Earnings call transcript: SBA Communications Q1 2025 misses EPS

SBA Communications (SBAC), a prominent player in the Specialized REITs industry with a market capitalization of $24.13 billion, reported its first-quarter 2025 earnings, revealing an EPS of $1.77, falling short of the forecasted $2.11. Despite this miss, the company’s stock saw a modest increase of 0.79% in aftermarket trading, closing at $223.85. Revenue slightly exceeded expectations, coming in at $664.25 million compared to the forecast of $661.68 million. According to InvestingPro analysis, the stock is currently trading above its Fair Value, suggesting careful consideration for new positions.

Key Takeaways

• EPS missed expectations by $0.34, while revenue slightly beat forecasts.
• Stock price increased by 0.79% in aftermarket trading.
• Domestic leasing revenue showed strong growth, driven by network investments.
• The company exited markets in the Philippines and Colombia.
• SBA Communications increased its full-year outlook for key financial metrics.

Company Performance

SBA Communications showed resilience in Q1 2025 despite missing EPS forecasts. The company reported strong domestic leasing revenue growth, reflecting continued investments by U.S. mobile network operators. However, international operations faced challenges, leading to market exits in the Philippines and Colombia.

Financial Highlights

• Revenue: $664.25 million, slightly above forecasts.
• Earnings per share: $1.77, below the expected $2.11.
• Total debt: $12.5 billion; Net debt: $11.8 billion.
• Net debt to adjusted EBITDA leverage ratio: 6.4x.

Earnings vs. Forecast

The EPS of $1.77 fell short of the $2.11 forecast, marking a significant miss. Revenue, however, was slightly above expectations, which may have contributed to the modest stock price increase despite the EPS miss.

Market Reaction

Following the earnings announcement, SBA Communications’ stock rose 0.79% in aftermarket trading. With a beta of 0.83, the stock has shown lower volatility compared to the broader market. This increase suggests that investors may be focusing on the company’s positive revenue performance and improved full-year outlook, rather than the EPS miss. InvestingPro data reveals the company maintains a "GOOD" overall financial health score, supported by strong profitability metrics.

Outlook & Guidance

SBA Communications has revised its full-year outlook upwards for site leasing revenue, tower cash flow, and adjusted EBITDA. The company expects increased U.S. leasing activity and potential for better international lease escalations.

Executive Commentary

CEO Brendan Cavanaugh remarked, "We are very well positioned," emphasizing the company’s strategic focus on capturing growth in the wireless network sector. He also noted, "The wireless ecosystem will continually evolve, providing new opportunities for those willing to take them."

Risks and Challenges

• High debt levels could constrain future investments.
• Market exits in the Philippines and Colombia may limit international growth.
• Potential impact from carrier consolidation in Brazil.
• Competitive pressures in the wireless infrastructure market.
• Valuation challenges in pursuing mergers and acquisitions.

Q&A

During the earnings call, analysts inquired about the company’s strategy amid increased network investments by carriers and potential spectrum auctions. Executives highlighted their focus on operational efficiency and capital allocation to navigate the current market environment.

Full transcript - SBA Communications Corp (SBAC) Q1 2025:

Conference Operator: Welcome and thank you for joining the SBA First Quarter twenty twenty five Results. This call is being recorded. All participant audio lines are in listen only mode. There will be a Q and A session at the end of prepared remarks. With that, I’ll turn the call over to Mark DeRussy, Vice President of Finance.

Please go ahead.

Mark DeRussy, Vice President of Finance, SBA: Thank you. Good evening, and thank you for joining us for SBA’s first quarter twenty twenty five earnings conference call. Here with me today are Brendan Cavanaugh, our President and Chief Executive Officer and Mark Montagnier, our Chief Financial Officer. Some of the information we will discuss on this call is forward looking, including, but not limited to, any guidance for 2025 and beyond. In today’s press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations.

Our statements are as of today, April 28, and we have no obligation to update any forward looking statement we may make. In addition, our comments will include non GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our Investor Relations website. With that, I’ll now turn it over to Brendan.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Great. Thank you, Mark, and good afternoon. 2025 got off to a good start in the first quarter. Results were broadly in line with our estimates, and activity levels continued to demonstrate a healthy level of growth. In The U.

S, our mobile network operator customers continued growing their level of network investment around our macro tower sites. We had our best quarter going back several years in terms of new domestic leasing business signed up during the quarter. Most encouraging though is that our leasing backlog also grew from December 31, meaning we are adding new applications at a greater pace than we are signing up new business. This bodes well for the balance of the year. We also continue to see a higher percentage of our new U.

S. Leasing business coming from new lease co locations versus amendments to existing leases. And our U. S.-based services business had a great quarter as well, with activity levels and results ahead of our expectations. We also saw our new business backlog grow for services during the quarter.

And as a result of the strong start to the year and our growing backlog, we have increased our full year outlook for services. In our international markets, we also saw a positive start to the year with solid leasing activity. In addition, elevated CPI rates in some of our markets have presented the potential for better existing lease escalations during the year. Across our markets, our customers have many network goals, which will require continued investment. Macro sites remain the most effective and cost efficient way to advance wireless coverage and deploy new spectrum and technologies.

Our portfolio is well positioned to capture growth from these initiatives over the next several years. In addition to our operational achievements during the quarter, we also made progress in the areas of portfolio management and capital allocation. During the quarter, we completed our exit from The Philippines. And on last quarter’s earnings call, we announced our planned exit from Colombia. We were able to finalize the required steps to complete this exit and formally sold our Colombian operations prior to quarter end.

These steps have allowed us to improve our focus and allocation of resources. We continue to evaluate all of our operations to identify ways to improve our market positioning or gain further synergies. In addition, during the first quarter, we closed on a small portion of the Central American sites previously put under a purchase agreement with Millicom International. While there are numerous regulatory and diligent steps remaining, we will continue to explore opportunities for additional early closings. Against the backdrop of the current uncertain macroeconomic environment and the results in market volatility, the stability and consistency of our company and our business stand out.

