Q1 2025 American Tower Corp Earnings Call
Okay.
Ladies and gentlemen, thank you for standing by.
Welcome to the American Tower first quarter 2025 earnings conference call.
As a reminder, today's conference is being recorded following their prepared remarks, we will open the call for questions.
Like to ask a question. Please press star one on one of your telephone.
Dean here, an automated message advising your hand is raised to withdraw your question. Please press star one again I would now like to turn the call over to your host Adam Smith.
Speaker Change: Senior Vice President of Investor Relations and F. P. N. A please go ahead sir.
Adam Smith: Good morning, and thank you for joining American Tower's first quarter earnings conference call, we've posted a presentation, which we'll refer to throughout our prepared remarks under the Investor Relations tab of our website Www Dot American tower Dot com.
Speaker Change: I'm joined on the call today by Steve <unk>, our president and CEO and Rod Smith, our executive Vice President and CFO and Treasurer.
Adam Smith: Following our prepared remarks, we will open up the call for your questions before.
Adam Smith: Before we begin I'll remind you that our comments will contain forward looking statements that involve a number of risks and uncertainties.
Adam Smith: These statements include our expectations regarding future growth, including our 2025 outlook capital allocation and future operating performance and any other statements that regard matters that are not historical facts.
Adam Smith: You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward looking statements.
Adam Smith: Such factors include the risk factors set forth in this morning's earnings press release those set forth in our most recent annual report on Form 10-K and in other filings, we make with the SEC.
Adam Smith: We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances with that I will turn the call over to Steve.
Steve: Thanks, Adam Good morning, everyone and thanks for joining the call.
As you saw in this morning's report we're off to a strong start to the year exceeding our initial expectations across property revenue adjusted EBITDA and attributable Eva per share for the quarter with demand persisting across our global portfolio I guess, the challenging economic backdrop.
Steve: Briefly share a few updates and trends for the quarter before Rod discussed there's more detailed financial results and our full year revised expectations I'll start with leasing trends in carrier activity now.
Steve: The durability and quality of our cash flows combined with ongoing resilience and network investments to meet growth in the mobile data demand.
Steve: To offer our investors a compelling option of American tower.
Steve: The large U S carriers are publicly stating the aggressive goals to substantially complete our GE equipment upgrades across nearly all of their networks by the end of 2026.
Steve: Giving broad based amendment activity complemented by the early signs of capacity oriented new site demand.
Steve: In fact Q1 represented our fifth consecutive quarter of sequential increases the application volumes and services revenue, which grew roughly 60% and over 140% year over year, respectively.
Steve: Meanwhile, in Europe, we continue to see steady demand across our ground based and rooftop sites highlighting a mark sport elevating the roughly 45% correct mid band population coverage at meeting 2030 coverage targets were.
Steve: We're seeing similar resilience across our emerging markets in Nigeria improve consumer pricing dynamics are facilitating enhanced cash flows for the carriers and <unk> already new business in Brazil, the benefits of the stronger three player backdrop are beginning to emerge with carrier steadily upgrading their networks to somewhere when you realize the spectral efficiency benefits we've highlighted.
Steve: In the U S.
Steve: Tori coverage requirements and began to feel on their networks.
Steve: We are encouraged by the demand across our emerging markets footprint, we're going to closely monitor the global economic backdrop, and any potential applications without including an FX, where certain emerging markets could be more susceptible along with various customer eventually collections export markets.
Steve: Our coronary business posted yet another set of impressive results in the quarter fueled by strong leasing and continued pricing favorability, while bringing the first phase of our enlighten III Center and the second phase of our CX Two center online collectively, adding 11 megawatts of capacity with a high degree of day one Lisa.
Steve: The team's consistent approach to underwriting with a focus on curated high quality interconnection rich ecosystems across a diverse set of cloud network and enterprise customers and leading markets yield the best in class returns, while insulating against broader market shifts.
Steve: We're all of course site performance supported by accelerated demand and a right to win through market positioning and service quality continues to exceed our initial expectations at marathon will be these levels of capital that we've allocated our 2025.
Steve: Next I'll touch on capital allocation portfolio management.
Steve: We continue to actively assess and manage our portfolio following our grow harvest and resolve methodology to reduce risk and drive higher quality more predictable earnings with.
Steve: We've previously highway discretionary capital prioritization to our developed markets, where we have a right to win.
Steve: Consistent with this approach we purchased our <unk> one data center in Denver and existing facilities of course, I had maintain a partial leaks direct ownership of this building, which serves as the primary point of interconnection in the Rocky Mountain region.
Steve: Of course like to control the areas only for cloud on ramps and one of the top network peering ecosystems.
Steve: Furthermore, on the resolve of the equation.
Steve: First we closed our previously announced sale of our South African Barbara business in early March marking a key step in the continued reduction of our international fiber footprint.
Steve: These activities productive steps are continue aim to hold our global portfolio mix by emphasizing core markets and products that drive synergistic value and durable cash flows we expect to translate into attractive returns for our shareholders over the long term.
Steve: Finally, I will touch on our global operations and our value proposition.
Steve: We have a great core business anchored in high quality high margin assets that we maximize with strong terms and conditions strategic Counterparties and world class operational execution, we already have a track record of building on our strong foundation by leveraging our scale core competencies and financial flexibility in a way that drives both customer.
Steve: And shareholder value. This concludes U S innovations like our <unk> Colocation engine, our fleet of growth in digital twin technology, our suite of site and construction services or backup power solutions and our programmatic approach to land buyouts, what the mixture of holistic contract structures.
Steve: Internationally, our best in Class African power program, which we've optimized through accretive sustainable energy investments and the use of comprehensive data analytics predictive monitoring leveraging AI are hefty European book to Bill processing and many other developments provide meaningful advantages as we globalize more intentionally there <unk>.
Difficult opportunity to evaluate cross border applicability of these regional offerings to drive efficiency and unlock incremental value.
Steve: And we're still in the early days of mapping our globalization plan, but we've already had an active start to the year as our team works to evaluate opportunities to streamline our operations enhanced synergies across our markets and products.
Steve: We're excited to build on the momentum we've established and further leverage our scale core competencies and balance sheet to enhance our market leading position.
Steve: Look forward to sharing more specifics in time.
Steve: In closing.
