American Tower Q1 2026 Earnings Call - Data Center Inflection and Strategic Rebound

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the American Tower First Quarter 2026 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’d like to ask a question, please press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. I would now like to turn the call over to your host, Spencer Kurn, Senior Vice President of Investor Relations. Please go ahead.

David Barden, Analyst, New Street Research1: Thank you and good morning. Welcome to our first quarter 2026 earnings call. I’m Spencer Kurn, Head of Investor Relations for American Tower. Joining me on the call today are Steven Vondran, our President and CEO; and Rodney Smith, our Executive Vice President, CFO, and Treasurer. Following our prepared remarks, we will open the call for your questions. Before we begin, I need to call your attention to our Safe Harbor statement. It says that some of our comments today may be forward-looking. As such, they are subject to risks and uncertainties described in American Tower SEC filings and results may differ materially. Additional information is available on our investor relations website. I’ll now turn the call over to Steve. Steve?

David Barden, Analyst, New Street Research2: Thanks, Spencer. Good morning, everybody, and thanks for joining the call. I’m extremely pleased with our start to 2026. Our performance through the early part of the year, combined with favorable FX and straight line dynamics, led us to raise our full-year outlook. The growth drivers shaping our industry continue to strengthen. Rising wireless data consumption, accelerating cloud adoption, rapidly expanding AI-driven workloads, and future generational technology shifts all point towards sustained investment in high-quality digital infrastructure. These trends are global, structural, and long duration in nature, and they play directly to American Tower’s core strengths. Over the past several years, we’ve taken decisive steps to ensure that we’re optimally positioned for this next phase of growth. We’ve strengthened our balance sheet, refined our portfolio, shifted our capital toward developed markets, and aligned our revenue base with the highest quality carriers in each of our markets.

As a result, I believe that American Tower is on its strongest strategic footing in at least a decade. Against that backdrop, I’d like to revisit the three strategic priorities for 2026 that I introduced last quarter, which are summarized on slide 5 of today’s presentation. First, driving durable revenue growth, including approximately 4% Organic Tenant Billings Growth across our global tower portfolio when adjusting for one-time DISH related impacts and double-digit growth from our data center business. Our fundamental growth drivers are compounding. Mobile data consumption is growing at a rapid pace, supported by increasing smartphone penetration, continued 5G adoption, fixed wireless access, and expanding enterprise use cases. In the U.S., industry analysts project that mobile data traffic will double over the next 5 years, requiring commensurate increase in network capacity.

Notably, those projections don’t fully capture the potential incremental upside from the transition to 6G or AI-enabled applications. While still early, the engineering principles guiding 6G point toward denser networks, more distributed compute, and materially higher throughput requirements, each of which should translate into increased activity across our tower portfolio. At the same time, AI investment’s exploding. History suggests that technological revolutions tend to expand well beyond their initial use cases, and we expect that new AI applications are gonna place meaningfully greater demands on wireless networks, both in terms of throughput and complexity. All these trends are inherently supportive of macro towers. Terrestrial wireless networks are the only scalable solution capable of meeting this demand, and towers remain the most efficient, economical, and flexible means of delivering network capacity, advantages that we believe will only become more pronounced over time.

These demand dynamics extend across our international footprint as well. In our European markets, mobile data traffic is expected to more than double by the end of the decade, which is expected to drive significant amendment and colocation activity. In our emerging markets, mobile data traffic is expected to nearly triple by the end of the decade, providing a long runway for growth as these less mature markets develop. Over the long term, we continue to expect our international markets, and our emerging markets in particular, to grow faster than the U.S. These same secular tailwinds are translating into accelerating momentum at CoreSite. Demand is scaling rapidly on top of an already strong foundation, with sustained growth in hybrid and multi-cloud deployments and even sharper ramp in AI-driven workloads, including inference.

Importantly, this quarter marked a clear inflection in interconnection activity, enhancing both the profitability of the platform and the long-term durability of customer relationships. CoreSite continues to stand apart as a uniquely differentiated digital infrastructure platform. Positioned at the convergence of network connectivity, cloud on-ramps, and enterprise ecosystems, CoreSite drives resilient leasing demand while capturing a high-margin interconnection revenue stream. This powerful combination delivers structurally higher returns and positions the business to outperform traditional single-tenant hyperscale data center models, especially as demand for interconnected AI-enabled infrastructure continues to grow. After more than four years leading CoreSite, my conviction in the platform is stronger than ever. The business has meaningfully exceeded our expectations, and we’re increasingly enthusiastic about accelerating CoreSite’s expansion as a core driver of long-term value within our portfolio. Our second strategic priority is driving operational efficiency.

Operational excellence has long been a core strength of American Tower, and we continue to build on that foundation. In the first quarter, we made progress on reducing direct tower costs, particularly in areas such as land expense, maintenance, sourcing, and internal technology platforms. We remain confident in our ability to deliver 200 to 300 basis points of Cash Adjusted EBITDA margin expansion in our tower business by 2030. In parallel, we’re evaluating how AI can further accelerate efficiency gains across the organization. We believe this opportunity represents meaningful upside in future years. Our third strategic priority is disciplined capital allocation. We remain in a strong financial position with significant flexibility. During the quarter, we continue to prioritize growth capital toward our highest return opportunities in our developed tower markets and at CoreSite, while also allocating capital toward share repurchases. Our capital allocation framework remains unchanged.

After funding the dividend, we’ll continue to evaluate the full range of options, including M&A, opportunistic share repurchases, and further deleveraging, guided by a consistent mandate to generate durable cash flow growth and attractive long-term returns on invested capital. In summary, our first quarter results reflect a company that, throughout heightened industry volatility, has emerged stronger, more focused, and better positioned for the future. The long-term opportunities ahead are extraordinary, and few companies are as well-positioned as American Tower to support and benefit from the next wave of digital infrastructure investment. I’d like to thank our employees around the world for their execution and commitment, and our customers and shareholders for their continued trust. With that, I’ll turn the call over to Rod to walk through the financial results and outlook in more detail. Rod?

