SBA Communications (SBAC) Earnings Call Transcript

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DATE

Thursday, February 26, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Brendan Cavanagh
• Chief Financial Officer — Marc Montagner

TAKEAWAYS

• AFFO per Share -- $3.19, supported a cash dividend of $1.11 per share, representing a 13% increase from the prior year period.
• New Domestic Leases and Amendments -- Approximately $10 million added, attributed predominantly to new colocations as carriers densified and expanded networks.
• U.S. Service Revenue -- Grew 13% compared to the prior year quarter, largely due to construction activities supporting network expansion.
• Sprint-Related Churn (U.S.) -- Approximately $17 million in the quarter; full-year 2026 outlook assumes $55 million to $56 million, slightly above previous estimates due to timing shifts.
• International Lease-Up -- $6 million in new leases/amendment billings added, with $8 million lost to churn from consolidation, bankruptcy, and network optimization.
• Share Repurchase Activity -- $213 million deployed in the quarter to retire 1.1 million shares at an average price of $191.07; total for 2025 reached $500 million for 2.5 million shares, leaving $1.1 billion on current buyback authorization.
• Service Revenues Guidance -- 2026 outlook forecasts service revenues between $190 million and $210 million, exceeding the initial 2025 outlook yet below 2025’s actual performance.
• Debt and Capital Management -- Paid off $750 million of ABS debt in January using the revolving credit facility and plans to refinance the $1.2 billion ABS maturity in November 2026 at 5.25%.
• Dividend Increase -- First quarter dividend declared at $1.25 per share, up 13% from the prior year and targeting approximately 41% payout of full-year AFFO guidance midpoint.
• 2026 Domestic New Revenue Guidance -- Expects approximately $35 million incremental revenue from new leases and amendments, with activity spread fairly evenly throughout the year.

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RISKS

• Higher-than-anticipated bad debt expense from EchoStar affected quarterly results; management removed all future recurring revenue from EchoStar in guidance and stated: "We'll continue to pursue legal rights to recover these revenues from EchoStar."
• International churn remains elevated, with 2026 guidance assuming $36 million to $40 million in churn, including $14 million attributed to Oi wireline, though management expects this to abate post-2026.
• Management highlighted industry churn from consolidation and bankruptcies, notably $17 million in U.S. Sprint churn and $8 million international churn during the quarter, with further risks identified by "the last big year of Sprint," and ongoing U.S. Cellular (USM) churn spreading over the next five years.
• Service revenue guidance for 2026 is lower than last year's actual results, as stated: guiding to a range of $190 million to $210 million in revenues, higher than our initial outlook for 2025, but lower than the extremely strong results we delivered last year.

SUMMARY

During the earnings call, SBA Communications Corporation (NASDAQ:SBAC) reported a 13% increase in both AFFO per share and the regular dividend for the quarter, underpinned by continued leasing and amendment activity, as well as disciplined capital deployment including significant share repurchases. Management outlined its 2026 guidance, reflecting expectations for steady new domestic leasing and amendment revenues, continued elevated churn from industry consolidation, and full-year contributions from the recent Millicom Central America acquisition. The company highlighted plans for further capital allocation, including possible additional asset purchases, share buybacks, or both, and discussed its evolving balance sheet strategy with planned refinancing and positioning for inaugural investment-grade bond issuance.

• Management stated all future recurring revenue from EchoStar is removed from outlook, with legal recovery efforts ongoing.
• Share buybacks remain a key capital return tool, with $1.1 billion remaining on the current authorization, and activity referenced as a significant role in creating shareholder value over time.
• Guidance for international new lease/amendment activity expects a modest increase to $19 million-$21 million, with churn poised to moderate as Oi-related impacts end after 2026.
• Verizon’s new master lease agreement is expected to boost its contribution to SBA’s domestic colocation activity starting in 2026, as management cited increased backlog after the agreement.
• Regarding technology evolution, management anticipates broad industry benefits from upcoming spectrum auctions, and the transition toward 6G and edge compute, viewing its network infrastructure portfolio as well positioned for future growth.
• The company clarified that further share repurchases or acquisitions are not assumed in the current outlook, but management anticipates investment in additional assets, share buybacks, or both during the year.