Steve: And mobile data has proven resilient across various economic cycles of our two plus decades of American tower.
Steve: As I mentioned at the onset I'm encouraged by the durability and leasing demand for our global portfolio of assets.
Steve: While simultaneously exercise a degree of caution in anticipation of persisting forward looking volatility and uncertainty.
Steve: We believe that American tower's approach to enhancing our organization and customer value proposition through the means that are within our control, including our globalization initiatives portfolio mix and quality of earnings and balance sheet, but rather an additional degree of street and differentiation moving forward.
Steve: Similar times of volatility or uncertainty during my tenure at historically presented incremental opportunity for us and I'm optimistic that the steps, we're taking to date will have us well positioned to capitalize on idiots.
Rod: Now I'll hand, the call over to Rod to discuss our first quarter financial performance.
Rod: Thanks, Steve and thank you all for joining the call as Steve mentioned, we are off to a strong start to 2025 with our customers continuing to invest in their networks as global mobile data consumption continues to grow.
Rod: Before I discuss the specifics of our Q1 results and revised full year outlook I will summarize a few highlights.
Rod: First the solid leasing trends, we observed over the course of 2024 continued into Q1 of 2025, resulting in consolidated organic tenant billings growth of four 7%.
Rod: As a result of accelerating tower activity, our U S services business delivered its highest quarter of revenue and gross profit since 2021 with applications rising nearly 30% compared to levels seen in Q4 of 2024 and up roughly 60% versus Q1 of 2024, reflecting a mix of.
Rod: Amendment, driven upgrades and new co locations.
Rod: In addition, core site delivered high single digit revenue growth underpinned by continuation of robust demand for our interconnection hubs consistent with past quarter themes, we complemented durable topline performance with prudent cost management, providing year over year cash adjusted EBITA margin expansion of nearly 70.
Rod: <unk> points to 68, 2%.
Rod: Next we continued to execute on our stated priorities successfully closing the sale of our South Africa fiber business in early March completing the purchase of our D. E. One data center asset in Denver in early April deploying over 75% of discretionary capital expenditures in the quarter towards our developed market.
Rod: Platforms, and resuming dividend per share growth of approximately 5% year over year for the quarter. Finally, we further mitigated 2025 refinancing risk by successfully accessing the debt capital markets last month issuing $1 billion in senior unsecured notes at a weighted average.
Rod: Cost of just over 5% proceeds from the transaction were used primarily to pay down existing debt at the end of the quarter floating rate debt represented approximately 4% of our total outstanding debt, while net leverage reduced to five times in line with our stated target, resulting in enhanced balance sheet strength and improve.
Rod: <unk> financial flexibility.
Rod: Turning to first quarter property revenue and organic tenant billings growth on slide six consolidated property revenue growth was slightly positive year over year and up approximately 3% excluding noncash straight line revenue, while absorbing approximately 300 basis points of FX headwinds.
Rod: U S and Canada property revenue declined approximately 1% and grew over three 5%, excluding noncash straight line, including over 1% negative impact from sprint churn.
Rod: International property revenue was roughly flat year over year with growth of approximately 8%, excluding the impact of foreign currency fluctuations.
Rod: Finally property revenue in our datacenter business grew by approximately 9%.
Rod: Moving to the right side of the slide consolidated organic tenant billings growth was four 7% supported by solid demand across our global portfolio.
Rod: In our U S and Canada segment organic tenant billings growth was in line with expectations at three 6% and approximately 5% excluding sprint related churn as.
Rod: As highlighted on our last earnings call. We continue to expect growth to be below 4% for the next two quarters due to sprint churn before increasing to over five 5% in Q4.
Rod: Our international segment drove six 7% in organic tenant billings growth a modest acceleration from Q4 of 2024 with generally consistent leasing trends escalator contributions and churn.
Rod: Turning to slide seven adjusted EBITDA grew one 9% and up over five 5%, excluding noncash straight line impacts while absorbing approximately 300 basis points of FX headwinds.
Rod: <unk> was supported by a high conversion of cash property revenue through ongoing cost control and an over 140% increase in our U S services gross margin associated with an increase in tower activity.
Rod: Moving to the right side of the slide attributable <unk> and attributable to <unk> per share declined by approximately one and over 1% respectively, primarily due to contributions from the India business in the prior year period, which had benefited from nearly $30 million in revenue reserve reversals.
Rod: On an as adjusted basis normalizing the prior year period for the sale of India growth was approximately six 6% driven by the high conversion of cash adjusted EBITDA growth to <unk> through the effective management of below the line costs.
Rod: Now turning to our revised full year outlook on slide eight we are pleased with the results to date in the durable demand trends that underscore our performance. However, like prior years and given proximity to our previously released outlook. We have kept core full year expectations largely unchanged with updates to our FX assumptions.
Rod: Consistent with past practice, our projected FX rates for outlook take the more conservative of bank forecasts and the trailing 30 day spot rate averages for each currency, which has generally resulted in rates more conservative than current spots.
Rod: As a result, we are raising our expectations for property revenue adjusted EBITDA attributable to <unk> and attributable <unk> per share by approximately $50 million $30 million $20 million.04, respectively compared to prior outlook solely attributable to updated FX assumptions.
Rod: <unk> at the midpoint, our expectation for attributable to <unk> per share is $10.44 or nearly 5% growth year over year on an as adjusted basis.
Rod: The more we are reiterating our prior outlook expectations for organic tenant billings growth across all regions, including greater than or equal to four 3% in the U S and canada or greater than or equal to five 3%, excluding the impacts of sprint churn and.
Rod: Approximately 12%, 5% and 2% for the Africa, and APAC segment, Europe, and Latin America, respectively.
Rod: <unk> driving approximately 6% for international and approximately 5% on a consolidated basis.
Rod: Complementing our organic trends and supporting margin expansion, our revised outlook maintained the expectation for a year over year reduction in cash SG&A.
Rod: Turning to slide nine we are generally maintaining consistent capital allocation expectations for the year updated only to reflect small M&A transaction closed during or shortly after the quarter. We continue to expect an approximately $3 $2 billion common dividend distribution to our shareholders subject to board approval.
Rod: And approximately $1 $7 billion in capital expenditures, which includes 2250 newly constructed sites at the midpoint and roughly $610 million for data Center development.
