SBA Communications Corporation
11/06/2025 | Press release | Distributed by Public on 11/06/2025 15:59
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We are a leading independent owner and operator of wireless communications infrastructure, including tower structures, rooftops, and other structures that support antennas used for wireless communications, which we collectively refer to as "towers" or "sites." Our principal operations are in the United States and its territories. In addition, we own and operate towers in South America, Central America, and Africa. Our primary business line is our site leasing business, which contributed 97.7% of our total segment operating profit for the nine months ended September 30, 2025. During the first quarter of 2025, we sold all of our towers and ended our operations in both the Philippines and Colombia and on October 15, 2025, we sold 365 of our towers held in Canada. In our site leasing business, we (1) lease space to wireless service providers and other customers on assets that we own or operate and (2) manage rooftop and tower sites for property owners under various contractual arrangements. As of September 30, 2025, we owned 44,581 towers, a substantial portion of which have been built by us or built by other tower owners or operators who, like us, have built such towers to lease space to multiple wireless service providers. Our other business line is our site development business, through which we assist wireless service providers in developing and maintaining their own wireless service networks.
Site Leasing
Our primary focus is the leasing of antenna space on our multi-tenant towers to a variety of wireless service providers under long-term lease contracts in the United States, South America, Central America, and Africa. As of September 30, 2025, no U.S. state or territory accounted for more than 10% of our total tower portfolio by tower count, and no U.S. state or territory accounted for more than 10% of our total revenues for the nine months ended September 30, 2025. In addition, as of September 30, 2025, approximately 30% and 10% of our total towers are located in Brazil and Guatemala, respectively. No other international market (each country is considered a market) represented more than 5% of our total towers.
We derive site leasing revenues primarily from wireless service provider tenants. Wireless service providers enter into (1) individual tenant site leases with us, each of which relates to the lease or use of space at an individual site or (2) master lease agreements ("MLA") with us, which provide for the material terms and conditions that will apply to multiple sites; although, in most cases, each individual site under a MLA is also governed by its own site leasing agreement which sets forth pricing and other site specific terms. Our tenant leases are generally for an initial term of five years to fifteen years with multiple renewal periods at the option of the tenant. Our tenant leases typically either (1) contain specific annual rent escalators, (2) escalate annually in accordance with an inflationary index, or (3) escalate using a combination of fixed and inflation adjusted escalators. In addition, our international site leases may include pass-through charges, such as rent related to ground leases and other property interests, utilities, property taxes, and fuel.
Cost of site leasing revenue primarily consists of:
Cash and non-cash rental expense on ground leases, right-of-use, and other underlying property interests;
Property taxes;
Site maintenance and monitoring costs (exclusive of employee related costs);
Utilities;
Property insurance;
Fuel (in those international markets that do not have an available electric grid at our tower sites); and
Lease initial direct cost amortization.
Ground leases and other property interests are generally for an initial term of five years or more with multiple renewal periods, which are at our option. Our ground leases either (1) contain specific annual rent escalators or (2) escalate annually in accordance with an inflationary index. As of September 30, 2025, approximately 71% of our tower structures were located on parcels of land that we own, land subject to perpetual easements, or parcels of land in which we have a leasehold interest that extends beyond 20 years. For any given tower, costs are relatively fixed over a monthly or an annual time period. As such, operating costs for owned towers do not generally increase as a result of adding additional customers to the tower. The amount of property taxes varies from site to site depending on the taxing jurisdiction and the height and age of the tower. The ongoing maintenance requirements are typically minimal and include replacing lighting systems, painting a tower, or upgrading or repairing an access road or fencing.
In Ecuador, El Salvador, Guatemala, Nicaragua, and Panama, significantly all of our revenue, expenses, and capital expenditures arising from our activities are denominated in U.S. dollars. Specifically, most of our ground leases and other property interests, tenant leases, and tower-related expenses are paid in U.S. dollars. In most of our Central American markets, our local currency obligations are principally limited to (1) permitting and other local fees, (2) utilities, and (3) taxes. In Brazil, Chile, and South Africa, significantly all of our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in local currency. In Costa Rica, Peru, and Tanzania, our revenue, expenses, and capital expenditures, including tenant leases, ground leases and other property interests, and other tower-related expenses are denominated in a mix of local currency and U.S. dollars.
As indicated in the table below, our site leasing business generates substantially all of our total segment operating profit. For information regarding our operating segments, see Note 14 to our Consolidated Financial Statements included in this quarterly report.
|
For the three months ended |
For the nine months ended |
|||||||||||
|
Segment operating profit as a percentage of |
September 30, |
September 30, |
||||||||||
|
total operating profit |
2025 |
2024 |
2025 |
2024 |
||||||||
|
Domestic site leasing |
73.7% |
76.5% |
75.5% |
76.4% |
||||||||
|
International site leasing |
23.8% |
21.7% |
22.2% |
22.1% |
||||||||
|
Total site leasing |
97.5% |
98.2% |
97.7% |
98.5% |
||||||||
We believe that the site leasing business continues to be attractive due to its long-term contracts, built-in rent escalators, high operating margins, and low customer churn (which refers to a lease that is non-renewed, cancelled, or discounted) other than in connection with customer consolidation or cessations of specific technology. We believe that over the long-term, site leasing revenues will continue to grow as wireless service providers lease additional antenna space on our towers due to increasing mobile network data traffic, network expansion, and network coverage requirements.
During the remainder of 2025, we expect core site leasing revenue in our domestic and international segments to increase over 2024 levels, on a currency neutral basis, due in part to wireless carriers deploying unused spectrum, the full year impact of towers acquired and built during 2024 and 2025, and the revenues from towers expected to be acquired and built during the remainder of 2025. We believe our site leasing business is characterized by stable and long-term recurring revenues, predictable operating costs, and minimal non-discretionary capital expenditures. Due to the nature and mix of our tower portfolio, we expect future expenditures required to maintain these towers to be minimal. Consequently, we expect to grow our cash flows by (1) adding tenants to our towers at minimal incremental costs by using existing tower capacity or requiring wireless service providers to bear all or a portion of the cost of tower modifications and (2) executing monetary amendments as wireless service providers add or upgrade their equipment. Furthermore, because our towers are strategically positioned, we have historically experienced low tenant lease terminations as a percentage of revenue other than in connection with customer consolidation or cessations of a specific technology.
Site Development
Our site development business, which is conducted in the United States only, is complementary to our site leasing business and provides us the ability to keep in close contact with the wireless service providers who generate substantially all of our site leasing revenue and to capture ancillary revenues that are generated by our site leasing activities, such as antenna and equipment installation at our tower locations. Site development revenues are earned primarily from providing a full range of end-to-end services to wireless service providers or companies providing development or project management services to wireless service providers. Our services include: (1) network pre-design; (2) site audits; (3) identification of potential locations for towers and antennas on existing infrastructure; (4) support in leasing of the location; (5) assistance in obtaining zoning approvals and permits; (6) tower and related site construction; (7) antenna installation; and (8) radio equipment installation, commissioning, and maintenance. We provide site development services at our towers and at towers owned by others on a local basis, through regional, market, and project offices. The market offices are responsible for all site development operations.
For information regarding our operating segments, see Note 14 to our Consolidated Financial Statements in this quarterly report.
Capital Allocation Strategy
Our capital allocation strategy is aimed at increasing shareholder value through investment in quality assets that meet our return criteria, stock repurchases when we believe our stock price is below its intrinsic value, and by returning cash generated by our operations in the form of cash dividends. In addition, in a high interest rate environment and when we believe interest rates may stay higher for longer, we believe that debt repayments, especially of our variable rate debt, may be an accretive use of our excess capital. While the addition of cash dividends and debt repayments have provided us with additional tools to return value to our shareholders, we continue to believe that our priority is to make investments focused on increasing Adjusted Funds From Operations per share. Key elements of our capital allocation strategy include:
Portfolio Growth.We intend to continue to grow our asset portfolio, domestically and internationally, primarily through tower acquisitions and the construction of new towers that meet our internal return on invested capital criteria.
