SBA Communications (NasdaqGS:SBAC) Q4 2025 Earnings call February 26, 2026 05:00 PM ET Company ParticipantsBrendan Cavanagh - President and CEODavid Guarino - Managing Director and Head of Global Data Center and Tower ResearchLouis Friend - VP of Finance and Capital MarketsMarc Montagner - CFOMichael Rollins - Managing Director of Communications Services and Communications InfrastructureRic Prentiss - Managing Director and Global Head of Telecommunications ResearchRichard Choe - Executive Director of Equity ...

SBA Communications (NasdaqGS:SBAC) Q4 2025 Earnings call February 26, 2026 05:00 PM ET Company ParticipantsBrendan Cavanagh - President and CEODavid Guarino - Managing Director and Head of Global Data Center and Tower ResearchLouis Friend - VP of Finance and Capital MarketsMarc Montagner - CFOMichael Rollins - Managing Director of Communications Services and Communications InfrastructureRic Prentiss - Managing Director and Global Head of Telecommunications ResearchRichard Choe - Executive Director of Equity ...

SBA Communications (NasdaqGS:SBAC) Q4 2025 Earnings call February 26, 2026 05:00 PM ET Speaker9Welcome and thank you all for joining the SBA fourth quarter 2025 results. I'll now turn it over to Louis Friend, Vice President of Finance and Capital Markets. Please go ahead, sir.Speaker6Good evening, thank you for joining us for SBA's fourth quarter 2025 earnings conference call. Here with me today are Brendan Cavanagh, our President and Chief Executive Officer, and Marc Montagner, our Chief Financial Officer. ...

Financial Data and Key Metrics Changes - In Q4 2025, total operating revenues decreased by 1% year-over-year, while for the full year, revenues declined by 2%. Excluding divestitures, revenues were flat year-over-year for both periods [19][21] - Adjusted EBITDA improved by 6% in Q4, but declined by 6% for the full year, primarily due to divestitures and a non-cash adjustment to stock-based compensation in Q1 [20][21] - Capital expenditures for the full year were $406 million, with a forecast for 2026 of $550 million to $600 million, driven by expansion efforts [21][35] Business Line Data and Key Metrics Changes - TDS Telecom added 58,000 new marketable fiber addresses in Q4, a 39% increase year-over-year, and delivered a total of 140,000 new marketable fiber addresses for the full year [11][12] - Residential fiber net adds were approximately 15,000 in Q4, up 11% from Q4 2024, totaling about 45,000 for the year [12][18] - Cash site rental revenue for Array increased by 64% year-over-year in Q4, with a 96% increase when including T-Mobile interim site revenue [29] Market Data and Key Metrics Changes - The divestitures in 2025 accounted for a $3 million revenue decline in Q4 compared to the prior year [19] - The company identified 300,000 additional fiber address opportunities across approximately 50 new communities, increasing long-term fiber address goals from 1.8 million to 2.1 million [8][15] Company Strategy and Development Direction - The company aims to strengthen its corporate and capital structure, grow TDS Telecom's fiber business, and support Array's success as a tower company [5][6] - The focus for 2026 includes delivering a fiber build plan of 200,000 to 250,000 new marketable fiber addresses and enhancing customer experience [16][21] - Array's strategy emphasizes optimizing tower operations and monetizing spectrum holdings, with significant progress in spectrum monetization already achieved [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth prospects for 2026, particularly in fiber and tower operations, despite challenges from legacy revenue declines [11][24] - The company is focused on executing its business transformation initiatives to improve operational efficiency and customer experience [14][16] Other Important Information - TDS repaid $150 million in term loan debt and received $726 million from a special dividend related to the AT&T spectrum sale [7][8] - The company plans to continue disciplined share repurchase activities, with $524 million remaining on its authorization as of the end of 2025 [9] Q&A Session Summary Question: Is DISH included in the 2026 guidance? - Management confirmed that DISH is completely out of the 2026 guidance, and any settlement would be considered upside [45][47] Question: What is the outlook for tower leasing applications? - Management is optimistic about growth prospects for 2026, expecting significant same-store growth and positive results from insourcing the sales team [48][49] Question: How is the company approaching video services? - Management believes video is a critical part of their value proposition and does not plan to outsource it, as it attracts bundled customers [89] Question: What is the strategy for monetizing naked towers? - Management sees significant latent value in naked towers and aims to reduce holding costs while exploring leasing opportunities [95] Question: What is the growth rate embedded in the revenue guidance for 2026? - Management expects around 6% growth on a same-store basis, excluding DISH revenue [85][86]

