Q1 2025 SBA Communications Corp Earnings Call
Of note there will be a Q&A session at the end of prepared remarks at that time, you can dial pound too on your phone to enter the question queue with that I'll turn the call over to Marc to Russey Vice President of Finance. Please go ahead.
Yes.
[music].
Speaker Change: Thank you good evening and thank you for joining us for Sba's first quarter 2025 earnings Conference call here with me today are Brendan Cavanagh, our President and Chief Executive Officer, and Mark Martin, Our Chief Financial Officer. Some of the information we will discuss on this call is forward looking including but not limited to any guidance for.
Speaker Change: 2025, and beyond in today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today April 28, we have no obligation to update any forward looking statement. We may make in addition, our comments will include non-GAAP <unk>.
Speaker Change: You are now being connected with an operator you are on mute it can I get your first name. Please.
Can I get your first name please.
Speaker Change: <unk> measures and other key operating metrics the reconciliation of and other information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our Investor Relations website with that I'll now turn it over to Brendan.
Speaker Change: Can I get your first name.
Speaker Change: You are being joined to the waiting room, especially list will be with you. Soon you are muted.
Speaker Change: [music].
Brendan Cavanagh: Great. Thank you Mark and good afternoon.
Brendan Cavanagh: 2025 got off to a good start in the first quarter results were broadly in line with our estimates and activity levels continued to demonstrate a healthy level of growth.
Brendan Cavanagh: In the U S. Our mobile network, operator customers continued growing their level of network investment around our macro tower sites.
Brendan Cavanagh: We had our best quarter going back several years in terms of new domestic leasing business signed up during the quarter.
Brendan Cavanagh: Most encouraging though is that our leasing backlog also grew from December 31.
Brendan Cavanagh: We are adding new applications at a greater pace than we are signing up new business. This bodes well for the balance of the year.
Brendan Cavanagh: We also continued to see a higher percentage of our new <unk>.
Brendan Cavanagh: <unk> leasing business coming from new lease co locations versus amendments to existing leases.
Brendan Cavanagh: And our U S based services business had a great quarter as well with activity levels and results ahead of our expectations.
Brendan Cavanagh: We also saw our new business backlog growth for services during the quarter.
Brendan Cavanagh: And as a result of the strong start to the year and our growing backlog, we have increased our full year outlook for services.
Brendan Cavanagh: In our international markets. We also saw a positive start to the year with solid leasing activity.
Brendan Cavanagh: In addition, elevated CPI rates in some of our markets have presented the potential for better existing lease escalations during the year.
Across our markets our customers have many network goals, which will require continued investment.
Brendan Cavanagh: Macro sites remain the most effective and cost efficient way to advanced wireless coverage and deploying new spectrum and technologies.
Brendan Cavanagh: Our portfolio is well positioned to capture growth from these initiatives over the next several years.
Brendan Cavanagh: In addition to our operational achievements during the quarter. We also made progress in the areas of portfolio management and capital allocation.
Brendan Cavanagh: During the quarter, we completed our exit from the Philippines and on last quarter's earnings call, we announced our plan to exit from Colombia.
Brendan Cavanagh: We were able to finalize the required steps to complete this exit and formally sold our Colombian operations prior to quarter end.
Brendan Cavanagh: These steps have allowed us to improve our focus and allocation of resources.
Brendan Cavanagh: We continue to evaluate all of our operations to identify ways to improve our market positioning or gain further synergies.
Brendan Cavanagh: In addition, during the first quarter, we closed on a small portion of the Central American site previously put under our purchase agreement with Millicom International.
Brendan Cavanagh: While there are numerous regulatory and diligence steps remaining we will continue to explore opportunities for additional early closings.
Speaker Change: You are now being connected with an operator you are on mute there your nameplate.
Brendan Cavanagh: Against the backdrop of the current uncertain macroeconomic environment and the results from market volatility the stability and consistency of our company and our business stand out.
Speaker Change: And I think we're having trouble hearing from this line. So just confirm you maybe on mute on your own device.
Brendan Cavanagh: We have not experienced nor do we foresee any direct impacts from the current tariff policies.
Brendan Cavanagh: Our business continues to generate steady cash flow and.
Speaker Change: Okay.
Brendan Cavanagh: And the underlying needs of our customers remain robust.
Speaker Change: Alright, and you give them another opportunity here.
Brendan Cavanagh: As a result, we have significant confidence in our company and our future.
Speaker Change: Please state your name and your departments or your company. So we can get you into the SBA conference here.
Brendan Cavanagh: Subsequent to quarter end, we have demonstrated that confidence by repurchasing 583000 shares of our stock at an average price per share of $210 87.
Speaker Change: Alright, I will be at this point, but when you back to the waiting room.
Speaker Change: You are being joined to the waiting room, especially list will be with you. Soon you are muted.
Brendan Cavanagh: We have also announced today that our board has approved a new $1 $5 billion share repurchase plan supporting our ability to return significant value to our shareholders.
Speaker Change: [music].
Brendan Cavanagh: The combination of this plan and our industry, leading dividend growth provide a direct line of shareholder returns, while our existing capital structure allows us the flexibility to still pursue meaningful asset investment opportunities, we are very well positioned.
Brendan Cavanagh: For the balance of 2025, SBA will be focused on operational execution driving efficiencies in our processes, particularly through the incorporation of new technologies and systems enhancing.
Brendan Cavanagh: Enhancing our relevance to and relationships with our largest customers and bringing our balance of entrepreneurial spirit and informed financial discipline to capital allocation and expansion.
Brendan Cavanagh: Some of these focus areas may seem straightforward or mundane, but our ability to excel in each of these areas will be what sets SBA apart from our peers.
Brendan Cavanagh: The wireless ecosystem, we will continually evolve providing new opportunities for those willing to take them I believe we have the people experience and DNA makeup to maximize these opportunities.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Before turning it over to Mark I'd like to thank our team members, who represent that experience in DNA.
Speaker Change: Our team members represent SBA, well everyday and continually put the goals and objectives of our customers first I look forward to sharing our progress with you throughout the balance of the year with that I'll turn it over to Mark who will provide additional details on our results. Thank you Brendan.
Speaker Change: The solid start to the year, we were increasing our full year outlook for all key metrics, including <unk> revenue telecast through adjusted EBITDA.
Speaker Change: <unk> per share as compared to our initial 2025 guidance.
Speaker Change: The primary drivers of these increases include <unk> nine first quarter resort.
Speaker Change: Losing a small portion of the acquisition of towers from medical earlier than expected.
Speaker Change: An improved outlook for services.
The highest <unk> revenue due to the extension of some leases.
Speaker Change: The reduction in share count from recently completed buybacks.
Speaker Change: First quarter domestic organic leasing revenue growth over the first quarter of last year was five 2% on a gross basis, 1% on a net basis.
Operator: There will be a Q&A session at the end of prepared remarks. At that time, you can dial pound two on your phone to enter the question queue.
Traded that confidence by repurchasing 583000 shares of our stock at an average price per share of $210 87.
Speaker Change: Including four 2% of churn.
Mark DeRussy: With that, I'll turn the call over to Mark DeRussy, Vice President of Finance. Please go ahead. Thank you.
We have also announced today that our board has approved a new $1 $5 billion share repurchase plan.
Speaker Change: $20 million of our first quarter churn was related to the sprint constant condition, which we anticipate to be approximately $50 million to $52 million for the full year 2025.
Mark DeRussy: Good evening, and thank you for joining us for SBA's first quarter 2025 earnings conference call. Here with me today are Brendan Cavanagh, our President and Chief Executive Officer, and Marc Montagner, our Chief Financial Officer. Some of the information we will discuss on this call is forward looking, including but not limited to any guidance for 2025 and beyond. In today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, April 28, that we have no obligation to update any forward looking statement we may make.
Supporting our ability to return significant value to our shareholders.
The combination of this plan and our industry, leading dividend growth provide a direct line of shareholder returns, while our existing capital structure allows us the flexibility to still pursue meaningful asset investment opportunities, we are very well positioned.
Speaker Change: Our previously provided estimate of aggregate sprint related churn over the next seven years remains unchanged.
Speaker Change: And 2025, we anticipate approximately $50 million in 2026, and 20 million thereafter.
For the balance of 2025, SBA will be focused on operational execution driving efficiencies in our processes, particularly through the incorporation of new technologies and systems enhancing.
Speaker Change: Known screen related domestic annual trend continues to be between one and one 5% of our domestic site leasing revenue.
Speaker Change: During the first quarter, 80% of consolidated cash site leasing revenue was denominated in U S dollars.
Enhancing our relevance to and relationships with our largest customers.
Mark DeRussy: In addition, our comments will include non-GAAP financial measures and other key operating metrics.
Speaker Change: International organic leasing revenue growth for the first quarter, which is calculated on a constant currency basis was one 6%, including five 6% of churn was seven 2% on a gross basis.
And bringing a balanced scenario spirit and informed financial discipline to capital allocation and expansion.
Mark DeRussy: The reconciliation of and other information regarding these items can be found in our Supplemental Financial Data Package, which is located on the landing page of our Investor Relations website.
Some of these focus areas may seem straightforward or mundane, but our ability to excel in each of these areas will be what sets SBA apart from our peers.
Brendan Cavanagh: With that, I'll now turn it over to Brendan. Great. Thank you, Marc, and good afternoon. 2025 got off to a good start in the first quarter. Results were broadly in line with our estimates, and activity levels continue to demonstrate a healthy level of growth. In the U.S., our mobile network operator customers continued growing their level of network investment around our macro tower site. We had our best quarter going back several years in terms of new domestic leasing business signed up during the quarter. Most encouraging, though, is that our leasing backlog also grew from December 31st, meaning we are adding new applications at a greater pace than we are signing up new business.
Speaker Change: <unk> International insurance remain elevated in the first quarter due mostly to carrier consolidation.
The wireless ecosystem, we will continually evolve providing new opportunities for those willing to take them I believe we have the people experience and DNA makeup to maximize these opportunities.
Speaker Change: We believe that post <unk> consolidation some of our international markets. The remaining wireless operators will be stronger and better positioned to invest for the long term.
Before turning it over to Mark I'd like to thank our team members, who represent that experience and DNA.
Speaker Change: We support a steady growth suite for operations in those countries.
Our team members represent SBA, well everyday and continually put the goals and objectives of our customers first I look forward to sharing our progress with you throughout the balance of the year with that I'll turn it over to Mark who will provide additional details on our results.
Speaker Change: During the first quarter of 2025, we acquired 344 sites for toward cash consideration of 58 million.
Speaker Change: Mostly related to the acquisition the acquisition of sites for many come in Nicaragua.
Brendan given the solid start to the year, we are increasing our full year outlook for all key metrics, including <unk> revenue telecast through adjusted EBITDA.
Speaker Change: The contribution to the 2025 outlook from closing earlier than previously Q4 million of site leasing revenue and twin review of total cash flow.
Brendan Cavanagh: This bodes well for the balance of the year. We also continue to see a higher percentage of our new U.S. leasing business coming from new lease co-location versus amendments to existing leases. and our U.S.-based services business had a great quarter as well, with activity levels and results ahead of our expectations. We also saw our new business backlog grow for services during the quarter. As a result of the strong start to the year and our growing backlog, we have increased our full year outlook for service. In our international markets, we also saw a positive start to the year with solid leasing activity.
<unk> per share as compared to our initial 2025 guidance.
Speaker Change: The remaining 6700 sites related to the American transaction, we remain under contract.
Primary drivers of these increases include <unk> quarter resort, the closing of a small portion of the acquisition of towers from medical earlier than expected.
Speaker Change: Guidance continues to assume a September for his closing date.
Speaker Change: The closing date is dependent upon regulatory approval and other requirement and may differ from this date. We also added 67, new sites in the quarter, mostly outside of the U S.
The improved outlook for services slightly higher Street, Nigel revenue due to the extension of some leases and the reduction in the share count from recently compete buybacks.
Speaker Change: Our balance sheet remains strong.
First quarter domestic organic leasing revenue growth over the first quarter of last year was five 2% on a gross basis, 1% on a net basis, including 2% of churn.
Speaker Change: Total liquidity from both cash on the balance sheet and a fully undrawn $2 billion revolver.
Speaker Change: The recent share buybacks, we've funded Fujian was excess cash it didn't require any borrowing.
Brendan Cavanagh: In addition, elevated CPI rates in some of our markets have presented the potential for better existing lease escalations during the year. Across our markets, our customers have many network goals, which will require continued investment. Macro sites remain the most effective and cost-efficient way to advance wireless coverage and deploy new spectrum and technology. Our portfolio is well positioned to capture growth from these initiatives over the next several years. In addition to our operational achievements during the quarter, we also made progress in the areas of portfolio management and capital allocation.
$20 million of our first quarter churn was related to the sprint consolidation, which we anticipate to be approximately $50 million to $52 million for the full year 2025.
Speaker Change: Our current leverage of 664 turns net debt to adjusted EBITDA remains near historical low.
Speaker Change: At the end of the first quarter, our weighted average interest which was three 7% of course.
Our previously provided SDN aggregate spring related churn over the next seven years, we mean and change.
Speaker Change: Standing debt and our weighted average maturity was approximately four years.
Beyond 2025, we anticipate approximately $50 million in 2026 and $20 million thereafter.
Speaker Change: Including the impact of our current interest rate hedge the interest rate on 98% of our current outstanding debt is fixed.
Non screen related domestic annual trend continues to be between one and one 5% of our domestic site leasing revenue.
Speaker Change: Finally, our next debt maturities are $750 million ABL security due in January of 2026.
Brendan Cavanagh: During the quarter, we completed our exit from the Philippines and on last quarter's earnings call, we announced our planned exit from Colombia. We were able to finalize the required steps to complete this exit and formally sold our Colombian operations prior to quarter end. These steps have allowed us to improve our focus and allocation of resources. We continue to evaluate all of our operations to identify ways to improve our market positioning or gain further synergy. In addition, during the first quarter, we closed on a small portion of the Central American sites previously put under a purchase agreement with Millicom International.
During the first quarter, 80% of consolidated cash site leasing revenue was denominated in U S dollars.
Speaker Change: Now, let me turn the call over to Mark. Thank you Mark we ended the quarter with $12 5 billion of total debt and $11 8 billion of net debt.
International organic leasing revenue growth for the first quarter, which is calculated on a constant currency basis was one 6% including.
Speaker Change: As Mark mentioned, our net debt to annualized adjusted EBITDA leverage ratio was six four times below the low end of our target range. Our first quarter net cash interest coverage ratio of adjusted EBITDA to net cash interest expense remained strong at four nine times during the second quarter, we repurchased 583000 shares of our common stock for 123.
Including five 6% of churn or seven 2% on a gross basis.
Total international churn remain elevated in the first quarter due mostly to carrier consolidation.
We believe that post <unk> consolidation in some of our international markets. The remaining wireless operators will be stronger in a better position to invest for the long term.
Speaker Change: At an average price per share of $210 87 on April 27th 2025, the company's board of directors authorized a new $1 $5 billion share repurchase plan, replacing the prior plan that was authorized in October of 2021, which had a remaining authorization of $82 million.
Brendan Cavanagh: While there are numerous regulatory and diligence steps remaining, we will continue to explore opportunities for additional early closings.
This will support steady growth suite for operations in those countries.
During the first quarter of 2025, we across 344 sites for total cash consideration of 58 million.
Brendan Cavanagh: Against the backdrop of the current uncertain macroeconomic environment and the resulting market volatility, the stability and consistency of our company and our business stand out. We have not experienced, nor do we foresee, any direct impacts from the current tariff policy. Our business continues to generate steady cash flow, and the underlying needs of our customers remain robust. As a result, we have significant confidence in our company and our future. Subsequent to quarter end, we have demonstrated that confidence by repurchasing 583,000 shares of our stock at an average price per share of $210.87. We have also announced today that our board has approved a new $1.5 billion share repurchase plan, supporting our ability to return significant value to our shareholders.
Speaker Change: This new plan authorizes the company to purchase from time to time up to $1 $5 billion of our outstanding class a common stock. The new plan has no time deadline and will continue until otherwise modified or terminated by the board of directors. In addition, during the first quarter, we declared and paid a cash dividend of a $122 3 million or $1 11 per <unk>.
Mostly related to the acquisition of positional sites for many come in Nicaragua.
The contribution to the 2025 outlook from closing earlier than previously assumed is 4 million of site leasing revenue and twinning of telecast.
The remaining 6700 sites related to the medical transaction, we remain under contract and guidance continues to assume a September for his closing date.
Speaker Change: Sure and today, we announced that our board of directors declared a quarterly dividend of $1 one dollar I'm sorry.
Speaker Change: $1 11 per share payable on June 17, 2025 to shareholders of record as of the close of business on May 22025. This dividend represents an increase of approximately 13% over the dividend paid in the second quarter of 2024, and approximately 35% at the midpoint of our full year <unk> outlook operator.
The closing date is dependent upon regulatory approval and other requirements and may differ from this date. We also added 67, new sites in the quarter, mostly outside of the U S.
Our balance sheet remains strong with ample liquidity from both cash on the balance sheet and a fully undrawn $2 billion revolver.
Speaker Change: We are now ready for questions.