Rod: I'd like to reiterate that while overall capital spend is moderately increasing year over year as we execute on attractive development opportunities across the U S. Europe and core site, we continue to reduce investments across our emerging markets in 2025 investments in Latin America Africa, and APAC will primarily.
Rod: Orally consist of augmenting sites to accommodate incremental tenants and executing on previously committed multiyear built to suit agreements with leading carriers.
Rod: Moving to the right side of the slide our balance sheet remains strong providing financial flexibility and optionality, including $11 7 billion in liquidity and low floating rate debt exposure.
Rod: Turning to slide 10, and in summary, we're off to a great start to 2025, the resilience of our global business demonstrates strength amidst a challenging economic backdrop. Despite ongoing market uncertainty carriers continue to invest in their networks to accommodate growing demand for mobile data consumption, which underscores the critical nature of our globe.
Rod: <unk> portfolio of assets.
Rod: This combined with our highly focused and disciplined approach to capital investing our best in class operating platforms, and our strong balance sheet position us well to reliably deliver high quality earnings and compelling total shareholder returns over the long term.
Speaker Change: And with that operator, we can now open the line for questions.
Rod: Thank you at.
Speaker Change: At this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on one of your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Speaker Change: Our first question comes from Matt Mcnulty from Deutsche Bank. Please go ahead.
Matt Mcnulty: Hey, guys. Thanks, so much for taking the questions maybe two if I could first maybe more high level.
Speaker Change: You've done a lot of portfolio optimization in.
Speaker Change: In recent years and so I'm wondering if it's fair to assume on a go forward basis, a more sharpened focus on the globalization strategy more cost optimization with the remaining assets that you've got in place and then secondarily on the U S side, it sounds like Theres still a lot of momentum.
Speaker Change: Both in services and new applications I'm, just wondering how we should think about the cadence of Colo and amendment rather than upcoming periods relative to the $38 million in <unk> and I guess more specifically, whether youre still comfortable with that $165 million to $170 million range that was laid out for new leasing last quarter. Thank you.
Speaker Change: Yes, Nick Thanks for the questions I'll take the first question.
Speaker Change: I think it's fair to say, we're going to be focused on both when you look at our portfolio optimization Thats an ongoing analysis that we will continue to do with the management team and the board and so that's something that we look at on a continuing basis. We review it and I think what we've said pretty clearly as we don't have anything that we're <unk>.
Speaker Change: Specifically looking to divest necessarily but there are markets.
Speaker Change: That are in our resolve category that we've highlighted.
Speaker Change: Also businesses that are noncore to our business and with those businesses. The way we look at that as we look at the value of the ongoing cash flows and then.
Speaker Change: If we think that someone's willing to pay more than the value of those ongoing cash flows that we would like to do a transaction if not we will harvest the cash flows from those and continue to operate them.
Speaker Change: We have kind of reordering our operations. So that there is nothing that there is a compelling reason to divest we've kind of started operating some of those markets on a regional hubs.
Speaker Change: And looking at it that way so we'll continue to do that evaluation.
Speaker Change: ACS continued optimizing you may see us do that.
Speaker Change: It's not going to add more value for the long term our globalization efforts, though are a huge focus for US right now we've been very successful in bringing down SG&A over the past couple of years.
Speaker Change: We kind of took the low hanging fruit first on that we still think theres. Some room, there as well we're going to keep working on that and what we've got but focused on his new role as chief operating officer is really looking at the rest of the business across the globe to see what type of synergies can we get across the globe with the rest of our cost structure and where we're at.
The second that right now we've got people teams looking at that we're looking through the different categories of spend and we're trying to figure out what the what the opportunities are there and that's something that we'll share with you guys over the years, we've come up with.
Speaker Change: Some better targets on that but we're encouraged by what we're seeing we think there's definitely some opportunities there to take some of these best practices that I highlighted in my opening remarks.
Speaker Change: Across the globe and we're excited to focus on that as well.
Matt Mcnulty: Hey, Matt Good morning, I'll take the second part there I think you asked really two questions first one hit.
Matt Mcnulty: The services number and how that kind of rolls into the the.
Matt Mcnulty: New business number.
Matt Mcnulty: As you heard in my prepared remarks, we started this year with a really strong services result, achieving about $75 million of services revenue for Q1.
Matt Mcnulty: And we're seeing a pickup in activity versus our original outlook that we talked about last February when we announced the Q4 earnings so things are starting off very strong for us.
Also expect that to continue into Q2 that that steady kind of strong demand for the services business. So another quarter in that range of about 75 million is is what we're targeting.
Matt Mcnulty: Still in the range for the full year for a strong revenue full year number in around the 240 $250 million range that would imply a lower.
Matt Mcnulty: <unk> revenue for Q3 and Q4, so we do see that in the.
Matt Mcnulty: In our outlook now much of that is driven just on the reduced visibility when you get into the outer part of 2025. So can we outperform that certainly possible we have less visibility when you get to the end of the year. So we are seeing a very strong start to services and we expect maybe that drifts down a little bit.
Matt Mcnulty: Just because we don't have as much clarity when you get to the end of the year when you jump into the <unk> numbers. The 165 number for the U S is absolutely. What we are targeting you saw for Q1, we hit a number around $38 million that was down a little bit from Q4, which was about 45.
Matt Mcnulty: This cadence here is really the opposite of what we see in the services.
Matt Mcnulty: Another month or another quarter in for Q2 in that $38 million range wouldn't be out of the expectation for us and then an acceleration there getting up over 40 for the last two quarters 40 over $40 million for the last two quarters and that would put you right in that target range of the 165 165.
Matt Mcnulty: <unk> plus.
Speaker Change: Great. Thank you both.
Speaker Change: Thank you one more move for our next question.
Speaker Change: Our next question comes from Jim Schneider from Goldman Sachs. Please go ahead.
Jim Schneider: Good morning, Thanks for taking my question two if I may 1st of all when you look at the sort of U S carrier activity and the activity Youre seeing there with respect to leasing activity seems relatively consistent with what you had projected but on the margin can you maybe talk about any kind of changes that youre seeing as we head through the end of the year.
Jim Schneider: In terms of what is being prioritized by the carriers in terms of new activity and then secondly.
Jim Schneider: Following up on the cost efficiency program, Steve you were pretty clear about that being a focus for you.