David Barden, Analyst, New Street Research0: Thanks, Steve. Thank you all for joining the call. As Steve mentioned, we are off to a great start to the year. Our strong performance coupled with FX and straight-line tailwinds have led us to raise our full-year outlook. I’ll start by reviewing our first quarter results. Then I will touch on our revised full-year outlook. Slide 7 shows a snapshot of our first quarter highlights. Consolidated property revenue grew approximately 3% year-over-year when excluding non-cash straight-line revenue and FX impacts. Normalized to the impact of one-time DISH churn, property revenue grew approximately 5% on a cash FX neutral basis. Our growth was primarily driven by Organic Tenant Billings Growth of approximately 2% or 4% normalized for the impact of one-time DISH churn and complemented by Data Center cash revenue growth of approximately 17%.

Adjusted EBITDA grew 1% when excluding net straight line and FX impacts. Normalized to the impact of one-time DISH churn, Adjusted EBITDA grew approximately 4% on a cash FX neutral basis. Cash-Adjusted EBITDA margins declined approximately 110 basis points year-over-year, primarily due to DISH-related churn, SG&A timing, and higher fuel prices in Africa. Attributable AFFO per share declined approximately 1% when excluding FX impacts. Normalized for the impact of one-time DISH churn and excluding the impact of refinancing costs, attributable AFFO per share grew approximately 4% on an FX neutral basis. Moving to Q1 organic growth and data center growth on slide eight, we delivered consolidated Organic Tenant Billings Growth of approximately 2% or approximately 4% when excluding DISH churn.

Across our segments, organic growth was in line with the expectations we laid out earlier this year, driven by solid demand across our global portfolio. In the U.S. and Canada, organic growth was approximately 1% and approximately 5% when excluding DISH churn. In Africa and APAC, organic growth was approximately 11%. As a reminder, churn is expected to be back-half weighted, resulting in approximately 10% organic growth in the first half of the year and approximately 7% in the second half of the year. In Europe, organic growth was approximately 4%. In Latin America, organic growth declined approximately 2%, primarily driven by elevated churn in Brazil. As discussed last quarter, the higher churn in 2026 is driven by a combination of delayed churn initially expected in 2025 and accelerated churn initially expected in 2027.

Overall, we are encouraged by the prospects of an earlier-than-expected market repair in Brazil and the forthcoming acceleration in organic growth in 2027. On the right side of the slide, organic growth in towers was complemented by data center property revenue growth of approximately 17% when excluding non-cash straight-line revenue. This double-digit growth was driven by robust demand for hybrid and multi-cloud installations, accelerating AI-related use cases, and an inflection in interconnection activity. We believe this inflection marks the beginning of a durable long-term trend that reinforces CoreSite’s value proposition while compounding its competitive moat over time. Let’s turn to our revised full-year outlook. We are raising guidance across all of our key consolidated financial metrics, primarily due to incremental FX and straight-line tailwinds.

Starting with property revenue outlook on slide 9, we are raising our outlook by approximately $145 million at the midpoint, representing a 1% increase to our prior outlook. Our revised outlook now implies approximately 3% year-over-year growth when excluding non-cash straight-line revenue and FX impacts. Normalized to the impact of one-time DISH-related churn, our outlook implies approximately 5% growth on a cash FX neutral basis. The increase to outlook was driven by approximately $110 million of FX tailwinds and approximately $35 million of accelerated non-cash straight-line revenue in Latin America related to Oi. We are reiterating organic growth assumptions across all regions and continue to expect Organic Tenant Billings Growth of approximately 1% or approximately 4% when excluding DISH churn and data center growth of approximately 13% year-over-year.

Moving to adjusted EBITDA on slide 10, we are raising our adjusted EBITDA outlook by approximately $105 million at the midpoint, representing a 1% increase to our prior outlook. Our revised outlook now implies approximately 2% growth year-over-year, excluding non-cash net straight line and FX impacts. Normalized to the one-time impact of DISH-related churn, our outlook for adjusted EBITDA implies approximately 5% growth on a cash FX neutral basis. Turning to AFFO on slide 11, we are raising our attributable AFFO outlook by $0.12 per share, representing a 1% increase to our prior outlook. Our revised outlook now implies growth of approximately 2% year-over-year. Normalized for the impact of one-time DISH-related churn and excluding the impact of refinancing costs, our outlook for attributable AFFO per share growth implies approximately 5% growth on an FX neutral basis.

We expect attributable AFFO per share growth on an FX neutral basis to be faster in the back half of the year than the front half, primarily due to the timing of maintenance capital and cash taxes compared to the prior year periods. As a reminder, we continue to expect our services business growth and debt refinancings to each represent an approximately 100 basis point headwind to attributable AFFO per share growth this year. We continue to believe that we are well-positioned to deliver our goal of industry-leading attributable AFFO per share growth and compelling total shareholder returns over the long term. Turning to capital allocation in our balance sheet on slide 12, we remain disciplined stewards of capital. Our investment-grade balance sheet is well-positioned for a variety of macroeconomic scenarios.

As Steve mentioned, over the past few years, we have taken deliberate action to reduce risk in our business. As a result, today we have the lowest leverage and the highest credit rating across our peer group, positioning us with exceptional financial flexibility going forward. Our capital allocation framework remains focused on maintaining financial flexibility, protecting our investment-grade credit profile, and investing prudently to enhance long-term shareholder value. In 2026, our growth capital plan remains consistent with our prior outlook. We continue to expect to spend approximately 85% of our discretionary capital within our developed markets platforms, including over $700 million in success-based investments in our data center portfolio to replenish elevated levels of capacity, purchases of land beneath our tower sites, and continued acceleration in European new builds with over 700 new sites planned.

