SBA(SBAC) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Q2 2025 Performance Highlights SBA Communications reported strong Q2 2025 financial and operating results, including significant net income, industry-leading AFFO per share, a major acquisition, and continued share repurchases Q2 2025 Key Financial Highlights | Metric | Value | | :----------------------- | :---------- | | Net income | $225.7 million | | Net income per share | $2.09 | | AFFO per share | $3.17 | | Millicom sites closed | 4,323 | | Shares repurchased | 799 thousand | CEO Commentary CEO Brendan Cavanagh highlighted strong domestic and international leasing, exceeding expectations with record colocations, an early Millicom acquisition, and a favorable full-year outlook, alongside a strategic Canadian tower asset sale - Domestic activity remained very strong, with carrier customers investing meaningfully in wireless networks. New U.S. leasing business was ahead of expectations, benefiting from high levels of new colocations[4] - International new leasing activity was solid, contributing to the highest company-wide total of new colocations in nearly three years[4] - Over 4,300 sites from the Millicom acquisition were closed, several months ahead of schedule, contributing to an increased full-year outlook across all key financial metrics due to strong leasing results, backlogs, early Millicom closing, and favorable foreign currency movements[4] - The company entered an agreement to sell all 369 Canadian tower assets, a divestiture expected to be immediately accretive to AFFO per share and aligns with the strategy to optimize or exit subscale markets[4] Dividend Declaration The Board declared a quarterly cash dividend of $1.11 per share of Class A Common Stock, payable September 18, 2025, to shareholders of record August 21, 2025 - Quarterly cash dividend declared: $1.11 per share of Class A Common Stock[3] - Payment Date: September 18, 2025. Record Date: August 21, 2025[3] Operating Results Consolidated Financial Performance SBA Communications reported mixed Q2 2025 consolidated financial results, with significant site development revenue growth, slight declines in site leasing and AFFO, but substantial net income and EPS increases due to a currency gain Consolidated Financial Results (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | $ Change ($M) | % Change | % Change excluding FX | | :--------------------------------- | :----------- | :----------- | :------------ | :--------- | :-------------------- | | Site leasing revenue | $631.8 | $626.5 | $5.3 | 0.9% | 2.1% | | Site development revenue | $67.2 | $34.0 | $33.2 | 97.5% | 97.5% | | Site leasing segment operating profit | $513.2 | $512.3 | $0.9 | 0.2% | 1.3% | | Tower cash flow | $511.2 | $503.9 | $7.3 | 1.4% | 2.6% | | Net cash interest expense | $111.5 | $90.5 | $21.0 | 23.2% | 23.0% | | Net income | $225.7 | $159.5 | $66.2 | 41.5% | (12.2%) | | Earnings per share — diluted | $2.09 | $1.51 | $0.58 | 38.5% | (12.3%) | | Adjusted EBITDA | $475.5 | $467.1 | $8.4 | 1.8% | 2.9% | | AFFO | $342.1 | $354.3 | ($12.2) | (3.4%) | (1.9%) | | AFFO per share | $3.17 | $3.29 | ($0.12) | (3.6%) | (2.1%) | - Net income for Q2 2025 includes a $30.4 million gain from currency-related remeasurement of intercompany loans, compared to a $66.2 million loss from such remeasurement in Q2 2024[8] Segment Performance (Domestic vs. International) Domestic site leasing revenue and cash site leasing revenue grew, while international revenue declined on a reported basis but increased significantly excluding foreign exchange impacts, with international operating profit and tower cash flow also growing ex-FX Segment Financial Results (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | $ Change ($M) | % Change | % Change excluding FX | | :--------------------------------- | :----------- | :----------- | :------------ | :--------- | :-------------------- | | Domestic site leasing revenue | $469.8 | $463.2 | $6.6 | 1.4% | 1.4% | | Domestic cash site leasing revenue | $467.4 | $457.4 | $10.0 | 