Q2 2025 American Tower Corp Earnings Call
Operator: Today's conference call is being recorded.
Operator: Following the prepared remarks, we will open the call for questions. If you would like to ask a question, please press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again.
Operator: I would like to turn the call over to your host, Kate Reeb, Senior Director of Investor Relations. Please go ahead.
Ladies and gentlemen, thank you for standing by. Welcome to the American Tower. Second quarter, 20125 earnings conference call. As a reminder, today's conference call is being recorded following the prepared remarks, we will open the call for questions. If you would like to ask a question, please press star 1. 1 on your telephone, you will then hear a message. Advising your hand. This raised to withdraw your question, simply Press Start 11 again.
Kate Reeb: Good morning, and thank you for joining American Tower's second quarter earnings conference call. We have posted a presentation which we will refer to throughout our prepared remarks under the Investor Relations tab of our website, www.americantower.com.
I would like to turn the call over to your host, Kate Ree, Senior Director of Investor Relations. Please go ahead.
Kate Reeb: I am joined on the call today by Steve Vondran, our President and CEO, and Rod Smith, our Executive Vice President, CFO, and Treasurer.
Good morning, and thank you for joining American Tower second quarter earnings conference call. We have posted a presentation which we will refer to throughout our prepared remarks, under the investor relations tab of our website. Www.american.com
Kate Reeb: Following our prepared remarks, we will open up the call for your questions. Before we begin, I'll remind you that our comments will contain forward-looking statements that involve a number of risks and uncertainties. Examples of these statements include our expectations regarding future growth, including our 2025 outlook, capital allocation, and future operating performance, and any other statements regarding matters that are not historical facts. You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements. Such factors include the risk factors set forth in this morning's earnings press release, those set forth in our most recent annual report on Form 10-K, and in other filings we make with the SEC.
I am joined on the call today by Steve andrin. Our president and CEO and Rod Smith, our Executive Vice President CFO and treasurer.
Following our prepared remarks, we will open up the call for your questions.
Before we begin, I'll remind you that our comments will contain forward-looking statements. That involve a number of risks and uncertainties.
These statements include our expectations regarding future growth, including our 2025 outlook for capital allocation and future operating performance, as well as any other statements regarding matters that are not historical facts.
You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements.
Kate Reeb: We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances.
Such factors include the risk factors set forth in this morning's earnings press release, those set forth in our most recent annual report on Form 10-K, and in other filings we make with the SEC.
Steve Vondran: With that, I'll turn the call over to Steve. Thanks, Kate. Good morning, everyone, and thanks for joining us all. As you can see from our results, 2025 continues to be a good year. Demand for our tower leasing services and data center businesses, combined with FX Tailwinds, has led us to raise outlook for property revenue, EBITDA, and ASFO. These results highlight the ongoing strength of our global businesses and the durability of mobile network demand that underpins it. And American Tower continues to offer a predictably compelling value proposition for investors against a volatile macroeconomic backdrop.
We urge you to consider these factors and remind you that we undertake no obligation to update the information contained. In this call, to reflect subsequent events or circumstances with that. I'll turn the call over to Steve.
Thanks, Kate. Good morning everyone and thanks for joining us. All.
As you can see from our results, 2025 continues to be a good year.
Steve Vondran: I'll briefly share a few highlights and trends before Rod discusses more detailed results and outcomes. Mobile data consumption continues to climb, driving increased demand for network capacity in every region where we are. We see this demand catalyze activity across our extensive tower footprint and drive network upgrades as the sunsetting of legacy radios faster than we've seen in early G-sites. Carriers and developed markets continue to expand and mature their 5G networks as they work toward aggressive coverage and quality targets between now and the end of the decade, while emerging market players actively complete their 4G rollouts and selectively, yet increasingly, pursue the 5G cycle.
Demand for our Tower, leasing services, and data center. Businesses combined with FX Tailwind has wanted us to raise outlook for property Revenue deep. A dock and ASO. These results highlight the ongoing strength of our Global businesses and the durability of mobile network demand that underpins it and American Tower continues to offer a predictably compelling value. Proposition for investors against the volatile macroeconomic backdrop.
I'll briefly share a few highlights and Trends before Rob discusses more detailed results and Outlook.
Mobile data consumption continues to climb driving increased demand for network capacity in every region. Where we operate, we see this demand catalyze activity across. Our extensive Tower footprint and drive Network upgrades as the sun setting of Legacy radio is faster than we've seen, it will reduce Cycles.
Steve Vondran: In our developed tower markets, which consist of the US, Canada, and Europe, mobile traffic growth rates are anticipated to slightly outpace global averages over the next five years. And increasingly data intensive and uplink use cases like mobile video, AI, and new devices will continue to stress networks and prompt both mid band coverage and capacity driven 5G activity across our tower footprint and rooftop sites. In the U.S., we see the 5G cycle playing out in line with our original expectations as carriers continue side upgrade activities to work toward 2026 5G coverage goals and begin early identification oriented co-location activity to improve network quality.
As carriers in developed markets continue to expand and mature their 5G networks, they are working towards aggressive coverage and quality targets between now and the end of the day. Meanwhile, emerging market players are actively completing their 4G rollouts and selectively yet increasingly pursuing the 5G cycle.
In our developed Tower markets, which consist of the US, Canada, and Europe, mobile traffic growth rates are anticipated to slightly outpace global averages over the next five years. Increasingly data-intensive and uplink use cases, like mobile video, AI, and new devices, will continue to stress networks and prompt both mid-band coverage and capacity driven by G activity across our Tower footprint and rooftop sites.
Steve Vondran: We still see significant differences in mid-band rollout progress across our portfolio, positioning us well to capture substantial new business from both amendments and co-locations, with the latter comprising an increasingly material share application mix for certain big three customers. On a combined basis, total application volume increased more than 50% year-over-year, representing strong, broad-based demand for ourselves.
In the US, we see the 5G cycle playing out in line with our original expectations as carriers, continue to cite upgrade activities work toward 2026 5G coverage goals and begin early densification oriented collocation activity to improve the network quality.
We still see significant differences in mid-band rollout progress across our portfolio, positioning us well to capture substantial new business for both amendments and collocations, with the latter comprising an increasingly material share of the application mix for certain Big 3 customers.
Steve Vondran: Our U.S. services business posted a near-record quarter, propelled mainly by outsourced construction services, signaling our customers' increasing recognition of the quality, efficiency, and overall value that we provide through our best-in-class offering. Next, our Europe business also continues to trend in line with expectations, benefiting from a healthy overall operating environment and strong customer agreements that provide both growth and insulation from various customer shifts across the region. Mid-band coverage now stands at just about 55 percent in the markets where we operate, which is slightly ahead of the continental average and leaves a significant runway for more coverage-oriented activity as carriers pursue 2030 rollout targets.
On a combined basis, total application volumes increased more than 50% year-over-year. Representing, strong broad-based demand for ourselves.
Our us Services business posted a near record quarter. Propelled mainly, by outside Construction, Services signaling, our customers, increasing recognition of the quality efficiency and overall value that we provide through our best-in-class offerings.
Next, our Europe business also continues to Trend in line with expectations benefiting from a healthy overall, operating environment, and strong customer agreements that provide both growth and insulation from various customer shifts across the region.
Steve Vondran: Additionally, spectrum extensions and related coverage obligations in Germany should unlock long-term investment and yield future growth benefits, and in the near term are bringing energy and momentum to 5G road activity. In our emerging markets, we've raised our outlook due to a mix of FX tailwinds and core leasing outperformance. Our African business continues to post robust growth results, benefiting from a stabilized, lower-churn carrot landscape, better consumer pricing in key markets, and supportive demand dynamics. 5G maturity remains limited in the region, with most activity focused on 4G rollouts and densification, but we do see early 5G deployments continue to progress in select urban areas, propelled by use cases of fixed wireless.
Midbank coverage now stands at just about 55% of the market's early operating, which is slightly ahead of the continental average and leaves a significant runway for more coverage-oriented activity as carriers pursue 2030 rollout targets.
Additionally Spectrum, extensions and related coverage, obligations in Germany. Should unlock long-term investment and yield future growth benefits. And in the near term are bringing energy and momentum to 5G rollout activity,
In our Emerging Markets, we raise our Outlook due to a mix of Ethics tailwind and core leasing outperformance. Our Africa, business continues to close robust growth results, benefiting from a stabilized, lower churn care, landscape, better consumer pricing and key markets and supportive demand Dynamics.
Steve Vondran: Activity has improved in markets like Nigeria, where higher consumer prices are supporting better carrier economics and unlocking stronger levels of network investment. Growth in Latin America remains muted relative to historical trends, and our expectations for persisting low-single-digit growth through 2027 remain unchanged. However, consolidation has normalized in Brazil, and new activity is anticipated across the more stabilized three-player market as carriers work to fulfill regulator commitments in the region and realize better margins from higher RPIs. Our outlook for the region has modestly increased, but along with some improvements in markets like Brazil, we're seeing continued elevated levels of churn as carriers rationalize the infrastructure that is required through consolidation activities.
5G maturity remains Limited in the region with most activity focused on 40, roll outs and densification but we do see early 5G deployments continue to progress in select urban areas propelled by use cases like 6 Wireless activity, is improved in markets like Nigeria where higher consumer prices are supporting better, carrier economics and unlocking stronger levels of network investment.
Realize better margins from higher RPS.
Steve Vondran: Moving to our data center business, we continue to see exceptional performance from CoreSight and have increased our 2025 expectations to reflect new growth attributable to the recently acquired TE1 facility, as well as elevated demand and pricing from our broader portfolio of interconnection data center facilities. Hybrid and multi-cloud IT architecture requiring secure, low-latency interoperability remains a primary driver of demand, but early phases of AI-related workloads, including inferencing, machine learning models, and GPUs-as-a-service represent a fast-growing component of Foresight's least For more information visit www.Foresight.com Capacity constraints from high absorption rates and continued AI-driven demand from both very large hyperscale players across the wider market and the enterprise customers that value our interconnection ecosystem are driving a sustained, favorable pricing and pre-leasing environment that we expect to continue into the foreseeable future.
