• Domestic Organic Revenue Growth: 5.1% gross, 2.2% net, including 2.9% churn.
• International Organic Recurring Cash Leasing Revenue Growth: 1.7% net, 7.7% gross, including 6% churn.
• Brazil Organic Growth: 8.7% on a constant currency basis.
• Cash Site Leasing Revenue and Adjusted EBITDA: 78% and 81% denominated in US dollars, respectively.
• Capital Allocation: Over $550 million invested in asset acquisitions, stock repurchases, and new tower builds.
• Dividend Growth: 15% increase, with a first quarter dividend of $1.11 per share announced.
• Net Debt to Adjusted EBITDA: 6.1 times, the lowest level in company history.
• Fourth Quarter Net Cash Interest Coverage Ratio: 5.5 times.
• Weighted Average Maturity of Debt: Approximately 3.4 years, with an average interest rate of 3.2%.
• 2025 Outlook for New Leases and Amendments: $35 million to $39 million domestically, $16 million to $18 million internationally.
• 2025 Services Revenue Guidance: $160 million to $180 million.
• Millicom Transaction Contribution to 2025: Approximately $42 million to cash site leasing revenue and $29 million to tower cash flow.

• Warning! GuruFocus has detected 6 Warning Signs with SBAC.

Release Date: February 24, 2025

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

Positive Points

• SBA Communications Corp (NASDAQ:SBAC) reported a solid finish to the year with results in line or slightly ahead of estimates despite unfavorable foreign exchange rates.
• Domestic new carrier activity and bookings increased sequentially, with a higher percentage coming from new lease co-locations.
• The US-based services business had its best quarter of the year, and the 2025 outlook suggests further growth in new leasing business.
• Internationally, network investment continues, with mobile network operators expanding 5G coverage, which is expected to drive future growth.
• SBA Communications Corp (NASDAQ:SBAC) improved its balance sheet by refinancing debt, extending maturities, and entering into interest rate hedges, reducing future interest exposure.

Negative Points

• International churn remains elevated due to customer consolidation, impacting cash flows and organic growth.
• The macro interest rate environment and a strong dollar have hindered stock performance.
• The company faces ongoing challenges with Sprint-related churn, which is expected to continue impacting financials in the near term.
• Foreign exchange continues to be a headwind, with a projected negative impact on site leasing revenue.
• The services revenue guidance for 2025 is slightly below the annualized exit rate from the fourth quarter, indicating potential moderation in customer activity.

Q & A Highlights

Q: Can you provide more color on the increase in the backlog? Is it coming from specific tenants or broadly across all tenants? How should we think about the book-to-bill cycle with colocation increasing? A: The backlog increase is broad across tenants, with some carriers busier than others. There's a shift towards more new leases versus amendments, which will drive the book-to-bill cycle later. We expect growth quarter-over-quarter throughout the year, suggesting favorable conditions for US leasing next year.

Q: With US carriers maintaining consistent CapEx budgets, how should we think about your ability to grow domestic leasing in the future? What areas could allow you to outperform CapEx growth? A: Carrier CapEx budgets are large, and minor shifts can significantly impact us. We're seeing more activity around wireless networks, especially macro-based networks. The lack of new spectrum means carriers must optimize existing spectrum, which could benefit us in the coming years.

Q: On the leasing outlook for '25, what's baked in for customer-specific activity across the three nationals and DISH? Also, the services outlook seems shy of the annualized exit rate from 4Q. Are there any one-timers in 4Q or assumptions of moderation from customers next year? A: There's no one-timers in 4Q. The services guidance is based on current backlog and carrier conversations. We tend to be conservative for the second half of the year. For leasing, all big 3 carriers are increasing activity, with some driven by regulatory obligations. DISH's contribution is much less than in the past.

Q: As merger churn picks up in the US, is there a corresponding increase in fees for carriers leaving equipment behind? How are you thinking about target debt leverage and capital allocation priorities? A: There are fees for decommissioning, but much has already been incurred. We don't expect it to significantly impact results. Regarding leverage, we're comfortable between 6 and 6.5 times net debt to EBITDA. If investment opportunities arise, we may adjust leverage accordingly.

Q: Can you update us on the Millicom deal timeline and international churn expectations for '26 and beyond? A: We aim for a September 1 close for the Millicom deal, but it could be earlier or later. International churn is mostly in Brazil due to Oi consolidation and network rationalization. We expect churn to remain elevated next year but anticipate stabilization in the markets over time.

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