Brendan Cavanagh: The combination of this plan and our industry-leading dividend growth provide a direct line of shareholder returns, while our existing capital structure allows us the flexibility to still pursue meaningful asset investment opportunities. We are very well positioned.
The recent share buybacks funded fully with excess cash and did not require any borrowing.
Speaker Change: As we move to Q&A. Please dial pound two to enter the question queue. Your name and affiliation will be announced when it's your turn to speak and your line will be muted you may ask a question at that time and our first question comes from Jim Schneider of Goldman Sachs.
Our current leverage of six <unk>.
Six four turns net debt to adjusted EBITDA remains near historical low.
As of the end of the first quarter.
Brendan Cavanagh: For the balance of 2025, SBA will be focused on operational execution, driving efficiencies in our processes, particularly through the incorporation of new technologies and systems. Enhancing our relevance to and relationships with our largest customers. And bringing the balance of entrepreneurial spirit and informed financial discipline to capital allocation and expansion. Some of these focus areas may seem straightforward or mundane, but our ability to excel in each of these areas will be what sets SBA apart from our peers. The wireless ecosystem will continually evolve, providing new opportunities for those willing to take them. I believe we have the people, experience, and DNA makeup to maximize these opportunities.
Weighted average interest rate was three 7% across auto spending debt and our weighted average maturity was approximately four years.
Speaker Change: Okay.
Speaker Change: Good afternoon, and thanks for taking my question.
Speaker Change: First.
Speaker Change: On the.
Speaker Change: The overall carrier environment.
Including the impact of our current interest rate hedge the interest rate on 98% of our current outstanding debt is fixed.
Speaker Change: Sounds like fairly constructive commentary on the direction of travel here, maybe just was wondering if you could comment on any updates in terms of carriers plans in the U S and their willingness to devote any capacity to fixed wireless access as far as you can see at this point and then secondly on the capital allocation front.
And finally, our next debt maturity to $750 million ABS securities due in January of 2026.
Now, let me turn the call over to Mark. Thank you Mark we ended the quarter with $12 5 billion of total debt and $11 8 billion of net debt.
Speaker Change: No buyback.
Speaker Change: $1 5 billion was encouraging to see.
As Mark mentioned, our net debt to annualized adjusted EBITDA leverage ratio was six four times below the low end of our target range. Our first quarter net cash interest coverage ratio of adjusted EBITDA to net cash interest expense remained strong at four nine times during the second quarter, we repurchased 583000 shares of our common stock for 120.
Speaker Change: How are you thinking about just the overall environment for capital allocation at this point rates are obviously, probably a little bit higher.
Speaker Change: Then you might have thought.
Brendan Cavanagh: Before turning it over to Marc, I'd like to thank our team members who represent that experience in DNA. Our team members represent SBA well every day and continually put the goals and objectives of our customers first. I look forward to sharing our progress with you throughout the balance of the year.
Speaker Change: Six 912 months ago, how are you thinking about the refinancing needs potentially for 2026.
Speaker Change: And the level of buybacks you'd want to do right now.
$3 million at an average price per share of $210 87 on April 27th 2025 copies Board of directors authorized a new $1 $5 billion share repurchase plan, replacing the prior plan that was authorized in October of 2021, which had a remaining authorization of 82 million.
Speaker Change: I mean, nothing changes in the rates environment today. Thank you.
Speaker Change: Sure Jim.
Marc Montagner: With that, I'll turn it over to Marc, who will provide additional details on our results. Thank you, Brandon. Given the solid start to the year, we're increasing our full-year outlook for all key metrics, including site leasing revenue, tower cash flow, adjusted EBITDA, FFO and FFO per share as compared to our initial 2025 guidance. The primary drivers of these increases include in-line first-quarter results, the closing of a small portion of the acquisition of towers from Medicom earlier than expected, An improved outlook for services, slightly higher straight line revenue due to the extension of some leases, and a reduction in the share count from recently completed buybacks.
Speaker Change: On the carrier environment overall as you heard in our prepared comments and in our press release.
Speaker Change: Things are generally pretty positive here in the U S. There's a lot of work to be done we are seeing a greater amount of leasing activity than we've seen over the last two years. So broadly we feel very positive about that.
This new plan authorizes the company to purchase from time to time up to $1 $5 billion of our outstanding class a common stock a new plan has no time deadline and will continue until otherwise modified or terminated by the board of directors. In addition, during the first quarter, we declared and paid a cash dividend of $122 3 million or $1 11.
Speaker Change: And the fact that the backlogs continue to grow as an indication that there is still a lot of work to be done and so that's part as I said in my comments, that's perhaps the most encouraging thing in terms of the specifics of what they are focused on and fixed wireless access.
For sure and today, we announced that our board of directors declared a quarterly dividend of $1, one dollar I'm sorry, but.
Speaker Change: Our belief is that fixed wireless access is certainly a contributing factor when you look at our customers' recent reports on their own results you saw that that's where a significant portion of their subscriber growth is coming from we know that that.
Marc Montagner: First quarter domestic organic leasing revenue growth over the first quarter of last year was 5.2% on a gross basis, 1% on a net basis, including 4.2% of churn. $20 million of our first quarter churn was related to the spring consolidation, which we anticipate to be approximately $50 to $52 million for the full year 2025. are previously provided estimates of aggregate sprint-related churn over the next seven years remain unchanged. Beyond 2025, we anticipate approximately $50 million in 2026 and $20 million thereafter. Non-spring-related domestic annual return continues to be between 1% and 1.5% of our domestic site leasing revenue.
$1 11 per share payable on June 17, 2025 to shareholders of record as of the close of business on May 22025. This dividend represents an increase of approximately 13% over the dividend paid in the second quarter of 2020 for approximately 35% at the midpoint of our full year <unk> outlook operator.
Speaker Change: It is a very heavy broadband consuming.
Speaker Change: Product and therefore, it drives a lot of usage of the capacity of the network and therefore would be a driver of the need for incremental.
We are now ready for questions.
Speaker Change: Investment in their networks and infrastructure so.
As we move to Q&A, please dial pound two to enter the question queue.
Speaker Change: Can't tell you specifically because it's using the same.
Name and affiliation will be announced when it's your turn to speak and your line will be uneven you may ask a question at that time and our first question comes from Jim Schneider of Goldman Sachs.
Speaker Change: Frequencies and spectrum generally speaking as their mobile network, but we do think it is a driver.
Speaker Change: There are many drivers so we just feel good about the pickup in activity on the second question around capital allocation.
Okay.
Good afternoon, Thanks for taking my question.
First of.
Speaker Change: The rates are certainly.
On the <unk>.
Marc Montagner: During the first quarter, 80% of consolidated cash-side leasing revenue was denominated in U.S. dollars. International organizing leasing revenue growth for the first quarter, which is calculated on a constant currency basis, was 1.6% net, including 5.6% of churn, or 7.2% on a gross basis. Total international churn remain elevated in the first quarter, mostly to carry a consolidation. We believe that post-carrier consolidation in some of our international markets, the remaining wireless operators will be stronger in a better position to invest for the long term. This will support a steady growth rate for our operation in those countries.
Speaker Change: Staying higher for longer.
The overall carrier environment.
Sounds like fairly constructive commentary on the direction of travel here, maybe just was wondering if you could comment on any updates in terms of carriers plans in the U S and their willingness to devote any capacity to fixed wireless access as far as you can see at this point and then secondly on the capital allocation front.
Speaker Change: It's hard to say for sure obviously in the current environment as to when we'll see rates moving lower if we will see rates moving lower but our positioning is very good as you heard our leverage position today is well below where we've historically carried.
Speaker Change: Our leverage balance and as a result that gives us a lot of flexibility we did buy back shares because we saw the opportunity to do it here in April.
Youll buyback.
$1 5 billion was encouraging to see.
How are you thinking about just the overall environment for capital allocation at this point rates are obviously, probably a little bit higher.
Speaker Change: Some dislocation around some of the announcements that were affecting the market more broadly we took advantage of that and I think if we see additional opportunities will continue to take advantage of it the new plan that was put in place by our board as evidenced that we expect to be allocating capital towards share repurchases, but as we said in the past you should expect.
Then you might have thought.
Six 912 months ago.
Are you thinking about the refinancing needs potentially for 2026.
And the level of buybacks you'd want to do right now.
Marc Montagner: During the first quarter of 2025, we acquired 344 sites for total cash consolidation of $58 million, mostly related to the acquisition of sites for Minicom in Nicaragua. The contribution to the 2025 outlook from closing earlier than previously assumed is $4 million of site leasing revenue and $3 million of tower cash flow. The remaining 6,700 sites related to the Medicom transaction remain under contract and the guidance continues to assume a September 1st closing date. The closing date is dependent upon regulatory approval and other requirements and may differ from this date. We also built 67 new sites in a quarter, mostly outside of the U.S.
Nothing changes in the rates environment today. Thank you.
Speaker Change: That our approach to capital allocation should be really a mix of buybacks new asset investments, where we see good opportunities and debt repayments. In addition of course to our dividend. So it hasnt really changed and we're pretty comfortable with our positioning to be able to be flexible and adjust as opportunities present themselves.
Sure Jim So on the carrier environment overall as you heard in our prepared comments and in our press release.
Things are generally pretty positive here in the U S. There's a lot of work.
Work to be done we are seeing a greater amount of leasing activity than we've seen over the last two years. So broadly we feel very positive about that.
Speaker Change: Yes.
Speaker Change: Alright moving on.
Speaker Change: Jonathan Atkin from RBC capital markets.
And the fact that the backlogs continue to grow as an indication that there is still a lot of work to be done and so that's part as I said in my comments, that's perhaps the most encouraging thing in terms of the specifics of what they are focused on and fixed wireless access our belief is that fixed wireless access is certainly a contributing factor when you look at our customers.
Speaker Change: King.
Speaker Change: Hey, John Thanks, so much.
Speaker Change: Curious about.
Speaker Change: Just given what you said about.
Speaker Change: The current activity level of the backlog, where do you think you might end the year on a run rate basis for U S leasing any kind of a proxy metrics you could share with us.
Marc Montagner: Our balance sheet remains strong, and we have ample liquidity from both cash on the balance sheet and a fully undrawn $2 billion revolver. The recent share buybacks were funded fully with excess cash and did not require any borrowing. Our current average of 6.4 turns net debt to adjusted EBITDA remains near historical low. At the end of the first quarter, our weighted average interest rates was 3.7% across our total outstanding debt, and our weighted average maturity was approximately 4 years. Including the impact of our current interest rate hedge, the interest rate on 98% of our current outstanding debt is fixed.
Recent reports on their own results you saw that that's where a significant portion of their subscriber growth is coming from we know that that.
Speaker Change: Yeah, I mean, it's a little hard to say absolutely at this point because I've got to see how things continue to build but it certainly would expect to end at a higher level than we're at in terms of what we produced here in the first quarter and that was approximately $9 million from new leases and amendments here in the U S side definitely expect to be higher than that.
It is a very heavy broadband consuming.
Product and therefore, it drives a lot of usage of the capacity of the network and therefore would be a driver of the need for incremental.
Investment in their networks and infrastructure so I.
Speaker Change: For the fourth quarter, but I'll I'll refrain from giving an absolute number there until we see how the rest of the year progresses.
I can't tell you specifically because it's using the same.
Frequencies and spectrum.
Speaker Change: And then secondly was interested just where you stand in terms of the.
Generally speaking as their mobile network, but we do think it's a driver in.
Speaker Change: Bilateral contracting relationships you have with the major customers in terms of pay by the drink or things like amendments co locations and just give us kind of a refresh on.
There are many drivers so we just feel good about the pickup in activity on the second question around capital allocation.
Marc Montagner: And finally, our next debt maturity is a $750 million ABS security due in January of 2026.
The rates are certainly.
Speaker Change: The mlps.
Staying higher for longer.
Marc Montagner: Now let me turn the call over to Marc. Thank you, Marc. We ended the quarter with $12.5 billion of total debt and $11.8 billion of net debt. As Mark mentioned, our net debt-to-annualized adjusted EBITDA leverage ratio is 6.4 times below the low end of our target range. Our first quarter net cash interest coverage ratio of adjusted EBITDA to net cash interest expense remains strong at 4.9 times.
Speaker Change: Yeah. So.
Speaker Change: We have.
It's hard to say for sure obviously in the current environment as to when we'll see rates moving lower if we'll see rates moving lower but our positioning is very good as you heard our leverage position today is well below where we've historically carried.
Speaker Change: Or should we not.
Speaker Change: <unk> had the kind of holistic MLA that you're referring to we've always had master lease agreements in place with our customers, but they usually been equipment specific in terms of.
Speaker Change: How they've paid us for the use of our site.
Our leverage balance and as a result that gives us a lot of flexibility we did buy back shares because we saw the opportunity to do it here in April.
Speaker Change: The exception to that was the deal we did with AT&T.
Marc Montagner: During the second quarter, we repurchased 583,000 shares of our common stock for $123 million in an average price per share of $210.87. On April 27, 2025, the company's Board of Directors authorized a new $1.5 billion share repurchase plan, replacing the prior plan that was authorized in October of 2021, which had a remaining authorization of $82 million. This new plan authorizes the company to purchase from time to time up to $1.5 billion of our outstanding Class A common stock. The new plan has no time deadline and will continue until otherwise modified or terminated by the Board of Directors.
Years ago, which was more of a holistic approach.
There was some dislocation around some of the announcements that were affecting the market more broadly we took advantage of that and I think if we see additional opportunities will continue to take advantage of it.
Speaker Change: We're open to a holistic approach with our customers, but it really is just dependent on the specific give and take within the negotiations around those agreements. So now.
The new plan that was put in place by our board as evidenced that we expect to be allocating capital towards share repurchases, but as we said in the past you should expect that our approach to capital allocation should be really a mix of buybacks new asset investments, where we see good opportunities and debt repayments. In addition of course to our dividend.
Speaker Change: We will just have to see how it goes but at this point the only true holistic agreement we have in the U S is the one that we signed with AT&T a couple of years ago.
Speaker Change: Thanks very much.
Sure.
Speaker Change: Our next call comes from.
Speaker Change: <unk> Levi UBS.
And so it hasnt really changed and we're pretty comfortable with our positioning to be able to be flexible and adjust as opportunities present themselves.
Speaker Change: Yes.
Great. Thank you a couple of quick questions.
Marc Montagner: In addition, during the first quarter, we declared and paid a cash dividend of $122.3 million, or $1.11 per share. And today, we announced that our Board of Directors declared a quarterly dividend of $1.11 per share, payable on June 17, 2025, to shareholders of record as of the close of business on May 22, 2025. This dividend represents an increase of approximately 13% over the dividend paid in the second quarter of 2024, and approximately 35% of the midpoint of our full-year AFFO outlook.
Speaker Change: First can you talk a little bit about what's driving higher network services business and versus what you had expected earlier in the year and when we look at domestic churn it looks like it picked up a little bit excluding spreads what were some of the drivers for that and maybe.
Yes.
Okay.
Sure Alright, moving on.
Jonathan Atkin from RBC capital markets.
And.
Speaker Change: Maybe on the M&A front, a couple of tower portfolios.
Hey, thanks.
So I was curious about just given what you said about.
Speaker Change: Those are available for sale in Canada that you have some exposure to the region, they're slower growth market, but can you provide some color on how you would approach M&A in Canada. Thank you.
The current activity level of the backlog, where do you think you might end the year.
Run rate basis for U S leasing any kind of a proxy metrics you could share with us.
Operator: Operator, we are now ready for questions. As we move to Q&A, please dial pound two to enter the question cube. Your name and affiliation will be announced when it's your turn to speak and your line will be unmuted. You may ask your question at that time.
Speaker Change: Sure.
Speaker Change: So first question was on services and why it's growing faster than we expected really it's as simple as one of our customers in particular, just operating at a much faster pace than we had even expected here in terms of their network.
Yeah, I mean, it's a little hard to say absolutely at this point because I've got to see how things continue to build but it certainly would expect to end at a higher level than we're at.
In terms of what we produced here in the first quarter and that was approximately $9 million from new leases and amendments here in the U S side definitely expect to be higher than that.
Jim Schneider: And our first question comes from Jim Schneider, Goldman Sachs. Good afternoon, thanks for taking my question. Maybe first, on the overall carrier environment, it sounds like fairly constructive commentary on the direction of travel here. Maybe I just was wondering if you could comment on any updates in terms of carriers' plans in the U.S. and their willingness to devote any capacity to fixed wireless access as far as you can see at this point.
Speaker Change: Investments in so.
Speaker Change: We're just seeing them.
For the fourth quarter, but I'll I'll refrain from giving you an absolute number there until we see how the rest of the year progresses.
Speaker Change: Frankly, just moved quicker, it's kind of that simple and I would expect based on backlogs growing that they will continue to keep.
And then secondly was interested just where you stand in terms of the.
Speaker Change: Fast pace during the rest of the year and Thats why we raised our outlook for the full year. So we'll continue to try to meet their needs and keep up with them.
The bilateral contracting relationships you have with major customers in terms of pay by the drink or things like amendments co locations and just give us kind of a refresh on an MLA.
Speaker Change: On the U S. Churn you said it was growing it's basically in line with what we put out at the beginning of the year. So I don't think it's it's.
Yeah. So.
