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This year’s Fortune 500 marks the 67th running of the list.

American Tower operates simultaneously as a real estate investment trust and an operator of communications networks. The company leases out space on wireless and broadcast towers at more than 43,000 properties in the U.S. and Canada. The company has benefited in recent years from efforts by telecom companies to upgrade their networks to the 5G transmission standard; American Tower's revenue grew 6% in 2020.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune 500 marks the 66th running of the list.

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An operator of wireless and broadcast communications towers, American Tower expanded further into emerging markets in 2019.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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American Tower is a global real estate investment trust that owns, operates, and develops communications real estate. The company provides the infrastructure that enables wireless carriers and broadcasters to transmit signals, supporting mobile and broadband networks. The company utilizes a “vertical office building” model for its clients by leasing space on its towers to multiple tenants.

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American Tower (AMT): Company Profile, Stock Price, News, Rankings

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American Tower

american tower

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower First Quarter twenty twenty five Earnings Conference Call. As a reminder, today's conference is being recorded. Following their prepared remarks, we will open the call for questions. If you would like to ask a question, please press 11 on your telephone.

You would 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, Adam Smith, senior vice president of investor relations in FP and A. Please go ahead, sir.

Good morning, and thank you for joining American Tower's first 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'm joined on the call today by Steve Vondren, 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.

Examples of these statements include our expectations regarding future growth, including our 2025 outlook, capital allocation and future operating performance, and any other statements that regard matters that are not historical facts. 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 ks and in other filings we make with the SEC. 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, Adam. Good morning, everyone, and thanks for joining the call. As you saw in this morning's report, we're off to a strong start to the year, exceeding our initial expectations across property revenue, adjusted EBITDA, and attributable AFFO per share for the quarter, with demand persisting across our global portfolio against the challenging economic backdrop. I'll briefly share a few updates and trends from the quarter before Rob discusses more detailed financial results and our full year revised expectations. I'll start with leasing trends and carrier activity.

The durability and quality of our cash flows combined with ongoing resilience and network investments to meet growth in the mobile data demand continues to offer our investors a compelling option in American talent. The large US carriers have publicly stated aggressive goals to substantially complete five gs equipment upgrades across nearly all of their networks by the end of twenty twenty six and are driving broad based amendment activity complemented by the early signs of capacity oriented new site demand. In fact, Q1 represented our fifth consecutive quarter of sequential increases in both application volumes and services revenue, which grew roughly 60% and over 140% year over year, respectively. Meanwhile, in Europe, we continue to see steady demand across our ground based and rooftop sites, highlighting a march toward elevating the roughly 45% current mid band population coverage and meeting 2,030 coverage targets. We're seeing similar resilience across our emerging markets.

In Nigeria, improved consumer pricing dynamics are facilitating enhanced cash flows for the carriers and in turn, accelerating new business. In Brazil, the benefits of a stronger three player backdrop are beginning to emerge, with carriers steadily upgrading their networks to similarly realize the spectral efficiency benefits we've highlighted in The US, meet regulatory coverage requirements, and begin to fill on their networks. While we're encouraged by the demand across our emerging markets footprint, we're going to closely monitor the global economic backdrop and any potential implications of that, including on FX, where certain emerging markets could be more susceptible, along with various customer events and collections in select markets. Our CoreSite business posted yet another set of impressive results in the quarter, fueled by strong leasing and continued pricing favorability, while bringing the first phase of our NY3 center and the second phase of our CH2 center online, collectively adding 11 megawatts of capacity with a high degree of day one leasing. The team's consistent approach to underwriting with a focus on curating high quality interconnection rich ecosystems across the diverse set of cloud, network, and enterprise customers in leading markets yields best in class returns while insulating against broader market shifts.

Overall, CoreSite performance, supported by accelerated demand and our right to win through market positioning and service quality, continues to exceed our initial expectations and merit the elevated levels of capital that we've allocated in our 2025 plan. Next, I'll touch on capital allocation and portfolio management. We continue to actively assess and manage our portfolio following our grow, harvest, and resolve methodology to reduce risk and drive higher quality, more predictable earnings. We've previously highlighted discretionary capital prioritization to our developed markets, where we have a right to win. Consistent with this approach, we purchased our DE1 Data Center in Denver, an existing facility where CoreSite had maintained a partial lease.