Additionally, we repurchased approximately $184 million of American Tower stock during the first quarter, plus an additional $19 million through April 21st, bringing our total share repurchases since we started buying back stock in Q4 to over $565 million. Turning to slide 13 and in closing, we are off to a strong start in 2026, reflecting the fundamental strength and durability of our business model. Continued growth in mobile data consumption, together with strong demand for our interconnection-rich data center platform, supports a long and attractive runway of growth for American Tower. With our best-in-class portfolio of towers and data centers, combined with a strong balance sheet, we are well-positioned to capture these opportunities and deliver on our objective of industry-leading attributable AFFO per share growth. With that, operator, we can open the line for questions.

Operator: Thank you. Our first question comes from the line of Richard Hamilton Prentiss of Raymond James & Associates. Your line is now open.

Richard Hamilton Prentiss, Analyst, Raymond James & Associates: Thanks. Good morning, everybody.

David Barden, Analyst, New Street Research2: Morning, Richard Hamilton Prentiss.

Richard Hamilton Prentiss, Analyst, Raymond James & Associates: Hey. A couple questions. First, the spectrum deal between EchoStar, DISH, and AT&T seems to be going very slowly. It feels to us like there’s some issues in Washington. We’re hearing that maybe one of the requests is that an escrow be set up with all the litigation and negotiation between the tower industry and EchoStar DISH. Can you update us on is that maybe one of the paths you’re taking and any other updates on what could be a, you know, an interesting process?

David Barden, Analyst, New Street Research2: Yeah, Rick, this is Steve. We really can’t comment on ongoing litigation or anything that’s kinda going on in that space today. We don’t really have any updates for you guys on DISH. I’ll just reiterate, you know, we believe our contract’s enforceable. We’re continuing to defend it in court. The litigation’s public, and you guys have access to that docket to see what’s happening on that front. We’ve completely de-risked our earnings and our guidance by taking DISH out of our numbers. Anything that happens in that space is incremental upside to the guidance we’ve put out there. At this time, there’s really not much more we can say about that.

Richard Hamilton Prentiss, Analyst, Raymond James & Associates: Okay. We’ll keep monitoring and checking with our Washington sources as well. Second question. Rod, you mentioned 700 new builds in Europe, 85% of your CapEx into developed areas. Because obviously 9% of the inorganic growth in Europe. Walk us through what’s happening there in Europe. What’s the model there? There’s been concern in the U.S. that when we see new builds, some of them have been uneconomic, that others have done, not you guys. Walk us through what the opportunity is in Europe, what the contracts kinda look like, and what the return profile might be there.

David Barden, Analyst, New Street Research0: Yeah. I think, Rick, you’ve heard us say in the past that the European market is outperforming the original business case that we underwrote the Telefónica deal with. We’ve been very pleased with the results. We’ve had upper single-digit growth rates across the region for a couple years. That has moderated down into the mid-single-digit growth rate, it’s still a very compelling growth rate for such a high quality set of economies. With the Telefónica deal, you may recall we also announced at that time that we had a contract to build 3,000 sites for Telefónica over the next 10 years, starting at the beginning of that acquisition, that contract. We’ve been executing on that. We’ve added a few additional build-to-suits with other carriers across the region.

Building sites in that market, we think is a pretty compelling thing to do. Of course, the return profile is, we expect it to be above our weighted average cost of capital in that region by 200 basis points over time. The secular trends in Europe are very similar to the U.S., which is technology evolution, rolling out 5G networks. Eventually, they’ll push into 6G networks. There are new applications coming, just like there will be in the U.S., that’ll drive mobile data consumption growth across the region. Again, we are in some of the greatest economies, not only in Europe, but also in the world there, with very compelling assets supporting some of the top tier customers, including Telefónica, in a big way.

Continuing to build sites and reinvesting some of the cash flow that we derive out of the Europe market back into the market as build-to-suits, we think is a really compelling thing to do to drive total shareholder return. The market is solid. Like any region across the world that we’re in, we will continue to watch the outlook and the growth rates and the political trends, the regulatory trends, the market backdrop. We’ll continue to watch that and be prudent every step of the way as we go forward. At the moment, the market’s performing very well and above our original expectations, so we’re happy with it.

David Barden, Analyst, New Street Research2: Rick, I would just add that we are also winning some things that are outside the contract on very good terms because of our operational excellence. In Europe, a lot of the sites being built are difficult to build. When they’re difficult to build, the carriers value a good operator who can bring things online quickly and get through that kind of regulatory scenario. We’re winning business at healthy returns for us because of our operational excellence there. You know, again, in the U.S., as you noted, we haven’t been building actively. A lot of those sites have been built in areas that aren’t as hard to build. You know, we think that if we get back to where we’re building things in hard-to-build areas, we’ve got advantage back in the U.S. as well.

We’re excited about the prospect of building, you know, more sites, you know, everywhere in our developed markets.

Richard Hamilton Prentiss, Analyst, Raymond James & Associates: The return hurdles would be a couple hundred basis points? Or what were you saying about? Because obviously we’ve seen some others that have stretched the thoughts of what you should build or not build.

David Barden, Analyst, New Street Research0: Yeah. I mean, I would say, Rick, from a return hurdle perspective, I don’t wanna get into the details here, but certainly being above our weighted average cost of capital by a couple hundred basis points, you know, over a reasonable amount of time, and I’m not gonna get into the details in terms of the terms. That really is what we would expect based on just the fundamentals of the market and the investment that we’re making. With that said, longer term, can it be well above that? Absolutely. Very similar to what we see in the U.S., where we will build, you know, an asset. We don’t build a lot at the moment. We have in the past. You know, you may start out at or even slightly below your weighted average cost of capital.

In the near term, you get up to that weighted average cost of capital and get above that, which might be in the, you know, upper single digit growth rate. Over time, with compounding, you know, results on the escalator and the new business, you can get up into the, into the teens in the U.S. We would expect certainly that direction for Europe new builds over the long term.