Jim Schneider: And then secondly, on the capital allocation front, the buyback of $1.5 billion was encouraging to see. How are you thinking about just the overall environment for capital allocation at this point? Rates are obviously probably a little bit higher than you might have thought 6, 9, 12 months ago. How are you thinking about the refinancing needs potentially for 2026 and the level of buybacks you'd want to do right now? Assuming nothing changes in the rates environment today. Thank you.
Speaker Change: Beyond.
We have.
Speaker Change: What our expectations were I don't know if you're asking about.
Or should we not typically had the kind of holistic MLA as that you're referring to we've always had master lease agreements in place with our customers, but they usually been equipment specific in terms of.
Speaker Change: Year over year.
Speaker Change: But no I.
Speaker Change: I guess.
Speaker Change: Yeah, it's within the range you've given it just picked up slightly versus the last two quarters, maybe it has.
How they've paid us for the use of our site.
Speaker Change: To be around 1%.
The exception to that was the deal we deal with AT&T.
Speaker Change: I think that's really just a timing thing if you look at our full year outlook, we didn't change it and I think the implied percentage for the full year for the U S is around one 2%. So it was one 4% in the first quarter. So you should take that to imply that it will be a little bit lower at other points during the rest of the year.
Years ago, which was more of a holistic approach.
We're open to a holistic approach with our customers, but it really is just dependent on the specific give and take within the negotiations around those agreements. So.
Brendan Cavanagh: Sure, Jim. So on the carrier environment overall, as you heard in our prepared comments and in our press release, things are generally pretty positive here in the US. There's a lot of work to be done. We're seeing a greater amount of leasing activity than we've seen over the last two years. So broadly, we feel very positive about that. And the fact that the backlogs continue to grow is an indication that there's still a lot of work to be done.
We will just have to see how it goes but at this point the only true holistic agreement we have in the U S is the one that we signed with AT&T a couple of years ago.
Speaker Change: And then.
On the Canada side really we approach that the way we approach most major M&A opportunities and portfolios that come to market anywhere are really around the globe, particularly obviously in the markets, where we already have operations. We will look thoroughly at any of those opportunities and if we can see value there.
Thanks very much.
Sure.
Yeah.
Our next call come from.
<unk> Levi UBS.
Okay.
Speaker Change: And see it at a price point that we think.
Great. Thank you a couple of quick questions.
Brendan Cavanagh: And so that's, as I said in my comments, that's perhaps the most encouraging thing. In terms of the specifics of what they're focused on and fixed wireless access, you know, our belief is that fixed wireless access is certainly a contributing factor. When you look at our customers' recent reports on their own results, you saw that that's where a significant portion of their subscriber group is coming from. We know that that is a very heavy broadband consuming. product and therefore it drives a lot of usage of the capacity of the network and therefore would be a driver of the need for incremental investment in their networks and infrastructure.
First can you talk a little bit about what's driving higher network services business and versus what you had expected earlier in the year and when we look at domestic churn it looks like it picked up a little bit excluding spreads what were some of the drivers for that and maybe on the M&A front a couple of power portfolio.
Speaker Change: Makes sense and is competitive and is better then we'll certainly we'll be interested in pursuing that I think you've heard us talk about our approach to our international markets over the last year or so in terms of what we'd like our positioning to be obviously in Canada. If you have the <unk>.
Speaker Change: Mobile network operators up there divesting of their towers.
So it's one of those are available for sale in Canada that you have some exposure to the region, they're slower growth market, but can you provide some color on how you would approach M&A in Canada. Thank you.
Speaker Change: Ever ends up buying those will certainly be in a lead position in terms of their size and scale in the market so that would be something.
Speaker Change: That we would consider in our analysis.
Sure.
Speaker Change: Of any deal but at this stage you should expect that we will look at any opportunities that come to market in.
First question was on services and why it's growing faster than we expected really it's as simple as one of our customers in particular.
Brendan Cavanagh: So, you know, I can't tell you specifically because it's using the same frequencies and spectrum, generally speaking, as their mobile network, but we do think it's a driver and there are many drivers. So we just feel good about the pickup and activity.
Speaker Change: I can't say, whether it will work or not but if it does that's something we will certainly pursue.
Operating in a much faster pace than we had even expected here in terms of their network investments.
Speaker Change: Got it thank you.
Walter: Next caller, Walter Paycheck light shed.
Investments in so.
We're just seeing them.
Frankly, just moved quicker, it's kind of that simple and I would expect based on backlogs growing that they will continue to keep a.
Brendan Cavanagh: On the second question around capital allocation, you know, rates are certainly staying higher here for longer. You know, it's hard to say for sure, obviously, in the current environment as to when we'll see rates moving lower, if we'll see rates moving lower. But our positioning is very good. As you heard, our leverage position today is well below where we've historically carried our leverage balance. And as a result, that gives us a lot of flexibility. We did buy back shares because we saw the opportunity to do it here in April as there was some dislocation around some of the announcements that were affecting the market more broadly.
Walter: Well.
Fast pace during the rest of the year and Thats why we raised our outlook for the full year. So we'll continue to try to meet their needs and keep up with them.
Speaker Change: Mr Project. Your line is unneeded, please make sure your phone isn't muted.
Speaker Change: What about now.
On the U S. Churn you said it was growing it's basically in line with what we put out at the beginning of the year. So I don't think it's it's beyond.
Speaker Change: Okay now I hear you now.
Speaker Change: Sorry about that.
Speaker Change: I guess I'll ask about I.
Speaker Change: I guess I'll ask about our friends at dish.
What our expectations were I don't know if you're asking about.
Speaker Change:
Speaker Change: I think there were some press reports about them wanting to lease or looking to lease their spectrum I think I might've been some rural areas and maybe Theres no impact there but.
Year over year.
But no it's not I guess is it.
Yeah, it's within the range you've given it just picked up slightly versus the last two quarters maybe.
Speaker Change: In general just can you just characterize kind of.
Brendan Cavanagh: We took advantage of that. And I think if we see additional opportunities, we'll continue to take advantage of it. The new plan that was put in place by our board is evidence that we expect to be allocating capital towards share repurchases. But as we've said in the past, you should expect that our approach to capital allocation should be really a mix of buybacks, new asset investments where we see good opportunities, and debt repayments, in addition, of course, to our dividends. So it hasn't really changed. And we're pretty comfortable with our positioning to be able to be flexible and adjust as opportunities present themselves.
Speaker Change: You know what they've told you about some of their longer term plans what role you may play and then Alternatively I suppose.
Just to be around 1%.
I think that's really just a timing thing if you look at our full year outlook, we didn't change it and I think the implied percentage for the full year for the U S is around one 2%. So it was one 4% in the first quarter. So you should take that to imply that it will be a little bit lower.
Speaker Change: Has there been any inbounds from cable companies who might be considering.
Speaker Change: Spectrum, that's available in the market.
Speaker Change: To redeploy on their own I would guess that they want to do a little due diligence ahead of that to see what.
Their points during the rest of the year.
Speaker Change: What type of expenses that they wanted to take on so basically the same question about cash.
And then.
On the Canada side really we approach that the way we approach most major M&A opportunities portfolios come to market anywhere are really around the globe, particularly obviously in the in the markets, where we already have operations. We will look thoroughly at any of those opportunities and if we can see value there.
Speaker Change: Yeah, well, you're probably not going to love my answer because theres not a lot of detail to offer there ill take the cable one first there really hasn't been much in the way of direct conversation, we talked to them periodically, but theres no.
Brendan Cavanagh: Thank you.
Operator: All right, moving on.
Jonathan Atkin: to Jonathan Atkin from RBC Capital Markets. Hey, John. Thanks.
Speaker Change: Theres nothing really along the lines of what you just described so I think until they have something firm are in hand, they frankly don't really need to spend a lot of time talking to the tower companies, just yet, but we'll see.
Let's see at a price point that we think.
Makes sense and is competitive and is better then we'll certainly we'll be interested in pursuing that I think you've heard us talk about our approach to our international markets over the last year or so in terms of what we like our positioning to be obviously in Canada. If you have the mobile network operators up there divesting up there.
Brendan Cavanagh: So I was curious about, just given what you said about The current activity level, the backlog, where do you think you might end the year on a run rate basis for U.S. leasing, any kind of approximate metrics you could share with us? Yeah, I mean, it's a little hard to say absolutely at this point, because I've got to see how things continue to build. But it certainly would expect to end at a higher level than we're at, in terms of what we produced here in the first quarter. And that was approximately $9 million from new leases and amendments here in the US.
Speaker Change: You can understand architecture to interject on that one before you go back Sir.
Speaker Change: Even on <unk>, because I think Comcast has.
Speaker Change: <unk> mentioned at least in some investor meetings that.
Speaker Change: The initial attempt to <unk> might be tied to a banner that didn't really deliver they moved to I think it was samsung or something.
Our towers.
We ended up buying those will certainly be in a lead position in terms of their size and scale in the market so that could be something.
Speaker Change: No a lot of that is kind of in home, but I thought there was an opportunity, especially with the current FCC to increase the power.
That we would consider in our analysis.
Speaker Change: Ability of cigarettes for them to start hitting towers no given the early indications of them looking at trying to offload the rising expense at Verizon.
Of any deal but at this stage you should expect that we will look at any opportunities that come to market in.
Brendan Cavanagh: I definitely expect to be higher than that when we get to the fourth quarter.
Brendan Cavanagh: But I'll refrain from giving an absolute number there until we see how the rest of the year progresses.
I can't say, whether it will work or not but if it does that's something we will certainly pursue.
Speaker Change: Okay.
Speaker Change: Very limited wall I mean, we have.
Brendan Cavanagh: And then secondly, we're interested just where you stand in terms of the bilateral contracting relationships you have with major customers in terms of pay by the drink or things like amendments, co-locations, and just give us kind of a refresh on MLA. Yeah, so we have not typically had the kind of holistic MLAs that you're referring to. We've always had master lease agreements in place with our customers, but they've usually been equipment specific in terms of how they've paid us for the use of our sites. The exception to that was the deal we did with AT&T a couple of years ago, which was more of a holistic approach.
Speaker Change: Have conversations with them, we've actually talked with them about CVR IRS over the years at various times, but.
Got it thank you.
Yeah.
Next caller, Walter Paycheck light shed.
Speaker Change: When I look at it from a materiality standpoint to us.
Speaker Change: It's really completely immaterial.
Speaker Change: Got it and then on the flip side like the dish what what are you.
Have you seen this stuff about them leasing out, especially in rural does that touch any part of your contract and otherwise what are they saying in terms of the intermediate term plans lets call. It.
Well.
Mr Project Your line isn't muted please make sure your phone isn't muted.
Speaker Change: Yeah at this stage they have there hasnt really been any specific conversations in terms of the leasing if they do lease their spectrum.
What about now.
Now I hear you now.
Sorry about that I.
Speaker Change: Their contract doesn't allow for that to change to send somebody else's hands. So they would have to be a conversation and we've not had that conversation as of yet.
I guess I'll ask about I guess I'll ask about our friends at dish.
I think there were some press reports about them wanting to lease or looking to lease their spectrum I think I might've been from rural areas. So maybe there is no impact there but.
Speaker Change: In terms of just their broader commentary and feedback with us we work pretty closely with them.
Brendan Cavanagh: We're open to a holistic approach with our customers, but it really is just dependent on the specific give and take within the negotiations around those agreements. So, you know, we'll just have to see how it goes. But at this point, the only true holistic agreement we have in the U.S. is the one that we signed with AT&T a couple of years ago.
In general just can you just characterize kind of.
Speaker Change: On the operations side are very clear about their desire to continue to pursue their their stand alone Greenfield network.
What they've told you about some of their longer term plans what role you may play and then Alternatively I suppose.
Speaker Change: At this stage, obviously things are much slower in terms of leasing activity with them.
Has there been any inbounds from cable companies who might be considering.
Speaker Change: So we're hopeful that that changes, but at this stage.
Brendan Cavanagh: Thanks very much.
Spectrum, that's available in the market and we want to redeploy on their own I would guess that they want to do a little due diligence ahead of that to see.
Speaker Change: It's really just meeting some very basic needs. There is some basic upgrades going on they are signing a few leases here and there, but it's pretty small at this stage so.
Batya Levi: Our next call comes from Batya Levi, UBS. Great, thank you. A couple quick questions.
What type of expenses that if they wanted to take on so basically the same question about that.
Speaker Change: I don't have much feedback for you there either.
Yeah, well, you're probably not going to love my answer because theres not a lot of detail to offer there ill take the cable one first there really hasn't been much in the way of direct conversation, we talked to them periodically, but theres no.
Speaker Change: I'll be interested to hear what they have to say on their call.
Brendan Cavanagh: First, can you talk a little bit about what's driving higher network services business versus what you had expected earlier in the year? And when we look at domestic churn, it looks like it's picked up a little bit, excluding sprints. What were some of the drivers for that?
Speaker Change: Got it thanks, sorry for the technical difficulties.
Speaker Change: Thanks.
Speaker Change: Okay, moving on to Michael Rollins from Citi.
Theres nothing really along the lines of what you just described so I think until they have something firm are in hand, they frankly don't really need to spend a lot of time talking to the tower companies, just yet, but we'll see.
Brendan Cavanagh: And maybe on the M&A front, a couple of power portfolios are available for sale in Canada. You have some exposure to the region there, slower growth market, but can you provide some color on how you would approach M&A in Canada? Thank you. Sure. So, first question was on services and why it's growing faster than we expected. Really, it's as simple as one of our customers in particular just operating at a much faster pace than we had even expected here in terms of their network investments. And so, you know, we're just seeing them, frankly, just move quicker.
Michael Rollins: Thanks, and good afternoon, two topics if I could first.
Michael Rollins: On the international front, just curious if you could share an update on how the visibility is trending for organic growth as well as the churn dynamics specifically in Latin America, both for this year and over the next few years.
You can understand our connected interject on that where before you go back to.
Even on <unk>, because I think Comcast has.
Maybe mentioned at least in some investor meetings that.
The initial attempt to see your estimate of when the tide was banner that didn't really deliver they moved to I think it was samsung or something.
Michael Rollins: And then secondly, I was just looking at the supplemental and thanks for the refresh I think you began on this last quarter.
I know a lot of that is kind of in home, but I thought there was an opportunity, especially with the current FCC to increase the power.
Michael Rollins: The supplemental looking at the straight line revenue and what caught my attention was the straight line revenue is negative this year for the first time in like five years from goes more negative next year and so as these contracts on average are getting further into their life is that increase.
Ability of cigarettes for them to start hitting towers.
Even if early indications of them looking at trying to offload the rising expense at Verizon.
Brendan Cavanagh: It's kind of that simple. And I would expect, based on the backlogs growing, that they'll continue to keep a fast pace during the rest of the year. And that's why we raised our outlook for the full year. So, we'll continue to try to meet their needs and keep up with them.
Okay.
Very limited wall I mean, we have conversations with them, we've actually talked with them about CVR IRS over the years at various times, but.
The potential for some renewals and is that something that.
When I look at it from a materiality standpoint to us.
Michael Rollins: It significantly just impact the way GAAP results look over the next few years that might be different than what the schedule is currently inspiring.
It's really completely immaterial.
Brendan Cavanagh: On the U.S. churn, you said it was growing. You know, it's basically in line with what we put out at the beginning of the year. So, I don't think it's what our expectations were. I don't know if you're asking about, you know, year over year. But no, it's not, I guess. Yeah, it's within the range you've given. It's just picked up slightly versus the last two quarters. Maybe, you know, it used to be around 1%. I think that's really just a timing thing. If you look at our full year outlook, we didn't change it. And I think the implied percentage for the full year for the U.S.
Got it and then on the flip side like the dish would what are you.
Have you seen this stuff about them leasing out, especially in the world does that touch any part of your contract in an otherwise what are they saying in terms of the intermediate term plans lets call it.
Michael Rollins: Okay.
Michael Rollins: Let me try to answer that second one first of all I am thinking about it I don't think selling basically if you think about what straight line revenue as it's essentially revenue that from an accounting standpoint, we're booking but we haven't actually received the cash. So eventually it's going to all go negative and reverse out and end up with zero accumulatively.
Yes, there is at this stage they have there hasn't really been any specific conversations in terms of the leasing if they do lease their spectrum.
Their contract doesn't allow for that to change since somebody else's hands. So they would have to be a conversation and we've not had that conversation as of yet.
Michael Rollins: I think what Youre seeing is that as we've had.
In terms of just the broader commentary and feedback with US we work pretty closely with them.
Speaker Change: Les <unk>.
Michael Rollins: New leases.
Brendan Cavanagh: is around 1.2 percent. So it was 1.4 percent in the first quarter. So you should take that to imply that it will be a little bit lower at other points during the rest of the year.
Michael Rollins: And moved further in terms of the dates and the timing of our portfolio as it gets more mature and you should expect that it would move back towards that sort of breakeven point.
On the operations side are very clear about their desire to continue to pursue their their standalone Greenfield network.
Brendan Cavanagh: And then on the Canada side, you know, really we approach that the way we approach most major M&A opportunities and portfolios that come to market anywhere really around the globe, particularly, obviously, in the markets where we already have operations. We will look thoroughly at any of those opportunities. And if we can see value there and see it at a price point that we think makes sense and is competitive and is better, then we'll certainly we'll be interested in pursuing that. I think you've heard us talk about our approach to our international markets over the last year or so in terms of what we'd like our positioning to be.