Our outlook for the region is modestly increased. But along with some improvements in markets, like Brazil we're seeing continued elevated levels of churn as carriers, rationalize the infrastructure, that required the consolidation activity.
Moving to our data center business. We continue to see exceptional performance from core site and have increased our 2025 expectations to reflect New Growth attributable. To the recently acquired de1 facility as well as elevated demand and pricing for our broader portfolio of interconnection data center facilities.
Hybrid and multi-cloud IT architecture, requiring secure, low-latency interoperability, remains a primary driver of demand in the early phases of AI-related workloads, including inferencing, machine learning models, and GPUs as a service. This represents a fast-growing component of Foresight's leasing.
Steve Vondran: These tailwinds have enabled us to remain selective in our customer mix to curate high quality ecosystems while exceeding our initial underwriting assumptions. We plan to continue to prioritize funding core site on a success basis and in line with our capital allocation strategy to replenish supply and facilitate future growth. Overall, our outlook is generally looking up as we enter the second half of 2025, but we remain focused on delivering our differentiated value proposition and staying true to our stated strategy. Our experience team is well-versed in addressing certain ebbs and flows across our global footprint, and our strategic long-term focus enables us to benefit from the durability of tower leasing and growing mobile data and computing demand.
Capacity concerns from high absorption rates and continued AI driven demand for both very large, hyperscale players Across The Wider market and the Enterprise customers that value. Our interconnection ecosystem are driving a sustained favorable pricing and pre-leasing environment that we expect to continue into the foreseeable future.
These Tailwinds have enabled us to remain selective in our customers to curate high-quality ecosystems while exceeding, our initial underwriting assumptions.
We plan to continue to prioritize funding core site on a success basis. And in line with our Capital, allocation strategy, to replace Supply and facilitate future growth.
Steve Vondran: Our superior global portfolio, best-in-class services and customer delivery, high-quality balance sheet, protective contracts, and highly disciplined approach to capital allocation already enable us to extract significant value from the global tower landscape. But we remain motivated to continuously improve and deliver even more compelling returns to our stakeholders.
Overall, our Outlook is generally looking up as we enter the second half of 2025, but we remain focused on delivering our differentiated value proposition and staying true to our state and strategy. Our experienced team is well-versed in addressing certain es and flows across our Global footprint and our strategic long-term. Focus enables us to benefit from the durability of power, Leasing and growing mobile data in Computing, demand terms.
Rod Smith: Now I'll hand it over to Rod to discuss second quarter results and our revised 2025 outlook.
Our Superior Global portfolio best-in-class services and customer delivery, high-quality balance sheet, protected contracts and highly disciplined approach to Capital. Allocation already enabled us to extract significant value from the global Tower landscape, but we remain motivated to continuously, improve and deliver even more compelling, with Human Service to coolers.
Rod Smith: Rod? Thanks, Steve, and thank you all for joining the call. As noted in this morning's press release, we had a strong second quarter driven by resilient demand across our global portfolio. We are well positioned to benefit from growing mobile data consumption and confident in our ability to sustain growth through the second half of the year.
Now I hand it over to Raj to discuss second quarter results and our revised, 2025 Outlook Broad.
Thanks, Steve, and thank you all for joining the call.
Rod Smith: Before diving into our Q2 results and our revised full year outlook, I'll share a few highlights. First, leasing momentum remains strong, resulting in consolidated organic tenant buildings growth of 4.7%. Our U.S. services business had a near record quarter, while application volumes among the big three were up over 50% year-over-year. This was primarily driven by amendment upgrades and a 200% year-over-year increase in co-location. Core Site also had an exceptional quarter with double-digit revenue growth and gross margin expansion, fueled by hybrid cloud demand and AI-related use cases. Strategically, we closed the acquisition of our DE1 data center asset in Denver and deployed over 75% of our discretionary capital in developed markets, rising to over 85% when including acquisition capital.
As noted in this morning's press release, we had a strong second quarter driven by resilient demand across our global portfolio. We are well positioned to benefit from growing mobile data consumption and are confident in our ability to sustain growth through the second half of the year.
Before diving into our Q2 results and our revised school year outlook, I'll share a few highlights.
First, leasing momentum, remains strong resulting in Consolidated. Organic tenant Billings growth of 4.7%.
Our U.S. Services business had a near-record quarter, while application volumes among the Big 3 were up over 50% year-over-year. This was primarily driven by amendment upgrades and a 200% year-over-year increase in collocations.
Of course, site also had an exceptional quarter with double digit, Revenue, growth and gross margin expansion. Fueled by hybrid Cloud, demand and AI related, use cases.
Rod Smith: Finally, we strengthened our balance sheet by issuing 500 million euros in senior unsecured notes at 3.625%. Proceeds were used primarily to pay down existing debt. At quarter end, floating rate debt was approximately 7% of our total outstanding debt and net leverage stood at 5.1 times.
Strategically, we closed the acquisition of our DE1 data center asset in Denver and deployed over 75% of our discretionary capital in developed markets, rising to over 85% when including acquisition capital.
Finally we strengthened our balance sheet by issuing 500 million euros in senior unsecured notes at 3.625%.
Proceeds were used primarily to pay down existing debt.
Rod Smith: Turning to second quarter property revenue and organic tenant buildings growth on slide six, consolidated property revenue grew 1.2% year-over-year and more than 3% when excluding non-cash straight line revenue, despite absorbing more than 70 basis points of FX headwinds. Year-over-year growth was negatively impacted by 2% due to a change in non-recurring revenue in the current period relative to the prior year. U.S. and Canada property revenue declined by more than half a percent and grew approximately 3% when excluding non-cash straight-line revenue, despite absorbing more than 100 basis points of sprint churn. International property revenue grew approximately 1% year-over-year and approximately 3% when excluding the impacts of foreign currency fluctuations.
At quarter end floating rate. Debt was approximately 7% of our total outstanding debt and net leverage stood at 5.1 times.
Turn it to second quarter property revenue and organic tenant billing growth on slide 6 Consolidated, property Revenue, grew 1.2% year-over-year in more than 3%. When excluding non-cash straight line revenue despite absorbing more than 70 basis points of FX headwinds
Year-over-year growth was negatively impacted by 2% due to a change in non-recurring Revenue in the current period relative to the prior year.
US and Canada property Revenue declined by more than half a percent and grow. Approximately 3%, when excluding non-cash straight line revenue despite absorbing more than 100 basis points of Sprint churn.
Rod Smith: Finally, property revenue in our data center business grew over 13%. Moving to the right side of the slide, Consolidated Organic Tenant Billings Growth was 4.7%, driven by solid demand across our global portfolio. In our U.S. and Canada segment, organic tenant buildings growth met our expectations at 3.7% and greater than 5% when excluding sprint-related churn. Our international segment drove 6.5% in organic tenant buildings growth, a modest step down from Q1 2025, reflecting generally consistent leasing trends paired with slightly lower contributions from escalators and churn.
International property, Revenue grew, approximately 1% year-over-year and approximately 3%. When excluding the impacts of foreign currency fluctuations,
Finally, property revenue in our data center business grew over 13%.
And across our Global portfolio.
In our US and Canada segment. Organic tenant Billings growth met our expectations at 3.7% and greater than 5% when excluding Sprint related germs.
Rod Smith: Turning to slide seven, adjusted EBITDA grew 1.8% and approximately 4.5% when excluding non-cash net straight line, despite absorbing approximately 90 basis points of FX headwinds. Growth was positively impacted by continued direct expense management, resulting in a high conversion of cash property revenue and a greater than 100% increase in U.S. services business gross profit. Partially offset by the flow-through of non-recurring revenue benefits in the prior year period, increased bad debt associated with Latin America customer collections and other non-recurring and timing-related costs. Cash adjusted EBITDA margin declined 40 basis points year-over-year, partially driven by a higher contribution from U.S.
Our International segment, drove 6.5% in organic tenant Billings growth. A modest step down from q1, 2025 reflecting generally, consistent leasing Trends, paired with slightly lower contributions from escalators and insurance.
Rod Smith: services.
Rod Smith: Moving to the right side of the slide, attributable AFFO and attributable AFFO per share declined by approximately 6.7% and 6.8% respectively, primarily due to more than $65 million of prior year revenue reserve reversals in our India business. On an as-adjusted basis normalizing for the sale of India, attributable AFFO per share growth was approximately 2.4%, driven by the high conversion of cash-adjusted EBITDA growth to AFFO through the effective management of below-the-line costs, partially offset by flow-through of non-recurring revenue benefits in the prior year period previously mentioned.
Turning to slide 7 adjusted evoc group, 1.8% and approximately 4.5%, when excluding non-cash, net straight line, despite absorbing a proximately 90 basis points of FX. Headwinds growth was positively impacted by a continued. Direct expense management, resulting in a high conversion of cash property revenue and a greater than 100% increase in US Services business growth profits, partially offset by the flow through of non-recurring Revenue benefits in the prior year, period increased bad debt associated with Latin America, customer Collections and other non-recurring and timing related costs, cash adjusted. Even on margin declined. 40 basis points year-over-year partially driven by a higher contribution from us services.
Moving to the right side of the slide attributable, afo and attributable, afo per share declined by approximately 6.7% and 6.8% respectively, primarily due to more than 65 million of Prior year Revenue, Reserve reversals in our India business on an as adjusted basis. Normalizing for the sale of India attributable, afo per share growth was approximately 2.4% driven by the high conversion of cash, adjusted. Even at growth to affo through the effective management of below the line costs,
Rod Smith: Now, turning to our revised full year outlook. As you will see on the next few slides, our core year-to-date results and expectations for the second half of the year are contributing to improvements across property revenue and adjusted EBITDA compared to our prior outlook. In addition, our revised FX assumptions are providing tailwinds of $130 million, $80 million, and $55 million to property revenue, adjusted EBITDA, and attributable AFFO, respectively. As a result, we are raising our expectations for property revenue, adjusted EBITDA, attributable AFFO, and attributable AFFO per share by approximately $165 million, $120 million, $55 million, and $0.12, respectively, compared to our prior outlook.