David Barden, Analyst, New Street Research2: Yeah. Just to be clear, Rick, I didn’t build stuff at bad economics previously. We’re not gonna start doing that. We’re gonna build things that make sense over time.

Richard Hamilton Prentiss, Analyst, Raymond James & Associates: Great. Makes sense. We like that third pillar of capital allocation discipline. Thanks, guys.

David Barden, Analyst, New Street Research0: Yep.

Operator: Thank you. Our next question comes from the line of Michael Rollins of Citigroup. Your line is now open.

Michael Rollins, Analyst, Citigroup: Thanks, good morning. Steve, you mentioned that M&A is a possible option for capital allocation. I’m curious if you could describe how you’re looking at those opportunities today, whether that’s similarly or differently than the way you may have looked at this in the past. If you could specifically comment on the possibilities of AMT participating in either public to public or public to private opportunities in the U.S. Rod, if I could just throw in one other question. On slide 11 that shows the normalized AFFO per share growth, plus some of the specific factors that are weighing on 2026, how should this inform investors after 2026 what the right range of annual AFFO per share expectation should be? Thanks.

David Barden, Analyst, New Street Research2: Sure, Mike. I’ll start with your question on M&A. We have a very disciplined capital allocation formula that we followed for a long time here, and we’re not changing the way we think about that. We look at everything through the lens of how do we create the best long-term shareholder value at the best risk-adjusted rates of return that we can get. We do some pretty detailed financial modelings on everything that we look at in that space. As you can imagine, we have an M&A team. They like to buy stuff, so we look at everything. There’s not a process out there that we haven’t had our toes dipped in the water to see what that looks like. In the past few years, we haven’t found compelling opportunities to do that.

We’re hopeful as we go forward that there are things that would make sense. For any M&A scenario, you’ve gotta have, you know, a willing counterparty, a constructive regulatory environment, and the economics have to make sense. We’ll continue to evaluate all the opportunities in front of us, and that’s whether it’s in the U.S., in another developed market, in the data center space. You know, whatever comes available, we’ll look at those M&A opportunities. If we think that we can create shareholder value over time with those, we’ll participate. We’re not gonna be reactive to specific market, you know, trends that are out there. You know, We have enough scale in our business today. There’s no sort of strategic imperative to overpay for anything. We’re not gonna do anything that doesn’t make sense economically.

We are hopeful that we’re seeing a more active environment, and we’re hopeful that we can participate in that in some manner. It may not work out, and it may. We’ll just have to see, you know, what fits in with our disciplined capital allocation and what’s gonna create the best long-term shareholder value for you guys.

David Barden, Analyst, New Street Research0: Good morning, Michael. Thanks for joining the call. On your AFFO question, on slide 11, we’re showing a revised outlook that’s about $10.99. That reflects a 2% reported growth rate year-over-year. Embedded within that is tailwinds of about 200 basis points from FX. It also has about 100 basis points of headwind for net interest. Within that, it includes 400 basis points of headwind due to the DISH churn. There’s a few pieces in there, a few moving pieces, but I think most of those notes are highlighted right on the slide there. I would encourage everyone to kind of piece that together.

This outlook for 2026 is in line with our longer-term view for AFFO per share growth, which is up in the mid-single digits to better than mid-single digits before you account for the impacts of FX and interest rates, whether those are tailwinds or headwinds, quite frankly. We will get through the event-driven churn from DISH. Again, that’s 400 basis points of churn. That 200 basis points would go up to about 6%, you know, growth, just adjusted for the impacts of churn. You take off the 200 basis points of tailwind from FX, that drops you back down to the 4% range. You remove the 1% headwind that we’re picking up from interest rates, and you get to 5%.

We’re right in the maybe the lower end of that longer term range, which is mid-single digits to upper single digit AFFO and AFFO per share growth rate over time. We really do feel as though we’ve moved through a number of event-driven headwinds, not only in the industry for us specifically, we are moving into a time where we will benefit from the secular technology trends within the sector. That continuation of mobile data, capital investment from the carriers, which we still see very stable, strong in that $30 billion-$35 billion range. The carriers continue to roll out their 5G networks kind of at the tail end of that. They’ll move into filling in, densifying, increasing capacity across the network. That’ll all be good for us. New applications will come down the pike, some will be driven by AI.

Those should all fuel that secular trend of growth, which should be very constructive in terms of supporting us and our business to that mid to upper single digit AFFO per share growth. In addition to all that, Steve and I and the entire management team continue to stay very focused on cost management, direct costs, SG&A, smart capital allocation, very strong balance sheet management to make sure that all those pieces as well support and contribute to achieving our ambition of mid to upper single digit AFFO and AFFO per share growth.

David Barden, Analyst, New Street Research2: Thanks.

Operator: Thank you. Our next question comes from the line of Eric Luebchow of Wells Fargo. Your line is now open.

Eric Luebchow, Analyst, Wells Fargo: Great. Thanks. I appreciate it. I just wanted to touch on the CoreSite business. One of your peers was talking about doing some early exploration on the mobile edge, and given your ownership of CoreSite and this theme that you’ve been looking at for several years, curious if there’s, you know, any update you could provide on whether you think there’s a real market that could develop there in the next couple years. Separately on CoreSite, just curious, given it’s a relatively small part of the business today and data center multiples seem to be very high, demand seems to be off the charts. Do you think longer term CoreSite makes sense within the American Tower family, or could there be something strategic that you would do with it to potentially maximize value? Thank you.

David Barden, Analyst, New Street Research2: Yeah. Thanks for the question. We’re really encouraged to hear other people talking about the edge. You know, something that we’ve believed passionately in for a period of time now, and we do continue to have projects ongoing. We launched our data center in Raleigh as a little bit of a playground for people to come in and experiment with edge. We are looking at, you know, some incremental opportunities in that space to continue to work with ecosystem partners to develop the edge.