Michael Rollins: Now, having said that we are signing more new leases today, and perhaps that will have an impact and as we in some cases extend out the length of the terms.
At this stage, obviously things are much slower in terms of leasing activity with them.
So we're hopeful that that changes, but at this stage.
It's really just meeting some very basic needs are some basic upgrades going on they are signing a few leases here and there but it's.
Michael Rollins: We'll see some adjustments up and actually that did happen in.
Michael Rollins: In the first quarter, we extended some leases out so that that pushes the timing, but I don't think that there's anything to be read into it other than just were a more mature business and we're in a more mature place in terms of our lifecycle with our biggest customers. So.
It's pretty small at this stage so I don't.
Have much feedback for you there either but I would I'll be interested to hear what they have to say on their call.
Got it thanks, sorry for the technical difficulties.
Michael Rollins: It's going to move up and down over time, but eventually if you went to the end of time it would be zero cumulatively.
No worries thanks.
Okay, moving on to Michael Rollins from Citi.
Brendan Cavanagh: Obviously, in Canada, if you have the mobile network operators up there divesting of their towers, whoever ends up buying those will certainly be in a lead position in terms of their size and scale in the market. So that would be something that we would consider in our analysis of any deal. But at this stage, you should expect that we'll look at any opportunities that come to market. And I can't say whether it'll work or not, but if it does, it's something we will certainly pursue.
Michael Rollins: And so the other question was on international I think.
Thanks, and good afternoon, two topics if I could go first on.
Michael Rollins: Mike right or organic growth and churn is that what your question was on dynamics exactly yes visibility into this year as well as in the next few years as you're managing through some of the Latin American churn dynamics.
On the international front, just curious if you could share an update on how the visibility is trending for organic growth as well as the churn dynamics and specifically in Latin America, both for this year and over the next few years.
Michael Rollins: Yes, we are.
Michael Rollins: Each market is a little different and in some of the markets. We have experienced churn over the last few years due to consolidations.
And then secondly, I was just looking at the supplemental.
Thanks for the refresh I think you began on this last quarter.
The supplemental looking at the straight line revenue and.
Brendan Cavanagh: Thank you.
Michael Rollins: Close to being on the other side of that in a number of markets. We are on the other side of it if you look across many of our Central American markets you had that consolidation take place you've had most of the right sizing of those leases.
What caught my attention was the straight line revenue is negative this year for the first time in like five years. Some goes more negative next year and so as these contracts on average are getting further into their life is that increase the potential for some renewals and is that something that.
Walter Piecyk: Next caller, Walter Piecyk, Light Shed. Mr. Piecyk, your line is unmuted. Please make sure your phone isn't muted. What about now? Hey, now I hear you.
Michael Rollins: And as a result of that.
Michael Rollins: So I think we're going to be in a good spot there and actually youre going to have carriers that are more interested in their network development and investing further in their networks and therefore, we can actually see some pickup in activity in that area and other spots like in Brazil, where we're really just kind of in the.
It's significantly just impact the way GAAP results look over the next few years that might be different than what the schedule was currently inspiring.
Walter Piecyk: I guess I'll ask about our friends at DISH. There was some press reports about them wanting to lease or looking to lease their spectrum. I think it might have been some rural areas, so maybe there's no impact there.
Michael Rollins: Throws of the consolidation impacts and everything that comes with that we talked about it a bunch over the last year or so everybody knows that Oi was replaced by the other three carriers, taking a piece of them each of them, but that leaves a lot of overlap and a lot of rationalization needs to take place and we're seeing that take place.
Okay.
Let me try to answer that second one first while I'm thinking about it I don't think selling basically if you think about what straight line revenue is essentially revenue that from accounting standpoint, we're booking but we haven't actually receive the cash. So eventually they're going to all go negative and report out.
Walter Piecyk: But in general, just can you just characterize kind of. you know, what they've told you about some of their longer-term plans, what role you may play, and then alternatively...
Michael Rollins: We're also still seeing the impacts of the.
Accumulatively.
What youre seeing is that as we've had.
Michael Rollins: Nextel acquisition by Claro and that was done years ago. So.
Brendan Cavanagh: host.
Brendan Cavanagh: Thank you. Has there been any inbounds from cable companies who might be considering... Well, I think that's the spectrum that's available in the market. And they want to redeploy on their own. I would guess that they want to do a little due diligence ahead of that to see what type of expenses they want to take on. So, I mean, basically, the same question about this.
Less.
New leases.
Speaker Change: Yes, I would say for the next few years, we probably will see some elevated churn internationally as a result of those dynamics.
And moved further in terms of the timing of our portfolio that gets more mature and you should expect that it would move back towards that sort of breakeven point.
Michael Rollins: And that.
Michael Rollins: Thank the hidden.
Michael Rollins: Cost of that is not just to turn it to the churn, but it is the fact that.
Now, having said that we are suffering more new leases today, and perhaps that will have an impact and as we see in some cases extend out the length of the terms.
Brendan Cavanagh: Yeah, well, you're probably not going to love my answer because there's not a lot of detail to offer there.
Michael Rollins: That rationalization takes a lot of the focus of the existing carriers and so the organic growth in terms of new lease up is also impacted I think a little bit by that so.
Brendan Cavanagh: I'll take the cable one first. There really hasn't been much in the way of direct conversation. We talk to them periodically, but there's no, there's nothing really along the lines of what you just described. So I think until they have something firmer in hand, they frankly don't really need to spend a lot of time talking to the tower companies just yet. But we'll see that that develops.
We will see some adjustments up and actually that did happen.
In the first quarter, we extended some leases out so that that pushes the timing, but I don't think that there's anything to be read into it other than just were a more mature business and we're in a more mature place in terms of our lifecycle with our biggest customers. So.
Michael Rollins: I'd say the next few years will probably be a slower growth period in Brazil in particular, which is the lion's share of our international business, but as we move beyond that based on what we've seen in other markets, including the U S. By the way I would expect there to be an acceleration of leasing activity as we start to get further down the maturity cycle of that process.
Brendan Cavanagh: Can I just interject on that one before you go back to it? Sure. Even on CBRS, because I think Comcast has may mention, at least in some investor meetings, that, you know, the initial attempt with CBRS might have been tied to a vendor that didn't really deliver. They moved to, I think it was Samsung or something. And I know a lot of that's kind of in-home, but I thought there was an opportunity, especially with the current FCC, to increase the power, you know, ability of CBRS for them to start hitting towers. No even early indications of them looking to try and offload the rising expense at Verizon.
It's going to move up and down over time, but eventually if you went to the end of time it would be zero cumulatively.
Michael Rollins: Thanks.
And so the other question was on international I think.
Michael Rollins: Sure.
Speaker Change: And before we move onto our next caller just a reminder to our audience if you'd like to ask a question and answer the question queue. Please dial two on your telephone keypad.
Mike right or organic growth and churn is that what your question was on dynamics exactly yes, the visibility into this year as well as in the next few years as you're managing through some of the Latin American churn dynamics.
Speaker Change: Next caller is Matt nickname from Deutsche Bank.
Yeah.
Speaker Change: Hey, guys. Thanks, so much for taking the questions.
Yes, we are.
Each market is a little different.
Speaker Change: Two if I could first on the macro front Im wondering if <unk>.
And.
And some of the markets we have experienced churn.
Speaker Change: Sales cycles conversations with carrier customers, particularly in the U S.
Brendan Cavanagh: Very limited, Walt. I mean, we have conversations with them. We've actually talked with them about CBRS over the years at various times. But, you know, when I look at it from a materiality standpoint, is really completely immaterial. Got it.
Over the last few years due to consolidations.
Speaker Change: Ah lengthening at all.
Pretty close to being on the other side of that in a number of markets. We are on the other side of it if you look across many of our Central American markets. You had that consolidation take place you've had most of the right sizing of those leases happen as a result of that and so I think we're going to be in a good spot there and actually youre going to have carriers that are more <unk>.
Speaker Change: Are you seeing carriers, even potentially reevaluating spending plans in light of what's developing into a choppy macro backdrop.
Speaker Change: And then just secondly on the U S. As well if you can give us any color on the mix of Colo relative to amendment for new lease assigned Q1and how that compares to prior quarters. Thanks.
Brendan Cavanagh: And then on the flip side, like The Dish, have you seen this stuff about them leasing out Specimen World? Does that touch any part of your contract? And otherwise, what are they saying in terms of their intermediate term plans, let's call it? Yeah, at this stage, there hasn't really been any specific conversations in terms of the leasing. If they do lease their spectrum, their contract doesn't allow for that to change in somebody else's hands. So there would have to be a conversation, and we've not had that conversation as of yet. In terms of just their broader commentary and feedback with us, we work pretty closely with them.
Interested in their network development and investing further in their networks and therefore, we're going to actually see some pickup in activity in that area and other spots like in Brazil, where we're really just kind of in the.
Speaker Change: Yeah.
Speaker Change: So the answer to your first question, Matt is we have not seen an impact on any of our sales or leasing discussions with our customers, but I also think that it is pretty fresh and it's it's not something that.
Throws of the consolidation impacts and everything that comes with that we talked about it a bunch over the last year or so everybody knows that Oi was replaced by the other three carriers, taking a piece of them each of them, but that leaves a lot of overlap and a lot of rationalization needs to take place and we're seeing that take place.
Speaker Change: I can square won't take place over the coming months I do feel very good in the sense that we obviously have no direct impact from tariffs our carrier customers have limited relative to most companies here international companies, obviously in particular.
Brendan Cavanagh: They, on the operations side, are very clear about their desire to continue to pursue their standalone greenfield network. At this stage, obviously, things are much slower in terms of leasing activity with them. So we're hopeful that that changes, but at this stage, it's really just meeting some very basic needs. There's some basic upgrades going on. They are signing a few leases here and there, but it's pretty small at this stage. So I don't have much feedback for you there either, but I'll be interested to hear what they have to say on their call. Got it.
We're also still seeing the impacts of the.
Nextel acquisition by Carl and that was done years ago. So.
Speaker Change: The impacts on our carrier customers are very limited so.
I would say for the next few years, we probably will see some elevated churn internationally as a result of those dynamics.
Speaker Change: I think we're not going to see a lot because there's still such significant network needs and.
On that.
Speaker Change: There is a competitive dynamic that exists among our customers that I think is also favorable to continued investment but.
The hidden.
Cost of that is not just the churn the churn, but it is the fact that that rationalization takes a lot of the focus of the existing carriers and so the organic growth in terms of new lease up is also impacted I think a little bit by that so.
Speaker Change: We will have to see how the macro.
Speaker Change: Environment around this topic.
Brendan Cavanagh: Thanks.
Brendan Cavanagh: Sorry for the technical difficulties. Oh, no worries. Thanks.
Speaker Change: All of a sudden where it ends up going and obviously there is a possibility that it has an impact but as of today, we have not seen any of that.
Speaker Change: I would say the next few years will probably be a slower growth period in Brazil in particular, which is the lion's share of our international business, but as we move beyond that based on what we've seen in other markets, including the U S. By the way I would expect there to be an acceleration of <unk>.
Michael Rollins: Okay, moving on to Michael Rollins from Citi. Thanks and good afternoon. Two topics, if I could.
Speaker Change: And your second question was Colo versus amendments right.
Speaker Change: Yeah, So we've definitely seen a pickup in.
Marc Montagner: First, on the international front, just curious if you could share an update on how the visibility is trending for organic growth, as well as the churn dynamics, specifically in Latin America, both for this year and over the next few years. And then second, I was just looking at the supplemental, and thanks for the refresh that I think you began on this last quarter, the supplemental looking at the straight line revenue. And what caught my attention was the straight line revenue is negative this year for the first time in, like, five years and goes more negative next year.
Speaker Change: The co locations that started last year and it has continued into this period.
Leasing: Leasing activity as we start to get further down the maturity cycle of that process.
Speaker Change: Now, where we're seeing the vast majority actually of new revenue added in the U S coming from new lease co locations versus amendments.
Speaker Change: Thanks.
Speaker Change: Sure.
Speaker Change: And before we move onto our next caller just a reminder to our audience if you'd like to ask a question and answer the question queue. Please dial two on your telephone keypad.
Speaker Change: I don't actually have the percentage handy to give you, but thats something our team could probably provide to you and a follow up call afterwards, but most of it is coming from new leases and based on the backlogs and the way they're building I would expect that to continue for the balance of the year.
Matt: Next caller is Matt nickname from Deutsche Bank.
Speaker Change: Yeah.
Speaker Change: Hey, guys. Thanks, so much for taking the questions just two if I could first on the macro front Im wondering if <unk>.
Speaker Change: Thank you.
Marc Montagner: And so, as these contracts, on average, are getting further into their life, does that increase the potential for some renewals? And is that something that could significantly just impact the way gap results look over the next few years that might be different than what the schedule is currently inferring?
Speaker Change: Our next caller is Nick del Deo from Moffett Nathanson. Please go ahead.
Speaker Change: Sales cycles conversations with carrier customers, particularly in the U S.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Ah lengthening at all.
Speaker Change: Thanks for taking my questions.
Speaker Change: First Brendan in your prepared remarks.
Speaker Change: Or are you seeing carriers, even potentially reevaluating spending plans in light of what's developing into a choppy macro backdrop.
Speaker Change: You noted that driving efficiencies through new technologies and systems that is a priority for the year can.
Speaker Change: Can you expand on that at all and maybe frame some of the areas that youre looking at the sorts of savings that you're expecting.
Speaker Change: And then just secondly on the U S. As well if you can give us any color on the mix of Colo relative to amendment for new lease assigned in <unk> and how that compares to prior quarters. Thanks.
Speaker Change: And then second you.
Marc Montagner: Let me try to answer that second one first while I'm thinking about it. I don't think so. I mean, basically, if you think about what straight line revenue is, it's essentially revenue that from an accounting standpoint, we're booking, but we haven't actually received the cash. So eventually, it's going to all go negative and reverse out and end up at zero cumulatively. I think what you're seeing is that as we've had less new leases and move further in terms of the dates and the timing of our portfolio as it gets more mature. You should expect that it would move back towards that sort of break-even point.
Speaker Change: Decommissioned a lot of towers oversees this quarter.
Speaker Change: Is that all oil related or are there other drivers anything we should be aware of there and how should that trend in the coming periods.
Speaker Change: Yeah.
Speaker Change: So the answer to your first question, Matt is we have not seen an impact on any of our sales or leasing discussions with our customers, but I also think that it is pretty fresh and it's it's not something that.
Speaker Change: Sure.
Speaker Change: Yes, so on the efficiencies we are.
Speaker Change: I mean this is stuff that you should expect that we would be doing anyway, but I call. It out because it's an internal focus area that we are definitely spending some time on we have a number of new systems that we're putting in place in various areas of our business. Some on the operational and front end side around leasing.
Speaker Change: I can swear won't take place over the coming months.
Speaker Change: Do feel very good in the sense that we obviously have no direct impact from tariffs our carrier customers have limited relative to most companies here international companies, obviously in particular.
Speaker Change: Others around back office operations, including our ERP system is getting a total.
Marc Montagner: Now, having said that, we are signing more new leases today, and perhaps that will have an impact. And as we, in some cases, extend out the length of the terms, we'll see some adjustments up. And actually, that did happen in the first quarter. We extended some leases out, so that pushes the timing. But I don't think that there's anything to be read into it other than just we're a more mature business, and we're in a more mature place in terms of our lifecycle with our biggest customers. So it's going to move up and down over time.
Speaker Change: Refresh.
Speaker Change: And as we do that and we incorporate AI and other things into the solutions that we're providing we will look for efficiencies in the way that we run these processes and I think through that we will actually gain not only cost savings, but opportunities to drive additional revenue sources as well.
Speaker Change: The impacts on our carrier customers are very limited so.
Speaker Change: I think we're not going to see a lot because there's still such significant network needs and there's a competitive dynamic that exists among our customers that I think is also favorable to continued investment but.
Speaker Change: It's too early at this point to probably quantify that for you.
Speaker Change: We'll have to see how the macro us.
Speaker Change: But over time I would hope that I'll be able to give you. Some idea of the places where we've actually realized real savings that make an impact on the financials.
Speaker Change: <unk> around this topic evolves.
Speaker Change: Where it ends up going and obviously there is a possibility that it has an impact but as of today, we have not seen any of that.
Marc Montagner: But eventually, if you went to the end of time, it would be zero cumulatively.
Speaker Change: As you mentioned.
Speaker Change: And your second question was Colo versus amendments right.
Speaker Change: Sorry, sorry to jump in you mentioned the ERP system.
Marc Montagner: And so the other question was on international, I think, Mike, right, organic growth and churn. Is that what your question was on? Dynamics? Exactly. Yeah, the visibility into this year as well as into the next few years as you're managing through some of the Latin American churn dynamics. Yeah, you know, we are, each market is a little different. And in some of the markets, we have experienced churn over the last few years due to consolidations. And we're pretty close to being on the other side of that. In a number of markets, we are on the other side of it.
Speaker Change: Sometimes that's been problematic for some companies when they change that how do you feel comfortable from a risk profile because thats typically a big big change for folks.
Speaker Change: Yeah, So we've definitely seen a pickup in.
Speaker Change: The co locations that started last year and has continued into this period.