Stock Repurchase Program.We currently utilize stock repurchases as part of our capital allocation policy when we believe our share price is below its intrinsic value. We believe that share repurchases, when purchased at the right price, will facilitate our goal of increasing our Adjusted Funds From Operations per share.
Dividend. Cash dividends are an additional component of our strategy of returning value to shareholders. We do not expect our dividend to require any changes in our leverage and believe that, due to our low dividend payout ratio, we can continue to focus on building and buying quality assets and opportunistically buying back our stock. While the timing and amount of future dividends will be subject to approval by our Board of Directors, we believe that our future cash flow generation will permit us to grow our cash dividend in the future.
Critical Accounting Policies and Estimates
We have identified the policies and significant estimation processes listed in our Annual Report on Form 10-K as critical to our business operations and the understanding of our results of operations. The listing is not intended to be a comprehensive list. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application. In other cases, management is required to exercise judgment in the application of accounting principles with respect to particular transactions. The impact and any associated risks related to these policies on our business operations is discussed throughout "Management's Discussion and Analysis of Financial Condition and Results of Operations" where such policies affect reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see Note 2 to our Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024. Our preparation of our financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting periods. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates and such differences could be significant.
Verizon Master Lease Agreement
On October 30, 2025, we entered into a new 10-year agreement with Verizon (the "Verizon agreement"). The Verizon agreement provides greater operational efficiencies for both companies helping support Verizon's continued network modernization plans. Additionally, the agreement provides commitments for growth through new deployments across our tower portfolio over the term of the agreement.
RESULTS OF OPERATIONS
This report presents our financial results and other financial metrics on a GAAP basis and, with respect to our international and consolidated results, after eliminating the impact of changes in foreign currency exchange rates. We believe that providing these financial results and metrics on a constant currency basis, which are non-GAAP measures, gives management and investors the ability to evaluate the performance of our business without the impact of foreign currency exchange rate fluctuations. We eliminate the impact of changes in foreign currency exchange rates by dividing the current period's financial results by the average monthly exchange rates of the prior year period, as well as by eliminating the impact of realized and unrealized gains and losses on our intercompany loans.
Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Revenues and Segment Operating Profit:
|
For the three months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
Revenues |
(in thousands) |
||||||||||||||
|
Domestic site leasing |
$ |
470,251 |
$ |
464,860 |
$ |
- |
$ |
5,391 |
1.1% |
||||||
|
International site leasing |
186,176 |
160,837 |
3,019 |
22,320 |
13.9% |
||||||||||
|
Site development |
75,900 |
41,898 |
- |
34,002 |
81.2% |
||||||||||
|
Total |
$ |
732,327 |
$ |
667,595 |
$ |
3,019 |
$ |
61,713 |
9.2% |
||||||
|
Cost of Revenues |
|||||||||||||||
|
Domestic site leasing |
$ |
70,251 |
$ |
68,908 |
$ |
- |
$ |
1,343 |
1.9% |
||||||
|
International site leasing |
57,030 |
49,040 |
1,055 |
6,935 |
14.1% |
||||||||||
|
Site development |
62,508 |
32,391 |
- |
30,117 |
93.0% |
||||||||||
|
Total |
$ |
189,789 |
$ |
150,339 |
$ |
1,055 |
$ |
38,395 |
25.5% |
||||||
|
Operating Profit |
|||||||||||||||
|
Domestic site leasing |
$ |
400,000 |
$ |
395,952 |
$ |
- |
$ |
4,048 |
1.0% |
||||||
|
International site leasing |
129,146 |
111,797 |
1,964 |
15,385 |
13.8% |
||||||||||
|
Site development |
13,392 |
9,507 |
- |
3,885 |
40.9% |
||||||||||
Revenues
Domestic site leasing revenues increased $5.4 million for the three months ended September 30, 2025, as compared to the prior year, primarily due to (1) organic site leasing growth from new leases, amendments, and contractual escalators and (2) revenues from 45 towers acquired and 34 towers built since July 1, 2024, partially offset by Sprint and other lease non-renewals and a decrease in non-cash straight line revenue.
International site leasing revenues increased $25.3 million for the three months ended September 30, 2025, as compared to the prior year. On a constant currency basis, international site leasing revenues increased $22.3 million. This change was primarily due to (1) revenues from 5,133 towers acquired (including 5,090 towers under the deal with Millicom) and 584 towers built since July 1, 2024, (2) organic site leasing growth from new leases, amendments, and contractual escalators, and (3) increases in non-cash straight line revenue and reimbursable pass-through expenses, partially offset by lease non-renewals and tower divestitures. Site leasing revenue in Brazil represented 13.3% of total site leasing revenue for the period. No other individual international market represented more than 5% of our total site leasing revenue.
Site development revenues increased $34.0 million for the three months ended September 30, 2025, as compared to the prior year, as a result of increased carrier activity.
Operating Profit
Domestic site leasing segment operating profit increased $4.0 million for the three months ended September 30, 2025, as compared to the prior year, primarily due to higher domestic site leasing revenue as noted above and the positive impact of our ground lease purchase program, partially offset by incremental costs associated with towers acquired and built since July 1, 2024.
International site leasing segment operating profit increased $17.3 million for the three months ended September 30, 2025, as compared to the prior year. On a constant currency basis, international site leasing segment operating profit increased $15.4 million. This change was primarily due to higher international site leasing revenues as noted above and the positive impact of our ground lease purchase program, partially offset by the incremental costs associated with towers acquired and built since July 1, 2024.
Site development segment operating profit increased $3.9 million for the three months ended September 30, 2025, as compared to the prior year, as a result of increased carrier activity.
Selling, General, and Administrative Expenses:
|
For the three months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Domestic site leasing |
$ |
30,889 |
$ |
32,114 |
$ |
- |
$ |
(1,225) |
(3.8%) |
||||||
|
International site leasing |
16,706 |
15,258 |
334 |
1,114 |
7.3% |
||||||||||
|
Total site leasing |
$ |
47,595 |
$ |
47,372 |
$ |
334 |
$ |
(111) |
(0.2%) |
||||||
|
Site development |
3,394 |
2,849 |
- |
545 |
19.1% |
||||||||||
|
Other |
15,019 |
9,866 |
- |
5,153 |
52.2% |
||||||||||
|
Total |
$ |
66,008 |
$ |
60,087 |
$ |
334 |
$ |
5,587 |
9.3% |
||||||
Selling, general, and administrative expenses increased $5.9 million for the three months ended September 30, 2025, as compared to the prior year. On a constant currency basis, selling, general, and administrative expenses increased $5.6 million. These changes were driven primarily by increases in personnel and other support related costs and non-cash compensation expense.
Asset Impairment and Decommission Costs:
|
For the three months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Domestic site leasing |
$ |
18,182 |
$ |
1,337 |
$ |
- |
$ |
16,845 |
1,259.9% |
||||||
|
International site leasing |
2,140 |
10,989 |
328 |
(9,177) |
(83.5%) |
||||||||||
|
Total site leasing |
$ |
20,322 |
$ |
12,326 |
$ |
328 |
$ |
7,668 |
62.2% |
||||||
|
Other |
- |
344 |
- |
(344) |
(100.0%) |
||||||||||
|
Total |
$ |
20,322 |
$ |
12,670 |
$ |
328 |
$ |
7,324 |
57.8% |
||||||
Asset impairment and decommission costs increased $7.7 million for the three months ended September 30, 2025, as compared to the prior year. On a constant currency basis, asset impairment and decommission costs increased $7.3 million. This change was primarily as a result of increased impairment charges resulting from our regular analysis of whether the future cash flows from certain towers are adequate to recover the carrying value of the investment in those towers, partially offset by a decrease in tower and equipment related decommission costs.
