SBA(US:SBAC)2021-11-02 00:45Financial Data and Key Metrics Changes - Total GAAP site leasing revenues for Q3 2021 were $535.5 million, with cash site leasing revenues at $525.1 million, positively impacted by foreign exchange rates by $3.2 million year-over-year [8][19] - Adjusted EBITDA for Q3 was $407 million, with an adjusted EBITDA margin of 70.3%, increasing to 74.7% when excluding revenues from pass-through expenses [14][19] - AFFO in Q3 was $302.5 million, with AFFO per share at $2.71, reflecting a 13.9% increase over Q3 2020 [16] Business Line Data and Key Metrics Changes - Same tower recurring cash leasing revenue growth was 3.6% year-over-year, with a gross basis growth of 6.1% [9] - Domestic same-tower recurring cash leasing revenue growth was 5.7% on a gross basis and 3.3% on a net basis, including 2.4% of churn [9] - The services business achieved record results with $53.8 million in revenue and $12.5 million in segment operating profit, with backlogs reaching an all-time high [15] Market Data and Key Metrics Changes - International same-tower cash leasing revenue growth was 5.2% net, including 2.7% of churn, and 7.9% on a gross basis [11] - Brazil, the largest international market, saw a gross same-tower organic growth of 9.5% on a constant currency basis [12] - The majority of consolidated cash site leasing revenue (84.5%) was denominated in U.S. dollars, with Brazil contributing 11.7% of consolidated cash site leasing revenues [12] Company Strategy and Development Direction - The company has increased its full-year 2021 outlook for site development revenue to $200 million at the midpoint, driven by strong third-quarter performance and growing backlogs [16][19] - The company continues to invest in land under its sites, spending $11.6 million to buy land and easements, with 72% of towers having land owned or controlled for over 20 years [17][18] - The company anticipates continued strong domestic operational leasing activity into 2022, supported by a growing backlog of new lease and amendment applications [10][28] Management's Comments on Operating Environment and Future Outlook - Management noted high levels of carrier activity in the U.S., with major customers like Verizon and T-Mobile actively deploying new technologies [27] - The company expects elevated domestic leasing activities to continue through 2022, driven by ongoing upgrades and new deployments [28][98] - International markets are returning to pre-pandemic activity levels, with expectations for growth in network investment from carrier customers [30] Other Important Information - The company ended Q3 with $11.9 billion in total debt and a net debt to annualized adjusted EBITDA leverage ratio of 7.2x, with the highest net cash interest coverage ratio in its history at 4.6x [21][33] - The company repurchased approximately 1 million shares for $350 million, with a new $1 billion stock repurchase plan authorized by the Board of Directors [24][25] - A fourth-quarter dividend of $0.58 per share was declared, representing a payout ratio of 21% of third-quarter AFFO per share [26] Q&A Session Summary Question: Insights on backlog and leasing activity for 2022 - Management expects leasing activity to build throughout 2022, with visibility improving as the year progresses [39] Question: Update on Sprint churn and its impact - The company adjusted its domestic churn impact for 2021 due to timing issues with Sprint, expecting a total impact of around $7 million for 2021 and higher in 2022 [44][46] Question: DISH's contribution to leasing and future spectrum auctions - DISH's activity is expected to contribute significantly in 2022, with most revenue recognition starting next year due to their payment schedule [51] Question: International market outlook and labor availability - Management sees growth opportunities in Africa and is monitoring labor market conditions, which are currently stable [56][57] Question: Insights on international churn and capital allocation - Elevated international churn is expected in Q4 and into 2022, primarily due to consolidation-related churn [65][67]