We have not experienced nor do we foresee any direct impacts from the current tariff policies. Our business continues to generate steady cash flow and the underlying needs of our customers remain robust. As a result, we have significant confidence in our company and our future. Subsequent to quarter end, we have demonstrated that confidence by repurchasing 583,000 shares of our stock at an average price per share of $210.87 We have also announced today that our Board has approved a new $1,500,000,000 share repurchase plan, supporting our ability to return significant value to our shareholders. The combination of this plan and our industry leading dividend growth provide a direct line of shareholder returns, while our existing capital structure allows us the flexibility to still pursue meaningful asset investment opportunities.

We are very well positioned. For the balance of 2025, SBA will be focused on operational execution, driving efficiencies in our processes, particularly through the incorporation of new technologies and systems, enhancing our relevance to and relationships with our largest customers, and bringing a balance of entrepreneurial spirit and informed financial discipline to capital allocation and expansion. Some of these focus areas may seem straightforward or mundane, but our ability to excel in each of these areas will be what sets SBA apart from our peers. The wireless ecosystem will continually evolve, providing new opportunities for those willing to take them. I believe we have the people, experience, and DNA makeup to maximize these opportunities.

Before turning it over to Mark, I’d like to thank our team members who represent that experience in DNA. Our team members represent SBA well every day and continually put the goals and objectives of our customers first. I look forward to sharing our progress with you throughout the balance of the year. With that, I’ll turn it over to Marc, who will provide additional details on our results.

Mark Montagnier, Chief Financial Officer, SBA: Thank you, Brendan. Given the solid start to the year, we’re increasing our full year outlook for all key metrics including site leasing revenue, tower cash flow, adjusted EBITDA, AFFO and FFO per share as compared to our initial 2025 guidance. The primary drivers of these increases include in line first quarter result, the closing of a small portion of the acquisition of towers from Medicom earlier than expected, an improved outlook for services, slightly higher straight line revenue due to the extension of some leases and the reduction in the share count from recently completed buybacks. First quarter domestic organic leasing revenue growth over the first quarter of last year was 5.2% on a gross basis and 1% on a net basis, including 4.2% of churn. Dollars 20,000,000 of our first quarter churn was related to the Sprint consolidation, which anticipate to be approximately $50,000,000 to $52,000,000 for the full year 2025.

Our previously provided estimate of aggregate Sprint related churn over the next seven years remain unchanged. Beyond 2025, we anticipate approximately $50,000,000 in 2026 and $20,000,000 thereafter. Non spring related domestic annual churn continues to be between 11.5% of our domestic site leasing revenue. During the first quarter, ’80 percent of consolidated cash site leasing revenue was denominated in U. S.

Dollars. International organic leasing revenue growth for the first quarter, which is calculated on a constant currency basis was 1.6% net, including 5.6% of churn or 7.2% on a gross basis. Total international churn remained elevated in the first quarter due mostly to carrier consolidation. We believe that post carrier consolidation in some of

Mark DeRussy, Vice President of Finance, SBA: our international markets, the remaining wireless operators will

Mark Montagnier, Chief Financial Officer, SBA: be stronger in a better position to invest for the long term. This will support a steady growth rate for our operation in those countries. During the first quarter of twenty twenty five, we acquired three forty four sites for total cash consideration of $58,000,000 mostly related to the acquisition of sites for Minicom in Nicaragua. The contribution to the 2025 outlook from closing earlier than previously assumed is $4,000,000 of site leasing revenue and $3,000,000 of tower cash flow. The remaining 6,700 sites related to the Medicom transaction remain under contract and the guidance continues to assume the September 1 closing date.

The closing date is dependent upon regulatory approval and other requirement and may differ from this date. We also bid 67 new sites in the quarter, mostly outside of The U. S. Our balance sheet remains strong and we have ample liquidity from both cash on the balance sheet and a fully undrawn $2,000,000,000 revolver. The recent share buybacks were funded fully with excess cash and did not require any borrowing.

Our current leverage of 6.4 turns net debt to adjusted EBITDA remains near historical low. As of the end of the first quarter, our weighted average interest rate was 3.7% across our total outstanding debt and our weighted average maturity was approximately four years. Including the impact of our current interest rate hedge, the interest rate of 98% of our current outstanding debt is fixed. And finally, our next debt maturity is a $750,000,000 ABS security due in January of twenty twenty six. Now, let me turn the

Mark DeRussy, Vice President of Finance, SBA: call over to Mark. Thank you, Mark. We ended the quarter with $12,500,000,000 of total debt and $11,800,000,000 of net debt. As Mark mentioned, our net debt to annualized adjusted EBITDA leverage ratio was 6.4 times below the low end of our target range. Our first quarter net cash interest coverage ratio of adjusted EBITDA to net cash interest expense remained strong at 4.9 times.

During the second quarter, we repurchased 583,000 shares of our common stock for $123,000,000 at an average price per share of $210.87 On 04/27/2025, the company’s Board of Directors authorized a new $1,500,000,000 share repurchase plan replacing the prior plan that was authorized in October of twenty twenty one, which had a remaining authorization of $82,000,000 This new plan authorizes the company to purchase from time to time up to $1,500,000,000 of our outstanding Class A common stock. The new plan has no time deadline and will continue until otherwise modified or terminated by the Board of Directors. In addition, during the first quarter, we declared and paid a cash dividend of $122,300,000 or $1.11 per share. And today, we announced that our Board of Directors declared a quarterly dividend of $1.1 I’m sorry, dollars 1.11 per share payable on 06/17/2025 to shareholders of record as of the close of business on 05/22/2025. This dividend represents an increase of approximately 13% over the dividend paid in the second quarter of twenty twenty four and approximately 35% of the midpoint of our full year AFFO outlook.

Operator, we are now ready for questions.

Conference Operator: And our first question comes from Jim Schneider, Goldman Sachs.

Jim Schneider, Analyst, Goldman Sachs: Good afternoon. Thanks for taking my question. Maybe first on the overall carrier environment. It sounds like fairly constructive commentary on the direction of travel here. Maybe just was wondering if you could comment on any updates in terms of carriers plans in The U.

S. And their willingness to devote any capacity to fixed wireless access as far as you can see at this point? And then secondly on the capital allocation front, buyback of $1,500,000,000 was encouraging to see. How are you thinking about just the overall environment for capital allocation at this point? Rates are obviously probably a little bit higher than you might have thought six, nine, twelve months ago.