What I’m most excited about is our wireless carriers are now talking about the edge. They’re engaging in discussions with chip makers and some of the cloud companies. Edge is absolutely something that we think is going to continue to grow. We think it’s gonna be a material opportunity for us in the future. Timing, I’m not gonna predict timing again ’cause I was a little bit off my first time predicting it. We do see a lot of momentum taking shape in that space.

We’re very excited about the opportunities, and we think that we’re positioned better than anyone else to provide the basic infrastructure that you need to support edge in various forms that it may evolve, whether it’s AI RAN, whether it’s, you know, smaller regional data centers that are supporting, you know, more inference, which is what we’re hearing is one of the use cases. You know, we think we’re in a great place to do that when you combine that interconnection ecosystem at CoreSite with our distributed land footprint and our abilities to service massively distributed real estate. We’re excited about the edge opportunity. We continue to work through it. You know, I don’t have a projection for you yet because we’re still in the early stages of how this is gonna develop.

The momentum is there, and all the people that are talking about it, really reinforces our original thesis on that. That’s really why CoreSite’s a strategically important asset for us. We do think it’s a big part of our future, and we think that we’re gonna realize that synergy between towers and data centers. In the meantime, we’re gonna continue to grow that company. It’s performing well beyond our expectations when we underwrote that acquisition. The tailwinds that are underpinning the growth in CoreSite are durable. AI is one of them, but it’s not the only tailwind there.

This highly interconnected ecosystem that we have there is different from most of the, quote-unquote, "data center companies out there." I don’t even like calling it a data center company to be honest because it’s really an interconnection hub. People come to us to connect to other people. They put their computer in a CoreSite facility because we give them access to other enterprises, the cloud on-ramps, and now to inference instances. That’s a nerve center for this rapidly developing kind of digital ecosystem out there, and it’s gonna continue to grow. We’re very excited about that as a part of our company. I do think it has a long-term place in our portfolio and, you know, we think that the edge will kind of finalize the synergies between the two.

In the meantime, we’re gonna focus on growing our tower business, which has great tailwinds, as Rod mentioned, and we’re gonna focus on growing CoreSite and being that interconnection provider of choice as this ecosystem continues to develop.

Eric Luebchow, Analyst, Wells Fargo: Thanks, Steve.

Operator: Thank you. Our next question comes from the line of James Edward Schneider of Goldman Sachs. Your line is now open.

James Edward Schneider, Analyst, Goldman Sachs: Good morning. Thanks for taking my question. You know, in light of what you just talked about in terms of the some of the attractive growth prospects for emerging markets and overseas developed markets, and maybe given some of the recent headwinds you’ve seen in terms of churn in the U.S., can you maybe kind of give us your latest thoughts about the relative attractiveness of M&A prospects across Europe, U.S. and emerging markets? Just wondering, you know, in the past you talked about the U.S. being, you know, probably your preference in terms of any potential scale acquisition. I’m wondering if you still see those pluses and minuses in the same way as you did before. Thank you.

David Barden, Analyst, New Street Research2: Yeah. Thanks, Jim. You know, the U.S. continues to be our flagship market and we’d love the opportunity to add scale here again, subject to the right terms and conditions and economics and things like that. Yeah, the U.S. will probably always be our primary focus if there are opportunities there. There haven’t been that many recently that met all of our criteria. Europe is a market that we continue to look at and, you know, we’ve talked in the past about how patient we were to get into that market because of the terms and conditions that were required, you know, by us to show long-term growth for our shareholders. We’re still not seeing a ton of opportunities there for incremental M&A that meet those criteria.

There are things that are happening in Europe, but they’re not things that we find long-term attractive at this point. You know, we’ll keep looking at it. Like I said before, we have M&A people. They’re looking at everything and if we found that would be on the table. In the emerging markets, you know, and I just wanna reiterate this, while those markets are a key component of our portfolio and they’re gonna give us outsized growth over time, the strategic decision that we made two years ago has not changed. That is, we think they should be a smaller piece of our overall portfolio than they’ve been in the past, and we will continue to allocate capital toward developed markets and away from those markets, not because we don’t believe in the growth.

We do believe in the growth. They are doing well. They are incremental to our U.S. growth. We think that’s their function in the portfolio. If they become too large of a part of the portfolio when there are macroeconomic shocks, it just puts a little bit too much volatility into the earnings. We’re not gonna change our strategic direction just because, you know, some of the short-term dynamics have changed. We still think the best opportunity to create long-term shareholder value is to continue to invest in the U.S. and other developed markets. We’ll continue to see the secular tailwinds driving growth in that business for a long period of time. The emerging markets are a complement to that. You know, I’m so proud of our teams.

They’ve managed through a lot of adversity in there. They’re the best operators on both of the continents that we’re operating in there. They’re getting some, you know, great sales results in Africa. The Latin America team has worked through this kind of reset and repair, and they’re on a great trajectory to get back to growth for us. I’m very excited about what the teams have been able to do there, but we’re not gonna change our strategic direction in terms of how we’re investing.

James Edward Schneider, Analyst, Goldman Sachs: Thank you.

Operator: Thank you. Our next question comes from the line of Nicholas Ralph Del Deo of MoffettNathanson. Your line is now open.

Nicholas Ralph Del Deo, Analyst, MoffettNathanson: Morning, guys. Thanks for taking my questions. I guess first, to build on the domestic new build activity commentary you provided in response to Rick Prentiss’s question earlier. You know, a peer of yours has commented that the carriers might be more interested in working with their large public tower company partners to undertake more new construction opportunities. I was wondering if you’ve had any similar discussions and if you think they might amount to anything. Then second, you know, Steve, you talked about the importance of interconnection a moment ago. You know, cloud on-ramps have always been a very important part of that, you know, strengthening those ecosystems.