Depreciation, Accretion, and Amortization Expense:
|
For the three months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Domestic site leasing |
$ |
37,085 |
$ |
34,636 |
$ |
- |
$ |
2,449 |
7.1% |
||||||
|
International site leasing |
36,765 |
26,098 |
512 |
10,155 |
38.9% |
||||||||||
|
Total site leasing |
$ |
73,850 |
$ |
60,734 |
$ |
512 |
$ |
12,604 |
20.8% |
||||||
|
Site development |
960 |
895 |
- |
65 |
7.3% |
||||||||||
|
Other |
2,073 |
1,886 |
- |
187 |
9.9% |
||||||||||
|
Total |
$ |
76,883 |
$ |
63,515 |
$ |
512 |
$ |
12,856 |
20.2% |
||||||
Depreciation, accretion, and amortization expense increased $13.4 million for the three months ended September 30, 2025, as compared to the prior year. On a constant currency basis, depreciation, accretion, and amortization expense increased $12.9 million. These changes were primarily due to an increase in the number of towers we acquired and built since July 1, 2024, partially offset by the impact of assets that became fully depreciated since the prior year period.
Operating Income (Expense):
|
For the three months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Domestic site leasing |
$ |
309,549 |
$ |
324,369 |
$ |
- |
$ |
(14,820) |
(4.6%) |
||||||
|
International site leasing |
72,674 |
57,560 |
775 |
14,339 |
24.9% |
||||||||||
|
Total site leasing |
$ |
382,223 |
$ |
381,929 |
$ |
775 |
$ |
(481) |
(0.1%) |
||||||
|
Site development |
9,038 |
5,763 |
- |
3,275 |
56.8% |
||||||||||
|
Other |
(17,092) |
(12,096) |
- |
(4,996) |
41.3% |
||||||||||
|
Total |
$ |
374,169 |
$ |
375,596 |
$ |
775 |
$ |
(2,202) |
(0.6%) |
||||||
Domestic site leasing operating income decreased $14.8 million for the three months ended September 30, 2025, as compared to the prior year, primarily due to increases in asset impairment and decommission costs and depreciation, accretion, and amortization expense, partially offset by higher segment operating profit and a decrease in selling, general, and administrative expenses.
International site leasing operating income increased $15.1 million for the three months ended September 30, 2025, as compared to the prior year. On a constant currency basis, international site leasing operating income increased $14.3 million. These changes were primarily due to higher segment operating profit and a decrease in asset impairment and decommission cost, partially offset by increases in depreciation, accretion, and amortization expense and selling, general, and administrative expenses.
Site development operating income increased $3.3 million for the three months ended September 30, 2025, as compared to the prior year, primarily due to higher segment operating profit driven by increased carrier activity.
Other operating expense, net increased $5.0 million for the three months ended September 30, 2025, as compared to the prior year, primarily due to an increase in selling, general, and administrative expenses.
Other Income (Expense):
|
For the three months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Interest income |
$ |
5,517 |
$ |
6,999 |
$ |
67 |
$ |
(1,549) |
(22.1%) |
||||||
|
Interest expense |
(120,154) |
(95,711) |
(55) |
(24,388) |
25.5% |
||||||||||
|
Non-cash interest expense |
(567) |
(7,192) |
- |
6,625 |
(92.1%) |
||||||||||
|
Amortization of deferred financing fees |
(5,477) |
(5,185) |
- |
(292) |
5.6% |
||||||||||
|
Other income, net |
35,595 |
23,700 |
12,698 |
(803) |
161.6% |
||||||||||
|
Total |
$ |
(85,086) |
$ |
(77,389) |
$ |
12,710 |
$ |
(20,407) |
20.1% |
||||||
Interest income decreased $1.5 million for the three months ended September 30, 2025, as compared to the prior year. This change was primarily due to a decrease in interest received on a loan to an unconsolidated joint venture as the loan was repaid on March 21, 2025.
Interest expense increased $24.4 million for the three months ended September 30, 2025, as compared to the prior year. This change was primarily due to a higher average principal amount of cash-interest bearing debt accruing interest at a higher weighted-average interest rate as compared to the prior year. The higher weighted-average interest rate experienced during the current year period was due to the higher blended rate of the interest rate swap agreements which replaced the previous swap on March 31, 2025.
Non-cash interest expense decreased $6.6 million for the three months ended September 30, 2025, as compared to the prior year. This change was primarily due to lower amortization of accumulated losses related to our interest rate swaps de-designated as cash flow hedges which reached their term end date in 2025.
Other income, net includes a $37.9 million gain on the remeasurement of U.S. dollar denominated intercompany loans with foreign subsidiaries for the three months ended September 30, 2025. The prior year period included a $24.3 million gain on the remeasurement of U.S. dollar denominated intercompany loans with foreign subsidiaries.
Provision for Income Taxes:
|
For the three months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Provision for income taxes |
$ |
(48,652) |
$ |
(42,316) |
$ |
(4,229) |
$ |
(2,107) |
6.1% |
||||||
Provision for income taxes increased $6.3 million for the three months ended September 30, 2025, as compared to the prior year. On a constant currency basis, provision for income taxes increased $2.1 million primarily due to increases in foreign deferred taxes and deferred withholding taxes, partially offset by a decrease in current domestic taxes.
Net Income:
|
For the three months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Net income |
$ |
240,431 |
$ |
255,891 |
$ |
9,256 |
$ |
(24,716) |
(10.3%) |
||||||
Net income decreased $15.5 million for the three months ended September 30, 2025, as compared to the prior year. On a constant currency basis, net income decreased $24.7 million. This change was primarily due to increases in interest expense, other operating expense, net, and provision for income taxes and decreases in domestic site leasing operating income and interest income, partially offset by a decrease in non-cash interest expense and increases in international site leasing operating income, site development operating income, and other income, net.
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Revenues and Segment Operating Profit:
|
For the nine months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
Revenues |
(in thousands) |
||||||||||||||
|
Domestic site leasing |
$ |
1,401,052 |
$ |
1,389,563 |
$ |
- |
$ |
11,489 |
0.8% |
||||||
|
International site leasing |
503,372 |
490,867 |
(20,862) |
33,367 |
6.8% |
||||||||||
|
Site development |
191,132 |
105,504 |
- |
85,628 |
81.2% |
||||||||||
|
Total |
$ |
2,095,556 |
$ |
1,985,934 |
$ |
(20,862) |
$ |
130,484 |
6.6% |
||||||
|
Cost of Revenues |
|||||||||||||||
|
Domestic site leasing |
$ |
207,944 |
$ |
200,368 |
$ |
- |
$ |
7,576 |
3.8% |
||||||
|
International site leasing |
153,386 |
146,525 |
(5,739) |
12,600 |
8.6% |
||||||||||
|
Site development |
154,222 |
82,705 |
- |
71,517 |
86.5% |
||||||||||
|
Total |
$ |
515,552 |
$ |
429,598 |
$ |
(5,739) |
$ |
91,693 |
21.3% |
||||||
|
Operating Profit |
|||||||||||||||
|
Domestic site leasing |
$ |
1,193,108 |
$ |
1,189,195 |
$ |
- |
$ |
3,913 |
0.3% |
||||||
|
International site leasing |
349,986 |
344,342 |
(15,123) |
20,767 |
6.0% |
||||||||||
|
Site development |
36,910 |
22,799 |
- |
14,111 |
61.9% |
||||||||||
Revenues
Domestic site leasing revenues increased $11.5 million for the nine months ended September 30, 2025, as compared to the prior year, primarily due to (1) organic site leasing growth from new leases, amendments, and contractual escalators and (2) revenues from 60 towers acquired and 45 towers built since January 1, 2024, partially offset by Sprint and other lease non-renewals and a decrease in non-cash straight line revenue.
