Core Industry Insights - Mobile data consumption in the U.S. is projected to increase by approximately 35% year-over-year in 2024, continuing a trend of doubling every 2 to 3 years, necessitating a significant increase in network capacity and cell sites [1][60] - The tower industry benefits from financially strong customers who invest in their networks to meet rising mobile data demand, driving greater demand for tower portfolios [2][10] - The demand for mobile data is expected to continue rising rapidly, with a need for network densification and expansion to accommodate this growth [5][60] Financial Performance - The company reported a nearly 8% year-over-year growth in total revenue, driven by strong organic growth and contributions from U.S. services and CoreSite [13][14] - Attributable AFFO per share as adjusted grew approximately 10% year-over-year, supported by robust EBITDA growth and disciplined cost management [14][17] - The company raised its full-year outlook across key financial metrics, including property revenue and adjusted EBITDA, primarily due to favorable FX impacts and U.S. services outperformance [18][21] Strategic Initiatives - The company is focused on optimizing long-term value creation through strategic priorities such as maximizing organic growth, expanding margins, and disciplined capital allocation [10][12] - The company has generated approximately 300 basis points of adjusted EBITDA margin expansion since 2020, with expectations for continued improvements [11][39] - A capital plan for 2025 includes approximately $3.2 billion in dividends and $1.7 billion in capital expenditures, with a focus on developed markets [23][56] Market Trends and Opportunities - The company is optimistic about the opportunities presented by AI-driven mobile data demand and is closely monitoring developments in satellite-based networks [5][60] - Leasing activity remains robust, with approximately 75% of towers upgraded with 5G equipment, indicating significant growth potential as carriers complete their 5G rollouts [6][10] - The international market is also seeing strong investment in 4G and 5G networks, particularly in emerging markets, positioning the company for future growth [7][10] Customer and Competitive Landscape - The company has a modest exposure to UScellular, representing less than 1% of U.S. revenue, with a significant portion up for renewal next year [48] - The company is currently engaged in a legal dispute with AT&T Mexico regarding tower rent calculations, with expectations to prevail in arbitration [19][20] - The company remains disciplined in capital allocation, prioritizing dividends and internal CapEx while evaluating M&A opportunities against share buybacks [56][57]

Financial Data and Key Metrics Changes - Total revenue grew nearly 8% year-over-year, driven by steady consolidated organic growth in the mid-single digits and strong contributions from U.S. services and CoreSite [15][16] - Adjusted EBITDA also grew nearly 8% year-over-year, complemented by 20 basis points of cash margin expansion [15] - Attributable AFFO per share as adjusted grew approximately 10% year-over-year, supported by robust EBITDA growth and disciplined management of below-the-line costs [15][16] Business Line Data and Key Metrics Changes - Consolidated property revenue grew nearly 6% year-over-year, with U.S. and Canada property revenue flat year-over-year and international property revenue growing approximately 12% year-over-year [16][17] - Data center property revenue grew over 14%, driven by record retail new leasing and consistent pricing growth [16][17] - Consolidated organic tenant billings growth was 5%, with U.S. and Canada segment growing approximately 4% organically [17] Market Data and Key Metrics Changes - Mobile data consumption in the U.S. increased approximately 35% year-over-year, indicating a strong demand for mobile data and a need for increased network capacity [8][9] - Approximately 75% of the company's towers have been upgraded with 5G equipment, with significant growth opportunities remaining as carriers complete their 5G rollouts [10] - International markets, especially in Africa and APAC, showed double-digit growth, while Europe and Latin America experienced steady mid-single-digit and low-single-digit growth, respectively [17] Company Strategy and Development Direction - The company focuses on four strategic priorities: optimizing long-term value creation, maximizing organic growth, expanding margins, and disciplined capital allocation [12][13] - The company aims to leverage its unmatched portfolio of assets to benefit from increasing mobile data consumption and demand for interconnection-rich data centers [11][24] - The capital allocation philosophy prioritizes dividends, internal CapEx, and evaluating M&A opportunities against share buybacks [65][68] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the industry landscape, highlighting the benefits of carrier consolidation and increased mobile data consumption [6][9] - The company raised its full-year outlook across key financial metrics, supported by FX tailwinds and U.S. services outperformance [15][16] - Management noted that the demand for mobile data will require a doubling in overall network capacity over the next five years, driving robust levels of leasing