Jim Schneider: Maybe just give us a sense of I know without giving us a firm target directionally as you head into the out years is the target to kind of get from.
Jim Schneider: 7% constant currency, a FIFO got it.
Jim Schneider: Our growth Youre doing this year to something closer to double digit in the out years. Thank you.
Jim Schneider: So.
Jim Schneider: I'll start with the care activity in the U S.
Jim Schneider: So what we're seeing is exactly in line with what we've expected to see we talked about it last year I talked about this year, which is kind of a steady ramp.
Jim Schneider: We think is consistent for this phase of the <unk> build and if you look at the public statements by the carriers. They have all set some pretty aggressive targets to getting too.
Jim Schneider: With close to two full deployment of their mid band spectrum across the portfolio. So there's still a decent amount of amendment activity that we should expect to see over the next two years as they take those percentages covered by mid band.
Jim Schneider: From somewhere in the 50% range for one of the carriers.
Jim Schneider: If you are a little bit higher up to that 80%, 90% coverage over time and so there is still a good degree of activity there as well we are still seeing some new co locations as well that comes in two flavors. We are people that are increasing coverage. Some of those consistent with government requirements to have some of them just trying to think the map a little bit more.
Jim Schneider: And we are starting to see some new colocation is coming in for Densification.
Jim Schneider: It's really consistent with what we've been talking about for the past couple of years, which is the carrier activity is broad based they are going to continue to deploy their <unk> until that becomes ubiquitous and we are starting to see the early signs of Densification, which is what we thought we would see at this place.
Jim Schneider: And the cycle here when it comes to the globalization.
Speaker Change: Nice try I'm still going to give you guidance for multiyear but.
Jim Schneider: I'll give you credit for trying there.
Speaker Change: The way, we're looking at it because we're looking at the category of expenses.
Jim Schneider: That's really in our controllable spend.
Jim Schneider: Our operations and maintenance to SG&A, we're already looking at.
Jim Schneider: Looking at our supply chain to see if we can actually impact our growth Capex <unk> capex.
Jim Schneider: A little bit better there and we'll continue to assess that there is no.
Jim Schneider: Yes, there is no specific target for that and so I'm not going to commit.
Jim Schneider: What we're going to get to an <unk> in those out years certainly the focus for the entire management team here is to do everything we can in the business to grow our <unk> per share and we're focused on that long term value creation. So everything that we do including our cost savings is geared towards the long term, we're not looking to make a splash in the quarter.
Jim Schneider: Half expenses rebound, we're not looking to damage the business will hurt our growth we're looking to be very thoughtful about all the changes we made to actually increase our customer service to increase our automation.
Jim Schneider: Actually increase revenues by being a better partner to our customers.
Jim Schneider: And as we have those targets I will share those later in the year.
Jamie: Hey, Jamie maybe I'll just highlight a couple of numbers here so for the 25 outlook.
Jim Schneider: Maybe just reminding you and the group here that we are planning for SG&A reductions.
Jim Schneider: At about $13 million mid teens here.
Jim Schneider: Excluding the impacts of nonrecurring bad debt that we saw in 2024 and that's on top of a 24 over 23 result, where we reduced SG&A without the impacts of bad debt by even more than that so we've been managing cost pretty tightly throughout.
Jim Schneider: Throughout the SG&A for a few years now consistently bringing those numbers down in the face of pretty significant.
Jim Schneider: Inflation in the U S over the last several years.
Jim Schneider: Alright, thank you.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from Ric Prentiss from Raymond James and Associates. Please go ahead.
Speaker Change: Thanks, Good morning, everybody.
Speaker Change: Morning Ric.
Speaker Change: Yes.
Speaker Change: Questions.
Speaker Change: State that first I always thought the capital allocation is probably the top job for senior management, you guys have been worthwhile.
Speaker Change: As you laid out leverage now hit five Dato, we're getting closer to that tell them below five dano.
Speaker Change: As far as thoughts on stock buyback is there an authorized program M&A clearly another potential any portfolios out there.
Speaker Change: And maybe explicitly.
Talking about Canada, as a market not necessarily the transactions.
Speaker Change: Okay, but what would be the attributes that would be attractive in a country like Canada.
Speaker Change: Sure Rick So stock buybacks are absolutely on the table as one of the potential uses for the capital that we generate.
Speaker Change: We do have an authorization by the board so $2 billion authorization, that's outstanding so that is out there.
Speaker Change: At this point the way, we look at our capital allocation and to your point, we've just got to that <unk> should be delevering further from there and the way we really look at it is what's going to create the most long term value. So we'll weigh those stock buybacks against any M&A opportunities. Our total Capex program further delevering et cetera.
Speaker Change: In terms of the M&A market today, we did close a small transaction in the U S.
Speaker Change: This year already.
Speaker Change: So it will continue to be opportunistic where you find the right portfolio at the right price.
Speaker Change: Don't see any large scale opportunities resort, that's taken us off of our path.
Speaker Change: So we've been pretty clear about that for the past few quarters that hasn't changed we're still not seeing any.
Speaker Change: Huge opportunities out there that we think are compelling enough.
Speaker Change: Canada is an interesting market for us we have a small portfolio there it's performing very well.
Speaker Change: So we like that market in terms of what we're seeing today and we have a lot of ability to operate that market out of the U S. So there's a lot of synergies that we would have if we did do something in Canada and I know there are some rumors of transactions out there and what I would say is true of Canada is very similar to what we had in Europe, which is we're going to.
Speaker Change: Very disappointing looking at terms and conditions number one and valuations number two in terms of trying to figure out if the transaction makes sense and so if a portfolio trade terms and conditions or something thats not going to give us a long term value creation opportunity, that's probably not the right deal for us. Similarly, if the price is too high.
Speaker Change: We're not going to we're not going to stretch for something unless we think it's going to create a lot of long term value for our shareholders. So we like the market.
Speaker Change: Operator from the U S.
Speaker Change: We're very huge amount of synergies.
Speaker Change: There and it would make sense, if we had the right deal but were going to be patient.
Speaker Change: In terms of conditions and valuation on it.
Speaker Change: Makes sense I think have you changed your middle name, especially to see terms and conditions of Undrawn.
Speaker Change: I think I've done a long time ago right.
Speaker Change: One follow up for me also some questions around Colocation amendments can you break out for us what either in the applications or a new revenue. Once you saw as far as Colocation amendment kind of the split between those.