Partially offset by flow through of non-recurring revenue benefits in the prior year, period previously mentioned.
Now, turning to our revised full year outlook.
As you will see on the next few slides, our core year-to-date results and expectations for the second half of the year are contributing to improvements across property revenue and adjusted EVA compared to our prior outlook.
In addition, our revised FX assumptions are providing a tailwind of $130 million, $80 million, and $555 million to property revenue, adjusted EBITDA, and attributable AFFO, respectively.
Rod Smith: At the midpoint, our expectation for attributable AFFO per share is $10.56, or approximately 6% year-over-year growth on an as-adjusted basis. Turning to slide 8, we are increasing our expectations for property revenue by approximately $165 million compared to our prior outlook, which includes $130 million of FX tailwinds, $15 million of consolidated core property outperformance, and $20 million of additional upside, consisting of an approximately $25 million increase in straight line revenue, partially offset by an approximately $5 million decrease in pass-through revenue. Consolidated core property outperformance includes upside from international and core site, including incremental contributions from our recently acquired DE1 asset.
As a result, we are raising our expectations for property Revenue, adjusted ebita attributable, affo and attributable afo per share by approximately 165 million 120 million, 55 million, and 12 cents, respectively, compared to our prior Outlook. At the midpoint, our expectation for attributable, afo for share is ten dollars or approximately 6% year-over-year growth on an as adjusted basis.
Turning to slide 8. We are increasing our expectations for property Revenue by approximately 165 million compared, to our prior Outlook, which includes 130 million of FX Tailwind, 15 million dollars of Consolidated, core property, outperformance and 20 million dollars of additional upside. Consisting of an approximately 25 million increase in straight line revenue. Partially offset by an approximately 5 million decrease in pass through Revenue.
Rod Smith: Outperformance was partially offset by slower commencements compared to initial expectations related to a customer in the US, which affect organic tenant buildings growth expectations that I will touch on in a moment.
Rod Smith: Moving to slide nine, we are reiterating our organic tenant buildings growth expectations of approximately 5% on a consolidated basis. We have revised our expectations for the U.S. and Canada Organic Tenant Billings growth to approximately 4.3 percent, reflecting slight timing differences due to modestly slower than initially anticipated pacing of new business. Importantly, while the timing of commencements could result in some quarter to quarter variability, it does not change our overall expectations to capture the new business. In addition, we are reiterating our Organic Tenant Billings growth expectations of approximately 5 percent for Europe, raising our expectations for Africa and APAC to greater than 12 percent due to solid carrier activity and slightly lower churn expectations, and raising our expectations for LATAM to greater than 2 percent driven by modestly higher than expected contributions from CPI linked escalators.
Consolidated core property, outperformance includes upside from International and core site, including incremental, contributions from our recently acquired de1 asset. Outperformance was partially offset by slower commencements, compared to initial expectations related to a customer in the US, which affect organic tenant Billings growth expectations that I will touch on in a moment.
Rod Smith: Turning to slide 10, we are increasing our adjusted EBITDA outlook by $120 million compared to our prior outlook, driven by the conversion of property revenue, services gross profit, and FX tailwinds, partially offset by non-recurring expense items, including incremental bad debt associated with certain Latin America customers. Moving to slide 11, we are raising our expectations for AFFO attributable to common stockholders by $55 million at the midpoint, or 12 cents on a per share basis. Cash-adjusted EBITDA outperformance and FX tailwinds are partially offset by increased minority interest in maintenance capital. Our revised attributable AFFO per share midpoint is $10.56.
than 2%, driven by modestly higher than expected contributions from CPI-linked escalators.
Turning to slide 10. We are increasing our adjusted Evita Outlook by 120 million compared to our prior Outlook driven by the conversion of property, Revenue Services, gross profit and FX Tailwind partially offset by non-recurring expense items, including incremental bad debt associated with certain Latin America, customers
Moving to slide 11. We are raising our expectations for afo attributable to Common stockholders by 55 million at the midpoint or 12 cents on a per share basis.
Cash adjusted, ebita outperformance. In FX Tailwinds are partially offset by increased minority interest in maintenance capital.
Rod Smith: Year over year, AFFO per share growth is now expected to be approximately 6% on an as-adjusted basis.
Rod Smith: Turning to slide 12, we are modestly revising our 2025 capital plans, which include approximately $1.7 billion in capital expenditures, down $20 million compared to prior outlook, and contemplates a 100 site reduction in Latin America and consistent data center spending. We continue to expect to distribute approximately $3.2 billion to our shareholders as a common dividend, which remains unchanged from our prior expectation and subject to board approval. Moving to the right side of the slide, our balance sheet is strong, providing financial flexibility and optionality, including $10.5 billion in liquidity and low floating rate debt exposure.
Our revised attributable AFO per share, midpoint, is $10.56 year-over-year. AFO per share growth is now expected to be approximately 6% on an as-adjusted basis.
Returning to slide 12, we are modestly revising our 2025 capital plans, which include approximately $1.7 billion in capital expenditures, down $20 million compared to the prior outlook. This contemplates a 100-site reduction in Latin America and consistent data center spending.
Rod Smith: Turning to slide 13, and in summary, we're pleased with our results through the first half of 2025, which highlight the criticality of our assets, the resilience of our business model, and the outstanding execution of our talented employees. We are confident in our ability to deliver sustainable growth and long-term shareholder value.
We continue to expect to distribute approximately 3.2 billion dollars to our shareholders, as a common dividend, which remains unchanged from our prior expectation and subject to board approval. Moving to the right side of the slide, our balance sheet is strong, providing Financial flexibility, and optionality, including 10.5 billion dollars in liquidity and low floating rate debt exposure.
Operator: And with that, operator, we can open the line for questions. Thank you so much. And as a reminder to get in the queue, simply press star 11 on your telephone and wait for your name to be announced. To remove yourself, press star 11 again. Please stand by for our first question.
Turning to slide 13, in summary, we're pleased with our results through the first half of 2025, which highlights the criticality of our assets, the resilience of our business model, and the outstanding execution of our talented employees. We are confident in our ability to deliver sustainable growth and long-term shareholder value.
Michael Rollins: and is from the line of Michael Rollins with City. Please proceed. Thanks and good morning.
And with that operator, we can open the line for questions. Thank you so much. And as a reminder, to get in the queue, simply press star, 1 1, 1 on your telephone, and wait for your name to be announced to remove yourself press star, 1 1 1, again please stand by for our first question.
And he's from the line of Michael Rallings with City. Please proceed.
Steve Vondran: So first, I'm curious if you could dig further into the different observations for domestic leasing. You talked about the increase in applications from amendments and COLO slash densification, but also the delay in commencements from one of your customers. So can you talk about a little bit more about how that's affecting the second half of the year? And is that setting up 2026 to be a better year and to get some of these benefits to come through?
Steve Vondran: And then secondly, I was just curious if you could provide an update on the opportunities to extract an incremental layer of efficiency within the business. Thanks.
Steve Vondran: Yeah, thanks, Mike. I'll take both of those.
Thanks and good morning. So first, I'm curious if you could dig further into, um, the different observations for domestic leasing, you talked about the increase in applications uh, from uh, amendments and uh, Colo densification but also the delay in commencements from 1 of your customers. So can you talk about um, a little bit more about how that's affecting the second half of the year? And is that setting up 2026 to be a better year and to get some of these benefits to come through and then, secondly, I was just curious. If you could provide an update on the opportunities to extract and incremental layer of efficiency, within the business that
Steve Vondran: So when you look at the US leasing environment, What we're excited to see is the increase in application volume that we expected from the beginning of the year. And so that's playing out in line with our expectations. So if you look across the board, we're seeing a healthy level of activity and we're seeing So that's all very positive. We're excited to see that. And that's indicative of a very healthy. And in terms of kind of what we were expecting in our pipeline, the volume that we were expecting from our customers is consistent and the price.
Steve Vondran: What has been a little bit slower than we expected is the conversion from one of our customers of that leasing into That's a customer that's not on the hold list. And so when we did our forecasting, we had a certain in there, and they're just moving a little bit slower than we So, you know, from our perspective. So you're talking a few million dollars of in-year is all in the difference, and that OTBG metric is very sensitive to the timing of commencements on it, but when you look at the health of the business and the fact that we're going to get that new business, we're very confident.
yeah, thanks, Mike. I'll take both of those. So when you look at the, the US leasing environment, uh, what we're excited to see is the increase in application, volume that we expected from the beginning of the year. And so that's playing out in line with our expectations. So, if you look across the board, we're seeing a healthy level of activity, uh, we're seeing, you know, continued increases in the pipeline and we're seeing an increase in the new collocations on that. So that's, that's all very positive work. Sorry to see that and that's indicative of a very healthy leasing environment. And in terms of kind of what we were expecting in our pipeline, the volume that we were expecting from our customers is consistent and the pricing is consistent. What happen?
Has been a little bit slower than we expected. Is the conversion from 1 of our customers of that, leasing into commencements, and that, that the customer. That's not on the holistic agreement. And so we did our forecasting. We had a certain Cadence that we thought that we were going to
Steve Vondran: We're not seeing anything that would indicate a pullback, we're not... The Pipeline of Applications dry up, we're not seeing any projects. It's just a little bit slower cadence in terms of signing the leases, getting them back and getting So from our perspective, there's nothing on that.
Steve Vondran: anything other than a robust We'll leave 26 guidance to 26. If you think about kind of the variables going into... A good pipeline is important, and that's what we're seeing.
Steve Vondran: Reporters of our Long-Term Guide. We do have less contracted revenue going into the next couple of years than we had the prior years. So we are more dependent on that. Revenue Commencement. And so we are excited to see them. That's positive. We are still expecting churn to trend down, that's not considering the U.S. cellular transaction, which has now been approved, so that's a variable. at the next couple of years.
Steve Vondran: But overall, I'd say the pipeline is healthy and we'll wait to get guidance on 2016.