International site leasing revenues increased $12.5 million for the nine months ended September 30, 2025, as compared to the prior year. On a constant currency basis, international site leasing revenues increased $33.4 million. This change was primarily due to (1) revenues from 5,246 towers acquired (including 5,090 towers under the deal with Millicom) and 749 towers built since January 1, 2024, (2) organic site leasing growth from new leases, amendments, and contractual escalators, and (3) increases in reimbursable pass-
through expenses and non-cash straight line revenue, partially offset by lease non-renewals and tower divestitures. Site leasing revenue in Brazil represented 13.5% of total site leasing revenue for the period. No other individual international market represented more than 5% of our total site leasing revenue.
Site development revenues increased $85.6 million for the nine months ended September 30, 2025, as compared to the prior year, as a result of increased carrier activity.
Operating Profit
Domestic site leasing segment operating profit increased $3.9 million for the nine months ended September 30, 2025, as compared to the prior year. This change was primarily due to higher domestic site leasing revenues as noted above and the positive impact of our ground lease purchase program, partially offset by the incremental costs associated with towers acquired and built since January 1, 2024.
International site leasing segment operating profit increased $5.6 million for the nine months ended September 30, 2025, as compared to the prior year. On a constant currency basis, international site leasing segment operating profit increased $20.8 million. This change was primarily due to higher international site leasing revenues as noted above and the positive impact of our ground lease purchase program, partially offset by the incremental costs associated with towers acquired and built since January 1, 2024.
Site development segment operating profit increased $14.1 million for the nine months ended September 30, 2025, as compared to the prior year, as a result of increased carrier activity.
Selling, General, and Administrative Expenses:
|
For the nine months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Domestic site leasing |
$ |
93,411 |
$ |
100,070 |
$ |
- |
$ |
(6,659) |
(6.7%) |
||||||
|
International site leasing |
54,933 |
46,741 |
(1,574) |
9,766 |
20.9% |
||||||||||
|
Total site leasing |
$ |
148,344 |
$ |
146,811 |
$ |
(1,574) |
$ |
3,107 |
2.1% |
||||||
|
Site development |
9,674 |
10,219 |
- |
(545) |
(5.3%) |
||||||||||
|
Other |
45,231 |
34,131 |
- |
11,100 |
32.5% |
||||||||||
|
Total |
$ |
203,249 |
$ |
191,161 |
$ |
(1,574) |
$ |
13,662 |
7.1% |
||||||
Selling, general, and administrative expenses increased $12.1 million for the nine months ended September 30, 2025, as compared to the prior year. On a constant currency basis, selling, general, and administrative expenses increased $13.7 million. These changes were driven primarily by an increase in personnel and other support related costs and a $4.9 million bad debt reserve recorded in the second quarter of 2025.
Acquisition and New Business Initiatives Related Adjustments and Expenses
|
For the nine months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Domestic site leasing |
$ |
14,823 |
$ |
11,883 |
$ |
- |
$ |
2,940 |
24.7% |
||||||
|
International site leasing |
3,599 |
7,496 |
(100) |
(3,797) |
(50.7%) |
||||||||||
|
Total |
$ |
18,422 |
$ |
19,379 |
$ |
(100) |
$ |
(857) |
(4.4%) |
||||||
Domestic acquisition and new business initiatives related adjustments and expenses increased $2.9 million for the nine months ended September 30, 2025, as compared to the prior year. This change was primarily as a result of higher new business initiative activity and an increase in our third party acquisition and integration costs as compared to the prior year.
International acquisition and new business initiatives related adjustments and expenses decreased $3.9 million for the nine months ended September 30, 2025, as compared to the prior year. On a constant currency basis, international acquisition and new business initiatives related adjustments and expenses decreased $3.8 million. These changes were primarily as a result of a decrease in our third party acquisition and integration costs.
Asset Impairment and Decommission Costs:
|
For the nine months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Domestic site leasing |
$ |
53,322 |
$ |
45,075 |
$ |
- |
$ |
8,247 |
18.3% |
||||||
|
International site leasing |
48,546 |
42,086 |
(2,079) |
8,539 |
20.3% |
||||||||||
|
Total site leasing |
$ |
101,868 |
$ |
87,161 |
$ |
(2,079) |
$ |
16,786 |
19.3% |
||||||
|
Other |
710 |
767 |
- |
(57) |
(7.4%) |
||||||||||
|
Total |
$ |
102,578 |
$ |
87,928 |
$ |
(2,079) |
$ |
16,729 |
19.0% |
||||||
Asset impairment and decommission costs increased $14.7 million for the nine months ended September 30, 2025, as compared to the prior year. On a constant currency basis, asset impairment and decommission costs increased $16.7 million. These changes were primarily as a result of increased impairment charges resulting from our regular analysis of whether the future cash flows from certain towers are adequate to recover the carrying value of the investment in those towers, partially offset by a decrease in tower and equipment related decommission costs.
Depreciation, Accretion, and Amortization Expense:
|
For the nine months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Domestic site leasing |
$ |
110,668 |
$ |
108,851 |
$ |
- |
$ |
1,817 |
1.7% |
||||||
|
International site leasing |
92,537 |
87,384 |
(3,874) |
9,027 |
10.3% |
||||||||||
|
Total site leasing |
$ |
203,205 |
$ |
196,235 |
$ |
(3,874) |
$ |
10,844 |
5.5% |
||||||
|
Site development |
2,681 |
2,767 |
- |
(86) |
(3.1%) |
||||||||||
|
Other |
6,008 |
5,442 |
- |
566 |
10.4% |
||||||||||
|
Total |
$ |
211,894 |
$ |
204,444 |
$ |
(3,874) |
$ |
11,324 |
5.5% |
||||||
Depreciation, accretion, and amortization expense increased $7.5 million for the nine months ended September 30, 2025, as compared to the prior year. On a constant currency basis, depreciation, accretion, and amortization expense increased $11.3 million. These changes were primarily due to an increase in the number of towers we acquired and built since January 1, 2024, partially offset by the impact of assets that became fully depreciated since the prior year period.
Operating Income (Expense):
|
For the nine months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Domestic site leasing |
$ |
920,884 |
$ |
923,316 |
$ |
- |
$ |
(2,432) |
(0.3%) |
||||||
|
International site leasing |
150,371 |
160,635 |
(7,496) |
(2,768) |
(1.7%) |
||||||||||
|
Total site leasing |
$ |
1,071,255 |
$ |
1,083,951 |
$ |
(7,496) |
$ |
(5,200) |
(0.5%) |
||||||
|
Site development |
24,555 |
9,813 |
- |
14,742 |
150.2% |
||||||||||
|
Other |
(51,949) |
(40,340) |
- |
(11,609) |
28.8% |
||||||||||
|
Total |
$ |
1,043,861 |
$ |
1,053,424 |
$ |
(7,496) |
$ |
(2,067) |
(0.2%) |
||||||
Domestic site leasing operating income decreased $2.4 million for the nine months ended September 30, 2025, as compared to the prior year, primarily due to increases in asset impairment and decommission costs, acquisition and new business initiatives related adjustments and expenses, and depreciation, accretion, and amortization expense, partially offset by a decrease in selling, general, and administrative expenses and higher segment operating profit.