Speaker Change: As we are watching some folks are starting to see some higher amount of new co location, obviously comes at a much higher incremental revenue that amendment.
Speaker Change: Yes, so we're seeing a continued increase in the colocation applications.
Speaker Change: So with that we're seeing an increase in both amendments and new leases and while the percentage of contribution from the clarification because it has increased a little bit the base has gotten bigger too. So it's not a huge proportion shift for US again, if you look at where those carriers are you've got one that's about 80% deployed once the 65 to 71.
Speaker Change: Still around 50%, so theres still a lot of amendment business to be done our portfolio. So while I do see an increase in co locations.
Speaker Change: Not making a huge shift in our mix today.
Speaker Change: We expect over the next couple of years, you'll see more of that.
You definitely we're seeing this phase of Densification star.
Speaker Change: Yes.
Speaker Change: Even before you get the applications you start having conversations with the carriers they start asking for more information on the towers.
Speaker Change: The answers are available what's structural capacity look like et cetera. So as we continue to hear that.
Speaker Change: Information requests that gives us a lot of confidence that we're going to see an increase in co locations over time as they move into that Densification phase over the next few years.
Speaker Change: Great. Thanks, guys.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from Michael Rollins from Citi. Please go ahead.
Speaker Change: Thanks, and good morning.
Speaker Change: Just first when you look at the collocation opportunity that you were just describing I'm curious.
Speaker Change: How much of that is.
<unk>, whether it's other large tower firms or smaller private firms or.
Speaker Change: Build to suits, whether it's by the carrier or some of the other private firms.
Speaker Change: Much of that is competitive and is there an opportunity to.
Speaker Change: To work with your customers to try to improve your share or win rate. If that's an option and then second just looking at the annualized EBITDA and it looks to be above the high end of the guidance range. So the annualized first quarter number and just curious if there are certain items that we should be mindful of through the year that Nate.
Speaker Change: EBITDA back into the current guidance range.
Speaker Change: Sure I'll take the first question I'll, let rod answer the second.
Speaker Change: So when you look at the new collocation of the carriers are deploying.
Speaker Change: It really depends on where they're deploying on what the competitive auctions are if you look at.
Speaker Change: All the towers in the U S. There's very little overlap between existing towers and most of the markets and that just makes sense you don't want to deploy with other Catholic either need to co locations and most cost effective way for everyone to deploy.
Speaker Change: You don't see a ton of overlap between the towers that are out there.
Speaker Change: When youre getting into pushing into kind of paint the map spaces, where people are trying to increase rural coverage a lot of those areas don't have coverage because of our towers. There. So you do see more new builds in that area.
Speaker Change: So overall.
Speaker Change: It depends on the geography thats around in terms of whether you can influence your share.
Speaker Change: Ken.
Speaker Change: It comes at the RF design phase, it's when they are actually designing their networks.
Speaker Change: And if you are a preferred partner.
Speaker Change: You provide great customer service and I know you can get them on air quickly.
Speaker Change: Target your sides and that's what we see with our customers and what we've been able to do over time is to.
Speaker Change: We get a good share of their business by being a really good partner to our customers providing great customer service.
Speaker Change: When youre looking at infill sites in some of our Densification, there may be a little bit less flexibility because youre looking at filling in sites within an existing design. So the geography, probably plays a bigger role in that.
Speaker Change: Splitsville has to be or in terms of trying to fill a hole that network where that is.
Speaker Change: May have fewer choices there so it's a little bit of a mixed bag depending on.
Speaker Change: But our goal is where they're building and what the existing infrastructure.
Speaker Change: Hey, Michael I'll take the second question you had there relative to the EBITDA and the cadence throughout the year.
Speaker Change: What I would say is we're very pleased with our Q1 results. We had a strong result on EBITDA and <unk> per share.
Speaker Change: When it comes to EBITDA going out for the full year in our outlook at this point, we believe that it's prudent to just hold our outlook kind of where it is.
Speaker Change: So we did outperform our EBITDA outlook for Q1, some of that was driven by the strong services outcome again and I mentioned this a few minutes ago. There is the potential for services revenue and therefore margin and EBITDA contribution to drift down in Q3 and Q4, so that could.
Speaker Change: Reduced kind of the run rate of EBITDA, but at this point given the proximity of our original outlook and <unk>.
Speaker Change: Quite frankly, the the general kind of market backdrop, and maybe this is more appropriate to <unk> <unk> per share where you see the same kind of a cadence right. If you look at our Q1 <unk> and <unk> per share result, and you annualize that for the full year. It suggests we're going to outperform our full year outlook.
Speaker Change: When you get into the <unk> numbers some of the some of the drivers there can be.
Speaker Change: Different quarter to quarter, notably cash taxes, there is a significant timing issue there for differences quarter over quarter as well as maintenance capex. So those things kind of can move that number around on a quarterly basis. So when you comp when you look at EBITDA and <unk>, Yes, we had a very strong very good quarter.
Speaker Change: In Q1, if you were to annualize that you get.
Speaker Change: Additional outperformance for our full year numbers at this point because of the timing issues because of a potential decline in services at the end of the year. We think it's prudent to just hold those outlooks consistent with the original outlook with the exception of updating the FX numbers.
Speaker Change: Thanks.
Speaker Change: Thank you.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from Nick del Deo from Moffett Nathan. Please go ahead.
Speaker Change: Hey, good morning, guys. Thanks for taking my questions.
Speaker Change: Can you expand a bit on the sort of services work that you're seeing behind the big increases in the degree to which that revenue is.
Speaker Change: Coincident with the leasing revenue.
Speaker Change: With the leasing activity that youre seeing versus being more of a leading indicator.
Speaker Change: And second I know you need to be a bit careful with the specifics of any deal and any any particular customer.
Speaker Change: But if echostar would engage in some sort of transaction involving spectrum, whether a sale or a lease do you have any contractual protections above and beyond their promise to pay the agreed upon rate.
Speaker Change: Sure.
Speaker Change: So I'll start with the.
Speaker Change: The Echostar question first on that.
Speaker Change: Hello, again in terms of conditions with the agreement, but we do.
Speaker Change: To get paid.
Speaker Change: So we always built into our kind of ongoing guidance for four hours.