Direct ownership of this building, which serves as the primary point of interconnection in the Rocky Mountain region, will enable Coorsight to control the area's only four cloud on ramps and one of the top network and peering ecosystems. Furthermore, on the resolve end of the equation, we successfully closed our previously announced sale of our South African fiber business in early March, marking a key step in the continued reduction of our international fiber footprint. These activities reflect productive steps in our continual aim to hone our global portfolio mix by emphasizing core markets and products that drive synergistic value and durable cash flows that we expect to translate into attractive returns for our shareholders over the long term. Finally, I'll touch on our global operations and our value proposition. We have a great core business anchored in high quality, high margin assets that we maximize with strong terms and conditions, strategic counterparties, and world class operational execution.

We already have a track record of building on this strong foundation by leveraging our scale, core competencies, and financial flexibility in a way that drives both customer and shareholder value. This includes US innovations like our instant collocation engine, our fleet of drones and digital twin technology, our suite of site and construction services, our backup power solutions, and our programmatic approach to land buyouts, not to mention our holistic contract structures. Internationally, our best in class African power program, which we've optimized through accretive sustainable energy investments and the use of comprehensive data analytics, predictive monitoring leveraging AI, our enhanced European book to bill processing, and many other developments provide meaningful advantages. As we globalize more intentionally, there's significant opportunity to evaluate cross border applicability of these regional offerings to drive efficiency and unlock incremental value. Now, we're still in the early days of mapping our globalization plan, but we've already had an active start to the year as our team works to evaluate opportunities to streamline our operations and enhance synergies across our markets and products.

We're excited to build on the momentum we've established and further leverage our scale, core competencies, and balance sheet to enhance our market leading position. And I look forward to sharing more specifics in time. In closing, growth in mobile data has proven resilient across various economic cycles over my two plus decades with American Tower. As I mentioned at the onset, I'm encouraged by the durability and leasing demand for our global portfolio of assets. While simultaneously exercise a degree of caution in anticipation of persisting forward looking volatility and uncertainty.

I firmly believe that American Tower's approach to enhancing our organization and customer value proposition through the means that are within our control, including our globalization initiatives, portfolio mix and quality of earnings and balance sheet, provides an additional degree of strength and differentiation moving forward. Similar times of volatility uncertainty during my tenure have historically presented incremental opportunity for us. And I'm optimistic that the steps we're taking today will have us well positioned to capitalize on any environment. Now I'll hand the call over to Rod to discuss our first quarter financial performance.

Thanks, Steve. And thank you all for joining the call. As Steve mentioned, we are off to a strong start to 2025 with our customers continuing to invest in their networks as global mobile data consumption continues to grow. Before I discuss the specifics of our Q1 results and revised full year outlook, I'll summarize a few highlights. First, the solid leasing trends we observed over the course of 2024 continued into Q1 of twenty twenty five, resulting in consolidated organic tenant billings growth of 4.7%.

As a result of accelerating power activity, our US services business delivered its highest quarter of revenue and gross profit since 2021, with applications rising nearly 30% compared to levels seen in Q4 of twenty twenty four and up roughly 60% versus Q1 of twenty twenty four, reflecting a mix of continued amendment driven upgrades and new co locations. In addition, CoreSite delivered high single digit revenue growth underpinned by a continuation of robust demand for our interconnection hubs. Consistent with past quarter themes, we complemented durable top line performance with prudent cost management providing year over year cash adjusted EBITDA margin expansion of nearly 70 basis points to 68.2%. Next, we continue to execute on our stated priorities, successfully closing the sale of our South Africa fiber business in early March, completing the purchase of our DE1 data center asset in Denver in early April, deploying over 75% of discretionary capital expenditures in the quarter towards our developed market platforms and resuming dividend per share growth of approximately 5% year over year for the quarter. Finally, we further mitigated 2025 refinancing risk by successfully accessing the debt capital markets last month issuing $1,000,000,000 in senior unsecured notes at a weighted average cost of just over 5 percent.

Proceeds from the transaction were used primarily to pay down existing debt. At the end of the quarter, floating rate debt represented approximately 4% of our total outstanding debt, while net leverage reduced to five times, in line with our stated target resulting in enhanced balance sheet strength and improved financial flexibility. Turning to first quarter property revenue and organic tenant billings growth on slide six, consolidated property revenue growth was slightly positive year over year and up approximately 3% excluding non cash straight line revenue, while absorbing approximately 300 basis points of FX headwinds. U. S.