Can you talk about any steps you might be taking to proactively land, you know, neocloud on-ramps or other deployments like that may be magnetic for AI workloads over the coming years?

David Barden, Analyst, New Street Research2: Sure. When it comes to the kind of the build-to-suit market in the U.S., we’re always talking to our customers about that. We have been for years, even when the competitive environment was tough. It’s a core competency that we’ve always had, and we used to be one of the largest builders of towers in the U.S. We think that there’s an opportunity there as people become more rational on the economics. There’s nothing to announce at this point. I will tell you that my sales team is always in there pitching those, and we’re hopeful something comes through. If and when it does, we’ll let you guys know. Until there’s until a deal is done, it’s not done. I wouldn’t prematurely talk about that.

When it comes to the interconnection on-ramps, you know, one of the things that was a core strength in CoreSite before we bought them, and we think it’s gotten even more advanced since we’ve been working with them, is the ability to curate an ecosystem. It’s not just about the cloud on-ramps. It’s about making sure that you balance networks, enterprises, and those cloud providers. Now you’ve got this kind of fourth category that you mentioned, which is inference hubs, and you’ve got other ecosystem players like neoclouds that are providing kind of services into that. What the team is very skilled at doing and they continue to do is making sure that we’re creating an ecosystem where everybody wants to be there. Our problem is not demand. All of those players want to come into our facilities.

The reason that we attract cloud on-ramps, the reason that we attract inference is because we’re bringing their customers to them, and we’re providing space for their customers to house their data and interconnect natively to those cloud on-ramps and those inference hubs. For us, it is really about keeping that balance and not getting too excited about a trend and not just trying to sell out a building the second it goes online to the highest bidder. It is about curating an ecosystem that gives us this long-term competitive moat around our business. Because of that, the vast majority of our revenue is with providers who are interconnected to five or more other people. Now, they may have hundreds of interconnections, but five or more other people. That makes that whole ecosystem very sticky.

It means that if there are downturns in that kind of sector over time, that we’ll be much more insulated than anybody else is for that because of the way we’ve curated the ecosystem. The team is very focused on continuing to build that. The inference hubs and the neoclouds are absolutely part of that ecosystem and they’re knocking on our doors. They wanna be there and our team is able to be selective and curate that right customer mix. I’m confident that we will continue to be a leading interconnection provider and that we will be the provider of choice for all of those use cases over time.

Nicholas Ralph Del Deo, Analyst, MoffettNathanson: Great. Thank you, Steve.

David Barden, Analyst, New Street Research0: Hey, Nick, I may add.

Nicholas Ralph Del Deo, Analyst, MoffettNathanson: Oh, sorry.

David Barden, Analyst, New Street Research0: I may add just a quick comment on our services business to complement Steven’s answer on the U.S. new business. Just to really remind folks that our services business has been very active in the last several years. We had record-setting levels of service revenue last year at the $340 million range. Over the last several years, we’ve expanded our end-to-end solutions through acquisition, zoning, permitting, and even construction management. We’ve got over 43,000 sites across the U.S. with a very distributed services business and hundreds of people that support that business. This year, we’re gonna have our third-highest revenue year ever.

That business is still very robust, and there’s a lot of capability there that directly translate into our ability to effectively and efficiently, do large scale builds for carriers if and when we get that opportunity. We’re really well-positioned from an operational standpoint, to move quickly, on any kind of an opportunity, like that.

David Barden, Analyst, New Street Research2: It’s a good point, Rod Smith. I hope our customers are listening to that.

David Barden, Analyst, New Street Research0: Yeah.

Nicholas Ralph Del Deo, Analyst, MoffettNathanson: Thank you, thank you both.

Operator: Thank you. Our next question comes from the line of Madison Rezaei of Bernstein. Your line is now open.

Madison Rezaei, Analyst, Bernstein: Hey, guys. Just wanted to build on the prior M&A question here, but with a slightly different angle. Obviously not gonna ask you to comment on any of the specifics, but how do you think about private and/or sort of consolidated portfolios in the U.S. shifting any competitive dynamics, if at all?

David Barden, Analyst, New Street Research2: I don’t think it actually changes the competitive dynamic. There have been a number of privately held scaled tower portfolios in the U.S. for years. We haven’t seen that affect the competitive dynamic at all in the tower space. It doesn’t change the way we operate, hasn’t changed our results or our ability to compete. We don’t think that, you know, having more private tower companies affects that. I think what it does reflect is that there’s a disconnect, and there has been for years, in the multiples that private players will value towers out versus the public markets. You know, we really think the reason that they value them at a higher multiple and have for a period of time is they’re taking a long-term view.

They see past some of the short-term noise that’s out there, and they see these long-term demand drivers that encourage us about our business. You know, they see that mobile data growth is gonna double over the next five years in the U.S., and that’s gonna require more network investment, which translates into new business for towers. They realize that AI is an incremental use case that’s not even factored into those projections that could be a catalyst for even more growth and could be pretty substantial growth, depending on how that evolves over time. You know, they’re looking at the fact that 6G is just around the corner and that the 6G frequencies are likely to be in the 6 to 7 gigahertz range, which means much more dense networks are gonna be required.

When I look at kinda what’s swirling around out there in the ether about tower companies in that private world, it’s encouraging to me to see that people are seeing the true value of towers and the fact that this is a growing long-term business that will be the backbone of digital infrastructure going forward. You know, when I hear the rumors and see what’s out there, to me, that just shows that the business model is still the best business model out there. It’s still a place to create a lot of long-term value for our shareholders. It’s the right place for us to be.

Madison Rezaei, Analyst, Bernstein: Super. Thanks very much.

Operator: Thank you. Our next question comes from the line of Henry McVey of Morgan Stanley. Your line is now open.