Financial Data and Key Metrics Changes - In Q4 2025, total operating revenues decreased by 1% compared to the previous quarter and by 2% for the full year, with revenues flat year-over-year when excluding divestitures [17][18] - Adjusted EBITDA improved by 6% in Q4, but declined by 6% for the full year due to divestitures and a non-cash adjustment to stock-based compensation in Q1 [18] - Capital expenditures for the full year were $406 million, with a forecast increase to $550 million-$600 million for 2026 [19] Business Line Data and Key Metrics Changes - TDS Telecom added 58,000 new marketable fiber addresses in Q4, a 39% increase year-over-year, and delivered a total of 140,000 new marketable fiber addresses for the full year [10][11] - Residential fiber net adds were approximately 15,000 in Q4, up 11% from Q4 2024, totaling about 45,000 for the year [11][12] - Cash site rental revenue for Array increased by 64% year-over-year in Q4, with a 96% increase when including T-Mobile interim site revenue [25] Market Data and Key Metrics Changes - The divestitures in 2025, including the sale of wireless operations, have concentrated TDS's footprint in economically viable markets for fiber [12] - The company identified 300,000 additional fiber address opportunities, raising its long-term goal from 1.8 million to 2.1 million fiber addresses [13][14] Company Strategy and Development Direction - TDS aims to strengthen its corporate and capital structure, grow TDS Telecom's fiber business, support Array's tower operations, and enhance company culture while delivering strong operational results [4][5] - Array focuses on optimizing tower operations and monetizing spectrum, with significant progress in spectrum monetization agreements with major carriers [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth prospects for 2026, particularly in fiber and tower operations, despite challenges from legacy revenue declines and divestitures [19][34] - The company is committed to delivering a best-in-class customer experience and achieving operational efficiency through ongoing business transformation efforts [14][15] Other Important Information - TDS repaid $150 million in term loan debt and received $726 million from a special dividend related to the AT&T spectrum sale [6][7] - The company plans to continue disciplined share repurchase activities, with $524 million remaining on its authorization as of the end of 2025 [8] Q&A Session Summary Question: Is DISH included in the 2026 guidance? - Management confirmed that DISH is completely out of the 2026 guidance, and any settlement would be considered upside [43][44] Question: What is the outlook for tower leasing applications? - Management expressed optimism about growth prospects, expecting significant same-store growth and positive results from insourcing the sales team [45][47] Question: How is TDS Telecom addressing video bundling? - Management emphasized the importance of video in their value proposition and plans to strengthen video bundling alongside broadband offerings [84] Question: What is the growth rate embedded in the revenue guidance for 2026? - Management indicated a growth expectation of around 6% on a same-store basis, excluding DISH revenue [80]

Group 1 - JPMorgan analyst Richard Choe lowered the price target on SBA Communications (SBAC) to $240 from $245, maintaining a Neutral rating on the shares [1] - The firm reduced new leasing estimates for tower companies due to a more conservative approach influenced by potential impacts from EchoStar [1] - The industry outlook is described as "modest," with concerns over the EchoStar/Dish situation, although potential deals could serve as a positive catalyst for tower stocks [1]

Core Insights - Digita Group has reached an agreement to be acquired by GI Partners, marking a significant transition for the company as it continues to operate independently within GI Partners' portfolio [1][3][4] - Under the previous ownership of DigitalBridge, Digita expanded its tower sites from approximately 200 to over 950 and enhanced its Data Centre and IoT platforms [2][5] - The acquisition is expected to close in the first quarter of 2026, with financial advisement provided by Houlihan Lokey for DigitalBridge and Rothschild & Co. for GI Partners [4] Company Overview - Digita Group, operating as Digita Oy in Finland and IslandsTurnar in Iceland, is one of the largest independent tower companies in the Nordics, with a nationwide portfolio of over 950 tower sites [1][5] - The company plays a crucial role in providing communication and connectivity services, partnering with Yle, Finland's public broadcaster, and serving millions through its telecom infrastructure [5] Investment and Growth Strategy - The new partnership with GI Partners is expected to support Digita's management team in the next stage of growth, focusing on expanding its independent tower operations and enhancing its data centre and IoT networks [3][7] - GI Partners has a strong background in investing in digital infrastructure, managing over $49 billion in assets, which positions them well to support Digita's future growth [6][7]

Core Insights - Anterix and Crown Castle have launched a nationwide tower optimization solution called TowerX to enhance the deployment of 900 MHz private LTE networks for utilities, aiming to reduce costs and accelerate grid connectivity [1][2][3] Group 1: TowerX Overview - TowerX provides a streamlined path for utilities to deploy 900 MHz private wireless networks, combining a portfolio of qualified tower sites with comprehensive site development [2] - The service standardizes processes and leverages collective experience to help utilities control costs, reduce project delays, and optimize tower assets for long-term operational needs [2][3] Group 2: Infrastructure and Collaboration - Utilities using TowerX will gain access to a vast network of tower infrastructure, including over 40,000 sites from Crown Castle, facilitating faster deployment of private wireless networks [3] - The collaboration between Anterix and Crown Castle aims to strengthen operational resilience and enable large-scale grid modernization [3][4] Group 3: Industry Impact - TowerX is part of the Anterix Active Ecosystem, which includes over 125 technology and infrastructure innovators, working together to provide end-to-end solutions for utilities [4] - This ecosystem enhances interoperability and accelerates grid transformation, addressing the challenges faced by utilities in modernizing their infrastructure [4][6]