And Canada property revenue declined approximately 1% and grew over 3.5% excluding non cash straight line, including over 1% negative impact from Sprint churn. International property revenue was roughly flat year over year with growth of approximately 8% excluding the impact of foreign currency fluctuations. Finally, property revenue in our data center business grew by approximately 9%. Moving to the right side of the slide, consolidated organic tenant billings growth was 4.7% supported by solid demand across our global portfolio. In our US and Canada segment, organic tenant billings growth was in line with expectations at 3.6% and approximately 5% excluding Sprint related churn.

As highlighted on our last earnings call, we continue to expect growth to be below 4% for the next two quarters due to Sprint churn before increasing to over 5.5 in Q4. Our International segment drove 6.7% in organic tenant billings growth, a modest acceleration from Q4 of twenty twenty four with generally consistent leasing trends, escalator contributions, percent and up over 5.5% excluding non cash straight line impacts, while absorbing approximately 300 basis points of FX headwinds. Growth was supported by a high conversion of cash property revenue through ongoing cost control and an over 140% increase in our US services gross margin associated with an increase in tower activity. Moving to the right side of the slide, attributable AFFO and attributable AFFO per share declined by approximately one and over 1% respectively, primarily due to contributions from the India business in the prior year period, which had benefited from nearly $30,000,000 in revenue reserve reversals. On an as adjusted basis, normalizing the prior year period for the sale of India, growth was approximately 6.6% driven by the high conversion of cash adjusted EBITDA growth to AFFO through the effective management of below the line costs.

Now turning to our revised full year outlook on slide eight. We are pleased with the results to date in the durable demand trends that underscore our performance. However, like prior years and given proximity to our previously released outlook, we have kept core full year expectations largely unchanged with updates to our FX assumptions. Consistent with past practice, our projected FX rates for outlook take the more conservative of bank forecasts and the trailing thirty day spot rate averages for each currency, which has generally resulted in rates more conservative than current spots. As a result, we are raising our expectations for property revenue, adjusted EBITDA, attributable AFFO and attributable AFFO per share by approximately $50,000,000 30 million dollars 20 million dollars and $04 respectively compared to prior outlook solely attributable to updated FX assumptions.

At the midpoint, our expectation for attributable AFFO per share is $10.44 or nearly 5% growth year over year on an as adjusted basis. Furthermore, we are reiterating our prior outlook expectations for organic tenant billings growth across all regions, including greater than or equal to 4.3% in The US and Canada, or greater than or equal to 5.3% excluding the impacts of Sprint churn, and approximately 12%, five % and two % to the Africa and APAC segment, Europe and Latin America respectively. Collectively driving approximately 6% for international and approximately 5% on a consolidated basis, Complementing our organic trends and supporting margin expansion, our revised outlook maintains the expectation for a year over year reduction in cash SG and A. Turning to slide nine, we are generally maintaining consistent capital allocation expectations for the year, updated only to reflect small M and A transaction closed during or shortly after the quarter. We continue to expect an approximately $3,200,000,000 common dividend distribution to our shareholders subject to Board approval and approximately $1,700,000,000 in capital expenditures, which includes 2,250 newly constructed sites at the midpoint and roughly $610,000,000 for data center development.

I'd like to reiterate that while overall capital spend is moderately increasing year over year as we execute on attractive development opportunities across The U. S, Europe and CoreSite, we continue to reduce investments across our emerging markets. In 2025, investments in Latin America, Africa and APAC will primarily consist of augmenting sites to accommodate incremental tenants and executing on previously committed multi year built to suit agreements with leading carriers. Moving to the right side of the slide, our balance sheet remains strong, providing financial flexibility and optionality, including $11,700,000,000 in liquidity and low floating rate debt exposure. Turning to slide 10 and in summary, we're off to a great start to 2025.

The resilience of our global business demonstrates strength amidst the challenging economic backdrop. Despite ongoing market uncertainty, carriers continue to invest in the networks to accommodate growing demand for mobile data consumption, which underscores the critical nature of our global portfolio of assets. This, combined with our highly focused and disciplined approach to capital investing, our best in class operating platforms, and our strong balance sheet position us well to reliably deliver high quality earnings and compelling total shareholder returns over the long term. And with that operator, we can now open the line for questions.

Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by while we compile the Q and A roster.

Our first question comes from Matt McNam from Deutsche Bank. Please go ahead.