Speaker Change: I do it is a big change and it's actually a multiyear project, but I feel very good about.
Speaker Change: Now, where we're seeing the vast majority actually of new revenue added in the U S coming from new lease co locations versus amendments.
Speaker Change: Where we are today and the progress, we're making on that but yes.
Speaker Change: Okay, Okay no worries.
Speaker Change: Okay, and then the decommissioning question yes.
Speaker Change: I don't actually have the percentage handy to give you, but thats something our team could probably provide to you and a follow up call afterwards, but most of it is coming from new leases and based on the backlogs and the way. They are building I would expect that to continue for the balance of the year.
Speaker Change: Yes, the decommissioning so I'll just to be sure that we're clear because you probably are looking at the total number.
Speaker Change: For international that includes the divestitures of Colombia in the Philippines, which took place so just to be clear that's the vast mature okay. Okay.
Marc Montagner: If you look across many of our Central American markets, you had that consolidation take place, you had most of the right sizing of those leases happen as a result of that. And so I think we're going to be in a good spot there. And actually, you're going to have carriers that are more interested in their network development and investing further in their networks. And therefore, we're going to actually see some pickup and activity in that area.
Speaker Change: Thank you.
Speaker Change: Right Okay.
Speaker Change: Our next caller is Nick del Deo from Moffett Nathanson. Please go ahead.
Speaker Change: Got it okay. So if you if you strip that out though we are decommissioning some sites primarily in Brazil and that is you know it.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Thanks for taking my questions.
Speaker Change: It is an association with the Hawaii consolidation, where we're seeing places where we have towers that we don't think how much progress promise sorry.
Speaker Change: First Brendan in your prepared remarks.
Speaker Change: He noted that driving efficiencies through new technologies and systems. There is a priority for the year can.
Speaker Change: Can you expand on that at all and maybe frame some of the areas that youre looking at the sorts of savings that you're expecting.
Marc Montagner: In other spots, like in Brazil, we're really just kind of in the throes of the consolidation impacts and everything that comes with that. You know, we talked about it a bunch over the last year or so. Everybody knows that Hoy was replaced by the other three carriers, taking a piece of them, each of them. But that leaves a lot of overlap and a lot of rationalization that needs to take place. And we're seeing that take place. We're also still seeing the impacts of the Nextel acquisition by Claro. And that was done years ago. So, you know, I would say for the next few years, we probably will see some elevated churn internationally as a result of those dynamics.
Speaker Change: In those cases, we'll take those towers down to say the cost but most of that number is is the sale of those two countries.
And then second you.
Speaker Change: <unk> mentioned a lot of towers oversees this quarter.
Speaker Change: Okay. Okay, great. Thank you Brendan.
Speaker Change: Is that all oil related or are there other drivers or anything we should be aware of there and how should that trend in the coming periods.
Speaker Change: Sure.
Speaker Change: Next question is from Eric <unk> from Wells Fargo. Please go ahead.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Yes, so on the efficiencies we are.
Speaker Change: Thanks for taking the question.
Michael Rollins: Brendan I think you talked a little bit about the increasing colo mix in your backlog.
Speaker Change: I mean this is stuff that you should expect that we would be doing anyway, but I call. It out because it's an internal focus area that we are definitely spending some time on we have a number of new systems that we're putting in place.
Michael Rollins: Any sense for you have you have for how much might be related to regulatory requirements of certain carriers have.
Speaker Change: In various areas of our business some on the operational and front end side around leasing.
Michael Rollins: Specific time, those need to be deployed versus kind of any early signs of densification in your footprint from.
Marc Montagner: And I think the hidden cost of that is not just the churn, but it is the fact that that rationalization takes a lot of the focus of the existing carriers. And so the organic growth in terms of new lease up is also impacted, I think, a little bit by that. So, you know, I would say the next few years will probably be a slower growth period in Brazil in particular, which is the lion's share of our international business.
Speaker Change: Others around back office operations, including our ERP system is getting a total.
Michael Rollins: No early mid band deployment.
Michael Rollins: Yeah.
Speaker Change: Refresh.
Michael Rollins: Yeah, well first let me since you gave me the opportunity here to go back and.
Speaker Change: And as we do that and we incorporate AI and other things into the solutions that we're providing we will look for efficiencies in the way that we run these processes and I think through that we will actually gain not only cost savings, but opportunities to drive additional revenue sources as well.
Michael Rollins: Answer Matt's question on the actual percentages it was about 75% of the new leasing business signed up in the first quarter.
Michael Rollins: In the U S came from co lows as opposed to amendments.
Michael Rollins: So then to your question.
Marc Montagner: But as we move beyond that, based on what we've seen in other markets, including the U.S., by the way, I would expect there to be an acceleration of leasing activity as we start to get further down the maturity cycle of that process.
Michael Rollins: It's a mix of things definitely the regulatory requirements as a part of it and I only know that with confidence because when we look at at least one of our carrier customers and we look at the locations and sort of the.
Speaker Change: It's too early at this point to probably quantify that for you.
Speaker Change: But over time I would hope that I'll be able to give you. Some idea of places where we've actually realized real savings that make an impact on the financials.
Michael Rollins: More rural nature of some of those that gives us a pretty good sense of what they're trying to accomplish there, but it's really hard to say in every case because.
Speaker Change: As you mentioned.
Operator: Thanks. Sure.
Speaker Change: Sorry, sorry to jump in you mentioned the ERP system.
Matt Niknam: And before we move on to our next caller, just a reminder to our audience, if you'd like to ask a question and enter the question queue, please dial pound two on your telephone keypad.
Speaker Change: Sometimes that's been problematic for some companies when they change that how do you feel comfortable from a risk profile because that's typically a big big change for folks.
Michael Rollins: They have.
Michael Rollins: Real network needs and all of these different spots and so whether it's for a commercial reason or a regulatory.
Speaker Change: I do it is a big change and it's actually a multiyear project, but I feel very good about.
Matt Niknam: Next caller is Matt Niknam from Deutsche Bank. Hey guys, thanks so much for taking the questions. Two if I could, first on the macro front, I'm wondering if sales cycles, conversations with carrier customers, particularly in the U.S., are lengthening at all, or are you seeing carriers even potentially re-evaluating spending plans in light of what's developing into a choppier macro backdrop? And then just secondly on the U.S. as well, if you can give us any color on the mix of COLO relative to amendment for new lease assigned in Q and how that compares to prior quarters.
Speaker Change: Where we are today and the progress, we're making on that but yes.
Speaker Change: Okay. Okay.
Michael Rollins: Reason.
Speaker Change: Yes.
Michael Rollins: Sometimes we don't have that clarity.
Speaker Change: Okay.
Speaker Change: Question.
Michael Rollins: But I would expect that we'll continue to see a balance of both of those.
Speaker Change: The decommissioning so.
Speaker Change: Just to be sure that we're clear because you probably are looking at the total number.
Michael Rollins: Factors as a driver.
Speaker Change: Okay, Great I appreciate that and on the on the services guide uplift I believe you're over indexed to one carrier in particular, there. So would you attribute that uptick to that customer or is it a little bit more broad based than that.
Speaker Change: For international that includes the divestitures of Colombia in the Philippines, which took place so just to be clear that's the vast mature okay. Okay.
Speaker Change: Okay.
Speaker Change: Got it okay. So if you if you strip that out though we are decommissioning some sites primarily.
Speaker Change: I guess do you think theres any correlation here between the services upside in some of the higher leasing activity that you've talked about in your backlog.
Speaker Change: Primarily in Brazil, and that is you know.
Speaker Change: It is an association with the Hawaii consolidation, where we're seeing places where we have towers that we don't think how much progress promise sorry.
Speaker Change: Yes.
Brendan Cavanagh: Thanks.
Brendan Cavanagh: Yeah. So the answer to your first question, Matt, is we have not seen an impact on any of our sales or leasing discussions with our customers, but I also think that it is pretty fresh and It's not something that I can swear won't take place, you know, over the coming months. I do feel very good in the sense that we obviously have no direct impacts from tariffs. Our carrier customers have limited relative to most companies here, international companies, obviously, in particular, the impacts on our carrier customers are very limited. So I think we're not going to see a lot because there's still such significant network needs and there's a competitive dynamic that exists among our customers that I think is also favorable to continued investment.
Speaker Change: Yeah, I do think that there is a correlation to the leasing.
Speaker Change: At least a little bit.
Speaker Change: In those cases, we will we'll take those towers down to say the cost but most of that number is is the sale of those two countries.
Speaker Change: Because most of the work that we're doing virtually all of the services work. We're doing now is on our own tower sites. So.
Speaker Change: It's definitely tied into leasing activity and yes, I mean, we do have a significant percentage of our services business with one particular carrier, but the increase at least proportionately among them is more broad based but obviously that that one customer makes up a bigger percentage and therefore.
Brendan: Okay. Okay, great. Thank you Brendan.
Speaker Change: Sure.
Speaker Change: Yeah.
Speaker Change: Next question is from Eric <unk> from Wells Fargo. Please go ahead.
Speaker Change: Okay.
Speaker Change: Thanks for taking the question.
Speaker Change: Brendan I think you talked a little bit about the increasing colo mix in your backlog.
Speaker Change: As they get busier that that makes more of an impact to our outlook.
Speaker Change: Any sense for you have you have for how much might be related to regulatory requirements of certain carriers have.
Speaker Change: Thanks, Brian.
Speaker Change: Sure.
Specific time, those need to be deployed versus kind of any early signs of densification in your footprint from.
Speaker Change: Our next caller is Brandon <unk> from Keybanc.
Speaker Change: Yes.
Speaker Change: Early mid band deployments.
Speaker Change: Yeah.
Speaker Change: Thanks for taking the question Brendan I want to go back to your comments around new bookings and backlog.
Speaker Change: Yeah.
Speaker Change: Yeah, well first let me since you gave me the opportunity to be here to go back and <unk>.
Brendan Cavanagh: But, you know, we'll have to see how the macro environment around this topic, you know, evolves and where it ends up going. And obviously, there's a possibility that it has an impact. But as of today, we've not seen any of that. And your second question was COLOs versus amendments, right? That's right. Yeah. So, we've definitely seen a pickup in... The collocation, that started last year and it's continued into this period now where we're seeing, you know, the vast majority actually of new revenue added in the U.S. coming from new lease collocations versus amendments. I don't actually have the percentage handy to give you, but that's something our team could probably provide to you in a follow-up call afterwards.
Speaker Change: From a historical standpoint, what period is most comparable to the new bookings you saw this quarter and then I was hoping you could help us contextualize, what what the book to Bill ratio looks like today.
Matt: Answer Matt's question on the actual percentages it was about 75% of the new leasing business signed up in the first quarter.
Matt: In the U S came from Colo as opposed to amendments.
Speaker Change: Sure.
Matt: So then to your question.
Speaker Change: I don't know if I can say absolutely, but it's been a couple of years, it's been over two years I would say since we saw this level.
Matt: It's a mix of things definitely the regulatory requirements as a part of it and I only know that with confidence because when we look at at least one of our carrier customers and we look at the locations and sort of the.
Speaker Change: Of the applications that drive our backlog.
Speaker Change: So it's pretty good in terms of recent history, and we were pretty busy back in the 'twenty two 'twenty three window. So that's probably as good as it was.
Matt: More rural nature of some of those that gives us a pretty good sense of what they're trying to accomplish there, but it's really hard to say in every case because.
Speaker Change: Anytime since then.
Matt: They have.
Michael Rollins: I'm sorry, Brandon your second question.
Matt: Real network needs and all of these different spots and so whether it's for a commercial reason or a regulatory.
Speaker Change: Just curious on.
Brendan Cavanagh: But most of it is coming from new leases. And based on the backlogs and the way they're building, I would expect that to continue for the balance of the year. Thank you.
Speaker Change: Book to bill backlog in and sort of where that what that looks like today.
Speaker Change: Yeah, it's still because of this shift in the mix to new leases. It's obviously more elongated than it's been historically, it's typically a six to nine months for a new Colo.
Matt: Reason.
Matt: Sometimes we don't have that clarity.
Matt: But I would expect that we will continue to see a balance of both of those.
Nick DelDeo: Our next caller is Nick DelDeo from Moffitt-Matheson, please go ahead. Oh, thanks for taking my questions. First, Brendan, in your prepared remarks, you noted that driving efficiencies through new technologies and systems was a priority for the year. Can you expand on that at all? Maybe frame some of the areas that you're looking at, the sorts of savings that you're expecting?
Matt: Factors as a driver.
Speaker Change: Okay, Great I appreciate that and on the on the services guide uplift I believe you're over indexed to one carrier in particular, there. So would you attribute that uptick to that customer or is it a little bit more broad based than that.
Speaker Change: We've seen a little bit of improvement in that it's probably been a little bit shorter than that on average at least thus far into the year, which is not that much.
Speaker Change: History, but.
Speaker Change: They are turning them around a little bit quicker and getting them deployed quicker. So you know.
Speaker Change: And I guess do you think theres any correlation here between the services upside in some of the higher leasing activity that you talked about in your backlog.
Brendan Cavanagh: And then second, you know, you decommissioned a lot of towers overseas this quarter. Is that all oil related? Or are there other drivers? Anything we should be aware of there? And you know, how should that trend in the coming?
Speaker Change: Let's say three to nine months just to kind of hedge at every lease is a little bit different but.
Speaker Change: Yeah, I do think that there is a correlation to the leasing at.
Speaker Change: That's the typical range.
Speaker Change: Great. Thanks for taking the questions.
Speaker Change: At least a little bit.
Speaker Change: Sure.
Brendan Cavanagh: Sure. Yeah, so on the efficiencies, we are, I mean, this is stuff that you should expect that we would be doing anyway, but I call it out because it's an internal focused area that we are definitely spending some time on. We have a number of new systems that we are putting in place in various areas of our business, some on the operational and front end side around leasing, others around back office operations, including our ERP system is getting a total refresh. And as we do that, and we incorporate AI and other things into the solutions that we're providing, we will look for efficiencies in the way that we run these processes.
Because most of the work that we're doing virtually all of the services work. We're doing now is on our own tower sites. So.
Speaker Change: Moving on to Mike Zhang from Bank of America.
Speaker Change: It's definitely tied into leasing activity and yes, I mean, we do have a significant percentage of our services business with one particular carrier, but the increase at least proportionately.
Speaker Change: Thank you all for the questions today.
Speaker Change: So the first one just what do you attribute the increase in new leasing activity from the carriers based on your conversations with them.
Speaker Change: Among them is more broad based but obviously that that one customer makes up a bigger percentage and therefore as they as they get busier that that makes more of an impact to our outlook.
Speaker Change: Maybe went between the carriers would be helpful. As well and then second one kind of more of a bookkeeping you mentioned during the prepared remarks that <unk> rates have a potential for better escalators throughout the year internationally. If you can quantify that would be helpful.
Brent: Thanks Brent.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Yeah. So.
Speaker Change: Our next caller is Brendan misspelled from Keybanc.
Speaker Change: The increase I don't want to get too specific by customer in terms of what they are each doing I think you can look at their own.
Brendan Cavanagh: And I think through that, we will actually gain not only cost savings, but opportunities to drive additional revenue sources as well. It's too early at this point to probably quantify that for you, but over time, I would hope that I'll be able to give you some idea of places where we've actually realized real savings that make an impact on the financials.
Speaker Change: Yes.
Thanks for taking the question Brennan I wanted to go back to your comments around new bookings and backlog.
Speaker Change: Reports and get a sense of the things that they're focused on that would be the logical drivers of activity in terms of leasing on macro tower sites.
Speaker Change: From a historical standpoint, what period is most comparable to the new bookings you saw this quarter and then I was hoping you could help us contextualize, what what the book to Bill ratio looks like today.
Speaker Change: But it's broadly.
Speaker Change: Increased subscriber activity certainly.
Brendan Cavanagh: Only because you mentioned, sorry to jump in, you mentioned the ERP system, I know sometimes that's been problematic for some companies when they change that out, do you feel comfortable for a risk profile? Because that's typically a big change. I do, it is a big change and it's actually a multi-year project, but I feel very good about where we are today and the progress we're making on that, but yes.
Speaker Change: Certain product offerings that are more network.
Speaker Change: Sure.
Speaker Change: I don't know if I could say absolutely, but it's been a couple of years, it's been over two years I'd say since we saw this level of.
Speaker Change: With intensive such as fixed wireless access.
Speaker Change: There are some regulatory requirements, which we referred to a moment ago for at least one of our customers. That's T mobile who has some.
Speaker Change: Of the applications that drive our backlog.
Speaker Change: So it's pretty good in terms of recent history, we were pretty busy back in the 'twenty two 'twenty three window. So.
Speaker Change: Need to meet.
Speaker Change: Meet obligations in terms of downlink speeds and coverage that they committed to as part of the sprint acquisition. So that's ongoing as a driver as well so there's a variety of things.
Brendan Cavanagh: That's it. No worries.
Speaker Change: It's probably as good as it was anytime since then.
Brendan Cavanagh: Okay, and then the decommissioning question? Yeah, the decommissioning. So just to be sure that we're clear, because you probably are looking at the total number for international, that includes the divestitures of Colombia and the Philippines, which took place. So just to be clear, that's the vast majority. Oh, okay. Okay. Yeah, okay.
Brendan: I'm sorry, Brendan your second question.