2.2% | 2.2% | | Domestic site leasing segment operating profit | $400.4 | $397.7 | $2.7 | 0.7% | 0.7% | | Domestic site leasing tower cash flow | $396.1 | $388.2 | $7.9 | 2.0% | 2.0% | | Int'l site leasing revenue | $162.0 | $163.3 | ($1.3) | (0.8%) | 4.0% | | Int'l cash site leasing revenue | $163.7 | $163.6 | $0.1 | 0.1% | 5.0% | | Int'l site leasing segment operating profit | $112.8 | $114.6 | ($1.8) | (1.6%) | 3.3% | | Int'l site leasing tower cash flow | $115.1 | $115.6 | ($0.5) | (0.5%) | 4.5% | Key Margins Tower Cash Flow Margin remained stable, while Adjusted EBITDA Margin decreased in Q2 2025 compared to the prior year period Key Margins (Q2 2025 vs Q2 2024) | Margin | Q2 2025 | Q2 2024 | | :------------------ | :------ | :------ | | Tower Cash Flow Margin | 81.0% | 81.1% | | Adjusted EBITDA Margin | 68.1% | 71.3% | Strategic and Investing Activities Acquisitions and Tower Builds SBA significantly expanded its communication site portfolio in Q2 2025 by acquiring 4,329 sites (mainly Millicom) and building 94 new towers, now operating over 44,000 sites globally - Acquired 4,329 communication sites in Q2 2025, including 4,323 from the Millicom transaction, for $562.9 million cash consideration[12] - Built 94 new towers during Q2 2025[12] - As of June 30, 2025, SBA owned or operated 44,065 communication sites (17,437 in the U.S. and 26,628 internationally)[12] - Approximately 2,500 Millicom sites remain under contract for $391.0 million, expected to close by September 1, 2025[13][20] Divestitures SBA agreed to sell all 369 Canadian tower assets for CAD$446.0 million, expected to close in Q4 2025, optimizing its portfolio by exiting a subscale market - Agreement to sell all 369 Canadian towers and related operations for CAD$446.0 million[14] - Transaction expected to close during Q4 2025; no adjustment made to full year 2025 Outlook due to closing date uncertainty[14][21] Capital Expenditures Total cash capital expenditures for Q2 2025 were $645.1 million, primarily for discretionary investments in new builds, augmentations, and acquisitions, alongside non-discretionary maintenance and corporate spending Q2 2025 Cash Capital Expenditures | Category | Amount ($M) | | :--------------------------------- | :---------- | | Total cash capital expenditures | $645.1 | | Non-discretionary (maintenance, corporate) | $13.8 | | Discretionary (new builds, augmentations, acquisitions, land) | $631.3 | - Spent $9.4 million to purchase land and easements and extend lease terms[12] Financing and Liquidity Debt and Leverage SBA maintained a strong Q2 2025 balance sheet with total debt of $12.6 billion and a Net Debt to Annualized Adjusted EBITDA Leverage Ratio of 6.5x (6.3x pro forma with Millicom assets) Q2 2025 Debt and Leverage | Metric | Amount ($B) | | :--------------------------------- | :---------- | | Total debt | $12.6 | | Total secured debt | $9.6 | | Cash and cash equivalents, short-term restricted cash, and short-term investments | $0.3 | | Net Debt | $12.3 | | Net Debt to Annualized Adjusted EBITDA Leverage Ratio | 6.5x | | Net Secured Debt to Annualized Adjusted EBITDA Leverage Ratio | 4.9x | - Adjusted Net Debt to Annualized Adjusted EBITDA Leverage Ratio was 6.3x on a pro forma basis for a full quarter of Adjusted EBITDA from acquired Millicom assets[4] - Only $35.0 million outstanding under the $2.0 billion Revolving Credit Facility as of the press release date[16] Share Repurchases The company repurchased 618 thousand shares in Q2 2025 and 182 thousand shares post-quarter, totaling 799 thousand shares, with $1.45 billion remaining under the current authorization Share Repurchases | Period | Shares Repurchased | Amount ($M) | Average Price per Share | | :----------------------- | :----------------- | :---------- | :---------------------- | | Q2 2025 | 618 thousand | $130.7 | $211.63 | | Subsequent to Q2 2025 | 182 thousand | $41.4 | $227.92 | | Total (Q2 + subsequent) | 799 thousand | - | - | - $1.45 billion of authorization remained under the $1.5 billion stock repurchase plan after these