Hey, guys. Thanks so much for taking the questions. Maybe two if I could. First, maybe more high level. You've done a lot of portfolio optimization in recent years.

And so I'm wondering if it's fair to assume on a go forward basis a more sharpened focus on the globalization strategy, more cost optimization with the remaining assets that you've got in place? And then secondarily, on The U. S. Side, it sounds like there's still a lot of momentum both in services and new applications. I'm just wondering how we should think about the cadence of COLO and amendment revs in upcoming periods relative to the 38,000,000 in 1Q?

I guess more specifically, whether you're still comfortable with that 165,000,000 to $170,000,000 range that was laid out for new leasing last quarter? Thank you.

Yeah, Nick, thanks for the questions. I'll take the first question. I think it's fair to say we're going be focused on both. When you look at our portfolio optimization, that's an ongoing analysis that we will continue to do with the management team and the board. And so that's something that we look at on a continuing basis.

We review it and, I think what we've said pretty clearly is we don't have anything that we're specifically looking to divest necessarily, but there are markets that are in our resolve category that we've highlighted and also businesses that are non core to our business. And with those businesses, the way we look at that is we look at the value of the ongoing cash flows. And then if we think that someone's willing to pay more than the value of those ongoing cash flows, then we would look to do a transaction. If not, we'll harvest the cash flows from those and continue to operate them. And we have kind of reordered our operations so that there's nothing that there's a compelling reason to divest.

We've kind of started operating some of those markets out of regional hubs and looking at it that way. So we'll continue to do that evaluation, and you may see us continue to optimize. You may see us not do that if it's not going to add more value for the long term. Our globalization efforts though are a huge focus for us right now. We've been very successful in bringing down SG and A over the past couple of years.

And, we've kind of took the low hanging fruit first on that. We still think there's some room there as well. We're going to keep working on that. And what we've got Bud focused on in his new role as Chief Operating Officer is really looking at the rest of the business across the globe to see what type of synergies can we get across the globe with the rest of our cost structure. And we're in the sick of that right now.

We've got people, teams looking at that. We're looking through the different categories of spend and we're trying to figure out what the opportunities are there. And that's something that we'll share with you guys later in the year as we come up with some better targets on that. But we're encouraged by what we're seeing. We think there's definitely some opportunities there to take some of these best practices that I highlighted in my opening remarks across the globe.

And we're excited to focus on that as well.

Hey, Matt. Good morning. I'll take the second part there. I think you asked really two questions. The first one hit, the services number and how that kind of rolls into the new business number.

As you heard in my prepared remarks, we started this year with a really strong services result, achieving about $75,000,000 of services revenue for Q1. And we're seeing a pickup in activity versus our original outlook that we talked about last February when we announced the Q4 earnings. Things are starting off very strong for us. We also expect that to continue into Q2. That's steady kind of strong demand for the services business.

So Another quarter in that range of about $75,000,000 is what we're targeting. Still in the range for the full year for a strong revenue full year number in or around the $240,000,002 $50,000,000 range, That would imply a lower amount of revenue for Q3 and Q4. So we do see that in our outlook. Now, of that is driven just on the reduced visibility when you get into the outer part of 2025. So can we outperform that?

Certainly possible. We have less visibility when you get to the end of the year. So we are seeing a very strong start to services and we expect maybe that drifts down a little bit just because we don't have as much clarity when you get to the end of the year. When you jump into the new biz numbers, the +1 number for The US is absolutely what we are targeting. You saw for Q1 we hit a number around $38,000,000 That was down a little bit from Q4, which was about 45,000,000 This cadence here is really the opposite of what we see in the services.

Another month or another quarter for Q2 in that $38,000,000 range wouldn't be out of the expectation for us. And then in acceleration, they're getting up over 40,000,000 for the last two quarters, over $40,000,000 for the last two quarters. That would put you right in that target range of the 165 plus.

Thank you. One moment for our next question. Our next question comes from Jim Schneider from Goldman Sachs. Please go ahead.

Good morning. Thanks for taking my question. Two, if I may. First of all, when you look at the, sort of U. S.

Carrier activity and the activity you're seeing there, with respect to leasing activity, seems relatively consistent with what you had projected. But on the margin, can you maybe talk about any kind of changes that you're seeing as we head through the end of the year in terms of what is being prioritized by the carriers in terms of new activity? And then secondly, following up on the cost efficiency program, Steve, you're pretty clear about that being a focus for you. Maybe just give us a sense of without giving us a firm target directionally as you head into the out years, is the target to kind of get from the 7% constant currency AFFO growth you're doing this year to something closer to double digit in the out years? Thank you.