How are you thinking about the refinancing needs potentially for 2026 and the level of buybacks you’d want to do right now and assuming nothing changes in the rates environment today? Thank you.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Sure, Jim. So on the carrier environment overall, as you heard in our prepared comments and in our press release, things are generally pretty positive here in The U. S. There’s a lot of work to be done. We’re seeing a greater amount of leasing activity than we’ve seen over the last two years.

So broadly, we feel very positive about that. And the fact that the backlogs continue to grow is an indication that there’s still a lot of work to be done. And so that’s part as I said in my comments, that’s perhaps the most encouraging thing. In terms of the specifics of what they’re focused on in fixed wireless access, our belief is that fixed wireless access is certainly a contributing factor when you look at our customers’ recent reports. On their own results, you saw that that’s where significant portion of their subscriber growth is coming from.

We know that that is a very heavy broadband consuming product, and, therefore, it it drives a lot of usage of the capacity of the network and, therefore, would be a driver of the need for incremental investment in their networks and and infrastructure. So, you know, I can’t tell you specifically because it’s using the same frequencies in spectrum, generally speaking, as their mobile network. But we do think it’s a driver, there are many drivers. So we we just feel good about the the pickup and activity. On the second question around capital allocation, you know, I the rates are certainly staying higher here for longer.

You know, it’s it’s hard to say for sure, obviously, in the current environment as to when we’ll see rates moving lower, if we’ll see rates moving lower. But our positioning is very good. As you heard, our leverage position today is well below where we’ve historically carried our leverage balance. And as a result, that gives us a lot of flexibility. We did buy back shares because we saw the opportunity to do it here in April as there were some dislocation around some of the announcements that were affecting the market more broadly.

We took advantage of that. And I think if we see additional opportunities, we’ll continue to take advantage of it. The new plan that was put in place by our Board is evidence that we expect to be allocating capital towards share repurchases. But as we said in the past, you should expect that our approach to capital allocation should be really a mix of buybacks, new asset investments where we see good opportunities and debt repayments in addition, of course, to our dividend. So it hasn’t really changed, we’re pretty comfortable with our positioning to be able to be flexible and adjust as opportunities present themselves.

Jonathan Chaplin, Analyst, New Street: Thank you.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Sure.

Conference Operator: All right. Moving on to Jonathan Atkin from RBC Capital Markets.

Brandon Mispel, Analyst, KeyBanc: So

Nick Del Deo, Analyst, MoffettNathanson: I was curious about just given what you said about the current activity level, the backlog, where do you think you might end the year on a run rate basis for U. S. Leasing? Any kind of approximate metrics you could share with us?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yes. I mean, it’s a little hard to say absolutely at this point because I’ve got to see how things continue to build. But I certainly would expect to end at a higher level than we’re at in terms of what we produced here in the first quarter. And that was approximately $9,000,000 from new leases and amendments here in The U. S.

So I definitely expect to be higher than that when we get to the fourth quarter. But I’ll refrain from giving an absolute number there until we see how the rest of the year progresses.

Nick Del Deo, Analyst, MoffettNathanson: And then secondly, was interested just where you stand in terms of the bilateral contracting relationships you have with major customers in terms of pay by the drink for things like amendments, colocations, and just give us kind of a refresh on on MLAs.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. So have we’ve not typically had the kind of holistic MLAs that you’re referring to. We’ve always had master lease agreements in place with our customers, but they’ve usually equipment specific in terms of how they’ve paid us for the use of our sites. The exception to that was the deal we did with AT and T a couple of years ago, which was more of a holistic approach. We’re we’re open to a holistic approach with our customers, but it really is just dependent on the the specific give and take, within the negotiations around those agreements.

So, you know, we’ll just have to see how it goes. But at this point, the only true holistic agreement we have in The US is the one that we signed with AT and T a couple of years ago.

Analyst: Thanks very much.

Nick Del Deo, Analyst, MoffettNathanson: Sure.

Conference Operator: Our next call comes from Satya Levi, UBS.

Satya Levi, Analyst, UBS: Great. Thank you. Couple of quick questions. First, can you talk a little bit about what’s driving higher network services business and versus what you had expected earlier in the year? And when we look at domestic churn, it looks like it picked up a little bit excluding Sprint.

What were some of the drivers for that? And maybe on the M and A front, a couple of tower portfolios are available for sale in Canada. You have some exposure to the region there, slower growth market. But can you provide some color on how you would approach M and A in Canada? Sure.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: So first question was on services and and why it’s growing faster than we expected. Really, it it’s as simple as one of our customers in particular just operating in a much faster pace than we had even expected here in terms of their network investments. And so, you know, we’re just seeing them, frankly, just move quicker. It’s kinda that simple. And I would expect, based on the backlogs growing, that they’ll continue to to keep a fast pace during the rest of the year, and that’s why we raised our outlook for the full year.

So we’ll continue to try to meet their needs and keep up with them. On The US churn, you said it was growing. It’s basically in line with what we put out at the beginning of the year, so I don’t think it’s it’s beyond what our expectations were. I don’t know if you’re asking about, you know, year over year, but

Satya Levi, Analyst, UBS: it’s not I guess, yeah, it’s within the range you’ve given. It’s just picked up slightly versus the last two quarters, maybe. It used to be around 1%.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: I think that’s really just a timing thing. If you look at our full year outlook, we didn’t change it. And I think the implied percentage for the full year for The US is around 1.2%. So it was 1.4% in the first quarter. So you should take that to imply that it will be a little bit lower at other points during the rest of the year.

And then on the Canada side, really we approach that the way we approach most major M and A opportunities and portfolios that come to market anywhere really around the globe, particularly obviously in the markets where we already have operations. We will look thoroughly at any of those opportunities. And, if we can see value there, and see it at a a price point that we think makes sense and is is competitive and is better, then we’ll we’ll certainly will be interested in pursuing that. I think you’ve heard us talk about our approach to our international markets over the last year or so in terms of what we’d like our positioning to be. Obviously, in Canada, if you have the mobile network operators up there divesting of their towers, whoever ends up buying those will certainly be in a lead position in terms of their size and scale in the market.