Speaker Change: We will continue to see a mix of those things, but overall, it's going to be strained on the network and competitive pressures between the carriers.
Speaker Change: So just curious on.
Speaker Change: Book to bill backlog in and sort of where that what that looks like today.
Speaker Change: Yeah. It is.
Speaker Change: And on the CPI question.
Speaker Change: Because of this shift in the mix to new leases, it's obviously more elongated than it's been historically, it's typically a six to nine months for a new Colo.
Speaker Change: Yes, I mean, particularly in Brazil, we've seen an increase in CPI rates down there.
Brendan Cavanagh: So if you if you strip that out, though, we are decommissioning some sites, primarily in Brazil. And that is, you know, it is an association with the Hawaii consolidation, where we're seeing places where we have naked towers that we don't think how much progress promise, sorry. In those cases, we'll take those towers down to save the cost. But but most of that number is the sale of those two Okay, okay, great. Thank you, Brendan. Sure.
Speaker Change: We'll have to see whether that holds up we obviously didn't raise our outlook around international escalator contributions for this year, but if we continue to see elevated.
Speaker Change: We've seen a little bit of improvement in that it's probably been a little bit shorter than that on average at least thus far into the year, which is not that much.
Speaker Change: CPI rates down there there is a potential that we would actually be able to to raise our leasing outlook.
Speaker Change: History, but.
Speaker Change: They are turning them around a little bit quicker and getting them deployed quicker. So you know let's.
Speaker Change: Let's say three to nine months just to kind of hedge at every lease is a little bit different but.
Speaker Change: And we're really talking about our total for the full year, you're talking about 1 million or $2 million.
Speaker Change: That's the typical range.
Eric Luebchow: Next question is from Eric Luebchow from Wells Fargo. Please go ahead. Thanks for taking the question. Um, you know, Brendan, I think you talked a little bit about the increasing COLA mix in your backlog. Um, any sense where you have, you have for how much might be related to regulatory requirements that certain carriers have, that have a specific time to be deployed versus kind of any early signs of densification in your footprint from, you know, early, mid band deployment.
Speaker Change: Impact so it's not a massive number but as a percentage.
Speaker Change: Great. Thanks for taking the questions.
Speaker Change: It's a reasonable contribution increase.
Speaker Change: Sure.
Speaker Change: Moving on to Mike <unk> from Bank of America.
Great. Thank you for the question.
Speaker Change: Sure.
Mike: Thank you all for the questions today.
Speaker Change: Alright, moving on to Rick Prentiss from Raymond James.
Mike: So the first one just what do you attribute the increase in new leasing activity from the carriers based on your conversations with them.
Rick Prentiss: Hey, good afternoon, everybody I think I messed up my pound two here I appreciate the questions.
Mike: And then maybe went between the carriers would be helpful. As well and then second one kind of more of a bookkeeping you mentioned during the prepared remarks that <unk>.
Speaker Change: Sure.
Speaker Change: First question I wanted to follow up on the lives of people touched on the co location Amendment appreciate.
Speaker Change: The $75 25 to <unk> number.
Mike: Right.
Brendan Cavanagh: Yeah, well first let me, since you gave me the opportunity here, go back and answer Matt's question on the actual percentages. It was about 75 percent of the new leasing business signed up in the first quarter in the U.S. came from COLOs as opposed to amendments. So then, to your question... You know, it's a mix of things. Definitely the regulatory requirements is a part of it. And I only know that with confidence, because when we look at, you know, at least one of our carrier customers, and we look at the locations and sort of the more rural nature of some of those, that gives us a pretty good sense of what they're trying to accomplish there.
Mike: Cancel for better escalators throughout the year internationally, if you can quantify that would be helpful.
Speaker Change: Was that revenue base I assume instead of application base, because I would expect new co locations come in at a significantly higher amount of revenue than an amendment.
Mike: Yeah. So.
Mike: The increase I don't want to get too specific by customer in terms of what they are each doing I think you can look at their own.
Speaker Change: Yes, yes, that's revenue base.
Speaker Change: Okay.
Mike: Reports and get a sense of the things that they're focused on that would be the logical drivers of activity in terms of leasing on macro tower sites.
Speaker Change: Also the lease activity.
Speaker Change: Also associated with that kind of looking at new co locations versus amendments.
Speaker Change: What's your outlook as far as when spectrum, new spectrum, not just secondary like Walt was asking about but when new spectrum.
Mike: But it's broadly.
Mike: Increased subscriber activity certainly.
Speaker Change: It would be found <unk>.
Certain product offerings that are more network.
Speaker Change: <unk> put into the system.
Speaker Change: It would drive more spectrum deployments instead of having to split <unk> any update from Washington that Youre seeing on the spectrum front and when we might see some some blocks come out and when they might show up on your towers.
Mike: With intensive such as fixed wireless access.
Brendan Cavanagh: But it's really hard to say in every case, because, you know, they have real network needs in all these different spots. And so whether it's for a commercial reason or a regulatory reason, Sometimes we don't have that clarity, but I would expect that we'll continue to see a balance of both of those factors as a driver.
Mike: There are some regulatory requirements, which we referred to a moment ago for at least one of our customers. That's T mobile who has some.
Speaker Change: Yes.
Mike: Need to.
Speaker Change: We have a.
Speaker Change: Any insight that is specific to when youre going to see it but the general commentary.
Mike: Meet obligations in terms of downlink speeds and coverage that they committed to as part of the sprint acquisition. So that's ongoing as a driver as well so there's a variety of things.
That we get back in the conversations that we have in that.
Speaker Change: Our industry Association Wi has.
Mike: We'll continue to see a mix of those things, but overall, it's going to be strained on the network and competitive pressures between the carriers.
Speaker Change: Is that there is definitely much more of an interest.
Brendan Cavanagh: Okay, great, appreciate that. And on the on the services guide uplift, I believe you over indexed to one carrier in particular there. So would you attribute that that uptick to that customer? Or is it a little bit more broad based than that? And I guess, do you think there's any correlation here between the services upside and some of the higher leasing activities that you've talked about in your backlog? Yeah, I do think that there is a correlation to the leasing, at least a little bit. Because most of the work that we're doing, virtually all the services work we're doing now is on our own power sites.
Speaker Change: And this administration and the FCC to to get new spectrum out there and auctioned off and so we're encouraged by that I think even if they get that done and.
Mike: And on the CPI question.
Speaker Change: Yes, I mean, particularly in Brazil, we've seen an increase in CPI rates down there.
Speaker Change: In relatively short order by the time it gets cleared and is available and that is actually deployed I mean youre talking.
Speaker Change: We'll have to see whether that holds up we obviously didn't raise our outlook around international escalator contributions for this year, but if we continue to see elevated.
Speaker Change: Four five years from now probably before we would see.
Speaker Change: An opportunity for increased leasing activity as a result of that rig so it's a ways off but the faster that we get it done and out there.
CPI rates down there there is a potential that we would actually be able to to raise our leasing outlook.
Speaker Change: You get this process started the quicker we can get to that point. So we are definitely pushing for that.
Speaker Change: And we're really talking about our total for the full year, you're talking about 1 million or $2 million.
Brendan Cavanagh: So it's definitely tied into leasing activity. And yeah, I mean, we do have a significant percentage of our services business with one particular carrier, but the increase, at least proportionally, among them is more broad based. But obviously, that one customer, makes up a bigger percentage. And therefore, as they, as they get busier, that makes more of an impact to our outlook. Thanks, Brian. Sure.
Speaker Change: From our industry.
Speaker Change: Alright industry could definitely use more spectrum, that's going to take time, which means we should probably count on co locations more so than amendments being a trend it feels like.
Speaker Change: The impact so it's not a massive number but as a percentage.
Speaker Change: It's a reasonable contribution increase.
Speaker Change: Yeah, which obviously isn't bad I mean, we're fortunate in terms of where we're placed in the ecosystem and that if you don't have the spectrum.
Speaker Change: Great. Thank you for the question.
Speaker Change: Sure.
Speaker Change: Yeah.
Speaker Change: Alright, moving on to Rick Prentiss from Raymond James.
Speaker Change: Solutions, you've got or to densify your network and that typically means more locations for us and more equipment, which is a good thing.
Rick Prentiss: Hey, good afternoon, everybody I think I mess up my pound two here I appreciate the questions.
Brendan Cavanagh: Our next caller is Brandon Nispel from Key Banks. Thanks for taking the question. Brendan, I want to go back to your comments around new bookings and backlog. From a historical standpoint, what period is most comparable to the new bookings you saw this quarter? And then I was hoping you could help us contextualize what what the book to bill ratio looks like today. Thanks. Sure. I don't know if I could say absolutely, but it's been a couple of years. It's been over two years, I'd say, since we saw this level of applications that drive our backlog.
Speaker Change: Sure.
Speaker Change: Last one for me, obviously, a good capital allocation jumping on the dislocation in the stock price, but when you think about M&A that might be out there.
Speaker Change: First question I wanted to follow up on the lives lumpy will touch on the Colocation Amendment I appreciate the the $75 25 to one two number.
Speaker Change: It's about the Canada towers, but.
Speaker Change: Was that revenue base I assume instead of application based because I would expect new co locations come in at a significantly higher amount of revenue that an amendment.
Speaker Change: Are you still seeing private multiples being well above or just above.
Speaker Change: But the public multiples are going forward kind of how is that still impacting the ability to compete and win for external towers.
Speaker Change: Yes, yes, that's revenue base.
Speaker Change: Okay.
Speaker Change: You also then lease activity.
Speaker Change: Yeah, we are still seeing that if.
Also associated with that kind of looking at new co locations versus amendments.
Speaker Change: If you're talking about the U S. Because there is a limited supply of potential assets and there are a lot of people very interested in acquiring U S towers, when those opportunities come about the private valuations or are much much higher than the public valuations and that makes it a challenge for us.
Speaker Change: What's your outlook as far as when spectrum, New spectrum, that's a secondary like Walt was asking about but when new spectrum.
Brendan Cavanagh: So it's pretty good in terms of recent history. You know, we were pretty busy back in the 22-23 window, so it's... It's probably as good as it was any time since then.
Speaker Change: It would be down.
Speaker Change: <unk> put into the system.
Speaker Change: It will drive for spectrum deployments instead of having to split <unk> any update from Washington that you are seeing on the spectrum front and when we might see some some blocks come out and when they might show up on your towers.
Speaker Change: Nationally.
Speaker Change: In some of our emerging markets, where we've seen that rationalized a little bit more about what youre actually seeing as very few assets trading hands at all so I think what's happening is sellers are not getting.
Brendan Cavanagh: I'm sorry, Brandy, your second question. I'm just curious on, you know, book-to-bill backlog and sort of where that, what that looks like today. Yeah, yeah, it's still because of this shift in the mix to new leases, it's obviously more elongated than it's been historically. It's typically a six to nine month for a new COLO. We've seen a little bit of improvement in that it's probably been a little bit shorter than that on average, at least this far into the year, which is not that much history, but they're turning them around a little bit quicker and getting them deployed quicker.
Speaker Change: Yeah, I don't honestly have a.
Speaker Change: Any insight that is specific to when youre going to see it but the general commentary.
Speaker Change: Interest at the levels that they'd like to or that perhaps they were getting in the past and buyers arent willing to come up to those levels. So you end up having deals just not trade.
Speaker Change: That we get back in the conversations that we have and that our industry Association W. Ay has.
Speaker Change: Is that there is definitely much more of an interest.
Speaker Change: So I am I.
Speaker Change: I'm feeling better about there being a little bit of rationalization and most of the international markets, Although I'm not not seeing that so much in the U S.
Speaker Change: In this administration and the FCC to to get new spectrum out there and auctioned off and so we're encouraged by that I think even if they get that done and.
Speaker Change: Hopefully, we will see that kind of balance out because I think it will be good in terms of the health of the overall industry. If we have more rationality brought to some of these analyses you can't have cost of capital rising the way that it has and have no change in the approach that people take to valuing. These assets. So hopefully we'll start to see that.
Speaker Change: In relatively short order by the time it gets cleared and is available and that is to actually deployed I mean youre talking.
Brendan Cavanagh: So, you know, let's say three to nine months just to kind of hedge it. Every lease is a little bit different, but that's the typical range. Great. Thanks. Take the questions.
Speaker Change: Four or five years from now probably before we would see.
An opportunity for increased leasing activity as a result of that risk. So it's a ways off but the faster that we get it done and out there.
Mike Funk: Sure. Moving on to Mike Funk from Bank of America. Thank you all for the questions today. So first one, just, you know, what do you attribute the increase in new leasing activity from the carriers based on your conversations with them? And then any maybe split between the carriers would be helpful as well. And then second one, kind of more bookkeeping, you mentioned during your remarks that CPI rates have a potential for better escalators throughout the year, internationally, if you can quantify that be helpful.
Speaker Change: Makes sense in the U S at much much higher we think mid twenties high twenty's, even into the <unk> kind of what we're seeing out there.
Speaker Change: This process started the quicker we can get to that point. So we are definitely pushing for that.
Speaker Change: Yeah, I mean, it just depends on.
Speaker Change: From our industry.
Speaker Change: Portfolio to some degree because of the maturity of it makes a difference, but we're definitely seeing assets that are trading in the mid thirty's.
Speaker Change: Okay industry could definitely use more spectrum, but it's going to take time, which means we should probably count on co locations more so than amendments being a trend it feels like.
Speaker Change: Some cases, even higher.
Speaker Change: Wow.
Speaker Change: Yeah, which obviously isn't bad I mean were fortunate in terms of where we're placed in the ecosystem and that if you don't have the spectrum.
Great.
Speaker Change: Appreciate it thanks guys.
Speaker Change: Sure.
Speaker Change: Moving on to Ben Swinburne from Morgan Stanley.
Speaker Change: The only solutions, you've got or to densify your network and that typically means more locations for us and more equipment, which is a good thing.
Speaker Change: Thanks, Good afternoon.
Brendan Cavanagh: Yeah, so the increase, I don't want to get too specific by customer in terms of what they're each doing. I think you can look at their own reports and get a sense of the things that they're focused on. That would be the logical drivers of activity in terms of leasing on macro tower sites. But it's broadly increased subscriber activity, certainly certain product offerings that are more network bandwidth intensive, such as fixed wireless access. There are some regulatory requirements, which we referred to a moment ago, for at least one of our customers, that's T-Mobile, who has some need to meet obligations in terms of downlink speeds and coverage that they committed to as part of the Sprint acquisition, so that's ongoing as a driver as well.
Speaker Change: Two questions Brendan touched on it a few of your answer is just trying to can you give us a sense of your visibility into.
Speaker Change: Last one for me, obviously, a good capital allocation jumping on the dislocation in the stock price, but when you think about M&A that might be out there when asked about the Canada towers, but.
Speaker Change: Sort of the full year.
Speaker Change: Domestic site leasing growth should we look at the activity that service revenue growth and the mix shift to co locations as <unk>.
Speaker Change: Are you still seeing private multiples being well above or just above.
Speaker Change: Adding to that visibility and just trying to get a sense sitting here in late April.
Speaker Change: But the public multiples are going forward kind of how is that still impacting the ability to compete and win for external towers.
Speaker Change: The line of sight into the <unk>.
Speaker Change: Proving revenue trends domestic in the domestic business as we look through the rest of the year.
Speaker Change: Yeah, we are still seeing that.
Speaker Change: And then I just started a little bit of a housekeeping can you just update us on if there's any change to how we should think about the millicom contribution to revenue and gross profit when the rest of the bulk of the acquisition closes on assuming that closer to September one. Thank you.
Speaker Change: If you're talking about the U S. Because there is a limited supply of potential assets and there are a lot of people very interested in acquiring U S towers when those those opportunities come about the private valuations or are much much higher than the public valuations and that makes it a challenge for us.
Speaker Change: Yeah. So.
Speaker Change: Internationally.
Speaker Change: We we do break out.
Speaker Change: In some of our <unk>.
Brendan Cavanagh: So there's a variety of things. I think we'll continue to see a mix of those things, but overall it's going to be strain on the network and competitive pressures between the carriers.
Speaker Change: Emerging markets, where we've seen that rationalized a little bit more about what youre actually seeing as very few assets trading hands at all so I think what's happening is sellers are not getting.
Speaker Change: In our press release, our outlook for the contribution to leasing that we expect during the full year and the range that we set for that for the U S. We did not changed.
Speaker Change: After this quarter. It has only been two months since we gave that outlook.
Brendan Cavanagh: And on the CPI question... Yeah, I mean, particularly in Brazil, we've seen an increase in the CPI rates down there. We'll have to see whether that holds up. We obviously didn't raise our outlook around international escalator contributions for this year. But if we continue to see elevated CPI rates down there, there's a potential that we would actually be able to raise our leasing outlook. And we're really talking about on our total for the full year, you're talking about a million or $2 million of impact. So it's not a massive number, but as a percentage, you know, it's a reasonable contribution increase.
Interest at the levels that they would like to or that perhaps they were getting in the past.
Speaker Change: Originally and I think at this stage, while my commentary is is accurate in terms of the accelerating pace and that we're feeling very good about it as the backlogs have been bigger in the lease up was a little bit ahead of pace.
Speaker Change: And buyers arent willing to come up to those levels. So you end up having deals just not trade.