INDUSTRY GLOSSARY

• AFFO: Adjusted funds from operations; a cash-based REIT performance measure adjusting FFO for recurring capital expenditures and straight-line rental revenue effects.
• ABS Debt: Asset-backed securities; debt instruments secured by specific company assets such as tower receivables.
• Churn: Loss of recurring revenue due to contract terminations, consolidations, or network optimization by wireless carriers.
• MLA: Master Lease Agreement; a contract governing multiple leases between SBA and a carrier, typically setting terms for colocations or amendments.
• Lease-Up: The process of increasing site tenancy by signing new leases or amendments with additional wireless carriers or customers.

Full Conference Call Transcript

Marc Montagner: Thank you, Louis. The fourth quarter was a solid finish to the year. Results for the quarter were in line with our estimates, even with higher-than-forecasted bad debt expenses related to EchoStar. In the fourth quarter, AFFO per share was $3.19, with a cash dividend of $1.11 per share, an increase of 13% compared to the fourth quarter of 2024. Operationally, we added approximately $10 million of domestic new leases and amendment billings. The bulk of the activity continues to come from new colocations as carriers both densify and expand their network footprint. Our service business also continues to perform well, increasing revenue by 13% in the fourth quarter compared to the fourth quarter of 2025 (sic) [ 2024 ].

This was mostly due to construction-related projects focused on network expansion. With respect to churn, we are getting closer to the end of consolidation churn in the U.S. with Sprint-related churn of approximately $17 million in the quarter. Internationally, we continue to see healthy demand, adding approximately $6 million of new leases and amendment billings in the fourth quarter. International churn continues to be elevated, and we lost approximately $8 million of revenue in the quarter from carrier consolidation, bankruptcy restructuring and wireless operators network optimization. The team has been working around the clock to integrate the newly acquired sites from Millicom in Central America.

We're also ramping up our new build program in the region, setting up our business for future success as a leading independent tower operator in Central America. In the quarter, we deployed significant capital to buy back our shares, spending $213 million to retire 1.1 million shares at an average price of $191.07. In total, in 2025, we spent $500 million to repurchase 2.5 million shares. And as of today, we have $1.1 billion remaining on our share buyback authorization. We continue to believe that share buybacks play a significant role in creating shareholder value over time. Today's earnings press release includes our initial 2026 outlook.

Domestically, our 2026 outlook reflects a similar level of new revenue growth from carrier leasing activity to what we experienced in 2025. The outlook also assumes a range of $55 million to $56 million related to Sprint churn, which is slightly higher than we estimated last quarter. The increase is due to timing, and we now expect Sprint churn in 2027 and beyond to be less than the $20 million previously provided. In addition, our churn outlook removes all future recurring revenue from EchoStar. We'll continue to pursue legal rights to recover these revenues from EchoStar. For our international segment, our outlook reflects a full year contribution from the acquisition of sites from Millicom in Central America.

The outlook also assumes steady network investment from our customers in 2026, and we're guiding to a range of $19 million to $21 million for new leases and amendments, up slightly from 2025. Our outlook assumes a range of $36 million to $40 million related churn. The current churn range includes $14 million related to Oi wireline, which will not continue into 2027. Barring any unforeseen event, we expect international churn to trend down over the next couple of years. Turning to services. We are guiding to a range of $190 million to $210 million in revenues, higher than our initial outlook for 2025 but lower than the extremely strong results we delivered last year.

Our services backlogs are supportive of continuous carrier network activity in 2026. Regarding our balance sheet, in January, we successfully paid off $750 million of ABS debt with our revolving credit facility and our outlook assumes that we will use our free cash flow to pay down the current outstanding amount on this credit facility over time. We will also assume that our $1.2 billion November ABS maturity will be refinanced in November of 2026 at 5.25%. The [indiscernible] investment-grade issuer, and we will look to make our initial inaugural investment-grade bond at some point in 2026, depending on market conditions. During the fourth quarter, we declared or paid a cash dividend of $118.2 million, or $1.11 per share.