So that would be something that we would consider in our analysis of any deal. But at this stage, you should expect that we’ll look at any opportunities that come to market. And I can’t say whether it’ll work or not, but if it does, it’s something we will certainly pursue.

Satya Levi, Analyst, UBS: Got it. Thank you.

Conference Operator: Next caller, Walter Piecyk, LightShed.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Hello?

Conference Operator: Mister Prachik, your line is unmuted. Please make sure your phone isn’t muted.

Mark DeRussy, Vice President of Finance, SBA0: What about now?

Jonathan Chaplin, Analyst, New Street: Hey. Now I can hear you now.

Mark DeRussy, Vice President of Finance, SBA0: Sorry about that. That’s okay. I guess I’ll ask about I guess I’ll ask about our friends at DISH. I think there were some press reports about them wanting to lease or looking to lease their spectrum. I think it might have been some rural areas, so maybe there’s no impact there.

But in general, just can you just characterize kind of, you know, what they’ve told you about some of their longer term plans, what role you may play? And then, alternatively, I suppose, has there been any inbounds from cable companies who might be considering spectrum that’s available in the market and wanna redeploy on their own. I would guess that they wanna do a little due diligence ahead of that to see what type of expenses that they wanna take on. So, I mean, basically, the same question about Dish.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. Well, you’re probably not gonna love my answer because there’s not a lot of detail to offer there. I’ll take the cable one first. There really hasn’t been much in the way of direct conversation. We talk to them periodically, but there’s no there’s nothing really along the lines of what you just described.

So I think until they have something firmer in hand, they frankly don’t really need to spend a lot of time talking to the tower companies just yet. But we’ll see if that develops.

Mark DeRussy, Vice President of Finance, SBA0: Can I just inter can I just interject on that one before you go back to Sure? Even on CBRS, because I think Comcast has made mention, at least in some investor meetings, that, you know, the the initial attempt with CBRS might have been tied to a vendor that didn’t really deliver. They moved to, I think, was Samsung or something. And I know a lot of that’s kinda in home, but I thought there was an opportunity, especially with the current FCC, to increase the power, you know, ability of CBRS for them to start hitting towers. No even early indications of them looking to try and offload the the rising expense at Verizon?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Very limited. Well, I mean, we have conversations with them. We’ve actually talked with them about CBRS over the years at various times. But, when I look at it from a material standpoint to us, it’s really completely immaterial.

Mark DeRussy, Vice President of Finance, SBA0: Got it. And then on the flip side, like the DISH, what do you have you seen this stuff about them leasing out Spectrum and World? Does that touch any part of contract? And and otherwise, what are they saying in terms of their their intermediate term plans, let’s call it?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. There’s at this stage, they have there hasn’t really been any specific conversations in terms of the leasing. If they do lease their Spectrum, their contract doesn’t allow for that to change to send somebody else’s hand. So there would have to be a conversation, and we’ve not had that conversation as of yet. In terms of just their broader commentary and feedback with us, we work pretty closely with them.

They, on the operations side, are very clear about their desire to continue to pursue their standalone greenfield network. At this stage, obviously, things are much slower in terms of leasing activity with them. So we’re hopeful that that changes. But at this stage, it’s really, you know, just meeting some very basic needs. There’s some basic upgrades going on.

They are signing a few leases here and there, but it’s it’s pretty small at this stage. So, you know, I don’t have much feedback for you there either, but I would I’ll be interested to hear what they have to say on their call.

Mark DeRussy, Vice President of Finance, SBA0: Got it. Thanks. Sorry for the technical difficulties.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: No no worries. Thanks.

Conference Operator: Okay. Moving on to Michael Rollins from Citi.

Mark DeRussy, Vice President of Finance, SBA1: Thanks, and good afternoon. Two topics, if I could. So first, on the international front, just curious if you could share an update on how the visibility is trending for organic growth as well as the churn dynamics, specifically in Latin America, both for this year and over the next few years. And then second, I was just looking at the the supplemental, and and thanks for the refresh that I think you began on this last quarter. The supplemental, looking at the straight line revenue, and what caught my attention was the straight line revenue is negative this year for the first time in, like, five years and goes more negative next year.

And so as these contracts on average are getting further into their life, does that increase the potential for some renewals? And is that something that, it significantly just impact the way back results look over the next few years that might be different than what the schedule was currently inferring?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Let me try to answer that second one first while I’m thinking about it. I I don’t think so. I mean, basically, if you think about what straight line revenue is, it’s essentially revenue that from an accounting standpoint, we’re booking, but we haven’t actually received the cash. So eventually, it’s going to all go negative and reverse out and end up at zero cumulatively. I think what you’re seeing is that as we’ve had less new leases and moved further in terms of the dates and the timing of our portfolio as it gets more mature, you should expect that it would move back towards that sort of breakeven point.

Now having said that, we are signing more new leases today, and perhaps that will have an impact. And as we, in some cases, extend out the length of the terms, we’ll see some adjustments up. Actually, that did happen in the first quarter. We extended some leases out, so that pushes the timing. But I don’t think that there’s anything to be read into it other than just we’re a more mature business, and we’re in a more mature place in terms of our life cycle with our biggest customers.

So it’s gonna move up and down over time. But, eventually, if you went to the end of time, it would be zero cumulatively. And so the other question was on international, I think, Mike, right? Organic growth and churn, is that what your question was on dynamics? Exactly.

Mark DeRussy, Vice President of Finance, SBA1: Yeah. The visibility into this year as well as in the next few years as you’re managing through some of the Latin American churn dynamics.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. You know, we are each market is a little different. And in some of the markets, we have experienced churn over the last few years due to consolidations, and we’re pretty close to being on the other side of that. In a number of markets, are on the other side of it. If you look across many of our Central American markets, you had that consolidation take place.

You had most of the rightsizing of those leases happen as a result of that. And so I think we’re gonna be in a good spot there. And actually, you’re gonna have carriers that are more interested in their network development and investing further in their networks. And therefore, we’re gonna actually see some pickup in activity in that area. In other spots, like in Brazil, we’re we’re really just kind of in the throes of the the consolidation impacts and everything that comes with that.

