SBA(US:SBAC)2021-04-27 04:14Financial Data and Key Metrics Changes - Total GAAP site leasing revenues for Q1 2021 were $505.1 million, with cash site leasing revenues at $504.5 million, impacted by foreign exchange rates which negatively affected revenues by $12.6 million year-over-year [8][9] - Same tower recurring cash leasing revenue growth was 3.6% on a constant currency basis, with domestic same tower growth at 5.6% gross and 3.1% net, including 2.5% churn [10][11] - Adjusted EBITDA for Q1 was $390.1 million, with an adjusted EBITDA margin of 71.2%, and AFFO was $286.3 million, translating to $2.58 per share, a 13.2% increase year-over-year [14][38] Business Line Data and Key Metrics Changes - Domestic operational leasing activity was modestly lower sequentially, but there were substantial increases in new lease and amendment application backlogs due to agreements with Verizon Wireless and Dish [11] - International same tower cash leasing revenue growth was 6.1% on a constant currency basis, with Brazil showing 8.5% gross growth [12] - The services business generated $43.6 million in revenue, marking the strongest quarter in nearly seven years, with increased activity levels leading to a higher services backlog [14][29] Market Data and Key Metrics Changes - The majority of cash site leasing revenue (85.3%) was denominated in U.S. dollars, with Brazil contributing 11.1% of total cash site leasing revenues [12] - The company ended Q1 with $12.1 billion in total debt and a net debt to annualized adjusted EBITDA leverage ratio of 7.6 times, slightly above the target range [24][35] Company Strategy and Development Direction - The company has increased its outlook for full-year 2021 site leasing revenue, primarily due to a global amendment agreement with Verizon Wireless [17][20] - The strategy includes expanding the portfolio through acquisitions, with 731 communication sites acquired for $975.5 million and plans for additional site purchases [15][22] - The company is focused on capital allocation and opportunistic financing, having completed a $1.5 billion unsecured bond offering at a historically low rate [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growth driven by 5G deployment plans from major carriers, with expectations for increased domestic organic leasing activity [28][30] - The company anticipates that domestic same tower revenue growth will increase in the second half of the year, ending 2021 at the highest rate [20] - Management noted that the pandemic has had no material impact on U.S. operations, and they are optimistic about international markets as conditions improve [39] Other Important Information - The company repurchased 654,000 shares for $160.9 million, with $475.1 million remaining under the stock repurchase plan [26] - A cash dividend of $63.4 million was declared for Q1, with a second quarter dividend of $0.58 per share announced [26] Q&A Session Summary Question: Equipment installation on U.S. towers - Management indicated that while signed leases and amendments exist, actual installations have not yet occurred due to typical execution timelines [42][43] Question: Brazil's macroeconomic environment - Management acknowledged Brazil's economic challenges but noted that their operations continue to perform well despite the overall environment [44] Question: PG&E assets and lease applications - Interest in PG&E assets has been strong, with demand for both amendments and new leases [45] Question: Domestic organic growth expectations - Management suggested that Q1 might be the trough for domestic organic growth, with expectations for improvement in the second half of the year [48][49] Question: Cash taxes and PG&E acquisition impact - The increase in cash taxes is attributed to benefits from the PG&E acquisition, with expectations for future increases as international operations grow [72][75] Question: CBRS opportunity and rural broadband - Management discussed ongoing efforts to bridge the digital divide through CBRS initiatives, emphasizing the need for rental payment guarantees [102] Question: Edge compute developments - The company is actively pursuing edge compute opportunities, with new customers and facilities under construction [105] Question: C-Band spectrum utilization - Management expressed confidence that carriers will broadly utilize their towers for C-Band upgrades, although the exact extent remains uncertain [119]