International site leasing operating income decreased $10.3 million for the nine months ended September 30, 2025, as compared to the prior year. On a constant currency basis, international site leasing operating income decreased $2.8 million. These changes were primarily due to increases in selling, general, and administrative expenses, asset impairment and decommission costs, and depreciation, accretion and amortization expense, partially offset by higher segment operating profit and a decrease in acquisition and new business initiatives related adjustments and expenses.
Site development operating income increased $14.7 million for the nine months ended September 30, 2025, as compared to the prior year, primarily due to higher segment operating profit driven by increased carrier activity.
Other operating expense, net increased $11.6 million for the nine months ended September 30, 2025, as compared to the prior year, primarily due to an increase in selling, general, and administrative expenses.
Other Income (Expense):
|
For the nine months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Interest income |
$ |
24,452 |
$ |
21,359 |
$ |
(415) |
$ |
3,508 |
16.4% |
||||||
|
Interest expense |
(343,959) |
(289,632) |
(10) |
(54,317) |
18.8% |
||||||||||
|
Non-cash interest expense |
(10,148) |
(22,715) |
- |
12,567 |
(55.3%) |
||||||||||
|
Amortization of deferred financing fees |
(16,326) |
(15,405) |
- |
(921) |
6.0% |
||||||||||
|
Loss from extinguishment of debt, net |
- |
(4,428) |
- |
4,428 |
(100.0%) |
||||||||||
|
Other income (expense), net |
111,881 |
(125,811) |
259,856 |
(22,164) |
784.6% |
||||||||||
|
Total |
$ |
(234,100) |
$ |
(436,632) |
$ |
259,431 |
$ |
(56,899) |
18.1% |
||||||
Interest income increased $3.1 million for the nine months ended September 30, 2025, as compared to the prior year. On a constant currency basis, interest income increased $3.5 million. These changes were primarily due to a higher balance of interest-bearing deposits held and a higher effective interest rate on those deposits as compared to the prior year, partially offset by a decrease in interest received on a loan to an unconsolidated joint venture as the loan was repaid on March 21, 2025.
Interest expense increased $54.3 million for the nine months ended September 30, 2025, as compared to the prior year. This change was primarily due to a higher average principal amount of cash-interest bearing debt accruing interest at a higher weighted-average interest rate as compared to the prior year. The higher weighted-average interest rate experienced during the current year period was due to the higher blended rate of the interest rate swap agreements which replaced the previous swap on March 31, 2025.
Non-cash interest expense decreased $12.6 million for the nine months ended September 30, 2025, as compared to the prior year. This change was primarily due to lower amortization of accumulated losses related to our interest rate swaps de-designated as cash flow hedges which reached their term end date in 2025.
Loss from extinguishment of debt, net was $4.4 million for the nine months ended September 30, 2024 which primarily represents the write-off of $3.3 million of unamortized financing fees and $1.2 million of the original issuance discount associated with the repayment of the 2018 Term Loan in January 2024.
Other income (expense), net includes a $137.8 million gain on the remeasurement of U.S. dollar denominated intercompany loans with foreign subsidiaries and a $18.3 million loss on sale of assets for the nine months ended September 30, 2025 (which is inclusive of a $29.1 million non-cash adjustment to realize previously unrecognized accumulated currency translation adjustments arising from the sales of our Philippines and Colombia operations). The prior year period included a $119.0 million loss on the remeasurement of U.S. dollar denominated intercompany loans with foreign subsidiaries.
Provision for Income Taxes:
|
For the nine months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Provision for income taxes |
$ |
(125,730) |
$ |
(46,906) |
$ |
(86,958) |
$ |
8,134 |
(9.2%) |
||||||
Provision for income taxes increased $78.8 million for the nine months ended September 30, 2025, as compared to the prior year. This change was primarily due to the impact of foreign currency exchange rates and increases in foreign deferred taxes and deferred withholding taxes.
Net Income:
|
For the nine months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Net income |
$ |
684,031 |
$ |
569,886 |
$ |
164,977 |
$ |
(50,832) |
(7.8%) |
||||||
Net income increased $114.1 million for the nine months ended September 30, 2025, as compared to the prior year. This change (which is inclusive of a non-cash adjustment to realize previously unrecognized accumulated currency translation adjustments arising from the sales of our Philippines and Colombia operations) was primarily due to the impact of foreign currency exchange rates, increases in site development segment operating income and interest income and decreases in non-cash interest expense, provision for income taxes, and loss from extinguishment of debt, partially offset by increases in interest expense and other operating expense and decreases in international site leasing operating income and domestic site leasing operating income.
NON-GAAP FINANCIAL MEASURES
This report contains information regarding Adjusted EBITDA, a non-GAAP measure. We have provided below a description of Adjusted EBITDA, a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure and an explanation as to why management utilizes this measure. This report also presents our financial results and other financial metrics after eliminating the impact of changes in foreign currency exchange rates. We believe that providing these financial results and metrics on a constant currency basis, which are non-GAAP measures, gives management and investors the ability to evaluate the performance of our business without the impact of foreign currency exchange rate fluctuations. We eliminate the impact of changes in foreign currency exchange rates by dividing the current period's financial results by the average monthly exchange rates of the prior year period, as well as by eliminating the impact of the remeasurement of our intercompany loans.
Adjusted EBITDA
We define Adjusted EBITDA as net income excluding the impact of non-cash straight-line leasing revenue, non-cash straight-line ground lease expense, non-cash compensation, net loss from extinguishment of debt, other income and expenses, acquisition and new business initiatives related adjustments and expenses, asset impairment and decommission costs, interest income, interest expenses, depreciation, accretion, and amortization, and income taxes.
Management uses Adjusted EBITDA in evaluating, and believes that it is useful to investors in evaluating, the profitability of our operations and to evaluate our performance 1) from period to period and (2) compared to our competitors, by removing the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our financial results. In addition, Adjusted EBITDA is a widely used performance measure across the telecommunications real estate sector and management believes that it allows investors to evaluate our comparative performance without regard to items such as depreciation, amortization and accretion, which can vary across different companies depending upon accounting methods and the book value of assets. Management also believes Adjusted EBITDA is frequently used by investors or other interested parties in the evaluation of REITs. In addition, Adjusted EBITDA is similar to the measure of current financial performance generally used by our lenders to determine compliance with certain covenants under our Senior Credit Agreement and the indentures relating to the 2020 Senior Notes and 2021 Senior Notes. Adjusted EBITDA should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.