Financial Data and Key Metrics Changes - Total operating revenues decreased by 3% year-over-year, with a 1% decline when excluding divestitures, driven by declines in legacy cable and copper markets, partially offset by fiber growth [31] - Adjusted EBITDA also fell by 3% year-over-year, impacted by divestitures and legacy revenue declines, but supported by disciplined cost control [31] - Capital expenditures increased compared to the previous year due to spending on the EACAM program and higher expansion address delivery, with over 80% of 2025 capital expenditures focused on fiber [31][32] Business Line Data and Key Metrics Changes - TDS Telecom achieved a milestone of 1 million fiber addresses, with 42,000 fiber addresses delivered in the quarter, contributing to a 19% growth in residential fiber connections year-over-year [15][23] - Residential fiber net additions were 11,200 in the quarter, reflecting an 8% year-over-year increase [30] - The company is behind schedule on its annual address delivery target but expects the fourth quarter to be the strongest [29] Market Data and Key Metrics Changes - The fiber business is expected to grow significantly, with a target of 1.8 million marketable fiber service addresses, up from approximately 900,000 [28][84] - The company anticipates achieving gig speeds for at least 95% of its footprint, with 76% currently at gig speeds [28] Company Strategy and Development Direction - The company is focused on capital allocation decisions, prioritizing investments in fiber, achieving inorganic growth through M&A, and returning capital to shareholders [17][20] - The EACAM program aims to replace legacy copper infrastructure, adding approximately 300,000 new fiber addresses and providing $1.2 billion in regulatory revenue support over 15 years [24][25] - The company plans to pursue edge-out opportunities in adjacent communities without fiber providers, with several hundred thousand potential service addresses identified [18][57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fiber business's growth potential and the successful transition to an independent tower company [14][33] - The company is focused on optimizing tower operations and monetizing spectrum, with significant progress made in spectrum monetization [36][38] - Management acknowledged the challenges of transforming the business but emphasized the strong culture and commitment of associates [16] Other Important Information - A $500 million share repurchase program was announced, reflecting the board's confidence in the company's long-term strategy [20][60] - The company expects to declare a special dividend of approximately $10 per share following the closing of the AT&T transaction [18] Q&A Session Summary Question: Update on fiber plan and cohort analysis - Management acknowledged the request for cohort analysis and plans to provide updates in February regarding fiber opportunities and market performance [54][56] Question: Stock buyback program significance - The board's authorization of the buyback program reflects confidence in the company's strategy and is seen as a balanced approach alongside business investments [60] Question: SG&A expenses and wind down costs - Management indicated that SG&A costs are expected to remain high through the first half of next year, with ongoing efforts to rationalize expenses [64][65] Question: Naked tower strategy and land leases - The strategy involves leasing up towers and rationalizing ground rents, with minimal long-term commitments on land leases [75][78] Question: Leverage target and fiber passings impact - The leverage target is set to maximize flexibility, with current leverage at 1.4 times, and future updates on fiber goals will be provided in February [82][84] Question: M&A strategy and edge-out opportunities - Current focus is on operational execution rather than M&A, with potential future opportunities being evaluated [107]

Strategy & Vision - Helios Towers' new strategy, IMPACT 2030, targets capital efficient organic growth through tenancy expansion and customer experience excellence[35, 113] - The company aims to generate >$1.3 billion of cumulative recurring free cash flow across 2026-2030[35, 113, 138, 157] - The company is targeting >$500 million of discretionary capex on accretive growth opportunities and >$400 million of investor distributions up to 2030[35, 151, 152, 157] - The company targets >42,000 tenancies by 2030[106] and a tenancy ratio of >2.5x by 2030[37, 51, 106, 138] Financial Performance & Targets - The company's FY25 Adj EBITDA guidance is tightened upwards to c$470 million, representing a +12% YoY growth[30, 117, 119, 124, 125] - The company's Q3 2025 YTD Adj EBITDA grew +11% YoY to $346 million[117] - The company's Q3 2025 YTD free cash flow expanded to $49 million, a +$70 million YoY expansion[117] - The company's Q3 2025 YTD tenancy ratio expanded to 2.2x, a +0.1x YoY expansion[37, 51, 117] - The company's Q3 2025 YTD ROIC expanded to 14%, a +1ppt YoY expansion[37, 51, 117] - The company has initiated a share buyback program with a Board authorization of $75 million until 31 December 2026[107, 146, 147, 152]