• Revenue Growth: Nearly 1% growth for the year, 3% on an FX-neutral basis.
• Adjusted EBITDA Growth: Approximately 2% growth, over 4% on an FX-neutral basis.
• Cash SG&A Reduction: Decreased by approximately $35 million in 2024 compared to 2023.
• Cash Adjusted EBITDA Margin Expansion: Over 200 basis points year-over-year.
• Attributable AFFO per Share: $10.54, nearly 7% growth year-over-year, over 9% on an FX-neutral basis.
• Organic Tenant Billings Growth: Approximately 5% for 2025, around 5.5% excluding Sprint churn impacts.
• US and Canada Organic Tenant Billings Growth: Greater than or equal to 4.3%, 5.3% excluding Sprint churn.
• International Site Construction: Nearly 1,000 sites constructed with strategic anchor tenants.
• US Data Center Revenue Growth: Nearly 10% in the fourth quarter.
• 2025 Capital Deployment: $1.7 billion planned, with $1.5 billion discretionary.
• Dividend Growth: Expected mid-single-digit range, approximately $3.2 billion distribution.
• Liquidity Position: $12 billion, including $10 billion of bank facility capacity.

• Warning! GuruFocus has detected 9 Warning Signs with AMT.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• American Tower Corp (NYSE:AMT) reported strong demand for its assets, with significant activity in the US and European markets driven by mid-band spectrum deployments and 5G rollouts.
• The company achieved a record year of new leasing in its CoreSite data center business, highlighting robust demand and pricing durability.
• AMT successfully reduced cash SG&A expenses by approximately $35 million in 2024, demonstrating effective cost management and efficiency initiatives.
• The company is on track to maintain its leverage target of five times, supported by margin expansion and systematic reduction of recurring SG&A costs.
• AMT's strategic focus on developed markets is expected to contribute about 75% towards its unlevered AFFO in 2025, enhancing earnings quality and growth profile.

Negative Points

• AMT faces headwinds from carrier consolidation and foreign exchange (FX) and interest rate volatility, which could impact future results.
• The company's organic tenant billings growth in the US and Canada is expected to step down modestly in 2025 compared to 2024 due to the cadence of contracted use fees.
• AMT's emerging market exposure remains a concern, with discretionary CapEx in these regions being reduced by over 60% from 2021 levels.
• The company anticipates elevated churn in Latin America due to carrier consolidation, which is expected to persist through 2027.
• AMT's 2025 outlook includes a negative impact from FX devaluation and interest costs associated with refinancing needs, affecting growth projections.

Q & A Highlights

Q: Can you provide details on the domestic leasing environment, including the mix of colocations versus amendments, and how this affects the book-to-bill metrics for 2025? Also, what is the multiyear growth opportunity for domestic leasing? A: Steven Vondran, CEO, explained that the long-term guidance remains unchanged, with expectations of mid-single-digit growth through 2027. The 2025 organic tenant billings growth (OTPG) is influenced by a mix of contracted use fees and new business outside of these agreements. The pipeline is robust across all carriers, with a healthy mix of amendments and colocations. Timing of commencements can affect OTPG, but overall, the growth outlook remains positive.

Q: Regarding the data center business, how do you view the integration of data center connectivity with towers and AI? Is there a consideration to separate these assets due to valuation differences? A: Steven Vondran, CEO, stated that the integration of data centers with towers remains strategic, especially with the evolution towards edge computing. The company is focused on maximizing CoreSite's value and believes in the long-term convergence of wireless and wireline edges. While the current ownership is deemed appropriate, they will reassess if strategic fit changes. Rodney Smith, CFO, added that US land purchases are driven by securing long-term revenue and achieving high returns.

Q: Can you provide an update on the domestic activity, specifically the percentage of towers upgraded and the pacing of new leasing for the year? Also, how do you view capital allocation, including buybacks? A: Steven Vondran, CEO, mentioned that one carrier has upgraded over 80% of towers, another around 65%, and a third under 50%. The pacing of new business will be affected by Sprint churn, with lower growth in the first three quarters and higher growth in Q4. Rodney Smith, CFO, noted that leverage is within target, allowing for potential buybacks, but decisions will consider interest rates and macroeconomic conditions.

Q: What kind of yields are you achieving on data center investments, and how might AI impact towers? A: Steven Vondran, CEO, stated that CoreSite developments are underwritten at mid-teens stabilized yields. AI's impact on towers will depend on bandwidth-intensive applications, particularly video. As AI applications become more widespread, they may drive network densification. Rodney Smith, CFO, highlighted strong pricing power and demand in the data center business, with an all-time high backlog supporting future growth.

Q: How do you view the US carrier activity related to fixed wireless access, and what is your outlook for Europe? A: Steven Vondran, CEO, noted that fixed wireless access uses existing networks, and while it's challenging to isolate its impact, it generally benefits the industry. In Europe, mid-single-digit growth is expected, with opportunities for carriers to catch up on 5G deployment. M&A in Europe will be considered if terms and conditions are favorable, but current opportunities are not compelling.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.