repurchases[17] Dividends In Q2 2025, the company declared and paid $119.4 million in cash dividends - Declared and paid a cash dividend of $119.4 million in Q2 2025[18] Full Year 2025 Outlook Outlook Assumptions The updated full year 2025 outlook assumes remaining Millicom site closings by September 1, 2025, excludes future acquisitions, repurchases, new debt, or Canadian disposition impacts, and incorporates specific foreign currency exchange rates - Assumes closing of remaining Millicom sites under contract by September 1, 2025, subject to regulatory approvals[20] - Does not reflect additional capital spending on unidentified revenue-producing assets, additional stock repurchases, or new debt financings in 2025[21] - Does not contemplate any impact from the disposition of Canadian operations if closed prior to year-end[21] Assumed Average Foreign Currency Exchange Rates (Q3-Q4 2025) | Currency | Rate (per 1.0 U.S. Dollar) | | :----------------------- | :-------------------------- | | Brazilian Reais | 5.60 | | Canadian Dollars | 1.36 | | Tanzanian Shillings | 2,650 | | South African Rand | 17.90 | Updated Financial Guidance SBA Communications significantly increased its full year 2025 financial outlook across all key metrics, reflecting strong operational performance, early Millicom closing, and favorable foreign currency movements Full Year 2025 Outlook Update (vs. April 28, 2025 Outlook) | Metric | Full Year 2025 Outlook (Range) | Change from April 28, 2025 Outlook ($M) | Change from April 28, 2025 Outlook Excluding FX ($M) | | :--------------------------------- | :--------------------------------- | :---------------------------------------- | :---------------------------------------------------- | | Site leasing revenue | $2,565.0 to $2,590.0 | $29.0 | $21.0 | | Site development revenue | $215.0 to $235.0 | $35.0 | $35.0 | | Total revenues | $2,780.0 to $2,825.0 | $64.0 | $56.0 | | Tower Cash Flow | $2,058.0 to $2,083.0 | $15.0 | $10.0 | | Adjusted EBITDA | $1,908.0 to $1,928.0 | $17.0 | $12.0 | | Net cash interest expense | $435.0 to $441.0 | $5.0 | $5.0 | | Non-discretionary cash capital expenditures | $53.0 to $63.0 | — | — | | AFFO | $1,365.0 to $1,405.0 | $12.0 | $7.0 | | AFFO per share | $12.65 to $13.02 | $0.13 | $0.08 | | Discretionary cash capital expenditures | $1,255.0 to $1,275.0 | — | — | Site Leasing Revenue Bridge The 2025 site leasing revenue outlook projects growth from new leases, amendments, and escalations, partially offset by churn, with non-organic revenue contributing significantly and foreign exchange having a negative impact 2024 Total Site Leasing Revenue to 2025 Outlook Bridge | Category | Consolidated ($M) | Domestic ($M) | International ($M) | | :-------------------------- | :------------------ | :-------------- | :------------------- | | 2024 Total Site Leasing Revenue | $2,527 | $1,862 | $665 | | (+) New Leases and Amendments | $51 to $57 | $35 to $39 | $16 to $18 | | (+) Escalations | $68 to $71 | $51 to $52 | $17 to $19 | | (-) Sprint Consolidation Churn | ($52) to ($50) | ($52) to ($50) | — | | (-) Regular Churn | ($58) to ($52) | ($22) to ($20) | ($36) to ($32) | | (+) Non-Organic Revenue | $73 to $73 | $7 to $7 | $66 to $66 | | (+ / -) Straight-line Revenue | ($8) to ($3) | ($11) to ($8) | $3 to $5 | | (+ / -) FX | ($18) to ($18) | — | ($18) to ($18) | | (+ / -) Other | ($18) to ($15) | ($2) to — | ($16) to ($15) | | 2025 Total Site Leasing Revenue | $2,565 to $2,590 | $1,868 to $1,882 | $697 to $708 | Financial Statements Consolidated Statements of Operations Consolidated statements of operations show increased total revenues for Q2 and H1 2025, driven by site development growth, with net income attributable to SBA Communications Corporation also substantially increasing year-over-year Consolidated Statements of Operations (Key Figures) | Metric | Q2 2025 ($K) | Q2 2024 ($K) | 6M 2025 ($K) | 6M 2024 ($K) | | :------------------------------------------ | :----------- | :----------- | :----------- | :----------- | | Total revenues | $698,981 | $660,477 | $1,363,229 | $1,318,339 | | Operating income | $334,781 | $354,470 | $669,690 | $677,828 | | Net income | $225,694 | $159,452 | $443,598 | $313,994 | | Net income attributable to SBA Communications Corporation | $225,794 | $162,830 | $446,525 | $317,372 | | Diluted EPS | $2.09 | $1.51 | $4.14 | $2.93 | Condensed Consolidated Balance Sheets The June 30, 2025, balance sheet shows decreased total assets and liabilities compared to December 31, 2024, with significant current asset reduction due to restricted cash and prepaid expenses, and an improved shareholders' deficit Condensed Consolidated Balance Sheets (Key Figures) | Metric | June 30, 2025 ($K) | December 31, 2024 ($K) | | :------------------------------------------ | :----------------- | :--------------------- | | Total assets | $10,766,387 | $11,417,336 | | Total current assets | $523,808 | $1,978,720 | | Total current liabilities | $1,429,705 | $1,797,936 | | Total long-term liabilities | $14,210,420 | $14,675,206 | | Total liabilities, redeemable noncontrolling interests, and shareholders' deficit | $10,766,387 | $11,417,336 | | Shareholders' deficit | ($4,938,895) | ($5,109,938) | Condensed Consolidated Statements of Cash Flows Q2 2025 saw decreased operating cash flows, significantly increased cash used in investing due to acquisitions, and reduced financing cash outflows, resulting in a net decrease in cash, cash equivalents, and restricted cash for the quarter Condensed Consolidated Statements of Cash Flows (Key Figures) | Metric | Q2 2025 ($K) | Q2 2024 ($K) | | :------------------------------------------ | :----------- | :----------- | | Net cash provided by operating activities | $368,098 | $425,593 | | Net cash used in investing activities | ($580,962) | ($121,208) | | Net cash used in financing activities | ($158,278) | ($276,523) | | Net change in cash, cash equivalents, and restricted cash | ($363,583) | $18,812 | | Cash, cash equivalents, and restricted cash, end of period | $300,523 | $283,144 | - Acquisitions accounted for $589.2 million in cash used in investing activities in Q2 2025, a substantial increase from $41.6 million in Q2 2024[42] Supplemental Financial Information & Non-GAAP Reconciliations Communication Site Portfolio Summary SBA's communication site portfolio significantly grew in Q2 2025, primarily via acquisitions, reaching 44,065 sites globally Communication Site Portfolio Summary (Q2 2025) | Category | Domestic | International | Total | | :------------------------------------------ | :------- | :------------ | :---- | | Sites owned at March 31, 2025 | 17,447 | 22,262 | 39,709 | | Sites acquired during the second quarter | 5 | 4,324 | 4,329 | | Sites built during the second quarter | 10 | 84 | 94 | | Sites decommissioned/reclassified during the second quarter | (25) | (42) | (67) | | Sites owned at June 30, 2025 | 17,437 | 26,628 | 44,065 | Segment Operating Profit and Margin Domestic site leasing operating profit increased with high margins, while international operating profit and margin slightly declined; site development operating profit and margin both significantly increased Segment Operating Profit and Margin (Q2 2025 vs Q2 2024) | Segment | Q2 2025 Operating Profit ($K) | Q2 2024 Operating Profit ($K) | Q2 2025 Margin | Q2 2024 Margin | | :-------------------------- | :---------------------------- | :---------------------------- | :------------- | :------------- | | Domestic Site Leasing | $400,386 | $397,715 | 85.2% | 85.9% | | Int'l Site Leasing | $112,831 | $114,611 | 69.7% | 70.2% | | Site Development | $13,668 | $6,883 | 20.3% | 20.2% | Non-GAAP Financial Measures Overview SBA Communications utilizes non-GAAP measures including Cash Site Leasing Revenue, Tower Cash Flow, Adjusted EBITDA, FFO, AFFO, Net Debt, and Constant Currency to enhance investor understanding of financial performance and operational comparisons - Non-GAAP measures are used to evaluate economic productivity, allocate resources, and assess performance by excluding impacts of capital structure and asset base[49] - FFO, AFFO, and AFFO