Nothing on that. That indicates, you know, anything other than a robust leasing pipeline. Um, you know, we'll leave 26 guidance to 26. Uh, you know, if you think about, you know, kind of the variables going into 2026, uh, a good pipeline is important. And that's what we're seeing is a pipeline that's kind of supportive of our long-term guide that's there. Uh we do have less contracted Revenue going in to the next couple of years and we had the prior years so we are more dependent on that activity based uh, Revenue commencement. And so, we are excited to see that pipeline continue to build. That's positive for us. Uh, we are still expecting churn to Trend down and that's not considering the US Cellular uh, transaction, which has now been approved, so that we will be launching. That's a variable looking into the next couple of years to see how that's going to affect it.
Steve Vondran: As for your second question in terms of... Extracting Value. I've given bud till close to the end of the year to give me guidance on. But the efforts are progressing very well. And we've had. some very good receptivity across the globe to our globalization. Just to kind of set expectations in terms of what that's going to look like. We're looking at our total addressable spend, so that's including direct expenses, O&M, SG&A, growth capital. Supply Chain, all those different areas. And the overall goal that we've set ourselves is to have a continuously increasing.
Um but overall, you know, I I say the pipeline's healthy and we'll we'll wait to give guidance on 26 when we get there.
Uh, as for your your second question, in terms of the uh, extracting value, I've given Bud till close to the end of the year to give me to give me guidance on that, but the effort to progressing very well and we we've had uh some very good receptivity across the globe to our globalization efforts and the team is seeing opportunities there and just to kind of set expectations in terms of what that's going to look like. You know, we're looking at our total addressable spend so that's including direct expenses. O and m sgna growth capex supply chain, all those different
Areas in it.
Steve Vondran: So, you know, you probably shouldn't expect to see like a... at the Cost of Doing Business, but the goal is to bend the curve down so that those are growing slower than our revenues in every geography. So as Bud works through what this looks like, it'll be kind of a multi-year goal that we've set out to bend that cost curve down to give us better margin. So we'll continue to work through that, and again, I'll commit to you guys, by the end of the year, we'll get some targets out there, but so far, everything is kind of aligning up with what we thought we were going to see when we started this journey, and we feel very good about it.
And the overall goal that we've set for ourselves is to have a continuously increasing gross margin in our talent business.
So, you know, you probably shouldn't expect to see like a, you know, a huge decrease in direct expenses, some of that is, is just, you know, the cost of doing business. But the goal is to bend the curve down so that those are growing slower than our revenue and all in every geography on a consistent basis. And so, as Bud, Works through what this looks like, it'll be kind of a multi-year goal that we set up that bend that cost curve down to give us better margin expansion than than what we would see otherwise on that.
Rod Smith: in terms of what we're going to be able to create.
Rod Smith: Hey, Michael, this is Rod. Maybe I can add just a couple of quick points here for you to follow up on Steve's comments regarding new business, all the things that Steve mentioned around timing in the US, you'll see that play out in our numbers, primarily in new business. We were at a projection of about 165, 165 million. or slightly better for new business with this revised timing.
So we'll continue to work through that. And again, a committee to you guys by the end of the year will get some targets out there. Uh but so far, everything is kind of aligning up with what we thought we were going to see when we started this journey and we feel very good about that uh, in terms of what we're going to be able to create in terms of value creation over time.
Rod Smith: That number is expected now to be more like... and it is a timing related. What that does is it affects OTBG in a very modest or subtle way. Our original guide was equal to or greater than 4.3% in the U.S. We've adjusted that to approximately 4.3% just to reflect the fact that we could be at 4.3% or slightly below because of this mild timing.
Hey Michael, this is Rod. Maybe I can add just a couple of quick points here for you. Um, to follow up on Steve's comments, regarding new business, all the things that Steve mentioned around timing. In the US, you'll see that play out in our numbers primarily in new business in organic ten and billing growth. So, you know, we were at a projection of about 1 165 165 million, uh or slightly better for new business with this revised um timing of the pacing of some of the deployments that number is expected. Now to be more like 160 and it is a timing related issue as Steve uh, mention
Rod Smith: Just to give you a little bit of numbers there, and then I would just make one quick comment on SG&A. For the full year of 2025, we expect to be roughly flat on SG&A, excluding the bad debt. And that's after absorbing things like a few legal fees for some of the customer issues that we have in Latin America, as well as managing through the very robust business in CoreSite. There is some added SG&A there to support that double-digit growth. So you'll see us absorbing that and also keeping SG&A flat with a few other kind of timing issues.
Mentioned. And what that does is it affects, um, OTB in a, in a very modest or subtle, uh, way our original guide was equal to, or greater than 4.3% in the US, we've adjusted that to approximately 4.3, just to reflect the fact that we could be at 43 or slightly below because of this mild, uh, timing. So, just to give you a little bit of numbers there. And, and then I would just make 1, quick comment on sgna for the full year of 2025. We expect to be roughly flat on sgna, excluding the bad debt and that's after absorbing things like a few legal fees for some of the customer, um, issues that we have in in Latin America, um, as well as, uh, managing through the very robust business and core site, there is some added sgna there to support that double digit growth. Uh, so you'll see us absorbing that and also keeping SG in a flat with a few other kind of timing issues in their
Rod Smith: Thanks very much. Thank you.
Rick Prentiss: Our next question comes from Rick Prentiss with Raymond James. Please go ahead. Great morning, guys. Morning, Rick. A couple of questions. Follow up, Steve, you mentioned US Cellular T-mobile deal now is approved. Can you frame for us what that USM exposure you think might be, and the timing for that?
thanks very much.
Thank you.
Our next question comes from Rick Prentice with Raymond James, please go ahead.
Hey, this morning, guys.
Steve Vondran: And then obviously more speculative, just maybe an update on DISH, what you're seeing there and what the exposure is there. Sure, so with respect to U.S. Cellular, in absolute terms, not the overlap, but the total amount of new business we have with U.S. Cellular, it represents about less than a half a percent contribution to our property revenues, our global property revenues, and less than one percent to our U.S. and Canada property revenues. So it's relatively small exposure overall. And if you look at that portfolio, what we don't know yet is what T-Mobile plans. And so as we're looking out over the next couple of years, a lot of it depends on what their plans are.
Morning, Rick. Rick, a couple of questions. Um, follow up. Steve, you mentioned the US Cellular-T-Mobile deal? Now it's approved. Um, can you frame for us what that USM exposure you think might be and the timing for that? And then, obviously more speculative, just maybe an update on Dish, uh, what you're seeing there and what the exposure is there.
Steve Vondran: We haven't been able to have discussions on that because of the oil. So that's kind of a worst case scenario. We certainly wouldn't expect to lose all of them. But there will be some of that that they're going to want to turn off of as part of their synergies and we'll work with them on that. As that closes and we have those conversations, we can give you guys a little bit more visibility in. over time, and by the way, those percentages of total revenue.
Property revenues, so it's relatively small exposure overall. And if you look at that, that portfolio, what we don't know yet is what T-Mobile plans to do with those sites. And so, as we're looking at, over the next couple of years, a lot of it depends on what their plans are. And we haven't been able to have discussions on that because the deal wasn't approved yet. So that's kind of a worst case scenario. We certainly wouldn't expect to lose all of that. Um but but there will be some of that that they're going to want to turn off of as part of their synergies and we'll work with them on that some more than the way we have in the past. And so as that closes and we have those conversations we can get can give you guys a little bit more visibility into it uh over time. And by by the way that those percentages of total revenue, not new bids, that's total revenue that
Steve Vondran: with respect to DISH. We continue to watch the situation like everybody else does, and to see what's happening there. We think there have been a few positive developments in terms of... Thanks a lot, and thanks to the public for your time. So we feel pretty good about that. The overall exposure to DISH, they represent about 2% of our global population. over 2% of our global revenues, slightly over over 4% of our And that's, again, total. But again, what we're seeing is the same thing you guys are seeing, the headlines are slightly positive.
Less than half a percent of property revenues and half a percentage of us can or revenues on that.
Uh, with respect to Dish, um,
You know we continue to watch the situation like everybody else does and to see what's happening there. We think there have been a few positive developments in terms of of some of the things that they said publicly that they're doing. So we feel pretty good about that. The overall exposure to Dish is they represent about 2% of our Global over 2% of our Global revenues slightly over um over a 4% of our us revenues and that's again total exposure for that portfolio. But again what we're seeing is the same thing. You guys are seeing with the headlines are are slightly positive lately. So we're you know, optimistic and hopeful
Rod Smith: Hey, Rick, if I could go ahead.
Rod Smith: Sorry, just regarding the churn since you brought up churn, I've been been looking forward to saying this for a few years here. But just to remind everyone that we are in our final year of the sprint churn. So when you think about the churn percentages for Q3, we were at a little over two, maybe 2.3% total churn in our US business.
That they'll work through their situations and continue to deploy.
Hey, go ahead row. Sorry, just regarding the churn. Since you brought up churn, I've been been looking forward to saying this for a few years here, but just to remind everyone that we are in our final year of the Sprint churn,
Rod Smith: As we work through the churn this quarter for SPRINT, it won't be in our Q4 numbers or any numbers beyond that, and we expect churn as a percent to drop down to about 100 basis points or maybe even below for Q4, and then probably stay in that lower end or our range between one and 2% as a churn number, kind of staying at the lower end of that, closer to 1% for a little while, excluding the thing Steve just talked about in terms of U.S.
So, when you think about, you know, the churn, uh, percentages for Q3 we were at a little over 2, maybe 2.3%, uh, total churn in our us business.
Steve Vondran: A lot of discussion lately about direct-to-device satellite connectivity, you guys own a piece of ASTS. Update us a little bit about what you're seeing in direct-to-device and what you think it might mean U.S. versus international. We continue to see Direct-to-Device as the complementary technology to the macro-cell networks. Delivering bandwidth via macro-towers continues to be a challenge. cheapest way to deliver bandwidth. No matter where they are. So we don't view it as a threat at all to our business in the US or international. The places where satellite is going to be ideal are places that have lower population and what the carriers would like to cover.