activity [8][9] Other Important Information - The company reached a positive interim agreement with AT&T Mexico regarding previously withheld payments, which will resume monthly payments going forward [20] - The arbitration regarding the legal dispute with AT&T Mexico is scheduled for August 2026, with expectations of future reserves until the arbitration is settled [21] Q&A Session Summary Question: Services revenue continues to come in above expectations. How does that factor into deployments in 2026? - Management noted a healthy pipeline of activity in services, indicating robust carrier activity and a continued build-out of 5G networks [26][27] Question: How are you thinking about the relevance of your tower portfolio for supporting higher frequency bands? - Management expressed excitement about new spectrum bands coming to market, emphasizing that towers will be essential for deploying these bands [31][32] Question: Can you provide details on the cost optimization program? - Management highlighted that cost efficiencies are a strategic priority, with incremental improvements expected rather than a step function change [42][44] Question: What is the outlook for the data center business? - Management indicated sustained double-digit growth is possible, driven by increased demand for hybrid cloud deployments [48][50] Question: How do you view the potential impact of new spectrum sales on densification demand? - Management stated that more spectrum typically leads to network augmentations, which are monetizable events, and emphasized the need for densification over time [71][73]

Financial Data and Key Metrics Changes - Total revenue grew nearly 8% year over year, driven by steady consolidated organic growth in the mid-single digits and strong contributions from U.S. services and CoreSite [18][19] - Adjusted EBITDA also grew nearly 8% year over year, complemented by 20 basis points of cash margin expansion [18] - Attributable AFFO per share as adjusted grew approximately 10% year over year, supported by robust EBITDA growth and disciplined management of below-the-line costs [18][20] Business Line Data and Key Metrics Changes - Consolidated property revenue grew nearly 6% year over year, with U.S. and Canada property revenue flat year over year but growing approximately 5% when excluding non-cash straight-line revenue and Sprint churn [19][20] - International property revenue grew approximately 12% year over year, and data center property revenue grew over 14%, driven by record retail new leasing and consistent pricing growth [19][20] Market Data and Key Metrics Changes - Mobile data consumption in the U.S. increased approximately 35% year over year, indicating a strong demand for mobile data and necessitating a doubling of overall network capacity over the next five years [10][11] - Approximately 75% of the company's towers have been upgraded with 5G equipment, with significant growth opportunities remaining as carriers complete their 5G rollouts [12] Company Strategy and Development Direction - The company focuses on four strategic priorities: optimizing long-term value creation, maximizing organic growth, expanding margins, and disciplined capital allocation [14][16] - The company is well-positioned to benefit from demand drivers across its tower and data center businesses, with a strong emphasis on operational excellence and cost efficiency [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the industry landscape, highlighting the benefits of carrier consolidation and the increasing demand for mobile data [9][10] - The company raised its full-year outlook across key financial metrics, supported by FX tailwinds, U.S. services outperformance, and net interest benefits [19][21] Other Important Information - The company has executed $28 million in share repurchases since the quarter-end and maintains a strong balance sheet with net leverage below five times [16][25] - The company expects to distribute approximately $3.2 billion to shareholders as a common dividend in 2025, subject to board approval [25] Q&A Session Summary Question: Services revenue performance and deployment expectations - Management noted a healthy pipeline of activity in services, indicating robust carrier activity and a positive outlook for 2026 [33][34] Question: Impact of new spectrum auctions on tower portfolio - Management expressed excitement about new spectrum bands coming to market, emphasizing that towers will be essential for deploying these higher frequency bands [36][37] Question: CoreSite pre-leasing share decline - Management clarified that the decline in pre-leasing was due to transitioning construction projects into service, not a slowdown in demand [41][43] Question: Cost optimization program details - Management highlighted ongoing efforts to improve cost efficiencies, with expectations for incremental improvements rather than a step function change [51][52] Question: EchoStar contract and future contributions - Management confirmed that EchoStar is current on payments and emphasized the importance of defending the contract through 2036 [69][70] Question: Capital allocation strategy - Management reiterated a disciplined approach to capital allocation, prioritizing dividends, internal CapEx, and evaluating M&A opportunities against share buybacks [71][74]