So I'll start with the care activity in The U. S. So, what we're seeing is exactly aligned with what we've expected to see. We talked about it last year and talked about it this year, which is kind of a steady ramp, which we think is consistent for this phase of the five gs build. And if you look at the public statements by the carriers, they've all set some pretty aggressive targets to getting to, close to full deployment of their mid band spectrum, across the portfolio.

So there's still a decent amount of amendment activity that we expect to see over the next two years as they take those percentages covered by mid band, from somewhere in the 50% range for one of the carriers, one, the other two are little bit higher up to that 80 to 90% coverage over time. So there's still a good degree of activity there as well. We are still seeing, some new collocations as well though. And that comes in two flavors. We are seeing people that are increasing coverage.

Some of those consistent with governmental requirements they have. Some of them just trying to paint the map a little bit more. And we are starting to see some new co locations coming in for densification. So it's really consistent with what we've been talking about for the past couple of years, which is the care activity is broad based. They are going to continue to deploy their five gs until that becomes ubiquitous.

And we are starting to see the early signs of densification, which is what we thought we would see at this place in the cycle here. When it comes to the globalization, nice try. I'm still not gonna give you guidance for multi year, but, I'll give you credit for trying there. The way we're looking at it is we're looking at the category of expenses that's really in our controllable spend. So you've got our operations and maintenance, the SG and A we're already looking at, looking at our supply chain to see if we can actually impact our growth CapEx, our maintenance CapEx by doing a little bit better there.

And we'll continue to assess that. There's no specific target for that. And so I'm not gonna commit to what we're gonna get to on AFFO in those out years. Certainly the focus for the entire management team here though is to do everything we can in the business to grow our FFO per share. And we're focused on that long term value creation.

So everything that we do, including our cost savings is geared toward the long term. We're not looking to make a splash in a quarter and then have expenses rebound. We're not looking to damage the business and hurt our growth. We're looking to be very thoughtful about all the changes we make to actually increase our customer service, to increase our automation, to actually increase revenues by being a better partner to our customers. And as we have those targets, I'll share those later in the year.

Hey, Jim, maybe I'll just highlight a couple of numbers here. So for the '25 outlook, maybe just reminding you and the group here that we are planning for SG and A reductions at about $13,000,000 mid teens here, excluding the impacts of non recurring bad debt that we saw in 2024. And that's on top of a '24 over '23 result where we reduced SG and A without the impacts of bad debt by even more than that. So we've been managing costs pretty tightly throughout the SG and A for a few years now, consistently bringing those numbers down in the face of pretty significant inflation in The US over the last several years.

Thank you. One moment for our next question. Our next question comes from Rick Prentiss from Raymond James and Associates. Please go ahead.

Hey. Couple questions. Appreciate that. First, I always have thought capital allocation is probably the top job for senior management. You guys have been working on on that as you laid out.

Leverage now hit 5.o. We're getting closer to that coming below 5.o. Update us as far as thoughts on stock buyback. Is there an authorized program? M and A, clearly another potential.

Any portfolios out there? And maybe explicitly talk about Canada as a market, not necessarily the transactions that might be out there, but what would be the attributes that would be attractive in a country like Canada?

Sure, Rick. So stock buybacks are absolutely on the table as one of the potential uses for the capital that we generate. We do have an authorization by the board. It's a $2,000,000,000 authorization that's outstanding. So that is out there.

At this point, the way we look at our capital allocation to your point, we just got to So we should be delivering further from there. And the way we really look at is what's going to create the most long term value. So we'll weigh those stock buybacks against any M and A opportunities, our internal CapEx program further delevering, etcetera. In terms of the M and A market today, we did close a small transaction in The US this year already.

So we'll continue to be opportunistic where you find the right portfolio at the right price. We don't see any large scale opportunities that are taking us off of our path. And so we've been pretty clear about that for the past few quarters. That hasn't changed. We're still not seeing any huge opportunities out there that we think are compelling enough.

Canada is an interesting market for us. We have a small portfolio there. It's performing very well. So we like that market in terms of what we're seeing today. And we have a lot of ability to operate that market out of The US.