You know, we talked about it a a bunch over the last year or so. Everybody knows that Oi was replaced by the other three carriers taking a piece of them, each of them. But that leaves a lot of overlap and a lot of rationalization that needs to take place, and we’re seeing that take place. We’re also still seeing the impacts of the the Nextel acquisition by Claro, and that was done years ago. So, you know, I would say for the next few years, we probably will see some elevated churn internationally as a result of those dynamics.

And that I think the hidden cost of that is not just the churn, but it is the fact that that rationalization takes a lot of the focus of the existing carriers. And so the organic growth in terms of new lease up is also impacted, I think, a little bit by that. I would say the next few years will probably be a slower growth period in Brazil in particular, which is the lion’s share of our international business. But as we move beyond that, based on what we’ve seen in other markets, including The U. S, by the way, I would expect there to be an acceleration of leasing activity as we start to get further down the maturity cycle of that process.

Thanks. Sure.

Conference Operator: And before we move on to our next caller, just a reminder to our audience, if you’d like to ask a question and answer the question queue, please dial 2 on your telephone keypad. Next caller is Matt Niknam from Deutsche Bank.

Mark DeRussy, Vice President of Finance, SBA2: Hey guys, thanks so much for taking the questions. 2 if I could. First, on the macro front, I’m wondering if sales cycles, conversations with carrier customers, particularly in The U. S, lengthening at all? Or are you seeing carriers even potentially reevaluating spending plans in light of what’s developing into a choppier macro backdrop?

And then just secondly, on The U. S. As well, if you can give us any color on the mix of COLO relative to amendment for new leases signed in 1Q and how that compares to prior quarters. Thanks.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. We so the answer to your first question, Matt, is we have not seen an impact on any of our sales or or leasing discussions with our customers. But I also think that it is pretty fresh, and it’s it’s not something that I can swear won’t take place, you know, over the coming months. I do feel very good in the sense that we obviously have no direct impacts from tariffs. Our carrier customers have limited relative to most companies here, international companies, obviously, in particular.

The impacts on our carrier customers are very limited. So I think we’re not going to see a lot because there’s still such significant network needs, and there’s a competitive dynamic that exists among our customers that I think is also favorable to continued investment. But, you know, we’ll have to see how how the macro environment around this topic, you know, evolves and where it ends up going. And, obviously, there’s a possibility that it has an impact. But as of today, we’ve not seen any of that.

And your second question was colos versus amendments. Right? That’s right. Yeah. So we’ve definitely seen pickup in the colocation.

That started last year, and it has continued into this period now where we’re seeing the vast majority actually of new revenue added in The US coming from new lease collocations versus amendments. I don’t actually have the percentage handy to give you, but that’s something our team could probably provide to you in a follow-up call afterwards. But most of it is coming from new leases. And based on the backlogs and the way they’re building, I would expect that to continue for the balance of the year. Thank you.

Conference Operator: Our next caller is Nick Del Deo from MoffettNathanson. Please go ahead.

Nick Del Deo, Analyst, MoffettNathanson: Thanks for taking my questions. First, Brendan, in your prepared remarks, you noted that driving efficiencies through new technologies and systems was a priority for the year. Can you expand on that at all and maybe frame some of the areas that you’re looking at, the sorts of savings that you’re expecting? And then second, you decommissioned a lot of towers overseas this quarter. Is that all oil related?

Or are there other drivers, anything we should be aware of there? And how should that trend in the coming periods?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Sure. Yes. So on the efficiencies, we are I mean, this this is stuff that you should expect that we would be doing anyway, Nick, but I call it out because it’s an internal focused area that we are definitely spending some time on. We have a number of new systems that we are putting in place, in various areas of our business, some on the operational and front end side around leasing, others around back office operations, including our ERP system is getting a total refresh. And as we do that and we incorporate AI and other things into the solutions that we’re providing, we we will look for efficiencies in the way that we run these processes.

And I think through that, we will actually gain not only cost savings, but opportunities to drive additional revenue sources as well. You know, it’s it’s too early at this point to probably quantify that for you. But over time, I would hope that I’ll be able to give you, some idea of places where we’ve actually realized real savings that make an impact on the financials.

Nick Del Deo, Analyst, MoffettNathanson: Only because you mentioned Yeah. Sorry to jump in. You mentioned the ERP I know sometimes that’s been problematic for some companies when they change that out. Do you feel comfortable for a risk profile? Because that’s typically a big change for folks.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: I do. It is a big change, and it’s actually a multiyear project. But I feel very good about where we are today and the progress we’re making on that. But yes,

Nick Del Deo, Analyst, MoffettNathanson: I feel Okay. Okay. Good.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: No worries. Yep.

Nick Del Deo, Analyst, MoffettNathanson: Okay. And then the decommissioning question?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. The decommissioning. So just to be sure that we’re clear, because you probably are looking at the total number for international, that includes the divestitures of Colombia and The Philippines, took place. So just to be clear, that’s the vast majority in that 101. Right?

Nick Del Deo, Analyst, MoffettNathanson: Okay. Yeah. Got it. Okay.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: So if you strip that out, though, we are decommissioning some sites, primarily in Brazil, and that is it is in association with the VOI consolidation, where we’re seeing places where we have naked towers that we don’t think have much progress promise, sorry. In those cases, we’ll take those towers down to save the cost. But most of that number is the sale of those two countries.

Nick Del Deo, Analyst, MoffettNathanson: Okay. Okay. Great. Thank you, Brendan.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Sure.

Conference Operator: Next question is from Eric Luchow from Wells Fargo. Please go ahead.

Mark DeRussy, Vice President of Finance, SBA3: For taking the question. Brandon,

Mark DeRussy, Vice President of Finance, SBA0: I think you talked a

Mark DeRussy, Vice President of Finance, SBA3: little bit about the increasing colo mix in your backlog. Any sense where you have for how much might be related to regulatory requirements that certain carriers have that have a specific time that’s gonna be deployed versus kind of any early signs of of densification in your footprint from, you know, early mid band deployments?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yes. Well, first, let me since you gave me the opportunity here, back and answer Matt’s question on the actual percentages. It was about 75% of the new leasing business signed up in the first quarter in The US came from colos as opposed to amendments. So then to your question, it’s a mix of things. Definitely, the regulatory requirements is a part of it.