Speaker Change: I'm feeling better about there being a little bit of rationalization and most of the international markets, Although I'm not not seen us so much in the U S and <unk>.
Speaker Change: It's a little early to think that we're going to be outside of.
Speaker Change: Hopefully, we will see that kind of balance out because I think it will be good.
Speaker Change: The range that we gave.
Speaker Change: In terms of that the health of the overall industry. We have more rationality brought some of these analysis you can't have a cost of capital rising the way that it has and have no change in the approach that we'll take to value.
But we'll see where we are next quarter.
Speaker Change: We will certainly have a much better sense by then as to whether there is an opportunity to beat the range but.
Speaker Change: Perhaps will be more towards the higher end of the range if things continue on this track so.
Speaker Change: So hopefully we'll start to see that.
Speaker Change: Stay tuned on that at least we're talking about it being towards the higher end and not towards the lower right.
Speaker Change: So in the U S are much much higher and we think mid to high <unk>, which is a Thursday, what kind of what we're seeing out there.
Brendan Cavanagh: Great, thank you for the question.
Speaker Change: Alright, good side.
Rick Prentiss: All right, moving on to Rick Prentiss from Raymond James. Hey, good afternoon everybody. I think I messed up my pound two here. I appreciate the questions. Sure.
Speaker Change: Yeah, I mean, it just depends on.
Speaker Change: And then on the Millicom question, Yes, I mean at this stage.
Speaker Change: Portfolio to some degree because of the maturity of it makes a difference, but we're definitely seeing assets that are trading in the mid <unk> some cases, even higher.
Speaker Change: <unk>.
Speaker Change: The outlook that we put together originally hasnt really changed outside of the sites that we closed on early obviously, we adjusted for that.
Speaker Change: Well great.
Rick Prentiss: First question, I want to follow along the lines a lot of people have touched on the co-location amendment. I appreciate the 7525 for 1Q number. Was that revenue-based, I assume, instead of application-based? Because I would expect new co-locations to come in at a significantly higher amount of revenue than an amendment. Yes, yes, that's revenue-based dollars. Okay, which also then leads to activity.
Speaker Change: Great.
Speaker Change: Thanks, guys.
Speaker Change: Theres I don't know event, if youre looking for something in particular, but basically what we laid out in terms of the total expectation when it's all said and done that's still the same as what we put in our original press release, when we announced that deal.
Speaker Change: Sure.
Speaker Change: Moving on to Ben Swinburne from Morgan Stanley.
Speaker Change: Thanks, Good afternoon.
Speaker Change: Two questions have you touched on it a few of your answer is just trying to.
Speaker Change: No real changes there but.
Speaker Change: We'll be excited to get it done soon as we can.
Speaker Change: Can you give us a sense of your visibility into.
Speaker Change: Okay. The only change I guess, it's just part of that acquisition is closed already right yes.
Speaker Change: Sort of the full year.
Speaker Change: Domestic site leasing growth.
Brendan Cavanagh: Also associated with that, kind of looking at new co-locations versus amendments, what's your outlook as far as when spectrum, new spectrum, not just secondary, like Walt was asking about, but when new spectrum could be found, auctioned and put into the system that would drive more spectrum deployments instead of having to split sites. So any update from Washington that you're seeing on the spectrum front and when we might see some blocks come out and when they might show up on your towers. Yeah, I don't obviously have any insight that is specific to when you're going to see it, but the general commentary that we get back in the conversations that we have and that our Industry Association, WIAA has, is that there's definitely much more of an interest in this administration and the FCC to get new spectrum out there and auctioned off.
Speaker Change: Yes, yes, just a timing difference so it's a fairly small piece of it there were 320 sites that we were and if we can close other pieces early we will do that too.
Speaker Change: Should we look at the activity of the service revenue growth and the mix shift to co locations as <unk>.
Speaker Change: Adding to that visibility and just trying to get a sense sitting here in late April.
Speaker Change: There is not as great an opportunity to break off other pieces. Each this particular market there was an opportunity to buy the asset separately as opposed to an entity and so that allowed us to close a few early but.
Speaker Change: The line of sight into the <unk>.
Speaker Change: Proving revenue trends domestic in the domestic business as we look through the rest of the year.
And then I just got a little bit of a housekeeping can you just update us on if there's any change to how we should think about the millicom contribution to revenue and gross profit when the rest of the bulk of the acquisition closes on assuming that closer to September one. Thank you.
Speaker Change: We'll see how it goes if we can close them early we will do that.
Speaker Change: Great. Thank you so much.
Speaker Change: Thanks.
Speaker Change: Moving on to Richard Choe from J P. Morgan.
Speaker Change: I had a follow up on the services side.
Speaker Change: Yeah. So.
Speaker Change: Was the increase more in near term activity or is it just feeling more confident about the level through the year and then also how much more services revenue could you fulfill or how much capacity you have.
Speaker Change: We we do break out.
Speaker Change: In our press release, our outlook for the contribution to leasing that we expect during the full year and the range that we set for that for the U S. We did not change.
Speaker Change: After this quarter, it's only been two months since we gave that outlook.
Speaker Change: In our services business kind of from this <unk> 200 level.
Brendan Cavanagh: And so we're encouraged by that. I think even if they get that done in relatively short order, by the time it gets cleared and is available, and then it's actually deployed, you're talking four or five years from now, probably before we would see an opportunity for increased leasing activity as a result of that, Rick. So it's a ways off, but the faster that we get it done and out there, get this process started, the quicker we can get to that point. So we're definitely pushing for that from our industry.
Speaker Change: Originally and I think at this stage, while my commentary is is accurate in terms of the accelerating pace and that we're feeling very good about it as the backlogs have been bigger in a lease up was a little bit ahead of pace.
Speaker Change: Yes.
Speaker Change: Well the services the increase in guidance for services is a mix of the contribution from the first quarter, where we did a little bit better than we had anticipated when we set the original outlook as well as the increased backlogs, which gave us some confidence that we will do better during the balance of the year versus our original projections as well so it's really.
Speaker Change: Think that it's a little early to think that we're gonna be outside of the the range that we gave.
But we'll see where we are next quarter.
Speaker Change: A mix of both of those.
Speaker Change: On your question on capacity.
Speaker Change: We will certainly have a much better sense by then as to whether there is an opportunity to beat the range but.
Speaker Change: I'm not sure.
Speaker Change: What you're getting at I mean, obviously, we've given an outlook for this year of now updated for <unk> of 180 to 200 in the past we have had even bigger years a couple of years ago, We did almost $300 million in services revenue high 200. So we have the capacity in terms of our capabilities and scale.
Brendan Cavanagh: industry could definitely use some more spectrum but it's going to take time which means we should probably count on co-locations more so than amendments being the trend it feels like. Yeah, which obviously isn't bad. I mean, we're fortunate in terms of where we're placed in the ecosystem and that if you don't have the spectrum, you know, the only solutions you've got are to densify your network. And that typically means more locations for us and more equipment.
Speaker Change: Perhaps will be more towards the higher end of the range if things continue on this track so.
Speaker Change: Stay tuned on that at least we're talking about it being towards the higher end and not towards the lower.
Speaker Change: Alright, good side.
Speaker Change: And then on the Millicom question, Yes, I mean at this stage.
Speaker Change: Our ability to handle increased volume if we can find the right work and so if we see that opportunity hopefully, we'll continue to see it grow but.
Speaker Change: The outlook that we put together originally hasnt really changed outside of the sites that we closed on early obviously, we adjusted for that.
Brendan Cavanagh: Okay, last one for me, obviously good capital allocation jumping on the dislocation and the stock price. But when you think about M&A that might be out there and Vasya asked about the Canada Towers. Are you still seeing private multiples being well above or just above? public multiples are going forward, kind of how is that still impacting the ability to compete and win for external towers? Yeah, we are still seeing that. If you're talking about the U.S., because there is a limited supply of potential assets, and there are a lot of people very interested in acquiring U.S.
Speaker Change:
Speaker Change: We're not restrained in terms of our our capabilities or capacity.
Speaker Change: I don't know if youre looking for something in particular, but basically what we laid out in terms of the total expectation when it's all said and done that's still the same as what we put in our original press release, when we announced that deal.
Speaker Change: Great. Thank you.
Speaker Change: Sure.
Speaker Change: Moving on to Jonathan Chaplin from New Street.
Speaker Change: Okay.
Speaker Change: No real changes there but.
Thanks, guys. Just one clarifying question for me so I think in the past.
Speaker Change: We'll be excited to get it done as soon as we can.
Speaker Change: When you said that the two five gigahertz and three five gigahertz spectrum that the carriers have deployed on their site to sort of 55% to 65% of sites.
Speaker Change: Okay. The only change I guess, it's just part of that acquisition is closed already right.
Speaker Change: Yeah, just a timing difference so.
Speaker Change: It is a fairly small piece of it there were 320 sites that we work.
Speaker Change: Of your sites.
Speaker Change: And if we can close other pieces early we will do that too I think there is not as great an opportunity to break off other pieces. Each this particular market there was an opportunity to buy the asset separately as opposed to an entity and so that allowed us to close a few early but.
Speaker Change: Sure.
Speaker Change: Their sites the way I understood. It initially was 50.
Brendan Cavanagh: towers, when those opportunities come about, the private valuations are much, much higher than the public valuations, and that makes it a challenge for us. Internationally, in some of our emerging markets, we've seen that rationalized a little bit more, but what you're actually seeing is very few assets trading hands at all. So I think what's happening is sellers are not getting interest at the levels that they'd like to or that perhaps they were getting in the past, and buyers aren't willing to come up to those levels, so you end up having deals just not trade. So I'm feeling better about there being a little bit of rationalization in most of the international markets, although I'm not seeing that so much in the U.S., and hopefully we will see that kind of balance out, because I think it'll be good in terms of the health of the overall industry if we have more rationality brought to some of these analyses.
Speaker Change: <unk>, 55% to 65% of their sites and they still got a lot of.
Speaker Change: Growth to go and I would've thought that would've traded into.
Speaker Change: Translated into a lot more amendment amendments still to come as opposed to what you are seeing which is the bulk of growth coming from new leasing.
Speaker Change: We'll see how it goes if we can close them early we will do that.
Speaker Change: Great. Thank you so much.
Speaker Change: Thanks.
Speaker Change: Okay moving onto Richard Chow from J P. Morgan.
Speaker Change: Yes.
Speaker Change: When we gave the statistics, we're giving it on ours, but their presence on our site the leases that we have on our sites yes. It is.
Speaker Change: I had a follow up on the services side was the increase more in near term activity or is it just feeling more confident about the level through the year and then also how much more services revenue could you.
Speaker Change: Not to their overall position that's up to them to comment on so.
Speaker Change: And the carriers are not balanced in terms of that obviously T. Mobile is further ahead, because they had two five spectrum.
Speaker Change: Bill or how much capacity you have.
Speaker Change: In that services business kind of from this <unk> 200 level.
All ahead of the other incumbents, having their mid band C band spectrum. So.
Speaker Change: Yes.
Well the services the increase in guidance for services is a mix of the contribution from the first quarter, where we did a little bit better than we had anticipated when we set the original outlook as well as the increased backlogs, which gave us some confidence that we will do better during the balance of the year versus our original projections as well so it's really a mix.
Speaker Change: It's a mix between them and that perhaps is what's contributing to the shift of who's moving towards new leasing versus amendments faster but.
Brendan Cavanagh: You can't have cost of capital rising the way that it has and have no change in the approach that people take to valuing these assets, so hopefully we'll start to see that. makes sense. In the U.S., that much, much higher. We think in mid-20s, high-20s, even into the 30s, and that's kind of what we're seeing out there. Yeah, I mean, it just depends on the portfolio to some degree because the maturity of it makes a difference. But we're definitely seeing assets that are trading in the mid-30s, some cases even higher. Wow, great. Yeah, well, appreciate it.
Speaker Change: Either way.
Speaker Change: Through on a consolidated combined basis cumulatively, there through about close to 60% of our leases with the three incumbents have been upgraded for mid band spectrum.
Speaker Change: <unk> for both of those and on your question on capacity I'm not sure.
Speaker Change: Got it.
Speaker Change: What youre getting at I mean, obviously, we've given an outlook for this year of now updated for <unk> of 180 to 200 in the past we have had even bigger years a couple of years ago, We did almost $300 million in services revenue high 200. So we have the capacity in terms of our capabilities and <unk>.
Speaker Change: And in that 6% of their sites. So they they've done amendments on 60% of their sites for mid band spectrum.
Speaker Change: Already and so there is another 40% they could they.
Speaker Change: You could still do amendments on.
Brendan Cavanagh: Thanks, guys. Sure.
Speaker Change: Yes, as a group.
Ben Swinburne: All right, moving on to Ben Swinburne for Morgan Stanley. Thanks. Good afternoon. Two questions. Brendan, we touched on it in a few of your answers. Just try to, can you give us a sense of your visibility into, you know, sort of the full year domestic site leasing growth? Should we look at the activity that service revenue growth and the makeshift to co-locations is adding to that visibility? Just want to get a sense sitting here late April, sort of the line of sight into the improving revenue trends domestic and the domestic business as we look through the rest of the year.
Speaker Change: We're talking about their leases on our sites.
Speaker Change: Scale ability to handle increased volume if we can find the right work and so if we see that opportunity hopefully, we'll continue to see it grow but.
Speaker Change: Yes.
Speaker Change: Yes, hi.
Speaker Change: And so theyre not doing incremental.
Speaker Change: But that's not where the activity is coming from at the moment, it's mostly coming from them putting equipment on new sites.
Speaker Change: We're not restrained in terms of our our capabilities or capacity.
Speaker Change: Well, yes, I mean, we're still signing a bunch of amendments. So and then the amendment activity is largely around that.
Speaker Change: Great. Thank you.
Speaker Change: Sure.
Speaker Change: Moving on to Jonathan Chaplin from New Street.
Speaker Change: This is lars <unk> related upgrades.
Speaker Change: Perfect. Thanks for that clarification.
Speaker Change: Okay.
Speaker Change: Thanks, guys. Just one clarifying question for me so I think in the past.
Speaker Change: Sure.
Speaker Change: Next caller, David <unk> from Green Street.
Speaker Change: When you said that the two five gigahertz and three five gigahertz spectrum that the carriers have deployed on their site to sort of 55% to 65% of sites.
Speaker Change: Yeah.
Brendan Cavanagh: And then I just thought a little bit about housekeeping. Can you just update us on if there's any change to how we should think about the Milicom contribution to revenue and gross profit when the rest of the bulk of the acquisition closes on, assuming it closes September 1st? Yeah, so... We do break out in our press release our outlook for the contribution to leasing that we expect during the full year and the range that we set for that for the U.S. we did not change after this quarter. It's only been two months since we gave that outlook originally and I think at this stage while my commentary is accurate in terms of the accelerating pace and that we're feeling very good about it as the backlogs have been bigger and the lease up was a little bit ahead of pace I think it's a little early to think that we're going to be outside of the the range that we gave but we'll see where we are next quarter we'll certainly have a much better sense by then as to whether there's an opportunity to to beat the range but you know perhaps we'll be more towards the higher end of the range if things continue on this track so stay tuned on that at least we're talking about it being towards the higher end and not towards the lower end that's a good sign and then on the Milicom question yeah I mean at this stage the The outlook that we put together originally hasn't really changed outside of the sites that we closed on early.
Speaker Change: Thanks, Hey, Brandon going back to your comment on the transaction, Brian you said the bid ask spread might be too wide for some deals across the finish line with that comment in reference to the past few weeks and the volatility we've seen or is that something even if they're done and of course of the year.
Speaker Change: Is that of your sites.
Speaker Change: Sure.
Speaker Change: <unk> of the sites the way I understood. It initially was there.
Speaker Change: 55% to 65% of their sites and they still got a lot of.
Speaker Change: Yeah, No. It's something we've observed really for the last year or so internationally, where you're seeing this week.
Growth to go and I would've thought that would've traded into.
Speaker Change: Translated into a lot more amendment amendments still to come as opposed to what you are seeing which is the bulk of growth coming from new leasing.
Speaker Change: We've seen a number of <unk>.
Speaker Change: Potential transactions come to market.
Speaker Change: Processes run some we participated in others, we have not and there are.
Speaker Change: Yeah, when we gave the statistics, we're giving it on ours.
Speaker Change: <unk> of them that did not actually get completed so.
Speaker Change: Their presence on our site the leases that we have on our sites yeah.
Speaker Change: It's been a dynamic that's been happening for the last year or so really if you look at the timing of when cost of capital started to increase some time.
Speaker Change: Not to their overall position that's up to them to comment on so.
Speaker Change: And the carriers are not balanced in terms of that obviously T. Mobile is further ahead because they had two five spectrum well ahead of.
Speaker Change: Following on that.
Speaker Change: Time period, you started to see this dynamic.
Speaker Change: Makes sense and then you had a comment in your press release talking about the business, having very reliable cash flow amidst economic uncertainty and thats definitely been true in the past.
Speaker Change: The other end.
Speaker Change: <unk> is having their mid band.
Speaker Change: C band spectrum so.
Speaker Change: It's a mix between them and that perhaps is what's contributing to the shift of who's moving towards new leasing versus amendments faster but.
Speaker Change: The tenant landscapes evolved since that.
Speaker Change: Either way.