So there's a lot of synergies that we would have if we did do something in Canada. And I know there's some rumors of transactions out there. And what I would say is true of Canada is very similar to what we had in Europe, which is we're gonna be very disciplined in looking at terms and conditions, number one, and valuations, number two, in terms of trying to figure out if a transaction makes sense. And so if a portfolio trades and the terms and conditions are something that's not gonna give us a long term value creation opportunity, that's probably not the right deal for us. Similarly, if the price is too high, you know, we're not gonna stretch for something unless we think it's gonna create a lot of long term value for our shareholders.

So we like the market. We can operate it from The US with a very huge amount of synergies that we did there. And it would make sense if we had the right deal, but we're gonna be patient and get the right terms and conditions and valuation on it.

Makes sense. I think, have you changed your middle name officially to C terms and conditions on John?

One follow-up for me also, some questions around colocation amendments. Can you break out for us what either in the applications or new revenue 1Q saw as far as colocation amendment kind of the split between those? Because we are watching it. Some folks are starting to see some higher amount of new colocation obviously comes in at a much higher incremental revenue than amendment.

Yeah, so we're seeing a continued increase in the colocation applications. And so with that, we're seeing an increase in both amendments and new leases. And while the percentage of contribution from the colocations has increased a little bit, the base has gotten bigger too. So it's not a huge proportionate shift for us. Again, if you look at where those carriers are, you've got one that's about 80% deployed, one's in the 65 to 71 that's still around 50.

So there's still a lot of amendment business to be done on our portfolio. So while I do see an increase in colocations, it's not making a huge shift in our mix today.

We expect over the next couple of years, we see more of that.

Oh, you definitely will. We're seeing this phase of densification start and even before you get the applications, you start having conversations with the carriers. They start asking for more information on the towers, what rad centers are available, what structural capacity look like, etcetera. So as we continue to hear that information request, that gives us a lot of confidence that we're gonna see an increase in collocations over time as they move into that densification phase over the next few years.

Thank you. One moment for our next question. Our next question comes from Michael Rollins from Citi. Please go ahead.

Thanks and good morning. Just first, when you look at the colocation opportunity that you're just describing, I'm curious how much of that is competitive, whether it's other large tower firms or smaller private firms or build to suits, whether it's by the carrier or some of the other private firms. How much of that is competitive? And is there an opportunity to work with your customers to try to improve your share or win rate, if that's an option? And then second, just looking at the annualized EBITDA and it looks to be above the high end of the guidance range, the annualized first quarter number.

Just curious if there are certain items that we should be mindful of through the year that may pull EBITDA back into the current guidance range.

Sure. I'll take the first question and let Ron answer the second. So when you look at the new colocations, the carriers are deploying, it really depends on where they're deploying on what the competitive options are. If you look at all the towers in The US, there's very little overlap between existing towers in most of the markets. And that just makes sense.

You don't want to deploy redundant capital if you don't need to. Colocation is the most cost effective way for everyone to deploy. So you don't see a ton of overlap between the towers that are out there. When you're getting into pushing into kind of paint the map spaces where people are trying to increase rural coverage, a lot of those areas don't have coverage because there are towers there. So you do see more new builds in that area.

So overall, it kinda depends on the geography that they're in. In terms of whether you can influence your share, you can, and it comes at the RF design phase. It's when they're actually designing their networks. And if you are a preferred partner and you provide great customer service, they know you can get them on air quickly, they'll target your sites. And that's what we see with our customers and what we've been able to do over time is to get a good share of their business by being a really good partner to our customers, providing great customer service.

Now, when you're looking at infill sites and some of the densification, there may be a little bit less flexibility because you're looking at filling in sites within an existing design. So the geography probably plays a bigger role in where that split cell has to be, or in terms of trying to fill a hole in the network where that is. And so they made fewer choices there. So it's a little bit of a mixed bag depending on what their goal is, where they're building and what the existing infrastructure is.

Hey Michael, I'll take the second question you had there relative to the EBITDA and the cadence throughout the year. What I would say is we're very pleased with our Q1 results. We had a strong result on EBITDA and AFFO, AFFO per share. When it comes to EBITDA going out for the full year and our outlook, at this point, we believe that it's prudent to just hold our outlook kind of where it is. So we did outperform our EBITDA outlook for Q1.