Speaker Change: Future growth as the minimum contractual commitments under that agreement. So that's what's baked into our multiyear guide and that's what we're expecting out of those guys.
Speaker Change: We're not anticipating anything that materially changes in our business and if it does we'll kind of figure that out when it happens, but we do expect to get paid there.
Speaker Change: Tom.
Tom: Sorry, the first question.
Tom: Although im sorry could you just please yes its.
Tom: Services, you know the mix, there and the degree which its coincident versus a leading indicator, yes. So our services business that kind of break into two categories. The first is.
Tom: Really sad acquisition services, and that's things like zoning and permitting.
Tom: Engineering services things like that.
Tom: And that's a pretty steady path.
Tom: Out of the business, we do have a slightly larger proportion of construction services. This year, we don't do construction services nationwide or we don't do it for all the carriers that's much more of a targeted activity that we do it a couple of regions because we've got really good teams there and that construction services as project management, we don't have the appointment of a tower.
Tom: We're managing that process.
Tom: So we have seen a slightly larger component of that this year, but the overall services business is up and in terms of how that translates into revenue.
Tom: Bob.
Tom: There is a little bit of a disconnection from the activity levels and services to our property revenue because of our comprehensive agreements and those agreements are.
Tom: Steady cadence of what we're going to get paid on there, it's a little bit independent of the activity levels. However, we do have one customer that's not on a comprehensive agreement and we also have new co locations that are outside of some of the other comprehensive agreements and so those are much more affected by activity timing and when you think about the cadence of service.
Tom: <unk> versus <unk>.
Tom: Revenue if theyre not part of a comprehensive agreement there is a little bit of a lag time from when you see the services revenue too when you see those commitments and that varies a lot by customer. So I would think about that as being somewhere in the neighborhood of 60 to 180 days, depending on the customer and the type of transaction.
Tom: And the geography.
Tom: Hey, Nick I'll, just add one additional point when it comes to services the margin that we see in that business. This year notwithstanding the increase in revenue and what's in the way Steve talked about the shift towards a little bit more construction management, we are consistently seeing north of 50% margins our outlook assumes a 52% margin on this.
Tom: Business, which is very consistent with what we saw in 2024.
Speaker Change: Okay, great. Thanks, guys.
Speaker Change: Thank you <unk> next question.
Speaker Change: Our next question is coming from.
Speaker Change: <unk>.
Speaker Change: Levi from UBS. Please go ahead.
Speaker Change: Great. Thank you.
Speaker Change: And my other question on Latam I think you mentioned that you are seeing a bit of more activity showing up we haven't really seen that in the results. Yet. So can you talk to the cadence of incremental leasing in Latam I think churn came in a bit lower was that just timing and how should we think about the escalator I think that was better as well.
Speaker Change: Yeah.
Speaker Change: Sure. So we are seeing pockets of increased activity in particular in Brazil has some of the carriers, who are very public statements about starting to enhance their <unk> offerings. So we continue to see some new business from that.
Speaker Change: There are also markets that are further behind in that cycle, because it's taken time to get the spectrum out there. So.
Speaker Change: If you look at Mexico, Mexico is a little bit behind in terms of starting a <unk> deployment. There. So it's a little bit of a mixed bag.
Speaker Change: And we do still have multiple years of churn in Latin America. So we are guiding for <unk> Latin America to be low single digits for the next three years and part of that is the churn.
Speaker Change: We'll continue to see wireless churn from <unk> over the next two years and 2027 will have wireline churn from Hawaii.
Speaker Change: And we.
Speaker Change: Do you have some churn that we've already recognized in those markets. So we're past most of the telefonica churn in Mexico at this point.
Speaker Change: And we have had some churn in Colombia, Chile that we've worked through with one and we'll continue to monitor that and see how that progresses, but that's all consistent with our multi year guide of low single digits. There and so we are seeing again, a little bit more investment as the Brazil carriers get through the digestion of the.
Speaker Change: Purchase of Hawaii.
Speaker Change: They start working on their networks, we think that will continue and we think we'll continue to see growth in leasing across that market, but we're still going to face the headwinds of churn for the next three years there.
Speaker Change: The escalator.
Speaker Change: We're anticipating about 5% in 2025, but that is CPI dependent.
Speaker Change: Alright, thank you.
Speaker Change: Okay.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from Eric Loop Chow from Wells Fargo. Please go ahead.
Speaker Change: Great. Thanks for taking the question.
Speaker Change: You mentioned that you know Youre, obviously off a holistic agreement our comprehensive agreement with one of your large carriers I know they have a lot of work to do it with mid band.
Speaker Change: Coverage.
Speaker Change: So maybe you could provide some color on any discussions with them on potentially.
Speaker Change: We're going into a new holistic agreement are you happy with the Ala Carte arrangement and how do you think about kind of.
Speaker Change: The cadence of their spending contributing to your leasing throughout this year into next.
Yeah. Thanks, when we think about our comprehensive agreements.
Speaker Change: Those are really a vehicle to make the operational relationship between the customer and us a lot simpler and a lot easier.
Speaker Change: And we're very comfortable operating either on an Ala carte basis or in a comprehensive MLA.
Speaker Change: And you can pretty much be assured we're always talking with all of our customers about about a deal the ink doesn't even drive a signature before you're having the next discussion with the customers on that.
Speaker Change: But.
Speaker Change: In terms of whether we're going to get into a new agreement or not we're pretty agnostic about that we're open to it.
Speaker Change: And so we'll just continue to to provide the best customer service. We can we'll continue to dialogue with the customers.
Speaker Change: The interest alignment doing something we will and if they don't we'll continue in the car.
Speaker Change: Our basis for us, it's really about whatever drives the best long term value.
Speaker Change: And if you look at our leading growth that we have today. It is a function of what we signed.
Speaker Change: Ts and CS 20 years ago, and will continue to be disciplined about that we'll continue to do it.
Speaker Change: The best thing for our customers and our shareholders in terms of negotiating those agreements over time, so you shouldn't read anything.
Speaker Change: Negative or positive into the fact that we don't have a comprehensive MLA. It's just not the right structure for the parties at the time.
Great. Thank you and just one follow up question I wanted to touch on the core site footprint.
Speaker Change: Obviously, there's been a ton of headlines in the data center segment year to date around server certain hyperscale are slowing some questions around enterprise enterprise spending just given lack of visibility in the broader economy. So maybe you could just touch on what your sales funnel looks like within the data center business across.