Speaker Change: Has any sort of economic stress test how should we think about net based portfolio performing U S economy were to hit a soft patch.
Speaker Change: Theyre through on a consolidated combined basis cumulatively, there through about close to 60% of our leases with the three incumbents have been upgraded for mid band spectrum.
Speaker Change: Well I.
Speaker Change: David.
Speaker Change: If you look at it from a big picture standpoint, we produced a tremendous amount of cash flow or <unk> is about $1 $4 billion, a year and even if there is softness in the U S or anywhere else you are talking about.
Speaker Change: Got it.
Speaker Change: And that 60% of their sites. So they they've done amendments on 60% of their sites for mid band spectrum will.
Speaker Change: Already and so there is another 40% they could they could still do amendments on.
Brendan Cavanagh: Obviously, we adjusted for that. I don't know, Ben, if you're looking for something in particular, but basically what we laid out in terms of the total expectation when it's all said and done, that's still the same as what we put in our original press release when we announced that deal. No real changes there, but we'll be excited to get it done as soon as we can. Okay, the only change, I guess, is that part of that acquisition is closed to Reddit. Yeah, yeah, just a timing difference. So it's a fairly small piece of it. There were 320 sites that we were.
Speaker Change: Creation of leasing activity in incremental dollars being added that is relatively small in the in the big picture.
Speaker Change: Yes, as a group.
Speaker Change: We're talking about their leases on our sites.
Speaker Change: The cash flow that we're able to produce the amount that we're able to return back to our shareholders.
Speaker Change: Yes.
Speaker Change: Yes, hi.
Speaker Change: And so they're not doing incremental.
Speaker Change: No.
Speaker Change: That's not where the activity is coming from at the moment, it's mostly coming from them putting equipment on new sites.
Speaker Change: Risk to our ability to continue to operate or.
Speaker Change: In quotes I'm, saying sell our product.
Speaker Change: Well, yes, I mean, we're still signing a bunch of amendment. So and then the amendment activity is largely around that.
It's already been sold it's already happening so we're talking about impacts happening on incremental.
Speaker Change: This is lars <unk> related upgrades.
Speaker Change: <unk> additions and right now that's.
Speaker Change: Perfect. Thanks for that clarification.
Brendan Cavanagh: And if we can close other pieces early, we will do that too. I think there's not as great an opportunity to break off other pieces each this particular market, there was an opportunity to buy the asset separately as opposed to an entity. And so that allowed us to close a few early, but we'll see how it goes. If we can close them early, we'll do that. Great.
Speaker Change: It's a positive environment and that's great, but even if things were.
Speaker Change: Sure.
Speaker Change: Or to slow down you are talking about fairly small amounts. So my commentary is that compared to most businesses out there the cash flow that we're able to produce can be relied upon it is very steady and consistent and that's a good place to be in a in an.
Next caller, David <unk> from Green Street.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Thanks, Hey, Brandon going back to your comment on the transaction, Brian you said the bid ask spread might be too wide for some deals across the finish line with that comment in reference to the past few weeks and the volatility we've seen or is that something you've observed over the course of the year.
Brendan Cavanagh: Thank you so much.
Speaker Change: Unstable environment.
Richard Chow: Okay, moving on to Richard Chow from J.P. Morgan. Just a follow-up on the services side, was the increase more in near-term activity or is it just feeling more constant? about the level through the year, and then also how much more services revenue.
Speaker Change: Yeah, no. It's something we've observed really for the last year or so internationally where are you seeing this.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: Moving on to our next and last caller Ari Klein from BMO capital markets.
Speaker Change: We've seen a number of.
Speaker Change: Potential transactions come to market.
Speaker Change: <unk> run some we participated in others, we have not and.
Speaker Change: Okay.
Ari Klein: Thanks for squeezing me in here.
Speaker Change: There are number of them that did not actually get completed.
Speaker Change: Terry.
Brendan Cavanagh: https://www.sba.gov.au for 1120 views. Well, the services, the increase in guidance for services is a mix of the contribution from the first quarter where we did a little bit better than we had anticipated when we set the original outlook, as well as the increased backlogs, which gave us some confidence that we will do better during the balance of the year versus our original projections as well. So it's really a mix of both of those.
Speaker Change: On domestic leasing activity and sign it needs to get better based on our conversations with carriers is that something you expect to continue to accelerate.
Speaker Change: So.
Speaker Change: It's been a dynamic that's been happening for the last year or so really if you look at the timing of when cost of capital started to increase some time.
Speaker Change: <unk> build here over the next couple of years or does it level off.
Speaker Change: Following on that.
Speaker Change: The range of where you are at now.
Speaker Change: Time period, you started to see this dynamic.
Speaker Change: Yeah.
Speaker Change: I think that's a hard question to answer to look out multiple years.
Speaker Change: Makes sense and then you and I had a comment in your press release talking about the business, having very reliable cash flow amidst economic uncertainty and thats definitely been true in the past.
Speaker Change: We've seen this play out over decades of being in this and there are.
Brendan Cavanagh: And on your question on capacity, I'm not sure I'm not sure. I'm not sure. What you're getting at, I mean, obviously, we've given an outlook for this year of now updated for 180 to 200. In the past, we have had even bigger years. A couple of years ago, we did almost $300 million in services revenue, high 200. So we have the capacity in terms of our capabilities and scalability to handle increased volume if we can find the right work. And so if we see that opportunity, hopefully, we'll continue to see it grow. But, you know, we're not restrained in terms of our capabilities or capacity.
Speaker Change: Some periods, where the carriers are busier than others, but it tends to move in cycles as different events happen and I think if you look out over the coming years.
Speaker Change: The tenant landscapes evolved since that.
Speaker Change: Really had any sort of economic stress test how should we think about net based portfolio performing U S economy were to hit a soft patch.
Speaker Change: This year, we're obviously feeling very confident and excited about the level of activity as it's continued to increase based on the specific drivers that are in place today.
Speaker Change: Well.
I think David.
Speaker Change: If you look at it from a big picture standpoint, we produced a tremendous amount of cash flow or <unk> is about $1 $4 billion, a year and even if there is softness in the U S or anywhere else you are talking about a variation of leasing activity in incremental dollars being added that is.
Speaker Change: That there are number of factors that could come along that caused that to slow and there are factors that come along the cost of that to increase as we look out longer term. We know that there will be new spectrum. That's eventually made available and that will be a driver of increased activity. There is eventually a <unk> cycle that will take place down the road and so.
Speaker Change: Relatively small in the big picture.
Speaker Change: Over time I feel very good that there will continue to be cycles of investment in networks by our customers and we will see we will be a beneficiary of that.
Brendan Cavanagh: Great, thank you. Sure.
Speaker Change: The cash flow that we're able to produce the amount that we're able to return back to our shareholders.
Jonathan Chaplin: Moving on to Jonathan Chaplin from New Street. Thanks, guys. Just one clarifying question for me. So I think in the past, Brendan, you said that the two and a half gigahertz and three and a half gigahertz spectrum that the carriers have deployed on their sites is sort of 55 to 65 percent of sites. Is that of your sites or of their sites? The way I understood it initially was they're at sort of 55 to 65 percent of their sites and they've still got a lot of growth to go. And I would have thought that would have translated into a lot more amendments to come, as opposed to what you're seeing, which is the bulk of growth coming from new leases.
Speaker Change: No.
Speaker Change: But to say from one year to the next whether this year is going to be a higher or lower year, it's hard to say without.
Speaker Change: Risk to our ability to continue to operate or.
Speaker Change: In quotes I'm, saying sell our product.
Speaker Change: With too much precision.
Speaker Change: It's already been sold it's already happening so we're talking about impacts happening on incremental.
Speaker Change: If we look out multiple years so I'll.
Speaker Change: I'll just leave it we'll see how it goes but you should feel comfortable that there's always another cycle of something needed.
Speaker Change: <unk> additions and right now that's a it's a positive environment and that's great, but even if things or.
Speaker Change: Got it and maybe if I can just kind of.
Speaker Change: Or to slow down you are talking about fairly small amounts. So my commentary is that compared to most businesses out there the cash flow that we're able to produce can be relied upon it is very steady and consistent and that's a good place to be in a in an.
Speaker Change: Yeah.
Speaker Change: Moving out leasing activity to backlog backlog in Q2.
Speaker Change: <unk> leasing.
Speaker Change: Leasing revenue I think one of the thing that the guide that theory.
Speaker Change: Midpoint, it down a little bit from last year despite that.
Speaker Change: <unk> activity is that something when we look at the 2006, we should expect decent Brian given given how active you Ben.
Speaker Change: Unstable environment.
Brendan Cavanagh: Yeah, no, it's when we give those statistics, we're giving it on our their presence on our sites, the leases that we have on our sites. Yeah, it's not to their overall position. That's up to them to comment on. So, and the carriers are not balanced in terms of that. Obviously, T-Mobile is further ahead because they had 2.5 spectrum well ahead of the other incumbents having their mid band C band spectrum. So, it's a mix between them and that perhaps is what's contributing to the shift of who's moving towards new leasing versus amendments faster. But either way, they're through on a consolidated combined basis.
Speaker Change: Thank you.
Speaker Change: Yep.
Speaker Change: Yes, if we continue to see it move the way that it's it's moved thus far this year and it stays with the same trajectory as we move through the balance of the year that should be favorable to next year because thats. The reason this year is down compared to last year, even though the activity is better this year than last year is because theres a drag there's a lag.
Speaker Change: Moving on to our next and last caller Ari Klein from BMO capital markets.
Speaker Change: Okay.
Ari Klein: Thanks for squeezing me in here.
The commentary.
Speaker Change: On domestic leasing activity in signing continues to get better based on the conversations with carriers is that something you expect to continue to accelerate.
<unk> between when you sign up these.
Speaker Change: Agreements and when they start to hit your financials and so we.
Speaker Change: Maybe build here for the next couple of years or does it level off kind of in the range of where you're at now.
Speaker Change: We will see this benefit into the.
Speaker Change: The balance of this year, but particularly into next year as it carries over.
Speaker Change: Oh I think that's a hard question to answer to look out multiple years. We we've seen this play out over decades of being in this and they are.
Speaker Change: Thanks for the color.
Speaker Change: Yeah.
Brendan Cavanagh: Cumulatively, they're through about close to 60% of our leases with the 3 incumbents have been upgraded for mid band spectrum. Got it. So wait, but Brendan, that's 60% of their sites. So they've done amendments on 60% of their sites for mid-band spectrum already. And so there's another 40% they could still do amendments on? as a, yes, as a group. When we're talking about their leases on our sites. Yeah. Yeah, and so they're not doing incremental, but that's not where the activity is coming from at the moment. It's mostly coming from them putting equipment on you.
Speaker Change: No problem.
Speaker Change: Thank you all for joining the call today, and we look forward to reporting our second quarter results.
Speaker Change: Some periods, where the carriers are busier than others, but it tends to move in cycles as different events happen and I think if you look out over the coming years.
Speaker Change: At the end of July.
Speaker Change: Okay.
Speaker Change: That concludes ESB first quarter of 2025 results Conference call you may now disconnect.
Speaker Change: This year, we're obviously feeling very confident and excited about the level of activity as it's continued to increase based on the specific drivers that are in place today.
That there are number of factors that could come along that caused that to slow and there are factors that come along the cost of that to increase as we look out longer term. We know that there will be new spectrum. That's eventually made available and that will be a driver of increased activity. There is eventually a <unk> cycle that will take place down the road and so.
Brendan Cavanagh: Well, yeah, I mean, we're still signing a bunch of amendments, though, and the amendment activity is largely around that. This is largely 5G-related upgrades, yep.
Speaker Change: Over time I feel very good that there will continue to be cycles of investment in networks by our customers and we will see we will be a beneficiary of that.
Brendan Cavanagh: Perfect. Thanks for that clarification.
Speaker Change: But to say from one year to the next whether this year, it's going to be a higher or lower year.
David Guarino: Next caller David Guarino from Gray Street. Thanks, Brendan. Go back to your comment on the transaction front. You said the bid-ask spread might be too wide for some deals to cross the finish line. Was that comment in reference to the past few weeks and the volatility we've seen, or is that something you've observed over the course of the year? Yeah, that's something we've observed really for the last year or so internationally, where you're seeing this. We've seen a number of potential transactions come to market, processes run, some we participated in, others we have not. And there are a number of them that did not actually get completed.
Speaker Change: It's hard to say without.
Speaker Change: With too much precision if we look out multiple years so ill.
Speaker Change: I'll just leave it we'll see how it goes but you should feel comfortable that there's always another cycle something needed.
Speaker Change: Got it maybe if I can just kind of.
Speaker Change: Yeah.
Speaker Change: Moving out leasing activity to backlog backlog in Q1 Q2 leasing.
Speaker Change: Leasing revenue I think one of the thing that the guide this year.
Speaker Change: Point, it down a little bit from last year. Despite the.
Speaker Change: Improvement in activity is that something when we look at the 2006, we should expect decent Brian given given how active you Ben.
Speaker Change: Yes, if we continue to see it move the way that it's it's moved thus far this year and it stays with the same trajectory as we move through the balance of the year that should be favorable to next year. Because that's the reason this year is down compared to last year, even though the activity is better this year than last year is because theres a drag there is a lag time.
Brendan Cavanagh: So It's been a dynamic that's been happening for the last year or so. Really, if you look at the timing when cost of capital started to increase, sometime following on that time period, you started to see this dynamic. Makes sense. And then you had a comment in your press release talking about the business having very reliable cash flow amidst economic uncertainty. And that's definitely been true in the past. But, you know, since the tenant landscapes evolved since that, you know, we've really had any sort of economic stress test. How should we think about SBA's portfolio performing if the U.S.
Speaker Change: <unk> between when you sign up these agreements and when they start to hit your financials and so.
Speaker Change: We will see this benefit into the balance of this year, but particularly into next year as it carries over.
Speaker Change: Thanks for the color.
Speaker Change: Okay.
Brendan Cavanagh: economy were to hit a soft patch? Well, I, I think David If you look at it from a big-picture standpoint, we produce a tremendous amount of cash flow. Our AFFO is about $1.4 billion a year. And even if there's softness in the U.S. or anywhere else, you're talking about a variation of leasing activity and incremental dollars being added that is relatively small in the big picture of the cash flow that we're able to produce, the amount that we're able to return back to our shareholders. There's no risk to our ability to continue to operate or, in quotes, I'm saying, sell our product.
Speaker Change: Well. Thank you all for joining the call today, and we look forward to reporting our second quarter results.
Speaker Change: At the end of July.
Okay.
Speaker Change: That concludes ESB first quarter of 2025 results Conference call you may now disconnect.
Brendan Cavanagh: It's already been sold. It's already happening. So we're talking about impact happening on incremental additions. And right now, that's a positive environment, and that's great. But even if things were to slow down, you're talking about fairly small amounts. So my commentary is that compared to most businesses out there, the cash flow that we're able to produce can be relied upon. It is very steady and consistent, and that's a good place to be in an unstable environment.
Brendan Cavanagh: Good point. Thank you.
Aryeh Klein: Okay, moving on to our next and last caller, Aryeh Klein from BMO Capital Markets. Thanks for including me in here. The commentary on domestic leasing activity and signing continues to get better. Based on the conversation with carriers, is that something you expect to continue to accelerate and maybe build here for the next couple of years? Or does it level off kind of in the range where you're at now? I think that's a hard question to answer, to look out multiple years. We've seen this play out over decades of being in this, and there are some periods where the carriers are busier than others, but it tends to move in cycles as different events happen.
Brendan Cavanagh: And I think if you look out over the coming years, you know, this year we're obviously feeling very confident and excited about the level of activity as it's continued to increase based on the specific drivers that are in place today. That there are a number of factors that could come along that cause that to slow, and there are factors that come along to cause that to increase. As we look out longer term, we know that there will be new spectrum that's eventually made available, and that will be a driver of increased activity. There's eventually a 6G cycle that will take place down the road.
Brendan Cavanagh: And so, you know, over time, I feel very good that there will continue to be cycles of investment in networks by our customers, and we will see, we will be a beneficiary of that. But to say from one year to the next, whether this year is going to be a higher or lower year, it's hard to say without too much precision if we look out multiple years. So I'll just leave it at, we'll see how it goes, but you should feel comfortable that there's always another cycle if something needs.
Brendan Cavanagh: Got it. And maybe if I can just kind of... you know, moving that leasing activity to backlog, from backlog to. I think one of the things is, you know, the guide this year is, you know, the midpoint is down a little bit from last year, just by... Talk about the improvement in activity. Is that something, when we look at the 26, we should expect, you know, a decent rank given our activity? Yeah, if we continue to see it move the way that it's moved thus far this year, and it stays with the same trajectory as we move to the balance of the year, that should be favorable to next year, because that's the reason this year is down compared to last year, even though the activity is better this year than last year, is because there's a drag, there's a lag time between when you sign up these agreements and when they start to hit your financials.
Brendan Cavanagh: So, you know, we will see this benefit into the balance of this year, but particularly into next year as it carries over.
Brendan Cavanagh: Thanks for the call.
Mark DeRussy: Well, thank you all for joining the call today, and we look forward to reporting our second quarter results at the end of July. That concludes the SBA first quarter of 2025 results conference call.
Operator: You may now disconnect.