per share are industry-standard metrics for REITs and communication site companies, providing insights into financial performance by adjusting for non-cash items and sustaining capital expenditures[49] - Non-GAAP Debt Measures offer a complete understanding of net debt and leverage by including the full principal amount of debt and netting cash and equivalents[49] - Constant Currency Measures help evaluate business performance without the impact of foreign currency exchange rate fluctuations[49] Impact of Foreign Currency Exchange Rates Foreign currency exchange rate changes significantly impacted reported Q2 2025 growth rates; growth rates excluding FX were generally higher, particularly for international site leasing metrics Q2 2025 Year-over-Year Growth Rates (with and without FX Impact) | Metric | Reported Growth Rate | Foreign Currency Impact | Growth Excluding Foreign Currency Impact | | :--------------------------------- | :------------------- | :---------------------- | :--------------------------------------- | | Total site leasing revenue | 0.9% | (1.2%) | 2.1% | | Total cash site leasing revenue | 1.6% | (1.3%) | 2.9% | | Int'l cash site leasing revenue | 0.1% | (4.9%) | 5.0% | | Total site leasing segment operating profit | 0.2% | (1.1%) | 1.3% | | Int'l site leasing segment operating profit | (1.6%) | (4.9%) | 3.3% | | Total site leasing tower cash flow | 1.4% | (1.2%) | 2.6% | | Int'l site leasing tower cash flow | (0.5%) | (5.0%) | 4.5% | | Net income | 41.5% | 53.7% | (12.2%) | | Earnings per share — diluted | 38.5% | 50.8% | (12.3%) | | Adjusted EBITDA | 1.8% | (1.1%) | 2.9% | | AFFO | (3.4%) | (1.5%) | (1.9%) | | AFFO per share | (3.6%) | (1.5%) | (2.1%) | Cash Site Leasing Revenue & Tower Cash Flow Reconciliation Cash Site Leasing Revenue and Tower Cash Flow are reconciled from GAAP site leasing revenue by adjusting for non-cash items, both showing Q2 2025 growth with stable Tower Cash Flow Margins Cash Site Leasing Revenue and Tower Cash Flow (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($K) | Q2 2024 ($K) | | :------------------------------------------ | :----------- | :----------- | | Site leasing revenue | $631,788 | $626,457 | | Non-cash straight-line leasing revenue | ($647) | ($5,466) | | Cash site leasing revenue | $631,141 | $620,991 | | Site leasing cost of revenues (excl. D&A) | ($118,571) | ($114,131) | | Non-cash straight-line ground lease expense | ($1,418) | ($2,988) | | Tower Cash Flow | $511,152 | $503,872 | | Tower Cash Flow Margin | 81.0% | 81.1% | Forecasted Tower Cash Flow for Full Year 2025 | Metric | Full Year 2025 (Range, $M) | | :------------------------------------------ | :------------------------- | | Site leasing revenue | $2,565.0 to $2,590.0 | | Non-cash straight-line leasing revenue | ($8.5) to ($3.5) | | Cash site leasing revenue | $2,556.5 to $2,586.5 | | Site leasing cost of revenues (excl. D&A) | ($490.0) to ($500.0) | | Non-cash straight-line ground lease expense | ($8.5) to ($3.5) | | Tower Cash Flow | $2,058.0 to $2,083.0 | Adjusted EBITDA Reconciliation Adjusted EBITDA, reconciled from net income, increased in Q2 2025 despite a margin decrease, with the full-year 2025 forecast also projecting an increase Adjusted EBITDA Reconciliation (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($K) | Q2 2024 ($K) | | :------------------------------------------ | :----------- | :----------- | | Net income | $225,694 | $159,452 | | Total interest expense | $126,306 | $109,542 | | Depreciation, accretion, and amortization | $69,964 | $64,179 | | Provision (benefit) for taxes | $35,229 | ($12,250) | | Adjusted EBITDA | $475,484 | $467,064 | | Annualized Adjusted EBITDA | $1,901,936 | $1,868,256 | | Adjusted EBITDA Margin | 68.1% | 71.3% | Forecasted Adjusted EBITDA for Full Year 2025 | Metric | Full Year 2025 (Range, $M) | | :------------------------------------------ | :------------------------- | | Net income | $865.5 to $910.5 | | Total interest expense | $505.0 to $495.0 | | Depreciation, accretion, and amortization | $289.5 to $279.5 | | Provision for taxes | $103.0 to $99.0 | | Adjusted EBITDA | $1,908.0 to $1,928.0 | FFO, AFFO, and AFFO per Share Reconciliation FFO and AFFO, key REIT metrics, showed FFO increasing in Q2 2025 while AFFO and AFFO per share slightly declined; the full-year 2025 forecast projects increases for both FFO and AFFO FFO, AFFO, and AFFO per Share (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($K) | Q2 2025 ($/share) | Q2 2024 ($K) | Q2 2024 ($/share) | | :------------------------------------------ | :----------- | :---------------- | :----------- | :---------------- | | Net income | $225,694 | $2.09 | $159,452 | $1.48 | | FFO | $339,175 | $3.14 | $253,275 | $2.35 | | AFFO | $342,117 | $3.17 | $354,327 | $3.29 | Forecasted AFFO for Full Year 2025 | Metric | Full Year 2025 (Range, $M) | Full Year 2025 (Range, $/share) | | :------------------------------------------ | :------------------------- | :------------------------------ | | Net income | $865.5 to $910.5 | $8.02 to $8.44 | | FFO | $1,289.0 to $1,324.0 | $11.94 to $12.27 | | AFFO | $1,365.0 to $1,405.0 | $12.65 to $13.02 | Net Debt and Leverage Ratios SBA's Net Debt and Leverage Ratios, calculated using notional principal, showed a Leverage Ratio of 6.5x as of June 30, 2025, adjusting to 6.3x pro forma with acquired Millicom assets' EBITDA Net Debt and Leverage Ratios (June 30, 2025) | Metric | Amount ($K) | | :------------------------------------------ | :----------- | | Total debt | $12,582,000 | | Less: Cash and cash equivalents, short-term restricted cash and short-term investments | ($297,583) | | Net debt | $12,284,417 | | Annualized Adjusted EBITDA | $1,901,936 | | Leverage Ratio | 6.5x | | Total secured debt | $9,582,000 | | Net Secured Debt | $9,284,417 | | Secured Leverage Ratio | 4.9x | - Leverage Ratio adjusted to 6.3x when reflecting a full quarter of EBITDA from the acquired Millicom assets[67] Forward-Looking Statements & Risks Information Concerning Forward-Looking Statements This press release contains forward-looking statements on growth strategies, financial performance, capital allocation, 2025 outlook, acquisitions, portfolio growth, shareholder returns, balance sheet strength, customer investments, and asset sales, all subject to material risks and uncertainties - Forward-looking statements cover growth strategies, financial performance, capital allocation, 2025 outlook, timing of pending acquisitions (including Millicom), tower portfolio growth, asset purchases, share repurchases, debt financings, ability to return capital, balance sheet strength, customer network investments, international churn, and the sale of Canadian tower assets[29] - Key risk factors include macroeconomic conditions (interest rates, inflation, market volatility), timing and integration of the Millicom acquisition, economic climate for the wireless industry, ability to secure and retain tenants, expense management, consolidation among wireless providers, international operations risks (including FX), services business performance, land acquisition terms, future financing, and ability to meet new build and portfolio growth targets[31] - Risks related to pending acquisitions and dispositions include due diligence completion, regulatory approvals, fulfillment of contractual obligations, and the ability to accurately anticipate future performance and integration costs[32] - The outlook assumes the company continues to qualify for REIT treatment for U.S. federal income tax purposes[32] Company Information About SBA Communications Corporation SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure, with over 44,000 sites across the Americas and Africa, listed on NASDAQ (SBAC), part of the S&P 500, and a top REIT by market capitalization - Leading independent owner and operator of wireless communications infrastructure (towers, buildings, rooftops, DAS, small cells)[34] - Portfolio of more than 44,000 communication sites throughout the Americas and Africa[34] - Listed on NASDAQ (SBAC), part of the S&P 500, and a top REIT by market capitalization[34]