As we work through the churn this quarter for Sprint, it's it won't be in our Q4 numbers or any numbers beyond that. And we expect churn as a percent to drop down to about a 100 basis points, or maybe even below for Q4. Um, and then probably stay in that lower end or our our range between 1 and 2 percent. Uh, as a Churn number kind of staying at the lower end of that closer to 1% for a little while excluding the thing. Steve just talked about in terms of uh, US Cellular
Um, a lot of discussion lately about directed device satellite connectivity. You guys own a piece of asts updates a little bit about what you're seeing and directed device. And what you think it might mean US versus International.
Steve Vondran: So, you know, when you think about... Grand Canyon, or rural Montana, those are places where that's going to be an excellent way to provide coverage. We don't have towers there, and frankly, I don't want to go there. is not a good business case. Same thing internationally. If you look at sub-Saharan Africa, there are going to be places that are much better served by satellite. Again, we don't have towers in those areas. So, you know, overall, you know, we believe it's complimentary, not think about where those satellites are. coverage is optimal. Less than 100 pop So we view it as...
Yeah we continue to see directed device as the complimentary technology to the macro cell networks. Uh delivering bandwidth via macro Towers continues to be the the cheapest way to deliver bandwidth to the customers no matter where they are. So we don't view it as a threat at all to our business in the US or internationally quite frankly. The places where satellite is going to be ideal are places that have lower population densities than what the carers would like to cover Through macro Towers. So, you know, when you think about
You know, the Grand Canyon or rural Montana. Those are places where that's going to be an excellent way to provide coverage, and we don't have towers there. And frankly, I don't want to build towers there because there's not a good business case for doing that.
Same thing internationally you know if you look at you know sub-Saharan Africa there are going to be places that are much better served by satellite and again we don't have Towers in those areas and don't want to build towers in those areas so you know overall you know we believe it's complimentary not competitive.
So, you know, if you think about where those satellites...
Steve Vondran: I'm really happy with. ringside seats that we have. all playing out just the way we thought, no threats and complimentary. Next we'll profit on our investment there. Great. Thanks, guys. Thank you.
coverage is optimal, it's less than 100 pops per side, you know, per some of the research that's kind of been sighted out there. So, uh, we view it as a nice niche market. Uh, we're happy with our investment as we're really happy with the, uh, ringside seats that we have to see how this plays out and uh and it's all playing out just the way. We thought no threat and a complimentary and
Might make a nice little profit on our investment there.
Operator: One moment for our next question, please.
Great. Thanks guys.
Thanks Rick.
Nick DelDale: and is from the line of Nick Deldale with Moffett Nathanson, please proceed. Hey, morning, guys. Thanks for taking my questions. Um, you know, first, just just to dig in a bit more into your prior comments, Steve, regarding the customer that's moving a bit slower than you had expected. Just to be clear, is this just a lengthening of the book to build? So they're kind of applying and signing leases as expected, but it's just dragging it in terms of when they get on air. Or are you seeing the applications come in with a bit of a delay?
Thank you. 1 moment for our next question, please.
And is from the line of Nick. Delta with Moret Nathanson, please proceed.
Hey morning guys, thanks for taking my questions. Um, you know, first just just to dig in a bit more into your prior comments. Steve, uh, regarding the customer. That's moving a bit slower than you would expected. It just to be clear, is this just a lengthening of the book to Bill?
Steve Vondran: No, it's exactly what you said. It's the book-to-bill cycle is a little bit longer. not moving along as quickly. Okay, okay. So it's, so it's in your backlog is just purely, purely timing then. Okay, great.
You seen the applications come in with, with a bit of a delay?
Not moving along as quickly as we anticipated to do.
Rod Smith: And then, you know, maybe switching to CoreSight.
Rod Smith: Could you talk a little bit about CoreSight's position in the supply chain, and your kind of the risk management strategy you have in place? You know, in particular, I'm thinking with the jump in demand for a lot of key components to support big projects, you know, for both established new players, I'm curious as to where you see CoreSight's place in line. Well, a lot of the supply chain challenges really started during COVID. And so that whole supply chain process several years ago. We had to adjust our strategy. So we started pre-buying those long lead time items several And the way you secure your place in line is you've got to pay, so you put a deposit down on that equipment.
Okay. Okay, so it's so it's in your backlog. It's just purely purely timing then, um, exactly. And okay, great. And then, you know, maybe switching to to core site, um, could you talk a little bit about core sites position in the supply chain? And, you know, kind of the risk management strategy you have in place, you know in in particular I'm thinking with the jump in demand for a lot of key components to support big projects, you know from both established new players. I'm curious as to whether it's becoming, you know, at all more challenging for kursite to to kind of keep its place in line.
um,
Rod Smith: And so we've been very proactive in looking at that over time. The other component that we're watching very closely, like everyone else's, is the effect of potential terror. of those supplies, because a lot of those components can only And what we're doing to protect ourselves there is building a contractual... that we're getting. So I feel very good about the action. University of Michigan to be able to secure that, and for all of our kind of development pipeline that we have in view and the things that we've planned out, we're secure on It may make it challenging to accelerate things from the pace.
well, a lot of the supply chain challenges, really started during Co and so that whole supply chain processed lengthened. Uh, you know, several years ago we had to adjust our strategy then. So we started pre-b buying those long lead, time items, several years ago, and the way you secure your place in line is you got to pay. So you put a deposit down on on that equipment. And so, we've been very proactive and looking at that over time and and securing those places the other component that we're watching very closely like everyone else is, is the effect of potential tariffs on some of those supplies because a lot of those components can only be sourced overseas. And what we're doing to protect ourselves. There is building in control.
For actual, uh, mitigation. So that if there are an increase in costs, when we're doing the pre-leasing, that we have a mechanism to adjust, that to make sure that we're getting that mid-teens stabilized, yield that we're underwriting on things. So I I feel very good about the actions. The team has seems to have taken to be able to secure that.
Rod Smith: We'd like to accelerate some of this development because the demand environment... healthy right now, and it does make that a little bit more challenging, but we are finding ways. Certainly a challenge out there that we're all. something that I thought the team has done a good job of.
Rod Smith: Okay, great.
Rod Smith: And sorry, can I ask one quick housekeeping item on the Corset front as well? Anything you can share about the inorganic contribution from the Denver Gas and Electric Building acquisition, both, you know, financials, and, you know, what it may have meant for interconnection ads, which looks like they may have had an inorganic bump. Let me talk about the acquisition kind of more broadly. Unknown Attendee Unknown Attendee That building was one where we already had a presence. It was a lease facility for us, but we didn't. We had the opportunity to buy the whole building. If you have a chance to take that interview.
And for all of our kind of development pipeline that we have, in View, and the things that we've planned out, we're we're secure on that. Uh, it it may make it challenging to xcelerate things from the pace that we originally wanted. You know, we'd like to accelerate some of this development because the demand environment is so healthy right now. And it does make that a little bit more challenging, but we are finding ways to do that, you know, in some circumstances as well. So certainly a challenge out there that we're all all facing but something that I feel like the team is doing a good job of getting ahead of
Okay, great. And and sorry, can I ask 1 quick um housekeeping item on the corset front as well. Um, anything you can share about the inorganic contribution from the Denver Gas and Electric building acquisition. Both, you know, financials and um you know what, it may have meant for interconnection ads which looks like they may have had an inorganic bump.
Rod Smith: Cremel new business. Away, that's all. So we're very happy that we have the opportunity to do that, and it is the most highly interconnected site. that gives us another, you know, kind of feather in our I'm not sure if we put any public numbers out on the acquisitions or something you want to share on that. Yeah, just a just a couple points that I would make for you, Nick. So we did close on the DE3. We have it in our in our outlook. I think I made a couple of comments in the script there. But you can assume that there's roughly 10 million.
Let me talk about the the acquisition kind of more broadly and then I don't know if we have any financials that we're on to share at hand right now. But uh, that building was 1, where where we already had a presence. It was at least facility for us but we didn't have the whole building and so we had the opportunity to buy the whole building and you know, if you have a chance to take that interconnection how to make own versus lease and pick up, some incremental, new business and incremental interconnection along the way, that's always a good thing to do. So we're very happy that we have the opportunity to do that and it is the most highly interconnected site in that Denver area. So that gives us another, you know, kind of feather in our cap in terms of of that portfolio.
Rod Smith: property revenue in our updated outlook. Okay, great.
And Rod. I'm not sure if we put any public numbers out on the Acquisitions or something you want to share on that or not, can I get? Yeah. Just a just a couple of points that I would make for you Nick. So we did close on the de3. We have it in our, in our Outlook. I think I made a couple of comments in the script there but you can assume that there's roughly 10 million in, um, in property Revenue in our updated Outlook coming from D1.
Rod Smith: Thanks, guys. Thank you.
Okay.
Great. Thanks guys.
James Schneider: Our next question is from James Schneider with Goldman Sachs. Please go ahead. Good morning. Thanks for taking my question.
Thank you.
Our next question is from Jim Schneider with Goldman Sachs. Please go ahead.
Rod Smith: Maybe just a quick follow-up on the data center business and then wanted to ask about LATAM. On the data center side of things, DE won $10 million of property revenue this year. Is that a good run rate to use for next year, or can we expect a bigger kind of run rate contribution for the full year of 2026? And maybe just kind of talk about directionally whether you expect the overall core site business to sort of grow the same, better, or decel next year relative to this year on an organic basis. Yeah, thanks. Thanks for the question, James.
Uh, good morning, thanks for taking my question. Um, maybe just a quick follow-up on the day Center business, and then wanted to to uh, ask about uh, latam on the data center side of things, uh, de1 10 million of property Revenue. This year, uh, is that a good run rate to use for for next year or weak expect. Um, a a bigger kind of run rate contribution for the full year of 2026 and maybe just kind of talk about directionally, whether you expect the overall course, site business to, uh, to sort of grow the same better or or decel. Uh, next year, relative to this year on organic basis.