|
For the three months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Net income |
$ |
240,431 |
$ |
255,891 |
$ |
9,256 |
$ |
(24,716) |
(10.3%) |
||||||
|
Non-cash straight-line leasing revenue |
(1,649) |
(1,065) |
3 |
(587) |
55.1% |
||||||||||
|
Non-cash straight-line ground lease expense |
(1,063) |
945 |
18 |
(2,026) |
(214.4%) |
||||||||||
|
Non-cash compensation |
19,323 |
16,373 |
68 |
2,882 |
17.6% |
||||||||||
|
Other income, net |
(35,595) |
(23,700) |
(12,698) |
803 |
161.6% |
||||||||||
|
Acquisition and new business initiatives |
|||||||||||||||
|
related adjustments and expenses |
5,156 |
5,388 |
15 |
(247) |
(4.6%) |
||||||||||
|
Asset impairment and decommission costs |
20,322 |
12,670 |
328 |
7,324 |
57.8% |
||||||||||
|
Interest income |
(5,517) |
(6,999) |
(67) |
1,549 |
(22.1%) |
||||||||||
|
Interest expense (1) |
126,198 |
108,088 |
55 |
18,055 |
16.7% |
||||||||||
|
Depreciation, accretion, and amortization |
76,883 |
63,515 |
512 |
12,856 |
20.2% |
||||||||||
|
Provision for income taxes (2) |
48,813 |
41,514 |
4,229 |
3,070 |
9.2% |
||||||||||
|
Adjusted EBITDA |
$ |
493,302 |
$ |
472,620 |
$ |
1,719 |
$ |
18,963 |
4.0% |
||||||
|
For the nine months ended |
Constant |
||||||||||||||
|
September 30, |
Foreign |
Constant |
Currency |
||||||||||||
|
2025 |
2024 |
Currency Impact |
Currency Change |
% Change |
|||||||||||
|
(in thousands) |
|||||||||||||||
|
Net income |
$ |
684,031 |
$ |
569,886 |
$ |
164,977 |
$ |
(50,832) |
(7.8%) |
||||||
|
Non-cash straight-line leasing revenue |
(3,578) |
(10,623) |
(296) |
7,341 |
(69.1%) |
||||||||||
|
Non-cash straight-line ground lease expense |
(4,148) |
(5,426) |
(8) |
1,286 |
(23.7%) |
||||||||||
|
Non-cash compensation |
56,552 |
56,439 |
(125) |
238 |
0.4% |
||||||||||
|
Loss from extinguishment of debt, net |
- |
4,428 |
- |
(4,428) |
(100.0%) |
||||||||||
|
Other (income) expense, net |
(111,881) |
125,811 |
(259,856) |
22,164 |
(784.6%) |
||||||||||
|
Acquisition and new business initiatives |
|||||||||||||||
|
related adjustments and expenses |
18,422 |
19,379 |
(100) |
(857) |
(4.4%) |
||||||||||
|
Asset impairment and decommission costs |
102,578 |
87,928 |
(2,079) |
16,729 |
19.0% |
||||||||||
|
Interest income |
(24,452) |
(21,359) |
415 |
(3,508) |
16.4% |
||||||||||
|
Interest expense (1) |
370,433 |
327,752 |
10 |
42,671 |
13.0% |
||||||||||
|
Depreciation, accretion, and amortization |
211,894 |
204,444 |
(3,874) |
11,324 |
5.5% |
||||||||||
|
Provision for income taxes (2) |
126,226 |
46,436 |
86,955 |
(7,165) |
(8.1%) |
||||||||||
|
Adjusted EBITDA |
$ |
1,426,077 |
$ |
1,405,095 |
$ |
(13,981) |
$ |
34,963 |
2.5% |
||||||
(1)Total interest expense includes interest expense, non-cash interest expense, and amortization of deferred financing fees.
(2)Includes franchise and gross receipts taxes reflected in selling, general, and administrative expenses on the Consolidated Statements of Operations.
Adjusted EBITDA increased $20.7 million for the three months ended September 30, 2025, as compared to the prior year period. On a constant currency basis, Adjusted EBITDA increased $19.0 million. These changes were primarily due to an increase in site leasing segment and site development segment operating profit, partially offset by an increase in cash selling, general, and administrative expenses.
Adjusted EBITDA increased $21.0 million for the nine months ended September 30, 2025, as compared to the prior year period. On a constant currency basis, Adjusted EBITDA increased $35.0 million. These changes were primarily due to an increase in site leasing segment and site development segment operating profit, partially offset by an increase in cash selling, general, and administrative expenses.
LIQUIDITY AND CAPITAL RESOURCES
SBA Communications Corporation ("SBAC") is a holding company with no business operations of its own. SBAC's only significant asset is 100% of the outstanding capital stock of SBA Telecommunications, LLC ("Telecommunications"), which is also a
holding company that owns equity interests in entities that directly or indirectly own all of our domestic and international towers and assets. We conduct all of our business operations through Telecommunications' subsidiaries. Accordingly, our only source of cash to pay our obligations, other than financings, is distributions with respect to our ownership interest in our subsidiaries from the net earnings and cash flow generated by these subsidiaries.
Our capital allocation policy, which is built upon predictable strong cash flows, continues to prioritize opportunistically pursuing investment in quality assets that meet our return criteria while maintaining flexibility to continue our buyback program and increase our dividend growth over-time. Based on our evaluation of market opportunities for portfolio growth and the current interest rate environment, we have also prioritized repayment of debt in the past few years which minimizes interest expense and supports AFFO per share growth and, we believe, creates a path for our move towards issuing investment grade debt. Consequently, in the short-term, we will also focus on reducing our ratio of secured debt to unsecured debt as existing secured debt maturities come due or are within their par call window.
A summary of our cash flows is as follows:
|
For the nine months ended September 30, |
||||||
|
2025 |
2024 |
|||||
|
(in thousands) |
||||||
|
Cash provided by operating activities |
$ |
987,303 |
$ |
1,024,697 |
||
|
Cash used in investing activities |
(421,008) |
(480,420) |
||||
|
Cash used in financing activities |
(1,520,215) |
(533,848) |
||||
|
Change in cash, cash equivalents, and restricted cash |
(953,920) |
10,429 |
||||
|
Effect of exchange rate changes on cash, cash equiv., and restricted cash |
18,657 |
(9,883) |
||||
|
Cash, cash equivalents, and restricted cash, beginning of period |
1,400,657 |
250,946 |
||||
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
465,394 |
$ |
251,492 |
||
Operating Activities
Cash provided by operating activities was $987.3 million for the nine months ended September 30, 2025 as compared to $1,024.7 million for the nine months ended September 30, 2024. The decrease wasprimarily due to increases in net interest expense and cash selling, general, and administrative expenses, as well as increases in cash outflows associated with working capital changes related to the timing of customer payments. The decrease was partially offset by (1) increases in site leasing segment and site development segment operating profit and (2) decreases in tower and equipment decommission costs.
Investing Activities
A detail of our investing activities is as follows:
|
For the nine months ended September 30, |
||||||
|
2025 |
2024 |
|||||
|
(in thousands) |
||||||
|
Acquisitions of towers and related assets(1) |
$ |
(634,751) |
$ |
(234,853) |
||
|
Land buyouts and other assets (2) |
(29,664) |
(33,556) |
||||
|
Construction and related costs |
(78,233) |
(96,683) |
||||
|
Augmentation and tower upgrades |
(41,362) |
(38,485) |
||||
|
Tower maintenance |
(39,072) |
(33,792) |
||||
|
General corporate |
(3,424) |
(3,640) |
||||
|
Purchase of investments |
(658,004) |
(1,204,628) |
||||
|
Proceeds from sale of investments |
909,937 |
1,179,250 |
||||
|
Repayment (funding) of loan to unconsolidated joint venture |
115,000 |
(11,100) |
||||
|
Proceeds from sale of assets |
40,564 |
- |
||||
|
Other investing activities |
(1,999) |
(2,933) |
||||
|
Net cash used in investing activities |
$ |
(421,008) |
$ |
(480,420) |
||
(1)The nine months ended September 30, 2025 excludes a $139.6 million acquisition completed during the third quarter of 2025 which was not funded until the fourth quarter of 2025 and is recorded in Accounts payable on the Consolidated Balance Sheets as of September 30, 2025.
(2)Excludes $9.7 million and $17.0 million spent to extend ground lease terms for the nine months ended September 30, 2025 and 2024, respectively. We recorded these amounts in prepaid expenses and other current assets within the changes in operating assets and liabilities, net of acquisitions section of its Consolidated Statements of Cash Flows.