And I only know that with confidence because when we look at, you know, at least one of our carrier customers and we look at the locations and and sort of the more rural nature of some of those, that gives us a a pretty good sense of of what they’re trying to accomplish there. But it’s really hard to say in every case because, you know, they have real network needs in all these different spots. And so whether it’s for a a commercial reason or a regulatory reason. Sometimes we don’t have that clarity. But I would expect that we’ll continue to see a balance of both of those factors as a driver.

Mark DeRussy, Vice President of Finance, SBA3: Okay. Great. Appreciate that. And on services guide uplift, I believe you over indexed to one carrier in particular there. So would you attribute that uptick to that customer?

Or is it a little bit more broad based than that? And I guess, do you think there’s any correlation here between the services upside and some of the higher leasing activity that you’ve talked about in your backlog? Yes.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: I do think that there is a correlation to the leasing, at least a little bit, because most of the work that we’re doing virtually, all the services work we’re doing now is on our own power sites. So, it’s definitely tied into leasing activity. And, yeah, I mean, we do have a a significant percentage of our services business with one particular carrier, but the increase, at least proportionally, among them is is more broad based. But, obviously, that that one customer makes up a bigger percentage, and, therefore, as they as they get busier, that that makes more of an impact to our our outlook.

Nick Del Deo, Analyst, MoffettNathanson: Thanks, Brian.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Sure.

Conference Operator: Our next caller is Brandon Mispel from KeyBanc.

Brandon Mispel, Analyst, KeyBanc: Thanks for taking the question. Brandon, I wanna go back to your comments around new bookings and backlog. From a historical standpoint, what period is most comparable to the new bookings you saw this quarter? And I was hoping you could help us contextualize what the book to bill ratio looks like today. Sure.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. I don’t know if I could say absolutely, but it’s been a couple of years. It’s been over two years, I’d say, since we saw this level of of applications that drive our our backlog. So it’s pretty good in terms of recent history. You know, we were pretty busy back in the 2223 window.

So it it’s it’s probably as good as it was anytime since then. I’m sorry, Brandon. Your second question?

Brandon Mispel, Analyst, KeyBanc: I was just curious on, you know, book to bill backlog and and sort of where that what that looks like today.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yep. Yeah. It it’s still because of this shift in the mix to new leases, it’s obviously more elongated than it’s been historically. It’s typically a six to nine month for a new colo. We’ve seen a little bit of improvement in that.

It’s probably been a little bit shorter than that on average at least thus far into the year, which is not that much history. But they’re turning them around a little bit quicker and getting them deployed quicker. So, you know, let’s say, three to nine months just to kind of hedge it. Every lease is a little bit different, but that’s the typical range.

Brandon Mispel, Analyst, KeyBanc: Great. Thanks for taking the questions.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Sure.

Conference Operator: Moving on to Mike Funk from Bank of America.

Brandon Mispel, Analyst, KeyBanc: Thank you all for the questions today. So first one, just what do you attribute the increase in new leasing activity from the carriers based on your conversations with them? And then any maybe split between the carriers would be helpful as well. And then second one, kind of more of a bookkeeping. You mentioned during the prepared remarks that CPI rates have a potential for better escalators throughout the year internationally.

If you can quantify that, that’d be helpful.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. So the increase, I don’t want to get too specific by customer in terms of what they’re each doing. I think you can look at their own reports and get a sense of the things that they’re focused on that would be the the logical drivers of activity in terms of leasing on macro tower sites. But it it’s broadly increased subscriber activity, certainly certain product offerings that are more network bandwidth intensive, such as fixed wireless access. There are some regulatory requirements, which we referred to a moment ago, for at least one of our customers, that’s T Mobile, who has some need to meet obligations in terms of downlink speeds and coverage that they committed to as part of the Sprint acquisition.

So that’s ongoing as a driver as well. So there’s a variety of things. I think, you know, we’ll continue to see a mix of those things. But overall, it’s gonna be strain on the network and and competitive pressures between the carriers. And on the CPI question, yeah, I mean, particularly in Brazil, we’ve seen an increase in the CPI rates down there.

We’ll have to see whether that holds up. We obviously didn’t raise our outlook around international escalator contributions for this year. But if we continue to see elevated CPI rates down there, there’s a potential that we would actually be able to to raise our leasing outlook. And and we’re really talking about on our total for the full year, you’re talking about $1,000,000 or $2,000,000 of impact. So it’s not a massive number.

But as a percentage, it’s a reasonable contribution increase.

Mark DeRussy, Vice President of Finance, SBA1: Great. Thank you for the question.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Sure.

Conference Operator: Alright. Moving on to Rick Prentiss from Raymond James.

Mark DeRussy, Vice President of Finance, SBA4: Hey. Good afternoon, everybody. I think I messed up my pound too here. I appreciate the questions.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Sure.

Mark DeRussy, Vice President of Finance, SBA4: First question, I wanna follow along the lines. A lot of people have touched on the colocation amendment. Appreciate the the $75.25 for one q number. Was that revenue based, I assume, instead of application based? Because I would expect new colocations come in at a significantly higher amount of revenue than an amendment.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yes. Yes. That’s revenue based dollars.

Mark DeRussy, Vice President of Finance, SBA4: Okay. Which also then leads to activity. Also, associated with that, kinda looking at new collocations versus amendments, what’s your outlook as far as when spectrum new spectrum, not just secondary like Walt was asking about, but when new spectrum could be found auctioned and put into the system that would drive for spectrum deployments instead of having to split sites? Any update from Washington that you’re seeing on the spectrum front and when we might see some some blocks come out and when they might show up on your towers.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. I don’t obviously have any insight that is specific to when you’re gonna see it. But the general commentary that we get back and the conversations that we have and that our our industry association, WIA, has is that there’s definitely much more of an interest in this administration and and the FCC to to get new spectrum out there and auctioned off. And so we’re encouraged by that. I think even if they get that done in relatively short order, by the time it gets cleared and is available and then is is actually deployed, I mean, you’re you’re talking, you know, four or five years from now probably before we would see an opportunity for increased leasing activity as a result of that, Rick.

So it’s a ways off. But the faster that we get it done and out there, get this process started, you know, the quicker we can get to that point. So we’re we’re definitely pushing for that from our industry.