Rod Smith: So the $10 million is the in-year number that reflects the fact that we completed the acquisition. earlier this year and in Q2. So with that said, there would be a full year impact next year. So you'd want to prorate that. But I don't want to get into any more details around what the exact impact here, regarding CoreSite, you can pick up in Steve's comments, his prepared comments, as well as mine, the CoreSite business continues to perform very strongly with revenue growth up in the 13, better than 13% for the quarter. We expect a very similar number of revenue growth for the full year.
so, the 10 million is, is the in-ear, um, the in-ear number
Rod Smith: That double-digit growth also extends down into interconnection growth, which is a key element of that business, so we expect interconnection to grow, interconnection revenue to grow by double digits. We also are seeing margin expansion. in the business. As I mentioned earlier on this call, we have a little bit higher SG&A and CoreSite to support the demand that we're seeing and all the new business that we've booked. So you'll see a slight bump up in SG&A, but our operating profit margin is also expected. year of the year this year by about a hundred. So the business continues to perform exceptionally well based on the last several years of either near record new business or record new business as we had in 23 and then again in 24.
Be a full year impact next year. So you'd want to Pro, write that but I don't want to get into any more details around. What the exact impact would be for next year. Uh, regarding you know, core site. You can pick up and and uh, Steve's comments, his prepared comments, as well as mine. The course like business continues, uh, to perform, uh, very strongly with Revenue. Growth up in the 13% for the quarter, we expect a very similar number, uh, of Revenue growth for the full year that double digit growth also, extends down into interconnection growth, which is a key element of that business. So we expect interconnection to grow interconnection Revenue to grow by double digits. We also are seeing margin expansion. Um, in the in the business, as I mentioned earlier on this call, we have a little bit higher sgna and core site to, uh, support the demand that we're seeing, and all the new business that we've booked.
Rod Smith: We expect that double digit growth to continue for the next couple of years based on kind of exhausting that backlog and delivering all those new business contracts. So we couldn't be more pleased with the performance of CoreSite, not just the last several years, but going forward.
So you'll see a slight bump up in sg&a, but our operating profit margin is also expanding year of the Year this year by about 100 basis points. So the business continues to perform exceptionally, well, based on the last several years of either near record new business, or record new business as we had in in 23. And then again in 24, we expect that double digit growth to continue for the next couple of years based on, uh, kind of exhausting that backlog and delivering all those new.
Rod Smith: Thanks.
Rod Smith: And then as a follow up, maybe if you can talk about the LATAM business, sounds like things are stabilizing or potentially improving there. Are we at a point where you can call a bottom in LATAM? And to what extent could you expect some significant acceleration hitting in 2026?
Business contract. So we couldn't be more pleased with the performance. Um, of course, I not just the last several years but going forward as well.
Rod Smith: Thank you. Yeah, we're still anticipating to have low single digit growth for the next So through 2027, we're going to continue to deal with the dynamics of that market where you have higher terms. had taken a little bit of a reserve on some collections. there as well. As that market continues to...
Thanks and and then as a as a follow up maybe if you can kind of talk about the Latin business, sounds like things are stabilizing or potentially improving their uh are we at a point where uh you you can call a bottom in in latam and to what extent could you expect some significant acceleration hitting in 2026? Thank you.
Yeah, we we're still anticipating to have uh, low single digit growth for the next couple of years there. So through 2027, we're going to continue to deal with the Dynamics of that market where you have
Rod Smith: to go through the challenges of consolidation and what's happening there, it's going to be a challenge for the next couple of years. And it's all the things we've talked about, you know, things like OI in Brazil, and some of the consolidation and some of the... So you should expect to see that continue to be a challenge.
higher turn. You know, we've had uh, take a little bit of a reserve on some collections issues there as well. And as that market continues to, uh,
Rod Smith: Thank you.
You know, to go through the, the challenges of consolidation and what's happening there? It's going to be a challenge for the next couple of years. And it's all the things we've talked about, you know, things like oi and Brazil, and some of the consolidation, and some of the, the other markets there. So, uh, we, you should expect to see that continue to be a challenge for the next 2 years. And we think that the inflection points really going to happen in 2028. That's when we see things. Getting uh, significantly better for us there.
Michael Funk: Our next question is from Michael Funk with Bank of America. Please proceed. Yes, hi. Hi, good morning. Thank you for the question.
Thank you.
Thank you.
Our next question is from Michael Funk with Bank of America. Please proceed.
Steve Vondran: So just coming back to the conversion from leasing to commencement from from the one customer, just wonder if anything your experience in the past, you know, it could it could inform our view on on the timing, and what might move that forward? It really just comes down to their priorities, and what they're trying to accomplish, and how they're incentivizing. So there's nothing specific that I would point to in this circumstance. When you look at kind of the relative positioning of the three major carriers, we have one that's got about 85% of our sites are upgraded to mid-tier carriers.
Yes, hi. Hi. Good morning, thank you for the questions.
So just coming back to the conversion from leasing to commencement from from the 1st. I wonder if anything in your experience. Um in the past you know it could it could inform our view on on the timing and what might move that forward.
Steve Vondran: And that implies, you know, quite a bit of work to do to get to that kind of upper 90s. This is where we think we'll end up with mid- So when we were doing our forecast at the beginning of the year, the way we construct that is we're going based on what the pipeline looks like, what we're hearing the priorities are from the people. And then, you know, you're only talking about a relatively slow, you know, small slowdown in that conversion rate. So there's not like like a major catalyst, but worse. I don't want to speculate.
It really just comes down to their priorities and and what they're trying to accomplish and how they're incentivizing their teams. So there's nothing specific that I would point to in this circumstance. When you look at kind of the relative positioning of the, the 3 major carriers, we have 1. That's got a about 85% of our sites are upgraded to mid-band 5G, ones at about 70% and 1 still at about 50% and that implies, you know, quite a bit of work to do to get to that kind of upper 90s percentage, which is where we think we'll, we'll end up with mid-band 5G on the site. And so, you know, when we are doing our forecast, at the beginning of the year, the way we construct that is, we're going based on what what the pipeline looks like, you know what we're hearing the priorities are for the people in the field. And then, you know, you're only talking about a, a relatively slow, you know, small slowdown, in that conversion rate. So there's not like a
Steve Vondran: would give us a reason for it. at which they're doing the deployment. So there's nothing in this from kind of a prior GE or prior. Unemployment that I would look at and say there's a comparison of this, it's just a little bit. Okay, so nothing to point to either on the on the labor side, equipment provisioning, or if it's simply a capital budget decision, nothing to really point to there. There's nothing pervasive. I mean, I'm sure every site has its own story.
There's like a major Catalyst that we're seeing on it and I don't want to speculate as to the reason because no 1's given us a reason for it. I think it's it could just be the pace that which they're doing the deployments.
Uh so there's nothing in this from kind of a prior G or or prior deployment that I would look at and say there's an there's a comparison of this. It's just a little bit of a slow start for the year quite frankly.
okay, so not nothing to point to either on the um,
on the labor side um equipment for vision um or if it's simply a a capital budget decision, nothing to really point to their
Steve Vondran: But there's no kind of general.
Steve Vondran: Okay, um, and I think it's a pair of remarks you mentioned, made some comments about Europe, Alex, actually on change. I thought you mentioned Germany.
Story but but there's no, there's no kind of General Trend there.
Steve Vondran: Can you dig in a bit more on what you're seeing in Europe and expectations for that region? Sure, I'll touch on the Iran if you want to. Can we continue to see the European carriers steadily deploying the 5G on their satellites? And there's kind of a mixed bag in terms of how far along they are. But there are some targets in the EU to get to a certain percentage of mid-band 5G deployment by 2030. So there's still quite a bit of work left to do there. So what we're seeing from that. as we're seeing our anchor tenants continue to do amendments to get there and we're seeing some continued deployments by the end of the year.
Okay. Um and I think it's a period of marks you mentioned. Um, made some comments about Europe, I think your Alex actually on change, I thought you mentioned Germany. Um, can you dig in a bit more on what you're seeing in Europe and expectations for that region?
Uh, sure I'll touch on the right if you want to jump in.
Steve Vondran: There is some consolidation that's happening in a few months. And our exposure, that's relatively modest. and others. Thank you. And that will slow down some of those carriers and their deployments a little bit. But overall, the leasing pipeline there is consistent with what we had in our underwriting for the deal originally. with our kind of mid-single digits. So, overall... kind of right in line with what we thought.
Steve Vondran: None of the consolidation.
You know, we continue to see the European carriers, uh, steadily deploying, they've been 5G on their site and when there's kind of a a mixed bag in terms of how far along they are in that. But there is a there are some some Targets in the EU to get to a certain percentage of mid-band 5G deployment by 2030. So there's still quite a bit of work left to do there. So what we're seeing on that front is we're seeing our anchor tenants, continue to do amendments to get there and we're seeing some continued deployments by other carriers. There is some consolidation that's happening in a few markets and our exposure that's relatively modest it's it's not zero but it's relatively modest in terms of what that uh that consolidation sure could be and that will slow down some of those carriers that are deployments a little bit but overall the leasing pipeline there is consistent with what we had in our underwriting for the deal. Originally, it's consistent with our kind of mid single digit organic growth in Europe that we're expecting to see. So overall,
Steve Vondran: Other news in the market is... Great, thank you for the question.
It's kind of right in line with what we thought. And none of the, uh, consolidations or other news in the market is concerning at this point.
Rod Smith: Nick, if I could just add a, or I'm sorry, Michael, I just had a couple of comments around Road. So it's a solid kind of steady, you know, mid single digit organic new biz, let's call it in the round three. that add a little bit more to that, another 2.5% or so. And one of the other very important elements is that the churn percentage is historically pretty low. And the way that our contracts work, particularly with one of our largest customers, we expect that churn percentage to be pretty low. below a hundred. forward. It's been there for a couple of years since the So you put all those things together and you get a very reliable.
Yep, thank you for the question.