Subsequent to quarter end, we closed on the 2,020 sites related to the Millicom transaction that were remaining under contract for approximately $217.4 million in cash. As of the date of this filing, we are under contract to purchase 78 communication sites for an aggregate consideration of $66.9 million in cash. We anticipate that these acquisitions will be closed by the end of the first quarter of 2026.
For 2025, we expect to incur non-discretionary cash capital expenditures associated with tower maintenance and general corporate expenditures of $56.0 million to $60.0 million and discretionary cash capital expenditures, based on current or potential acquisition obligations, planned new tower construction, forecasted tower augmentations, and forecasted ground lease purchases, of $1,290.0 million to $1,300.0 million. We expect to fund these cash capital expenditures from cash on hand, cash flow from operations, and borrowings under the Revolving Credit Facility or new financings. The exact amount of our future cash capital expenditures will depend on a number of factors, including amounts necessary to support our tower portfolio, our new tower build and acquisition programs, and our ground lease purchase program.
Financing Activities
A detail of our financing activities is as follows:
|
For the nine months ended September 30, |
||||||
|
2025 |
2024 |
|||||
|
(in thousands) |
||||||
|
Net borrowings (repayments) under Revolving Credit Facility(1) |
$ |
280,000 |
$ |
(20,000) |
||
|
Proceeds from issuance of Term Loans, net of fees(1) |
- |
2,274,815 |
||||
|
Repayment of Term Loans(1) |
(17,250) |
(2,279,500) |
||||
|
Repayment of Tower Securities (1) |
(1,165,000) |
- |
||||
|
Repurchase and retirement of common stock (2) |
(281,531) |
(200,019) |
||||
|
Payment of dividends on common stock |
(360,780) |
(318,808) |
||||
|
Proceeds from employee stock purchase/stock option plans |
51,491 |
27,144 |
||||
|
Payments related to taxes on stock options and restricted stock units |
(24,875) |
(18,187) |
||||
|
Other financing activities |
(2,270) |
707 |
||||
|
Net cash used in financing activities |
$ |
(1,520,215) |
$ |
(533,848) |
||
(1)For additional information regarding our debt instruments and financings, refer to "Debt Instruments and Debt Service Requirements" below.
(2)During the nine months ended September 30, 2025, we purchased 1.4 million shares of our Class A common stock for $284.8 million at an average price per share of $208.61. Amounts reflected in the table are based on the settlement date. Subsequent to September 30, 2025, we purchased 210 thousand shares of our Class A common stock for $40.2 million at an average price per share of $191.21. For additional information regarding our share repurchase activity, refer to Part II Item 2 under "Issuer Purchases of Equity Securities" below.
Dividends
For the nine months ended September 30, 2025, we paid the following cash dividends:
|
Payable to Shareholders |
||||||||
|
of Record at the Close |
Cash Paid |
Aggregate Amount |
||||||
|
Date Declared |
of Business on |
Per Share |
Paid |
Date Paid |
||||
|
February 23, 2025 |
March 13, 2025 |
$1.11 |
$122.3 million (1) |
March 27, 2025 |
||||
|
April 27, 2025 |
May 22, 2025 |
$1.11 |
$119.4 million |
June 17, 2025 |
||||
|
August 3, 2025 |
August 21, 2025 |
$1.11 |
$119.1 million |
September 18, 2025 |
(1)Amount reflected includes the payment of $2.4 million in dividend equivalents.
Dividends paid in 2025 were ordinary taxable dividends.
Subsequent to September 30, 2025, we declared the following cash dividends:
|
Payable to Shareholders |
Cash to |
|||||
|
of Record at the Close |
be Paid |
|||||
|
Date Declared |
of Business on |
Per Share |
Date to be Paid |
|||
|
November 2, 2025 |
November 13, 2025 |
$1.11 |
December 11, 2025 |
The amount of future distributions will be determined, from time to time, by our Board of Directors to balance our goal of increasing long-term shareholder value and retaining sufficient cash to implement our current capital allocation policy. The actual amount, timing, and frequency of future dividends will be at the sole discretion of our Board of Directors and will be declared based upon various factors, many of which are beyond our control.
Registration Statements
We have on file with the Securities and Exchange Commission (the "Commission") a shelf registration statement on Form S-4 registering shares of Class A common stock that we may issue in connection with the acquisition of wireless communication towers or antenna sites and related assets or companies who own wireless communication towers, antenna sites, or related assets. During the nine months ended September 30, 2025, we did not issue any shares of Class A common stock under this registration statement. As of September 30, 2025, we had approximately 1.2 million shares of Class A common stock remaining under this registration statement.
We have on file with the Commission an automatic shelf registration statement for well-known seasoned issuers on Form S-3ASR, which enables us to issue shares of our Class A common stock, preferred stock, debt securities, warrants, or depositary shares as well as units that include any of these securities. We will file a prospectus supplement containing the amount and type of securities each time we issue securities under our automatic shelf registration statement on Form S-3ASR. During the nine months ended September 30, 2025, we did not issue any securities under our automatic shelf registration statement.
Debt Instruments and Debt Service Requirements
Senior Credit Agreement
As of September 30, 2025, SBA Senior Finance II was in compliance with the financial covenants contained in the Senior Credit Agreement.
Revolving Credit Facility under the Senior Credit Agreement
The key terms of the Revolving Credit Facility are as follows:
|
Unused |
||||
|
Interest Rate |
Commitment |
|||
|
as of |
Fee as of |
|||
|
September 30, 2025(1) |
September 30, 2025(2) |
|||
|
Revolving Credit Facility |
5.235% |
0.140% |
(1)The rate reflected includes a 0.050% reduction in the applicable spread as a result of meeting certain sustainability-linked targets as of December 31, 2024.
(2)The rate reflected includes a 0.010% reduction in the applicable commitment fee as a result of meeting certain sustainability-linked targets as of December 31, 2024.
The table below summarizes our Revolving Credit Facility activity during the three and nine months ended September 30, 2025 and 2024:
|
For the three months |
For the nine months |
|||||||||||
|
ended September 30, |
ended September 30, |
|||||||||||
|
2025 |
2024 |
2025 |
2024 |
|||||||||
|
(in thousands) |
||||||||||||
|
Beginning outstanding balance |
$ |
80,000 |
$ |
120,000 |
$ |
- |
$ |
180,000 |
||||
|
Borrowings |
295,000 |
175,000 |
375,000 |
370,000 |
||||||||
|
Repayments |
(95,000) |
(135,000) |
(95,000) |
(390,000) |
||||||||
|
Ending outstanding balance |
$ |
280,000 |
$ |
160,000 |
$ |
280,000 |
$ |
160,000 |
||||
Subsequent to September 30, 2025, we borrowed $165.0 million and repaid $60.0 million under the Revolving Credit Facility, and asof the date of this filing, $385.0 million was outstanding.
Term Loan under the Senior Credit Agreement
2024 Term Loan
During the three and nine months ended September 30, 2025, we repaid an aggregate of $11.5 million and $17.3 million of principal on the 2024 Term Loan, respectively. As of September 30, 2025, the 2024 Term Loan had a principal balance of $2.3 billion.
Secured Tower Revenue Securities
Tower Revenue Securities Terms
As of September 30, 2025, we, through the Trust, had issued and outstanding an aggregate of $7.2 billion of Secured Tower Revenue Securities ("Tower Securities"). The sole asset of the Trust consists of a non-recourse mortgage loan made in favor of certain of our subsidiaries that are borrowers on the mortgage loan (the "Borrowers") under which there is a loan tranche for each Tower Security outstanding with the same interest rate and maturity date as the corresponding Tower Security. The mortgage loan will be paid from the operating cash flows from the aggregate 9,505 tower sites owned by the Borrowers as of September 30, 2025. The mortgage loan is secured by (1) mortgages, deeds of trust, and deeds to secure debt on a substantial portion of the tower sites, (2) a security interest in the tower sites and substantially all of the Borrowers' personal property and fixtures, (3) the Borrowers' rights under certain tenant leases, and (4) all of the proceeds of the foregoing. For each calendar month, SBA Network Management, Inc., an indirect subsidiary ("Network Management"), is entitled to receive a management fee equal to 4.5% of the Borrowers' operating revenues for the immediately preceding calendar month.