Speaker Change: The cloud companies.
Speaker Change: And the more type of retail colocation companies as well.
Speaker Change: And we have a robust sales funnel.
Speaker Change: Core site.
Speaker Change: Just to remind everyone. It's really a interconnection business, it's different than what you would see on a hyperscale world or in <unk>.
Speaker Change: Colo facility, it's really there for people to save money people come to <unk>, because they need to bear environment, where they can interconnect multiple players have access to multiple cloud on ramps and we're not seeing any flagging a demand for that today in fact, what we see is more and more enterprises want to take advantage of the Baltic.
Speaker Change: Cloud environment, so that they can take advantage of some of the neutral rules some of it being AI is probably being traditional cloud tools that are there.
Speaker Change: And what we're seeing in that space as more demand, we're seeing our existing customers looking for more space, we're seeing new customers looking for larger installations there.
Speaker Change: And we just don't see that tailing off anytime soon we think that core business of ours continues to be robust. We also see good demand in the retail space. So we've been able to.
Speaker Change: A few good quarters in retail that gives us a lot of confidence about that business going forward, but it's really that core enterprise demand interconnection ecosystem that drives the bulk of our leasing and of course, and we think that that's a durable demand.
Speaker Change: For the foreseeable future. Despite the pullback as you see in Hyperscale. Despite.
Speaker Change: Even though.
Speaker Change: Economic uncertainty that's out there people are going to continue to invest in automation, because that's how they're going to get the cost savings they need for the rest of their business feel very confident about that demand pipeline.
Steve: Alright, Thanks, Steve.
Speaker Change: Thank you and well before our next question.
Speaker Change: Our next question comes from Michael Funk from Bank of America. Please go ahead.
Michael Funk: Yes. Good morning. Thank you for the questions. So you mentioned uncertainty a few times prepared remarks.
Speaker Change: Hello back from increasing guidance.
Michael Funk: Ex the FX impact.
Michael Funk: I guess, maybe some more color if you could on the markets that are more vulnerable that are leading you to maybe hold back on increasing guidance and what youre looking for in those markets.
Michael Funk: I'll start maybe rather want to jump in there.
Michael Funk: When we think about the U S.
Michael Funk: Thinking of the uncertainty that's out there is going to affect demand in the U S. This year.
Michael Funk: Even some of the uncertainties driven by things like tariffs, that's probably more of a future looking risks and a 2025 risk most of the equipment that people are going to deploy is already here and warehouses. This year. So we're not as worried about the us when we look at internationally.
Michael Funk: There's probably some opportunity to add some risk in those markets given some of the macro uncertainties that are out there.
Michael Funk: When there is.
Michael Funk: Global macroeconomic shocks it tends to affect the emerging markets more than it does a developed market and so that's what we're watching now is to see if there's any impacts there that we're not anticipating theres nothing in our view shared today that were specifically worried about it's much more of a general economic condition Thats out there and probably the biggest impact that we are.
Speaker Change: Seeing right now and the uncertainty is FX, but I'll, let rob jump in.
Rob: Yes, good morning, Mike. Thanks for the question a couple of things that I would highlight when I think of uncertainty and you heard me say it in my prepared remarks, it's really the the general macro economic backdrop, the uncertainty around potential increases in inflation in the U S.
Speaker Change: Or decreases it could go either way I think the uncertainty there still exists and that certainly has.
Speaker Change: Puts uncertainty in the mix when you think about interest rates going forward.
Speaker Change: I think we've all appreciated over the last several months some of the political discussion around tariffs and other things can have impacts on businesses around the globe and it also can have impacts on foreign exchange rates, which we are sensitive to in certain regions. So maybe I'll highlight that that piece.
Speaker Change: First I think everyone can appreciate our methodology of applying FX rates to our outlook I described that in the prepared remarks.
Speaker Change: If you just take the spot rates today, we would see a benefit of up to $120 million in our revenue line.
Speaker Change: Our outlook for the balance of this year that would also translate into a $70 million positive impact at the EBITDA numbers that we have that's better than 10 cents on an <unk> per share that's better than the outlook. We just rolled out this morning forever. One so it's too early for us to count on those spot rates.
Speaker Change: Things can change and Thats. An example of uncertainty and then also with interest rates interest rates can move around and that certainly can impact our <unk> and <unk> per share now with that said <unk> seen us take multiple steps to strengthen our balance sheet to reduce the refinancing risk. This year that includes paying down.
Speaker Change: The bonds that are coming due this year as well as dramatically, reducing our exposure to floating rate debt, we've gotten that down into the low single digits as a percent of our total debt being exposed to floating rate debt. That's that's less than 1 billion and a half of floating rate debt in aggregate in total.
Speaker Change: The other thing I would highlight here is we only have a handful of bonds left to renew its a little over $2 billion. When you think about the balance of this year and within that it's about $2 $5 billion or so within that we've already refinanced our issued new bonds at the beginning of Q2 here of a $1 billion. So we've already taken half.
Speaker Change: Of that remaining refinancing risk off the table that puts us in a pretty good place relative to refinancing risk rate, maybe 1 billion and a half of refinancing going out up against the very low percentage of our debt is exposed to floating rate debt that means we could refinance all of the remaining bond.
Speaker Change: Throughout 2025 without getting into the capital markets at all if we chose to and we could we could pay those off with the revolvers, we haven't still be in the single digits in terms of.
Speaker Change: Ending the year with floating rate as a percent of our overall debt that gives us tremendous optionality to manage through this uncertainty. So those are just a couple of examples of what uncertainty means to us.
Speaker Change: Yes. Thank you for the color one more if I could quickly.
Speaker Change: Ken can you help us frame how much of the service revenue growth was due to one carrier upgrading.
Speaker Change: During their ran upgrade versus more traditional service revenue, maybe how far they argue that process.
Speaker Change: Yeah, it's pretty broad based on that so.
Speaker Change: With the construction services that is much more regional for one carrier, but you can't read anything into that because it's a pretty steady cadence with that carrier.
Speaker Change: Regardless of what Theyre doing in the active in the area there, but I would just say the rest of the services business is pretty broad based.
Speaker Change: Okay, so more organic not necessarily one carrier ran upgrade Dom dependent.