If I could just add a uh or I'm sorry Michael, I I just had a couple of comments around the the stability of the revenue growth expectations and particularly the organic growth. So it's a solid kind of steady, uh, you know, mid single digit, organic newbies. Let's call it in the round 3 and a half uh, percent contribution to organic tenant Billings growth comes from that that new business. That's pretty consistent with where it was last year. I think, you know, across most of the markets there, we have CPI linked escalators, um, that add a little bit more to that, another 2 and a half percent or so. And 1 of the other very important elements, is that the, the churn percentage is historically pretty low. And the way that our contracts work, particularly with 1 of our largest customers, we expect that churn percentage to be, you know, below 100 basis points, kind of going forward and spend their uh for a couple of years since the acquisition. So you put all those things together and you get a very reliable and uh, and
Rod Smith: Again, in a very high-quality market, high-quality economies, there with high-quality counterparty Again, the acquisition that we did in Europe, in our general Europe. very steady, very solid and of a high quality.
Rod Smith: Very helpful, Kyler. Thank you.
Able organic tenant Billings growth in the mid, single digits, again, in a very high quality Market, high quality economies there with high quality counterparties. So, again, that the, the the acquisition that we did in Europe and our in our general Europe, businesses very steady, very solid and uh, of a high quality
Eric Luebchow: Our next question is from Eric Luebchow with Wells Fargo. Please proceed. Great, I appreciate the question. Rod, I think you talked about a 200% increase in co-locations year over year. So I'm just curious what the mix is in your guide for this year, how that might trend, you know, after 2025.
Very, very helpful color. Thank you.
Thank you.
Our next question is from Eric Lupta with Wells. Fargo. Please proceed.
Rod Smith: And then I wanted to touch on capital allocation as well, you know, with leverage kind of around five times now, how are you thinking about buybacks versus M&A going forward, maybe just a quick review of what multiples and what regions you might be interested in? Thanks. Yep, sounds good, Eric. So regarding the the I would start off by saying co-location contributions continue to be relatively small in the grand scheme of things. So, you know, let's call it just over 10% of our application. that have been coming in are co-location. Now, that's up, you know, from where it was, you know, in the in the recent past there.
Uh great, I appreciate the question uh, Rod. I think you talked about a 200% um, increase in collocations year-over-year, so I'm just curious what the mix is, uh, in your guide for this year, how that might Trend uh you know after 2025 and then I wanted to talk touch on Capital allocation as well. You know with leverage kind of around 5 times now how are you thinking about BuyBacks versus m&a? Uh going forward. Maybe just a quick uh review of What multiples and what reasons you might be interested in. Thanks.
Rod Smith: So we are seeing a shift of. towards co-locations, but it's on small numbers to put it in the grand scheme of things. If you think about applications being up in the 18,000 range, or even a little bit higher, you know, you're talking a few thousand, a couple thousand co-locations, two and a half to 3,000 co-locations. kind of in total. So we are seeing hundreds of additional co-locations, but it's not thousands yet. So I would put it in the category of we're seeing a, the beginning of a shift towards co-locations, the beginning of an increase towards co-location as a bigger contributor to our new business.
Yep. Sounds good Eric. So regarding the, uh, the the the co-location uh, increase in terms of its contribution. Um, I would start off by saying co-location contributions continue to be relatively small in the grand scheme of things. So, you know, let's call it, uh, just over 10% of our applications, uh, that have been coming in our co-location applications. Now that's up, you know, from where it was
Rod Smith: This may be the beginning of densification, but it's still early days. And with that said, I wouldn't want to predict where that's going to go in 26 or beyond.
Rod Smith: We'll just have to wait and see what the carrier plans are when they get to full 5G kind of across the board and when they may actually turn. Before we go to the next question, I would just jump in and say, you know, just refer back to the percentage that I gave earlier of about 50, about 75, about 85 percent. R.D. at MidVan. That still implies a good-sized pipeline of amendments, so we would expect to make... a large portion of our pipeline going forward, but we do expect this continued trend of more co-location. We do think densification is starting.
Rod Smith: We talked about this on our last We're definitely supportive of the idea that we will continue to see densification as they continue to float through. And then Eric, regarding your question around capital allocation, so you are correct in pointing out that we're above 5.1 times leverage for the end of Q2. We still are marching towards 5.0 or below by the time we get into the second half of the year. So we're on pace with that, and the plan there is unfolding perfectly fine. One of the elements of being at 5.1 now is with the strengthening euro up against the U.S.
That's going to go, uh, in 26 or Beyond. We'll just have to wait and see what the carrier plans are. Uh, when they get to full 5G kind of across the board and when they may actually turn uh to more densification before we go, next question, I just, I would just jump in and say, you know, just refer back to the percentage that I gave earlier of about 50 about 75 about 85% going that are already at the midband 5G. That's still implies a good size pipeline at the moment. So we would expect a minimum to be a large portion of our pipeline going forward, but we do expect this continued trend of more collocations to to continue to accelerate. We do think densification is starting and and I talked about this in our last call the conversations we're having with carriers and the data requests that they're putting in, uh, are definitely supportive of the idea that we will continue to see densification as they, you know, continue to fill up their networks and we become stressed.
Rod Smith: dollar. That did drive an increase in our The amount of U.S. value in our European debt, which does impact leverage slightly. So we're at about 5.1 times. We want to push that down to its 5 or below. And once we are there, and I would say we're close enough to be there that we've already regained Financial Flexibility, let's call it Full Financial Flexibility.
Yep and then Eric regarding your question around Capital allocation. Um so you are correct in pointing out that we're about 5.1 times uh leverage for the end of Q2. We still are Marching towards uh 5.0 or below. By the time we get into the second half of the year. So we're on Pace with that and the plan there is unfolding perfectly fine um 1 of the elements of the of uh being at 51 now is with the strengthening uh Euro up against the US dollar.
Rod Smith: So, with that said, let me highlight what our capital allocation priorities are. First and foremost, we fund the dividend. That dividend in the last couple of quarters has represented a 5% growth. We've talked in the past that we would expect, because we're a REIT, that our dividend growth will largely be in line, on average, over multiple years with our AFFO growth. So you can think of that, the context there. We do expect to fund the dividend with a growth that's sort of in line with our AFFO growth on average. That's priority number one. Number two is we have a CAPEX program with internally generated projects that we prioritize because we like the returns, the contribution to the business, the long-term value that that capital can drive for our shareholders, so we invest this year about $1.7 billion.
That did drive an increase in our European, the amount of us value in our European debt which does impact leverage. Uh, slightly. So we're at about 5.1 times we we want to push that down to its 5, or or below. And once we are there and and I would say we're close enough to be there that we've already regained, some some Financial flexibility, let's call it full Financial flexibility.
Rod Smith: It's been between $1.5 and $2 billion over the last four years. We expect that to continue as we have a robust pipeline of places to put that capital. And again, we think it's a compelling use of capital to drive shareholder value. And then beyond that, we have options to either reduce debt and de-lever well below five times, or we could deploy that capital towards more inorganic growth through M&A. And I think, you know, our priorities there are looking to expand and increase exposure. are developed markets. U.S., Europe, and CoreSite as well. And then beyond that, it's share buybacks are an option.
Um, so with that said, let me highlight what our Capital allocation priorities are first. And foremost, we fund the dividend that dividend in the in the last couple of quarters has represented a 5% growth rate. We've talked in the past that we would expect because we're a Reit that our dividend growth will largely be in line on average over multiple years with our afo growth. Uh, so you can think of that the context there we do expect to fund the dividend with a growth, that's sort of in line with our afo growth on average that's priority number 1. Number 2 is we have a capex program with internally generated projects, um, that we prioritize because we like the returns the contribution to the business, the long-term value that that Capital can drive for our shareholders. So we invest this year about 1.7 billion, it's been between 1 and a half and 2 billion over the last few years. We expect that to continue as we have a robust pipeline of places to put that capital and again,
Rod Smith: So we will always be toggling between. and evaluating reducing debt, M&A, and share buybacks with an eye towards making the decisions really on a quarterly basis, an annual basis that drives the most shareholder value that represents the best opportunity at that time, and you may see us kind of bounce back and forth here and there. We've talked many times about the capital programs, but I also want to highlight the fact that within our capital programs, that $1.7 billion, that actually represents some of our priorities, where we've decreased the amount of capital investments in some of our emerging markets at the same time that we've increased capital investments in the U.S., in our data center business, and even...
And we think it's a compelling use of capital to drive shareholder value. And then beyond that, we have options to either reduce debt and and de-lever well below 5 times or we could deploy that Capital towards more inorganic growth through m&a. Um, and I think, you know, our priorities there around looking to expand and increase exposure to, um, our developed markets which uh, us Europe and, and core site as well. Um, and then beyond that, it's it's, uh, share BuyBacks are an option. So we will always be toggling between and evaluating reducing debt, m&a, and share BuyBacks with an eye towards making the decisions really on a quarterly basis and annual basis that drives the most shareholder value that represents the best opportunity at that time. And you may see us kind of bounce back and forth here. And and their, um, we've, you know, we've talked uh, many times about the the capital programs, but I also want to highlight the fact that within our capital
Rod Smith: in Europe. So you see our priorities showing up within our capital.
Rod Smith: But what I would say in a final comment here is everything's on the table for us, and we will be making decisions in the best interest of our shareholders over the long term. That certainly could include share buybacks, delevering, or when and if we see compelling M&A, we'll certainly Great, thanks guys.
Programs that 1.7 billion that actually represents um some of our priorities where we've decreased the amount of capital investments in some of our emerging markets at the same time that we've increased Capital investments in the US in our data center business and even in in Europe. So you see our priorities showing up within our Capital spending but what I would say in in the final comment here is everything's on the table for us. Um, and we will be making decisions uh in the best interest of our shareholders.
Was over the long term that certainly could include share BuyBacks de-levering or um, when and if we see compelling m&a, we'll certainly look at that.
Benjamin Swinburne: Thank you. Our next question is from the line of Benjamin Swinburne with Morgan Stanley. Please proceed. Thanks. Good morning.
Great. Thanks guys.
Thank you.
Steve Vondran: I know you get this question a lot, so I figured I'd ask it, given just the performance of QuarterSight continues to be impressive and accelerate. Just the strategic lens that you guys look at this business within American Tower, particularly as you talk about kind of value maximization. Does the fact the business is performing better make you more or less interested in exploring strategic options, or just any change in your philosophy as you watch the business perform well would be helpful to hear as you guys think about maximizing value on this business. Sure, well, just to remind everyone that the reason that we bought.
our next question is from the line of Benjamin swinburne with Morgan Stanley, please proceed
Thanks, good morning.