Mark DeRussy, Vice President of Finance, SBA4: Right. Industry could definitely use some more spectrum, but it’s gonna take time, which means we should probably count on collocations more so than amendments being the trend, it feels like.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. Which which obviously isn’t bad. I mean, we’re fortunate in terms of where we’re placed in the in the ecosystem and that if you don’t have the spectrum, you know, the only solutions you’ve got are to densify your network, and that typically means more locations for us and and more equipment, which is a good thing. K.

Mark DeRussy, Vice President of Finance, SBA4: Last one for me. Obviously, good capital allocation jumping on the dislocation in the stock price. But when you think about m and a that might be out there, Vasya asked about the Canada towers, but are you still seeing private multiples being well above or just above what the public multiples are going for? Kinda how is that still impacting the ability to compete and win for for external towers?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. We are still seeing that. If if you’re talking about The US, because there is a limited supply of potential assets and there are a lot of people very interested in acquiring U. S. Towers.

When those opportunities come about, the private valuations are much, much higher than the public valuations, and that makes it challenge for us. Internationally, in some of our emerging markets, we’ve seen that rationalize a little bit more, but what you’re actually seeing is very few assets trading hands at all. So I think what’s happening is sellers are not getting interest at the levels that that they’d like to or that perhaps they were getting in the past, and and buyers aren’t willing to come up to those levels. So you end up having deals just not trade. So I’m I’m feeling better about there being a little bit of rationalization in most of the international markets, although I’m not not seeing that so much in The US.

And hopefully, we will see that kind of balance out because I think it’ll be good in terms of the the health of the overall industry if we have, more rationality brought to some of these analyses. You can’t have cost of capital rising the way that it has and have no change in in the approach that people take to valuing, these assets. So, hopefully, we’ll start to see that.

Mark DeRussy, Vice President of Finance, SBA4: Makes sense. And in The US, that much, much higher. Are we thinking mid twenties, high twenties, even into the thirties? Is that kind of what we’re seeing out there?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. I mean, it just depends on portfolio to some degree because the maturity of it makes a difference, but we’re definitely seeing assets that are trading in the mid thirties, some cases even higher.

Mark DeRussy, Vice President of Finance, SBA4: Wow. Great. Well, appreciate it. Thanks, guys.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Sure.

Conference Operator: Alright. Moving on to Ben Swinburne from Morgan Stanley.

Mark DeRussy, Vice President of Finance, SBA5: Thanks. Good afternoon. Two questions. Brenna, we touched on a few of your answers. Just try can you give us a sense of your visibility into sort of the full year domestic site leasing growth?

Should we look at the activity that service revenue growth and the mix shift to co locations is adding to that visibility? Just wanted to get a sense sitting here late April sort of the line of sight into the improving revenue trends domestic in the domestic business as we look through the rest of the year. And then I just thought a little bit of housekeeping. Can you just update us on if there’s any change to how we should think about the Millicom contribution to revenue and gross profit when the rest of the bulk of the acquisition closes on assuming it closes September 1? Thank you.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. So we we do break out in our press release our outlook for the contribution to leasing that we expect during the full year. The range that we set for that for The US, we did not change after this quarter. It’s only been two months since we gave that outlook originally. And I think at this stage, while my commentary is is accurate in terms of the accelerating pace and that we’re feeling very good about it as the backlogs have been bigger and the lease up was a little bit ahead of pace.

I think that it’s a little early to think that we’re going to be outside of the range that we gave. But we’ll see where we are next quarter. We’ll certainly have a much better sense by then as to whether there’s an opportunity to beat the range. But perhaps we’ll be more towards the higher end of the range if things continue on this track. So stay tuned on that.

At least we’re talking about it being towards the higher end and not towards the lower end. That’s a good sign. And then on the Millicom question, yeah, mean, at this stage, the outlook that we put together originally hasn’t really changed outside of the sites that we we closed on early. Obviously, we adjusted for that. I don’t know, Veth, if you’re looking for something in particular.

But basically, what we laid out in terms of the total expectation when it’s all said and done, that’s still the same as what we put in our original press release when we announced that deal. No no real changes there, but, you know, we’ll be excited to get it done as soon as we can.

Mark DeRussy, Vice President of Finance, SBA5: Okay. The the only change, I guess, is just part of that acquisition is closed already. Right?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. Yeah. Just a timing difference. So it’s a fairly small piece of it. There were three twenty sites that we were and if we can close other pieces early, we’ll do that too.

I think there’s not as great an opportunity to break off other pieces each This particular market, there was an opportunity to buy the asset separately as opposed to an entity. And so that allowed us to close a few early. But we’ll see how it goes. If we can close them early, we’ll do that. Great.

Thank you so much. Thanks.

Conference Operator: Okay. Moving on to Richard Chao from JPMorgan.

Mark DeRussy, Vice President of Finance, SBA3: I had a follow-up on the services side. Was the increase more in near term activity? Or is it just feeling more confident about the level through the year? And then also, how much more services revenue could you fulfill or how much capacity you have in that services business kind of from this one eighty to 200 level?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Well, the the services the increase in guidance for services is a mix of the contribution from the first quarter where we did a little bit better than we had anticipated when we set the original outlook, as well as the increased backlogs, which gave us some confidence that we will do better during the balance of the year versus our original projections as well. So it’s really a mix of both of those. And on your question on capacity, I’m not sure what you’re getting at. Mean, obviously, we’ve given an outlook for this year of now updated for 01/1980 to February. In the past, we have had even bigger years.

A couple of years ago, we did almost 300,000,000 in services revenue, high 200. So we have the capacity in terms of our capabilities and scalability to handle increased volume if we can find the right work. And so if we see that opportunity, hopefully, we’ll continue to see it grow. But we’re not restrained in terms of our capabilities or capacity. Great.

Thank you. Sure.

Conference Operator: Moving on to Jonathan Chaplin from New Street.

Jonathan Chaplin, Analyst, New Street: Thanks,

Analyst: guys. Just one clarifying question for me. So I think in the past, Brendan, you said that the two and a half gigahertz and three and a half gigahertz spectrum that the carriers have deployed on their sites is sort of 55% to 65% of sites. Is that of your sites or, or of their sites? The way I understood it initially was there at sort of 55 to 65% of their sites, and they’ve still got a lot of, growth to go.

