range. Now it’s looking more like a percent, kind of in the forward-looking piece of it. They’ve moderated a bit. That’s going to continue to be a headwind that kind of happens. The other thing that we’re keeping an eye on is cash taxes because in those international markets, as those markets grow, you’ll have a little bit of cash tax headwinds on that.

As we put all those things together, we think that gives you a durable mid to upper single-digit growth rate over time. The difference between the mid and the upper is how you anticipate some of those headwinds and if you have a little bit of variability in growth year to year. That’s how we think about it. Now, that’s kind of on the steady-state business. That’s not anticipating a huge inflection from AI spiking up demand in the U.S. It’s not anticipating a new carrier entry. There is a lot of speculation on things that could drive that up. There are absolutely some things that you could be optimistic about and see us doing a little bit better than that.

From an expectation setting perspective, we’re looking at it saying that mid to upper single digit is, in a steady-state business, what we think that we’re capable of delivering, kind of given the current environment that we’re in.

James Edward Schneider, Towers Analyst, Goldman Sachs Group: Very good. I think we’re almost out of time, so we’ll end it there. Thank you very much, Steve, for being with us. We appreciate it.

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