And today, we announced that our Board of Directors declared our first quarter dividend of $1.25 per share payable on March 27, 2026, to shareholders of record as of close of business on March 13, 2026. This dividend represents an increase of approximately 13% over the dividend paid in the first quarter of 2025 and approximately 41% of the midpoint of our full year AFFO outlook. Please also note that our outlook does not assume any further share repurchase or acquisition beyond those which, as of today, are under contract or expected to close by the end of the year. However, we anticipate that we'll invest in additional assets or share buyback or both during the year.

This will potentially have an impact on our full year outlook. I will now turn the call over to Brendan.

Brendan Cavanagh: Thank you, Marc, and good afternoon. Today, I want to share our perspective on SBA's near- and long-term outlook and the opportunities ahead, starting with the U.S. market and the key drivers of future growth. For our U.S. customers, in a stabilized 3-carrier market, maintaining a high-quality end-user experience remains paramount. Offering superior network quality, reliability and speeds that meet the needs of today and tomorrow requires significant ongoing investment. We've seen this demonstrated in numerous cycles over the last several decades, and it is perhaps even more the case today. Mobile data use continues to climb as Americans rely on their devices across everyday experiences.

According to CTIA, in 2024, Americans consumed more than 132 trillion megabytes of mobile data, up 35% compared to the prior year, marking the single largest jump in history. The way to keep up with this level of demand remains relatively unchanged. It typically starts with a wave of amendments to efficiently upgrade existing towers, deploying new spectrum bands if available, adding or swapping equipment, followed by a shift toward densification. Today, we are still seeing upgrades, but with certain customers, we have seen a clear increase in new colocation activity tied to both densification and expansion.

On the amendment side, we've seen new technology upgrades such as massive MIMO, largely tied to new spectrum, including C-band and DoD, and are starting to see initial massive MIMO deployments in legacy AWS and PCS bands, significantly increasing network capacity. With regard to colocation activity, our customers work to address coverage gaps in the U.S., meet regulatory requirements and support 5G use cases like fixed wireless access. On fixed wireless access, growth and adoption have been impressive with total subscribers of approximately 15 million, initially driven by excess 5G capacity. Today, it's estimated that more than half of overall wireless network capacity is being used to support fixed wireless access.

A figure that could increase over time as carriers look to grow their subscriber base and lean further into convergence, bundling home Internet, mobile and enterprise services. As 5G continues to build out, we expect further support from the upper C-band auction, adding another growth driver for our industry. At least 100 megahertz of upper C-band is expected to be auctioned by mid-2027. Now looking beyond the near term, we're increasingly excited about 6G. We've already seen legislative tailwinds, including restoring the FCC's auction authority and 800 megahertz of spectrum to be studied and eventually auctioned, including the aforementioned 100 megahertz of upper C-band in 2027.

Other bands currently being evaluated include 2.7 to 2.9 gigahertz, 4.4 to 4.9 gigahertz and 7.25 to 7.4 gigahertz. These new bands will require new radios and likely a denser footprint given the higher band properties, creating future growth opportunities for SBA. Beyond spectrum, we see a fundamental shift in the network architecture, most evident in the transition from 5G to 6G. With 5G, traffic follows an 80-20 downlink to uplink mix, as users primarily consume data, streaming videos, shopping, connecting on social media or gaming online. Looking ahead, we anticipate a more balanced figure with 6G, driving significantly more data upstream to support increasingly AI-driven interactions.

Technology that seamlessly integrates into everyday experiences with data interpreted in real time is what will truly differentiate 6G. Many of these use cases are likely to emerge first in the home or enterprise using WiFi or private networks, eventually, though, migrating outdoors for a fully mobile experience reliant on the terrestrial network. We expect a wide range of use cases. Today, we are starting to see the early signs of the preparation for 6G. AI is beginning to move from the core to the RAN, but true 6G cannot be done with just software. It will also require physical components.

That means more compute at the tower site with higher capacity radios and denser and more intelligent antenna configurations to send and receive growing volumes of data. With regards to the compute element, the specifics are really still just starting to develop, but rapid advances in AI, particularly as it becomes more performative, we believe, will drive the need for compute to be closer to end users, where devices rely on real-time ultra-low latency environments. We believe our large distributed U.S. portfolio makes this a real opportunity for SBA. Turning now to our international markets. Let me start with Brazil. With a portfolio of over 12,000 sites, Brazil remains our second largest market.