And I would have thought that would have traded into, translated into a lot more amendment, amendments still to come as opposed to what you’re seeing, which is the bulk of growth coming from new leasing.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. No. It’s when we give those statistics, we’re giving it on ours their presence on our sites, the leases that we have on them on our sites. Yeah. I I it’s not to their overall position.

That’s up to them to comment on. So and and the carriers are not balanced in terms of that. Obviously, T Mobile is further ahead because they had two dot five spectrum well ahead of the other incumbents having their mid band, c band spectrum. So it’s a it’s a mix between them, and that perhaps is what’s contributing to the shift of who’s moving towards new leasing versus amendments faster. But either way, they’re through on a consolidated combined basis.

Cumulatively, they’re through about close to 60% of our leases with the three incumbents have been upgraded for mid band spectrum.

Analyst: Got it. So wait. That that and that’s six 60% of their sites. So they they they’ve done amendments on 60% of their sites from mid band spectrum all already. And so there’s another 40% they could they could still do amendments on?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: As a yes. As a group. When when we’re talking about their leases on our sites. Yep. Yep.

Okay.

Analyst: And so they’re not doing incremental. So but that’s not where the activity is coming from at the moment. It’s mostly coming from them putting equipment on new sites.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Well, yeah. I mean, we’re still signing a bunch of amendments, though, and and the amendment activity is largely around that. It’s largely five g related upgrades. Yep.

Analyst: Perfect. Thanks for that clarification.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Sure.

Conference Operator: Next caller, David Guarino from Gray Street.

Mark DeRussy, Vice President of Finance, SBA5: Thanks.

Mark DeRussy, Vice President of Finance, SBA6: Hey, Brendan. Going back to your comment on the transaction front, you said the bid ask spread might be too wide for some deals to cross the finish line. Was that comment in reference to the past few weeks and the volatility we’ve seen? Or is that something you’ve observed over the course of the year?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. No, it’s something we’ve observed really for the last year or so internationally where you’re seeing this we’ve seen a number of potential transactions come to market, processes run. Some we participated in, others we have not, and there are a number of them that did not actually get completed. So it’s it’s been it’s been a dynamic that’s been happening for the last year. So real really, if you look at the timing when cost of capital started to increase, sometime following on that time period, you started to see this dynamic.

Mark DeRussy, Vice President of Finance, SBA6: Makes sense. And then you had a comment in your press release talking about the business having very reliable cash flow amidst economic uncertainty. And that’s definitely been true in the past. But since the tenant landscape has evolved since that we’ve really had any sort of economic stress test, how should we think about SPA’s portfolio performing if The U. S.

Economy were to hit a soft patch?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Well, I think, David, if you look at it from a big picture standpoint, we produce a tremendous amount of cash flow. Our AFFO is about $1,400,000,000 a year. And even if there’s softness in The U. S. Or anywhere else, you’re talking about a variation of leasing activity and incremental dollars being added that is relatively small in the big picture of the cash flow that we’re able to produce, the amount that we’re able to return back to our shareholders.

There’s no risk to our ability to continue to operate or, in quotes, I’m saying sell our product. It’s already been sold. It’s already happening. So we’re talking about impact happening on incremental additions. And right now, that’s it’s a it’s a positive environment, and that’s great.

But even if things were to slow down, you you’re talking about fairly small amounts. So my my commentary is that compared to most businesses out there, the the cash flow that we’re able to produce can be relied upon. It is very steady and consistent, and that’s a good place to be in a in an unstable environment.

Conference Operator: Good point. Thank you.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yep.

Conference Operator: Moving on to our next and last caller, Ari Klein from BMO Capital Markets.

Jonathan Chaplin, Analyst, New Street: Thanks for squeezing me in here. The commentary on domestic leasing activity and signings continues to get better. Based on the conversations with carriers, is that something you expect to continue to accelerate and maybe build here for the next couple of years? Or does it level off kind of in the range where you’re at now?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: I think that’s a hard question to answer, to look out multiple years. We we’ve seen this play out over decades of being in this, and there are some periods where the carriers are busier than others, but it tends to move in cycles as different events happen. And I think if you look out over the coming years, this year, we’re obviously feeling very confident and excited about the level of activity as it’s continued to increase based on the specific drivers that are in place today. There are a number of factors that could come along that caused that to slow and there are factors that could come along that caused that to increase. As we look out longer term, we know that there will be new spectrum that’s eventually made available, and that will be a driver of increased activity.

There’s eventually a six g cycle that will take place down the road. And so, you know, over time, I feel very good that there will continue to be cycles of investment in networks by our customers, and we will see we will be a beneficiary of that. But to say from one year to the next, whether this year is gonna be a higher or lower year, it’s hard to say without too much precision if if we look out multiple years. So I’ll just leave it at we’ll see how it goes, but you should feel comfortable that there’s always another cycle of something needed.

Jonathan Chaplin, Analyst, New Street: Got it. And and maybe if I can just kind of, you know, move it moving that leasing activity to backlog from backlog to to to leasing or to to leasing revenue. I I think one of the things is, you know, the guide this year is, you know, the midpoint is down a little bit from from last year despite the the improvement in activity. Is is that something when we look at the ’26, we should expect that, you know, decent rent given given how active you’ve been?

Brendan Cavanaugh, President and Chief Executive Officer, SBA: Yeah. If it if we continue to see it move the way that it’s it’s moved thus far this year and it and stays with the same trajectory as we move to the balance of the year, that should be favorable to next year. Because that’s the reason this year is down compared to last year, even though the activity is better this year than last year, is because there’s a drag. There’s a lag time between when you sign up these agreements and when they start to hit your financials. And so, you know, we will see this benefit into the the balance of this year, but particularly into next year as it carries over.

Jonathan Chaplin, Analyst, New Street: Thanks for the color.

Brendan Cavanaugh, President and Chief Executive Officer, SBA: No problem. Well, thank you all for joining the call today, and we look forward to reporting our second quarter results at the July.

Conference Operator: That concludes the SBA first quarter of twenty twenty five results conference call. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.