Some of that was driven by the strong services outcome. Again, and I mentioned this a few minutes ago, there is the potential for services revenue and therefore margin and EBITDA contribution to drift down in Q3 and Q4. So that could reduce kind of the run rate of EBITDA. But at this point, given the proximity of our original outlook and quite frankly, the general kind of market backdrop and maybe this is more appropriate to AFFO and AFFO per share, where you see the same kind of a cadence, right? If you look at our Q1 AFFO and AFFO per share result and you annualize that for the full year, it suggests we're going to outperform our full year outlook.

When you get into the AFFO numbers, some of the drivers there can be different quarter to quarter. Notably, cash taxes, there's a significant timing issue there for differences quarter over quarter, as well as maintenance CapEx. So those things kind of can move that number around on a quarterly basis. So when look at EBITDA and AFFO, yes, we had a very strong, very good quarter in Q1. If you would annualize that, you'd get an additional outperformance for our full year numbers.

At this point, because of timing issues, because of a potential decline in services at the end of the year, we think it's prudent to just hold those outlooks consistent with the original outlook with the exception of updating the FX numbers.

Thank you. One moment for our next question. Our next question comes from Nick Del Deo from MoffettNathanson. Please go ahead.

Hey, good morning guys. Thanks for taking my questions. First, can you expand a bit on the sort of services work that you're seeing behind the big increases and the degree to which that revenue is coincident with the leasing activity that you're seeing versus being more of a leading indicator? And second, I know you need to be a bit careful with the specifics of any deal in any particular customer. But if EchoStar would engage in some sort of transaction involving its spectrum, whether a sale or a lease, do you have any contractual protections above and beyond, their promise to pay the agreed upon rent?

So I'll start with the EchoStar question first on that. When we get in terms of conditions with the agreement, but we do, expect to get paid. So all we've built into our kind of ongoing guidance our kind of future growth is the minimum contractual commitments under that agreement. So that's what's baked into our multi year guide and that's what we're expecting out of those guys. We're not anticipating anything that materially changes their business.

And if it does, we'll kinda figure that out when it happens, but we do expect to get paid there. Sorry. Remind me the first question. Hold on. The service.

Yeah. The service, you know, the mix there and the degree which is coincident versus a a leading indicator.

Yeah. So our services business, I kinda break into two categories. The the first is really site acquisition services and that's things like zoning and permitting, engineering services, things like that. And that's a pretty steady part of the business. We do have a slightly larger proportion of construction services this year.

We don't do construction services nationwide. We don't do it for all the carriers. It's much more of a targeted activity that we do in a couple regions because we've got really good teams there. And that construction services is project management. We don't have the crews climbing the towers.

We're managing that process. So we have seen a slightly larger component of that this year, but the overall services business is up. And in terms of how that translates into revenue, there's a little bit of a disconnection from the activity levels and services to our property revenue because of our comprehensive agreements. So in those agreements, there's a steady cadence It's a little bit independent of the activity levels.

However, we do have one customer that's not on a comprehensive agreement, and we also have, new co locations that are outside of some of the other comprehensive agreements. And so those are much more affected by activity timing. And when you think about the cadence of services versus the property revenue, if they're not part of the comprehensive agreement, there is a little bit of a lag time from when you see the services revenue to when you see those commits. And that varies a lot by customer. So I would think about that as being somewhere in the neighborhood of sixty to one hundred and eighty days, depending on the customer and the type of transaction and the geography on that.

Hey Nick, I'll just add one additional point when it comes to services. The margin that we see in that business this year, notwithstanding the increase in revenue and what's in the way Steve talked about the shift towards a little bit more construction management. We are consistently seeing north of 50% margins. Our outlook assumes a 52% margin on this business, which is very consistent with what we saw in 2024.

Thank you. One moment for the next question. Our next question comes from Badia Levi from UBS. Please go ahead.

Great. Thank you. My other question on LatAm, I think you mentioned that you are seeing a bit of more activity showing up. We haven't really seen that in the results yet. So can you talk to the cadence of incremental leasing in LatAm?

And I think churn came in a bit lower. Was that just timing? And how should we think about the escalator? I think that was better as well.

Sure. So we are seeing pockets of increased activity in particular in Brazil have some of the carriers who made some public statements about starting to enhance their five g offerings. So we continue to see some new business from that. There are also markets that are further behind in that cycle because it's taking time to get the spectrum out there. So, if you look at Mexico, Mexico is a little bit behind in terms of starting a five gs deployment there.

American Tower (AMT) Q1 2025 Earnings Call Transcript

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