We intend to continue to harvest and grow cash flow organically in Brazil. We believe the country itself is very well positioned to be a leader in Latin America over the coming years. It's a commodity superpower with meaningful exports of food, energy and metals. It has a population of over 200 million and a younger demographic that drives higher mobile data usage. Operationally, we've performed well in Brazil, though we faced elevated churn, largely driven by industry consolidation and network rationalization. In the Brazilian wireless market more broadly, we see several opportunities.

As operators continue to rationalize their networks, reducing redundant infrastructure while increasing tenancy, there's a clear opportunity to improve both the carriers' and the tower companies' return through site consolidation and increased colocations. We're actively working with our customers to find more efficient ways to help them meet their network needs. This is a key focus area for SBA in 2026. Another structural opportunity is network density. According to a UBS research report from October 2025, Brazil has an estimated 4 sites for 10,000 people compared with roughly 16 sites for 10,000 people in the U.S. We see that gap providing a meaningful opportunity for additional colocations as carriers densify their networks. And lastly, there is spectrum.

The government is planning to auction both 450 megahertz and 700 megahertz spectrum bands. While the timing remains uncertain, recent estimates suggest this could happen in 2027. Each of these factors gives us confidence in the long-term prospects for Brazil. In the meantime, operators continue to invest in advancing 5G coverage. Beyond Brazil, Central America and Africa offer diverse customer bases, attractive opportunities to deploy capital through new site builds and organic growth as these markets remain earlier in the 5G deployment cycle. As we've discussed previously, the Millicom transaction has positioned us as the leading independent tower company in Central America, supported by long-term master lease agreements with the leading carrier.

We expect that agreement to drive predictable operating results and durable cash flow. Our select African markets have continued to deliver superior risk-adjusted returns as well and our highest return on invested capital across our company. In addition to strong operational and technology indicators, we feel good about the future due to the strength of our balance sheet and capital return profile. As discussed on our prior earnings call, we have recently achieved investment-grade ratings from 2 major rating agencies and have operated comfortably between 6 and 7 turns of leverage for the last 3 years. While investing meaningfully in new assets and share repurchases, we have still delivered the fastest-growing dividend in our industry.

We believe the strength of our capital structure will allow us to consistently provide meaningful and growing shareholder remuneration going forward in the form of share buybacks and dividends while also preserving the flexibility to opportunistically invest in new assets in our markets and minimizing the cost of debt. In summary, SBA is very well positioned to play a meaningful role in future network deployments, helping our customers meet their network needs. Our towers remain the backbone of the network and offer a truly turnkey option for ground space, power and, most importantly, location. Before opening it up for questions, I'd like to thank our team members.

We strive to be the industry's leader in digital infrastructure, and it is only possible because of the incredible team members we have at SBA. I'd also like to thank our customers for their trust in us. And lastly, I'd like to thank our shareholders for their ongoing support. And with that, operator, we are now ready for questions.

Operator: [Operator Instructions] Let's go ahead and move on to our first caller, Richard Choe from JPMorgan.

Richard Choe: Do you expect to see domestic colocation revenue growth through this year? And can you give us a sense of what the carriers are looking for?

Brendan Cavanagh: Yes. Well, so in terms of our domestic colocation expectations, we obviously gave our outlook for the full year, which assumes $35 million of incremental revenue added through new leases and amendments in the U.S. We would expect that will be contributed, perhaps slightly heavier in the beginning of the year, but we would expect activity levels with the carriers in terms of new business being signed up to be pretty steady throughout the year. That's our assumption. And based on the way things are starting, that's what we think will continue to happen. And it will be a mix, as we said in some of our prepared comments, of densification as well as expansion of coverage.

Richard Choe: And one quick one on Brazil. As we look at the buckets of growth that could drive your revenue there, how should we think about the difference between maybe builds, upgrading to, I guess, 5G densification and spectrum over the next few years? Like where do you expect to see kind of most of the growth to come from there eventually?