Speaker Change: Yes, just more general activity levels on the tower, so it's a little bit of everything.
Speaker Change: New collocation, that's the amendments it's just all the activity on our sites we capture.
Speaker Change: A pretty high degree of that activity in our services business.
Speaker Change: Great. Thank you for your time.
Speaker Change: Thank you one more before our next question.
Speaker Change: Our next question comes from Ben Swinburne from Morgan Stanley. Please go ahead.
Ben Swinburne: Thanks, Good morning, excuse me.
Speaker Change: Two questions.
Speaker Change: Had another quarter last week strong fixed wireless growth across here.
Speaker Change: Domestic carrier customer base and I know.
Speaker Change: It's hard to sort of map that to what youre seeing in your business, but just wanted to see if Steve do you have any updated thoughts on sort of the increased activity you keep talking about and seeing in your business the outlook for accelerating growth in the role fixed wireless may or may not be playing in carrier investment into their into their networks and then maybe for rod.
Speaker Change: Thank you guys last quarter talked about having maybe.
Speaker Change: Ah quantified cost savings initiative.
Speaker Change: So the message for US later this year.
Speaker Change: Anything new on that front today, but just wondering if do you have any update in terms of the process for things that the team is focused on our opportunities that you think are sizeable just as we kind of think about that opportunity longer term for the company. Thank you.
Speaker Change: I'll take the second one first on the cost savings and it's really a matter of.
Speaker Change: Where we are in the processes. We've got teams looking at the various cost components around the globe and so the way I would think about that is you've got SG&A that we have looked at we've already made some progress on SG&A over the.
Speaker Change: Over the portfolio.
Speaker Change: And so we've kind of harvest a lot of the low hanging fruit there, there's still probably a little bit of room, there, but we're still trying to figure out exactly what that means.
Speaker Change: When you look at the rest of the of the cost stack, it's things like operations and maintenance.
Speaker Change: Yes, some of our our development Capex things like that we might be able to say if somebody with supply chain, but we're still in the early days of assessing that we don't have targets for you guys, but we do think there's opportunity for directionally on that.
Speaker Change: In terms of the fixed wireless.
Speaker Change: Anything that our carriers can monetize good news right, they're able to put more customers on their network, we're seeing them earn some some healthy returns on our fixed wireless that theyre doing.
Speaker Change: They are saying publicly is still that they are using follow capacity on the network and there is nothing that I would say that would contradict the carriers on that I think that thats, what they continue to do.
Speaker Change: In terms of what that means for the future we don't know.
Speaker Change: I hope that they find a business case to invest in stand alone fixed wireless.
Speaker Change: What I can tell you is that to the extent that they're using the existing network for fixed wireless we wouldn't see that broken out that will just show up as kind of normal business for us.
Speaker Change: That would just be kind of the normal course of business to the extent that they started building dedicated fixed wireless assets, that's not something that's been in our view shatter it's not in any of our projections. So that would be an upside opportunity for us. If we started doing that but theres no indications today from any of the carriers that they are investing in a separate fixed wireless network at this point.
Speaker Change: Got it thank you.
Speaker Change: Thank you.
Speaker Change: In the interest of time, we have time for one more question.
Speaker Change: Yes.
Speaker Change: Our next question comes from Jonathan Atkin from RBC.
Speaker Change: Capital markets. Please go ahead.
Speaker Change: Thanks.
Speaker Change: I wanted to ask a little bit about inorganic growth.
Speaker Change: And particularly in Europe, but what would be the some of the criteria that you would look at it.
Speaker Change: Maybe get bigger in some of those developed markets whether it's.
Speaker Change: Gail and evaluation and what's.
Speaker Change: What's kind of the landscape there in your lens around.
Speaker Change: The acquisition and then back on core sites.
Speaker Change: You made some pretty positive comments are we to conclude that youre seeing accelerating.
Speaker Change: Growth in say cross connect counts and.
Speaker Change: Kilowatt or cabinet growth.
Speaker Change: Based on the demand trends that you saw anything on book to Bill that you can share on other other metrics around core site. Thank you.
Speaker Change: Sure. So when it comes to Europe. The first thing that we look for in any market that we're looking at it as a healthy carrier ecosystem that supports long term growth. So we would be looking at we talked about Europe as well.
Speaker Change: One thing it's not at each country has its own dynamics there. So for us it's making sure that you have a healthy carrier environment and that you have a an environment that supports co location as a business model.
Speaker Change: So that's the first criteria. The second thing that we look for is to make sure. The terms. The conditions are something that gives us long term.
Speaker Change: Viability for growth there and so.
Speaker Change: It's easier to talk about the things that we've passed up on in the past and some of those transactions. So we've seen transactions, where you couldn't monetize amendments with the anchor tenant we're seeing transactions, where the carriers are right to buy the assets back in a certain number of years, we've seen transactions, where they had low fixed escalators versus CPI linked.
Speaker Change: You've had sites that were characterized as kind of golden sites, where you couldnt leased them up those are all things that diminish your opportunity to grow in the future and those are things that we would pass up on and then the third criteria is really valuation and can we drive.
Speaker Change: Incremental value by doing a transaction there so.
Speaker Change: There are a number of countries in Europe that we like that we think <unk> got some of those characteristics, while we've not seen as a portfolio trade that has the right terms and conditions at the right price and so we will continue to be disciplined on that.
And we will see if any opportunities horizon on that.
Speaker Change: On the core site.
Speaker Change: Right.
Speaker Change: Yes, we continue to see good cross that growth. It was high single digit to low double digit revenue growth in 2025 from cross connects.
Speaker Change: We are continuing to see strong and elevated pricing our mark to market is above our historical 2% to 4% range and our terms kind of in line with our historical churn range there.
Speaker Change: We feel very good about.
Speaker Change: Pretty much all the dynamics in core site right now.
Speaker Change: And like I mentioned earlier, the demand has not not waning and we do see.
Speaker Change: A long tail of that.
Speaker Change: Enterprise customers, it's going to continue to repatriate workloads from the cloud and continue to repatriate workloads from their own data centers and the core site.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: This does conclude the question and answer session I will now turn it back to Adam Smith for closing remarks.
Speaker Change: Thank you all for joining the call today, if you have any other questions. Please feel free to reach out to the Investor Relations team. Thank you.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
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