Henry McVey, Analyst, Morgan Stanley: Hi, thank you. I just wanted to actually follow up on CoreSite. You know, I’m curious how you’re thinking about expanding capacity at CoreSite versus reinvesting in retrofitting some of the current sites. Has your approach to expanding CoreSite capacity changed at all given some of the current supply-demand imbalance dynamics we hear about with regard to power and tight, you know, supply chains? Thanks.

David Barden, Analyst, New Street Research2: Sure. A few years ago, we had to start thinking a lot longer term about both land acquisition, power acquisition, and actually even ordering the components that go into it. You know, we had some supply chain disruption as a result of COVID. Because of that, the team started taking a longer term view. That’s put us in a really good position for where we are today. We’ve had more construction over the past couple years than at any time in CoreSite’s history. Because of the record sales we’ve had the past few years, we’ve also really ramped up our capabilities to build more. Yes, we’re being more aggressive. We’re out buying more land. We are looking at some new market entries.

Nothing that we want to announce yet because it’s premature to do that until you have a good idea about when you’re gonna break ground on it. We do think there are opportunities there. We’ve also looked at retrofitting some buildings. We have retrofitted some computer rooms. Sometimes that makes sense, and sometimes it doesn’t. But with higher density applications coming in, if you have the available power there, it can make sense to retrofit a computer room and take up the density levels in it. That is something that we’ve looked at. We have done a little bit of that in the past. We are designing our new facilities with more flexibility in the future to go higher density and with multiple different cooling options in it as well.

We have altered the way that we build new sites and the way that we’re looking for it. You know, we’ve also, you know, looked at some existing buildings that have available power. You know, you’ve seen us buy a couple of small ones in that space, and that’s something that could be a strategy for us going forward to accelerate some of the development that we’d like to do. We feel very good about the pipeline we have just kind of for organically to build within our existing footprint, and we think there’s some opportunities to go into new markets. You know, overall, again, that business is performing so well. It’s some of the highest returns that we can get on invested capital today, and it’s continuing to grow rapidly.

We’re excited about it, and we’re gonna continue to invest in it.

David Barden, Analyst, New Street Research0: Hey, Henry, I would just add to Steven’s comments here as he talks about our investment in land and additional power across our existing campuses. Just to put a little bit finer detail on that, last year, we had about 287, 280 megawatts of development, held for development, and we’ve increased that by 200 megawatts. That’s where we’re negotiating with power companies, securing that power in certain places, buying land and banking that land for additional development where we can expand campuses. We are really well positioned to continue to lean into the demand across our footprint.

Henry McVey, Analyst, Morgan Stanley: Makes sense. Thank you both.

Operator: Thank you. Our next question comes from the line of Brendan Lynch of Barclays. Your line is now open.

Brendan Lynch, Analyst, Barclays: Great. Good morning. Thanks for taking the question. Rod, I appreciate all the color on the long-term AFFO per share growth outlook. You also mentioned a earlier return to normal in Brazil. Can you give us some color on what that actually looks like in terms of potential co-investment growth and cancellations?

David Barden, Analyst, New Street Research0: Yeah, absolutely. I think everyone is familiar with where we are in Latin America. We are experiencing a higher level of churn this year. It’s around 8% contribution to our Organic Tenant Billings Growth. I’ll highlight a couple of things and I think I said this in my prepared remarks, but probably worth highlighting. That includes delaying some churn from 25 into 26, and also accelerating some churn, particularly on the Oi side from 27 into 26. We do think that the market there is peaking in terms of the churn that we would expect. We also have in 200 basis points of new business across the region, and that’s a function of consolidation needing.

Some of the markets that we’re in across Latin America have been fragmented, including Brazil in the past, which we’ve seen the consolidation that we’ve worked through there. With all that, you know, with all that kind of put together, you end up with negative Organic Tenant Billings Growth for 2026. Because we’re accelerating some of the churn from 2027 into 2026, and we’ve gotten through some of this market repair and consolidation across the region, and most importantly in Brazil itself, we do expect to get back to accelerated Organic Tenant Billings Growth into 2027. Moving from a negative OTBG into positive territory in the lower single digits in 2027 and returning to kind of the expectation of normalized growth by the time we get out to 2028 and beyond.

We do think that it is the beginning of, you know, seeing much better results across Latin America as there are a rational number of carriers, three solid, well-capitalized carriers in Brazil. Going forward, kind of the absence of this consolidation churn really sets us up well to get back to normal Organic Tenant Billings Growth and a normal new business contribution kind of across that region too, Organic Tenant Billings Growth.

David Barden, Analyst, New Street Research2: Yeah. I would just highlight that the 3 carriers in Brazil have all talked about investing more in their networks. We’re absolutely seeing an increase in demand across the ecosystem there. We’re seeing the acceleration in new business applications in Brazil. We’re seeing that market repair take place, and we’re excited about the prospect of Latin America being accretive to the U.S. growth rates over time. And we believe that we’re on track to see that start happening, as Rod said, 2028 and beyond.

David Barden, Analyst, New Street Research0: Yeah. Maybe I would just highlight there, I mean, Steve talks about Latin America being accretive to our overall AFFO per share growth rates. I’ll just take a step back and remind everyone of the bits and pieces of our longer-term AFFO per share growth rate expectation, which is solid mid-single-digit growth in the U.S. market, probably better than that across the Europe market. That would be driven by a mid-single-digit Organic Tenant Billings Growth in the U.S., probably slightly higher in Europe, complemented by good cost controls in managing the expenses down the line. CoreSite double-digit growth, that’s accretive to those growth rates. You look at the emerging markets, Africa is growing double-digits. That’s, you know, very accretive to the overall growth rates. Returning Latin America to normalized growth will also be accretive there.