Brendan Cavanagh: Yes. I think we're not building that many sites down there. So most of the growth is going to come organically through new lease-up. In terms of the drivers of that new lease-up, some of that will be just new spectrum that's going to be auctioned off, we believe, over the next couple of years. And some of that's going to be just further expansion and densification of the network. I think if you heard in the prepared comments, one of the things we pointed out was a statistic about the amount of sites per person in Brazil, and they're basically 4x more in the U.S. than there are in Brazil.

And so with that sort of dynamic, it leads to the need for increased investment in the network and expansion of the network by each of the remaining carriers. It's been, I'd say, a little bit muted over the last couple of years since the consolidation of Oi into the big 3 carriers that are remaining there. As they work through sort of rationalization of that, that's been a big focus. But as we kind of get on the back end of that, I would expect significant investment into expanding the network and competing on network quality.

Operator: Moving on to the next caller, Batya Levi, UBS.

Batya Levi: Great. A follow-up on the domestic activity. When you look at the range you provided, the low end would suggest a slowdown. Can you provide more color on how much visibility you have for the year ahead versus maybe last year? And what could drive that low end? And also, the Verizon MLA that you recently signed, how does that impact the trend against the lower CapEx that they're guiding to?

Brendan Cavanagh: Sure. On the overall range that we're guiding to, we have pretty good visibility. We obviously give a range because it's not set in stone, and there's a certain amount, particularly at the beginning of the year, that we have to see how the first half of the year, in particular, goes in terms of new business being signed up. So that's why we give a range. And, obviously, if it's slow out of the gates, you could be towards the low end of the range. But we're typically focused on the midpoint as our best estimate of where we expect to be. And so it's a little bit less than last year.

It's about $2 million less than last year, although we did actually have $2 million of lease-up contribution from DISH last year. So excluding that, which is 0 now, it's basically flat. I will say that there's a different sort of mix among the big 3 carriers in terms of the relative contribution of each that we expect. And to kind of pivot to your second question, because it's related to that, we do expect to see more of a contribution from Verizon because of the MLA that we signed with them late last year. In terms of their comments around CapEx, I know they have a number of things that they're focused on in terms of controlling costs.

But our agreement is pretty well set in terms of minimum commitments that they have and so, for the most part, our assumptions are built around those minimum commitments as well as existing backlogs that we have with them. And our backlogs have grown quite a bit over the last couple of months, as you might expect, after we signed that agreement. So we feel pretty good that we're going to see increased contributions from Verizon due to that agreement starting this year.

Operator: Moving on to Ric Prentiss from Raymond James.

Ric Prentiss: A couple of questions. One, thanks for giving the cleanest view in taking the DISH out of the guidance, but can you update us as far as what's the process? Did you guys file a lawsuit? Have you terminated the contract? And just how do you see kind of the time line or how this might play out?

Brendan Cavanagh: Yes. So we did actually file a lawsuit just recently. And as part of that, because of their default lack of payment, we did terminate and accelerate the rents that were due under that contract. I mean I can't really get into too much in terms of the details around that and what we foresee happening there, but the basic gist of it is that they defaulted on the agreements and we filed suit. We tried to get them to comply with the agreement, they did not. We filed suit. We're going to go after enforcing our rights under the agreement as best we can. And we'll see where it all shakes out.

But for now, we thought the cleanest thing to do in terms of our outlook for this year was to basically just remove them entirely as it seems like others in the industry are doing. This is kind of a consistent issue across the industry. But for us, the relative size of that exposure is less than others. But nonetheless, it's all out.

Ric Prentiss: Okay. Second question for me. I think Marc mentioned -- [ I'm seeing Marc with a C, I've got a Mark with a K here ]. But Marc mentioned that you're closer to -- I think probably in the U.S., closer to carrier consolidations from being done. There is one more maybe in progress, right, T-Mobile USM. Can you update us as far as how much T-Mobile USM churn might be when you're thinking it might affect you guys?