And a lot to figure out, I’d ask it. Given just the performance, of course, the site continues to be impressive and accelerate just the strategic lens that you guys look at this business within American Tower. Um, particularly as you relate, as you talked about kind of value maximization, does the fact that the business is performing better make you more or less interested in exploring strategic options or just any change in your philosophy as you watch the business, you know, perform well? It would be helpful to hear, uh, as you guys think about maximizing value on this business.
Steve Vondran: was because we believe that When you look at where the, skate to where the puck is going. My boss... We think that EdgeCompute is a huge opportunity to drive value to our tower portfolio. We believe that owning the access to the interconnection environment that that edge. gives us a right to. And our initial timing on that was a little bit off. It's developing slower than we thought it was going to. But we are confident, and probably more confident today than we were even back then, that the edge is going to develop the way we envisioned that due to COVID.
Sure. Well, just to remind everyone, the reason that we bought CoreSite was because we believe that,
you know, when you look at where the skate to where the puck is going to to use a responsible analogy on that,
we think that that Edge Computers is a huge opportunity to to drive value to our Tower portfolio over time.
Steve Vondran: One of the ways that we're seeing that is the wireless carriers are now talking about And in doing local breakout, that's actually, you're curing it. You're starting to see them express more. So we still think that that strategic reason for buying CoreSite holds true. When you look at the asset itself, the way we underwrote that investment. We underwrote it as a stand-alone, so meaning we weren't putting the value of the edge into the value of the... We were just looking for underlying business instead. Can we make that work? we were confident that we could. So in a way, the edge was kind of going to be the gravy on top of the investment, but it wasn't.
And we believe that owning the access to the interconnection environment, that that edge has to be connected to gives us a right to land in that space and our initial timing. And that was a little bit off. It's it's developing slower than we thought it was going to, but we are confident and probably more confident today than we were even back then that the edge is going to develop the way we envision that doing and, and, and 1 of the ways that we're seeing that is the wireless carriers are not talking about Edge and, uh, and doing local breakout, that's actually, you know, appearing at the edge, and you're starting to see them Express more interest in the space. So we still think that that, uh, strategic reason for buying core site holds true,
Steve Vondran: Assets Performing Better Than Our Underprivileged And some of that is derived from AI and what's happening in the whole ecosystem where it's taking up a lot of space. there, that's driven up pricing, which has helped us to underwrite better yield. to Curator, Customer Mix the way we like to, but actually at least that. So it is performing exceptionally well as a standard. That doesn't really change my assessment. what we're going to do with the asset. It really comes down to what's going to create the most value for our show. I still think The Edge is a compelling play that would have...
When you look at the asset itself, the way we underwrote that investment is that we underwrote it as a standalone. Meaning, we weren't putting the value of the edge into the value of the asset when we bought it. We were just looking for underlying businesses that, you know, can we make that work on a business case? And we were confident that we could. So, in a way, the edge was kind of going to be the gravy on top of the investment, but it was the strategic reason for doing it.
The assets performing better than our underwriting and some of that is derived from Ai and what's happening in the whole ecosystem where it's taking up a lot of the the capacity there that's driven up pricing which is helped us to underwrite better yields and continue to curate. Our customer makes the way we like to but actually at least up faster.
so so it is performing exceptionally well as a standalone asset um that doesn't really change my assessment of of
Steve Vondran: And for some reason that does it, and we'll make the assessment about what to do with Our focus in the meantime is to maximize the value So we continue to invest what we need to invest to maximize that value. We set up a private capital partnership to give us flexibility. NASA Jet Propulsion Laboratory, California Institute of Technology Horsesight feels like it can't do what it can't do. We think that we are doing all the right things to create the most value for the shareholders regardless of what Got it. That's very helpful.
What we're going to do with the asset over time, it really comes down to what's going to create the most value for our shareholders. We still think the edge is a compelling play, that will develop over time and if, for some reason that does it, then we'll make the assessment about what to do. With course site, our focus in the meantime, is to maximize the value. Of course, I and so we continue to invest what we need to invest, to Max, to maximize that value. We set up a private Capital Partnership to give us flexibility in terms of how we Finance it. So, there's never a situation where course site feels like, it can't do what it needs to do to maximize.
Growth. And so, you know, we think that we're doing all the right things to create the most value for the shareholders, regardless of what the ultimate decision, of course, is, you know,
Down the line.
Steve Vondran: And just maybe one more. It was interesting last week, AT&T, I thought, sounded more excited about fixed wireless than I'd heard them in the past. Their growth in that business is accelerating and talked about opening up more mid band for that product. Are you seeing, I know, again, you don't see that directly in the business, but any sense in the application activity or anything else with AT&T or your, you know, your other carriers on fixed wireless? There's starting to be a more clear tailwind towards capacity needs for your customer base. At this point, all of our customers say that they're using fallow capacity in the network.
Got it. Oh, that's that's very helpful and just maybe 1 more. Um, if it was interesting last week AT&T, I thought sounded more excited about fixed Wireless than I'd heard them in the past, um, their, their growth in that business is accelerating and talked about opening up more mid-band for that product.
are you seeing I know again you don't see that directly in the business, but any sense in the application activity or anything else with AT&T or your you know, your other carriers on
Fixed Wireless, starting to be a more clear Tailwind towards uh, capacity needs for your customer base.
at this point, all of our customer,
Steve Vondran: Fixed Wireless, and there's nothing that we're seeing that differs from what we're I think where you would see that over time is if you start... Real sites that typically didn't get multiple amendments in the 4G cycle, get multiple amendments in the 5G cycle, that might be a possibility. We're not seeing that yet, and we're not seeing any stand-alone fixed wireless. However, as you point out, all the customers are becoming more bullish on it. I'm very bullish. come from a rural area where you don't have good broadband, so I'm actually excited to see it expand in my home.
Steve Vondran: And I think that if you look at the number of subs they've got, the ARPUs they're getting, you know, to me, that's indicative that they could... separate business that could support incremental investment. And if and when that happens, that's incremental to our base case in terms of what We're not seeing But I do hope. Great. Thank you.
To say that they're using fow capacity in the network to support fixed Wireless. And there's nothing that we're seeing that differs from what we're hearing from the customers publicly on that. Um, I think where you would see that over time is, if you start seeing, uh, rural sites that typically didn't get multiple amendments in the 4G cycle and get multiple amendments to the 5G cycle, that might be an indication. We're out seeing that yet and we're not seeing any Standalone fixed Wireless installations at this point. However, as you point out all, the customers are becoming more bullish on it. I'm very bullish on it. I, I come from a, a rural area where you don't have good Broadband, so I'm actually excited to see it expand.
In my home state. And I think that uh if you look at the number of Subs, they've got the RBS, they're getting, you know, to me that's indicative that they could, you know, make this
A a separate business that could support incremental investment and if, and when that happens, that's incremental to our base case, in terms of what we would see, in terms of the activity on our site, so that could be an upside for us. We're not seeing it yet.
Ari Klain: Our next question is from Ari Klain with BMO Capital Markets. Please proceed. Thanks and good morning. Maybe just on the services business, which has been quite quite strong. Curious if you could talk to what's been underpinning that because, you know, they're having higher periods of activity with lower services level. Is there anything new there or different that you're doing? And where do we kind of go from here?
Great. Thank you.
Thank you.
Our next question is, from Ari Kline with BMO Capital markets, please proceed.
Steve Vondran: No, the services business, it's indicative of two things. The first is a robust application pipeline. And so there's a segment of our services that we do for all of our customers. is like acquisition zoning and permitting engineering. And that component is really a volume. So we see the application volumes go up. Good tailwinds to the surface. There's another piece of it that's a little bit bigger chunk of the pie. Construction Management, which we don't do everywhere, we don't... Thanks very much. Thank you. to where we have really capable. Show. lowers their total cost of ownership.
Uh, thanks and good morning. Um, maybe just on the services business which has been quite quite strong currency could talk to what's been underpinning that because, you know, they have higher periods of a character Katie with lower Services level. Is there, anything new there or different that you're doing and and where do we kind of go from here? Thank you.
Uh, know the the services business, it's it's indicative of 2 things. The first is a robust application Pipeline and so there there's a segment of our services that we do for all of our customers kind of Nationwide. And that's
Things like acquisition zoning and permitting, Engineering Services, things like that, and that component is really volume driven.
So we can see the application volumes go up; that gives, you know, good tailwind for the services business there.
Steve Vondran: That's a little bit bigger piece of the pie, but what you should read in terms of our service to business this year is Healthy Pipeline, and That construction business comes in a little bit lower margin. Well, over time, the effect continues to grow, cease and suppression, and more. of Business, but it's all still. Good for us. Thank you.
There's another piece of it that's a little bit bigger, you know, a chunk of the pie this year, which is construction and management, which we don't do everywhere. We don't do it for every 1. It's very much a niche business that we do, where we have really capable teams in place. So where our customers are asking for that Turnkey service, because it lowers their total cost of ownership, it increases the value proposition there. And so that's a little bit bigger piece of the pie. But, what you should read in terms of our services business this year is it gives us the indications of the healthy pipeline.
and,
It was we're getting some good business in the construction management and that construction business comes in a little bit lower margins. So you know, you will over time that that continues to grow. See some compression and margin on the services business, but it's all still a very healthy business and it's it's good for us because it it is some incremental, cash flow. But it also increases customer satisfaction stickiness.
Operator: Thank you, and this concludes our Q&A session for today. I will turn the call back for final remarks. Thanks everyone for joining the call today. Please feel free to reach out to the Investor Relations team with any questions. Thank you, and this concludes our conference for today. Thank you all for participating, and you may now disconnect. Thanks for watching!
Thank you.
Thank you. And this concludes our Q&A session for today.
I will uh, turn the call back.
For final remarks.
Good morning the call today. Please feel free to reach out to the investor relations team with any questions. Thanks.
Thank you. And this concludes our conference for today. Thank you all for participating. And you may now disconnect