That’s how you get down to an AFFO, an AFFO per share growth rate that will be in the mid-single digits or upper single digits. Of course, complemented by a strong balance sheet, wise, very smart capital allocation, whether it is, you know, driving the dividend, which I think you all know we’ve got 5% growth for Q1 on the dividend. We expect that growth rate to be in line on average with our AFFO per share growth rate. Again, a mid-single digit growth rate on the dividend, investing one and a half to two billion in CapEx. Then, you know, looking at accretive M&A from time to time where we see good opportunities and also balancing paying down debt, reducing our overall leverage further than the 4.9 times that we ended this last quarter.

Also buying back shares. Based on my prepared remarks, I think you all know we bought back about $184 million worth of shares in Q1. That is in addition to what we did in Q4, which you put the two together, you’re up well over, you know, $560 million devoted towards share buybacks. That helps support that mid to upper mid-single digit growth rate on AFFO and AFFO per share going forward.

Brendan Lynch, Analyst, Barclays: Great. Thank you for all that color. Very helpful. Maybe just one other kind of quick one on the data centers. There’s some press reports out there about DC construction being delayed in North Carolina. Seems there’s a kind of growing wave of NIMBYism across the country. Can you just talk about how you’re kind of handling some of those restrictions?

David Barden, Analyst, New Street Research2: Yeah, I mean, unfortunately, we are seeing an increase in that. For me, it’s very reminiscent of my early days in Tower. One of the things that I did as a baby lawyer was permitting towers. So it’s a very similar phenomenon to that, and we’re attacking it the same way. This is, you know, one of those synergies that may not be as apparent between the two companies, but we’re using our government affairs team from American Tower and our zoning and permitting team from American Tower to help the CoreSite team deal with that, and also to help the Data Center Coalition, who’s also attacking that, you know, from an industry perspective.

I think we have a long track record of being able to work with communities and finding ways to address those concerns. You know, we’re very confident that our team is able to tackle that as well as anybody in the industry can. It is certainly something that’s taking a little bit of airtime in the news and on social media, and it’s something that we’re very aware of. At this point, it hasn’t been an issue for us where we’ve had to scrap any projects or have any significant delays. You know, we believe we can navigate through that, but we’re gonna continue to work with the industry partners and our internal teams to make sure that it doesn’t get worse.

Brendan Lynch, Analyst, Barclays: Great. Thank you.

Operator: Thank you. Our next question comes from the line of David Barden of New Street Research. Your line is now open.

David Barden, Analyst, New Street Research: Hey, guys. Thank you for taking the questions. I really appreciate it. I guess I’ll just ask it, right? What does it mean if SBA gets taken private? How important is the multiple that they get taken private at? If it’s low, does that mean, you know, maybe you stop buying back stock? If it’s high, do you start buying back stock more aggressively? Or do you start thinking about maybe taking parts of your portfolio, and taking those private or selling them to private entities? I think it’d be great to have you guys as the biggest tower company in the U.S. kinda just weigh in on what that means for everybody. I guess the second is, you know, last week, SpaceX had a 3-day kinda diligence meeting.

I guess some buy-side guys, sell-side guys were there. You know, we’re not an investment bank, so we don’t get involved in that. You know, some people are walking away from that meeting and the roadshow that’s beginning and thinking that, you know, 1 of the growth vectors to support a multi-trillion dollar valuation is disrupting the terrestrial wireless market. Give us, you know, your perspectives on both of those would be super helpful. Thank you.

David Barden, Analyst, New Street Research2: Sure. Look, on the SBA question, you know, we’re not gonna comment on the rumors that are out there and any of the valuations that may be rumored to be out there. You know, that’s gonna be what it’s gonna be. We, we don’t run our business based on what other people are doing with their business. When we think about our business and how we create the most long-term shareholder value, we’re always looking at portfolio optimization. The dislocation between public and private multiples is not something that’s new. It’s something that’s been out there before. You’ve seen us take decisive action when we think that we can create more value by selling something than by holding it. We’re always evaluating all the different opportunities in the portfolio, and we’ll continue to do that.

You know, like I said, we’re gonna figure out what creates the most long-term shareholder value. We believe that we have a lot of secular tailwinds driving growth in this industry. We believe that our portfolio is gonna continue to grow, and that we can deliver that mid to high single digit AFFO per share growth with our combined portfolio of the whole company here over time. We believe that that’s gonna drive a lot of shareholder value, you know, beyond where we are today. That’s how we look at the industry piece of it.

In terms of our share buyback, we’re doing our own calculations on what we think is gonna drive value over time on that, and it’s not really gonna be influenced that much by what, you know, other people are doing in this space. We’re gonna continue to make our decisions based on our business, our growth prospects, and what we think the right thing to do is. You know, like everybody else, we’ll watch the market and see what happens, but we’re gonna continue to kind of be independent thinkers in terms of how we create value over time. In terms of the satellite piece of it, look, you know, we’ve answered this question a bunch of times, and I’ll just repeat. We have a front row seat to this space. We have a board seat with AST.

It’s why we made the investment that we made in AST. Satellites are complementary to terrestrial networks. We’ve said it, other tower companies have said it, the carriers have said it, most of the satellite companies themselves have said it. We don’t see anything that changes that. In the very ultra-rural areas, it may be a better solution, we don’t have towers there. We have a tiny number of towers in those areas. Quite frankly, they’re not the top performing towers in the portfolio. If it does disintermediate a handful of towers, you’re not even gonna notice it. From our business perspective, I don’t lose a second sleep worried about satellites. I’m actually encouraged by satellites. It’s gonna provide ubiquitous coverage.

It will enable some of the capabilities that they’re talking about for 6G, which is gonna continue to give new use cases to our customers, things that you can’t do when you have a network that has holes in it. I think the satellite story is gonna play out over time. It’s gonna be a big positive for our carrier customers. That means it’s gonna be a big positive for us. I think the short-term noise that people are hearing about this is just misplaced.

David Barden, Analyst, New Street Research: I appreciate it, Steve. Thank you.

Operator: Thank you. This concludes the question and answer session. I’d like to thank everyone for your participation in today’s conference. This does conclude the program, and you may now disconnect.