Brendan Cavanagh: Yes. We have, and Louis can correct me on this if I'm wrong, I believe somewhere around $1 million to $2 million of our churn estimate for this year covers specifically USM churn associated with that. So there's a little bit in there. The total amount of revenue that we have under those U.S. Cellular leases is $20 million. So we've had a very small amount of that realized already plus we've incorporated, as I said, $1 million to $2 million in our numbers for this year. So somewhere less than $20 million. I don't know that it will all necessarily churn.

There may be some that are kept, I would think, but we've kind of assumed that over the next 5 years, you'll see all of it go away kind of evenly over that period of time.

Ric Prentiss: Okay. And related to USM, we obviously get the question a lot on what does direct-to-device satellite mean for terrestrial wireless, terrestrial towers? I'll admit I'm in the camp that thinks it's complementary, maybe fixes white space. But help people understand, are there any sites on the fringe of where you have sites or how you're thinking of direct-to-device and what it might mean to terrestrial wireless and terrestrial towers?

Brendan Cavanagh: Well, first of all, we agree with the premise that you just mentioned, which is that it is largely a complementary solution, and it is best suited in some of those harder-to-reach areas, those areas that maybe aren't economic to cover with a traditional terrestrial solution. And so I don't see it having a huge impact on our business because even when we have sites that you would classify as slightly more rural, they're still in population centers or they're covering areas that people -- where there's a concentration of people. We typically don't have sites that are in the middle of nowhere, those don't last for very long.

So I don't think it's going to have much of an impact, Ric, and there are clearly limitations, both financial and just physical properties, in terms of the ability to deliver speeds and latency levels at a level that it's going to be required, particularly with the newer technologies that are coming. I think as we move towards 6G and there's greater uplink, it's going to be much harder to provide anywhere close to the same solution through a satellite product. But that will all play out over time. But for now, we haven't seen anything that indicates a threat from that.

Operator: Our next caller is Eric Luebchow from Wells Fargo.

Eric Luebchow: Brendan, now that we have effectively a stable 3-carrier market in the U.S. going forward, maybe you could just update us on kind of longer-term expectations where you think net organic growth could get to domestically, especially once you watch out some of the consolidation churn that you've talked about on this call?

Brendan Cavanagh: Yes, sure. I would expect -- I'll give you a little bit of a range because I think in any given period, any given quarter, you don't -- we don't know for sure, but it's probably in that 4% to 5% range. And it's basically made up of 3% roughly from escalators. I think the long-term domestic churn is around 1%. I think what we guided to for this year is slightly higher than that. But we have, like, the U.S. cell stuff and a couple of other things in there that I think will ultimately wash out. So long term, I think that's in the 1% area.

And so that leaves the organic lease-up is kind of the question mark. And I think 2% to 3% for that item is a reasonable expectation over time, especially when you get back to more of a network-driven competitive environment, which we tend to thrive in. I think there will be quarters where we do something towards the higher end of that range, and there will be quarters where we do something towards the lower end. But I think that's the best reasonable assumption going forward.

Eric Luebchow: Great. And just one follow-up. I think you said that the bulk of your activity was coming from new colos this year. If you could just remind us if you have any split between colos and amendments. And, I guess, some of the spectrum auctions that have been talked about like upper C-band, do you think we're still kind of 2 to 3 years away from seeing amendment activity from new spectrum pick up again? Or what do you think the time line is from when we really start to see new spectrum actually hitting your sites where you can monetize it?

Brendan Cavanagh: Yes. So we still have a heavy amount of contribution from colocations. I can't give you a specific percentage because there's some nuances in the way that the master agreements are set up. But it's definitely more in terms of dollars coming from colocations than from amendments. From a spectrum implication standpoint, the upper C-band piece likely will be several years away. I mean I would think that's somewhere around the turn of the decade before that starts to impact us even though it is expected to be auctioned by midyear next year. By the time it's cleared and actually starts getting deployed, it's probably going to be 2029 to 2030.

But there is spectrum-driven activity that we expect will be taking place prior to that with spectrum that's currently in the hands of the carriers that they haven't yet deployed. And there's a mix of those things. A lot of them -- for instance, some of the carriers have, with their AWS and PCS spectrum, the need to deploy massive MIMO antennas and, in particular, radios in order to maximize the benefit of that. You have C-band that's sitting with T-Mobile that has not been deployed at all yet that, at some point, we would expect them to start to deploy.