The table below sets forth the material terms of our outstanding Tower Securities as of September 30, 2025:
|
Security |
Issue Date |
Amount Outstanding |
Interest |
Anticipated Repayment Date |
Final Maturity Date |
|||||||||
|
2020-1C Tower Securities |
Jul. 14, 2020 |
$750.0 |
1.884% |
Jan. 9, 2026 |
Jul. 11, 2050 |
|||||||||
|
2020-2C Tower Securities |
Jul. 14, 2020 |
$600.0 |
2.328% |
Jan. 11, 2028 |
Jul. 9, 2052 |
|||||||||
|
2021-1C Tower Securities |
May 14, 2021 |
$1,165.0 |
1.631% |
Nov. 9, 2026 |
May 9, 2051 |
|||||||||
|
2021-2C Tower Securities |
Oct. 27, 2021 |
$895.0 |
1.840% |
Apr. 9, 2027 |
Oct. 10, 2051 |
|||||||||
|
2021-3C Tower Securities |
Oct. 27, 2021 |
$895.0 |
2.593% |
Oct. 9, 2031 |
Oct. 10, 2056 |
|||||||||
|
2022-1C Tower Securities |
Nov. 23, 2022 |
$850.0 |
6.599% |
Jan. 11, 2028 |
Nov. 9, 2052 |
|||||||||
|
2024-1C Tower Securities |
Oct. 11, 2024 |
$1,450.0 |
4.831% |
Oct. 9, 2029 |
Oct. 8, 2054 |
|||||||||
|
2024-2C Tower Securities (2) |
Oct. 11, 2024 |
$620.0 |
4.654% |
Oct. 8, 2027 |
Oct. 8, 2054 |
(1)Interest paid monthly.
(2)The interest rate reflected is the all-in fixed rate which includes the impact of the treasury lock agreement entered on September 11, 2024 which settled upon issuance of the notes. The treasury lock agreement fixed the three-year treasury rate at 3.3985% for $620.0 million of notional value related to the 2024-2C Tower Securities issued on October 11, 2024. Excluding the impact of the treasury lock agreement, the 2024-2C Tower Securities accrue interest at 5.115%.
Risk Retention Tower Securities
The table below sets forth the material terms of our outstanding Risk Retention Tower Securities as of September 30, 2025:
|
Security |
Issue Date |
Amount Outstanding |
Interest |
Anticipated Repayment Date |
Final Maturity Date |
|||||||||
|
2020-2R Tower Securities |
Jul. 14, 2020 |
$71.1 |
4.336% |
Jan. 11, 2028 |
Jul. 9, 2052 |
|||||||||
|
2021-1R Tower Securities |
May 14, 2021 |
$61.4 |
3.598% |
Nov. 9, 2026 |
May 9, 2051 |
|||||||||
|
2021-3R Tower Securities |
Oct. 27, 2021 |
$94.3 |
4.090% |
Oct. 9, 2031 |
Oct. 10, 2056 |
|||||||||
|
2022-1R Tower Securities |
Nov. 23, 2022 |
$44.8 |
7.870% |
Jan. 11, 2028 |
Nov. 9, 2052 |
|||||||||
|
2024-1R Tower Securities |
Oct. 11, 2024 |
$108.7 |
6.252% |
Oct. 9, 2029 |
Oct. 8, 2054 |
(1)Interest paid monthly.
To satisfy certain risk retention requirements of Regulation RR promulgated under the Exchange Act, SBA Guarantor, LLC, a wholly owned subsidiary, purchased the Risk Retention Tower Securities. Principal and interest payments made on the 2020-2R Tower Securities, 2021-1R Tower Securities, 2021-3R Tower Securities, 2022-1R Tower Securities, and 2024-1R Tower Securities eliminate in consolidation.
Debt Covenants
As of September 30, 2025, the Borrowers met the debt service coverage ratio required by the mortgage loan agreement and were in compliance with all other covenants as set forth in the agreement.
Senior Notes
The table below sets forth the material terms of our outstanding senior notes as of September 30, 2025:
|
Senior Notes |
Issue Date |
Amount Outstanding |
Interest Rate Coupon |
Maturity Date |
Interest Due Dates |
Optional Redemption Date |
||||||
|
2020 Senior Notes |
Feb. 4, 2020 |
$1,500.0 |
3.875% |
Feb. 15, 2027 |
Feb. 15 & Aug. 15 |
Feb. 15, 2025 |
||||||
|
2021 Senior Notes |
Jan. 29, 2021 |
$1,500.0 |
3.125% |
Feb. 1, 2029 |
Feb. 1 & Aug. 1 |
Feb. 1, 2025 |
Each of our senior notes is subject to redemption, at our option, in whole or in part on or after the date set forth above. We may redeem each of the senior notes during the time periods and at the redemption prices set forth in the indentures.
Debt Service
As of September 30, 2025, we believe that our cash on hand, capacity available under our Revolving Credit Facility, and cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months.
The following table illustrates our estimate of our debt service requirement over the next twelve months ended September 30, 2026 based on the amounts outstanding as of September 30, 2025 and the interest rates accruing on those amounts on such date:
|
(in thousands) |
|||
|
Revolving Credit Facility(1) |
$ |
17,066 |
|
|
2024 Term Loan (2) |
141,677 |
||
|
2020-1C Tower Securities |
754,108 |
||
|
2020-2C Tower Securities |
14,159 |
||
|
2021-1C Tower Securities |
19,371 |
||
|
2021-2C Tower Securities |
16,752 |
||
|
2021-3C Tower Securities |
23,491 |
||
|
2022-1C Tower Securities |
56,362 |
||
|
2024-1C Tower Securities |
70,510 |
||
|
2024-2C Tower Securities |
29,052 |
||
|
2020 Senior Notes |
58,125 |
||
|
2021 Senior Notes |
46,875 |
||
|
Total debt service for the next 12 months |
$ |
1,247,548 |
|
(1)As of September 30, 2025, $280.0 million was outstanding under the Revolving Credit Facility. Subsequent to September 30, 2025, we borrowed $165.0 million and repaid $60.0 million under the Revolving Credit Facility, and as of the date of this filing, $385.0 million was outstanding.
(2)Total debt service on the 2024 Term Loan (as amended on October 2, 2024) includes the impact of the interest rate swaps which collectively swap $2.0 billion of notional value accruing interest at Term SOFR plus 175 basis points for a blended all-in fixed rate of 5.165%.
Inflation
The impact of inflation on our operations has not been material to date. However, the impact of higher interest rates has impacted, and is expected to continue to impact, our growth rate and future operating results. Higher interest rates have impacted, and are expected to continue to impact, the ability and willingness of wireless service providers to incur capital expenditures at prior levels to expand their networks, which could adversely affect our future revenue growth rates. In addition, increased interest rates may adversely affect our costs to refinance our indebtedness at maturity. In addition, persistent high rates of inflation could adversely affect our future operating results particularly in light of the fact that our site leasing revenues are governed by long-term contracts with pre-determined pricing that we will not be able to increase in response to increases in inflation other than our contracts in South America and Africa, which have inflationary index-based rent escalators.
SBA Communications Corporation published this content on November 06, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 06, 2025 at 22:00 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]