So there's still going to continue to be activity with the spectrum that's currently in the hands of the carriers and some of the new spectrum that they've acquired. For instance, AT&T has acquired from DISH. Those will all be drivers. But the new spectrum auctions will be helpful to start to fill the coffers back up so that as they get through those cycles, you start to see the next wave of activity with those newer bands.

Operator: Moving on to Michael Rollins from Citi.

Michael Rollins: So just thinking about just some of the comments you were providing about leasing, is organic leasing annually should be 2% to 3% a year. I think this year, it's calculating at the midpoint to be slightly below that. Do you view 2026 as the bottom? And what you're just describing, in terms of factors that contribute to activity, just collectively driving more activity over the next few years? And then secondly, I was just curious, as you're getting through carrier consolidation and you're pulling out customers that aren't -- customers that haven't paid you. What's left? So what's left in terms of remaining consolidation churn that we need to be mindful of both in the U.S. and internationally?

And is there anything else that gets you to a way of a kind of smoother organic path from here?

Brendan Cavanagh: Okay. Thanks, Mike, for the questions. On the organic leasing question and whether '26 is the bottom, basically, I think it's definitely right at the bottom. I think it probably is the bottom. I mean, obviously, I have to see how things play out. The reason that it's a little bit below the range that I gave is you see a little bit of cyclicality. And while we're seeing a pickup with Verizon, we had some pretty heavy leasing activity with one of the other carriers, T-Mobile, and that has slowed -- those go in cycles a little bit more. But I expect that we'll start to see that pick up again, which will help move the total back up.

And with regard to AT&T, I think we've discussed before the structure of our MLA, which was a little bit front-end loaded in terms of payments associated with activity. And because it was front-end loaded, it's a little bit slower now, but the actual amount of activity is more even than the actual revenue recognition was for us. So given that dynamic, that agreement will be up in a couple of years, and I would expect that in a normalized environment, if you normalize for that, we would definitely be within the range that I mentioned. So I'm pretty comfortable that, that is an appropriate range going forward.

And then on the consolidation question in terms of what's left, I think there's not much left. I mean, certainly, all the big things have happened or are in the process of happening right now. We're in the last year of -- well, we're taking all the DISH, and we're in the last big year of Sprint, although there is still some amount of Sprint left, less than $20 million of that left, over time over the next couple of years. And then you have the U.S. cell churn in the U.S. that we talked about earlier. Outside of those items, it's really miscellaneous cats and dogs.

So there's nothing that I would think would be overly material in terms of its impact. Internationally, we've also faced most of the big items, particularly in Brazil with Oi. We've actually pulled forward into this year all of that Oi wireline system churn. So there won't be any more of that after this year. There may be some continued nuances. We still have overlapping sites there between Claro and Oi and between Claro and NEXTEL, even. And so there's a little bit of that. But in terms of [ things of ] scale and size, I think we've really seen all of them.

So I would expect to see a market improvement as we get through this next year or 2, and then there's just not that much left.

Operator: Our next question comes from Jim Schneider, Goldman Sachs.

James Schneider: Just wrapping up the past couple of questions into a broader long-term question for you [indiscernible]. I was just kind of curious, do you think that there's a clear path with domestic getting back to 4% to 5%, international, hopefully better than that? You can get the entire business back to sort of that 5% range. And is it something that could happen as early as '27? Or could it be 2028 or later?

Marc Montagner: Sure. Well, the answer is yes. I think we can get back there. I think the timing is probably -- we'll be moving partially back there in 2027 and I think more fully there as you get into '28 and '29 because there will be some hangovers of some of these remaining churn items that we're dealing with. But yes, I would expect definitely that we should get there. And international should grow faster. That's the idea of why we're there. They're less mature markets. They have a lot more to do in terms of network build-out.

And I think as we've seen some of these rationalizations take place, which is the challenge of the international markets, we're getting many of them behind us. And so growth should definitely improve in those markets in the coming years.

James Schneider: And then maybe, specifically, I think you mentioned some activity among your specific domestic carriers, but relative to Verizon, I think on their prior conference calls, they've talked about sort of finishing up their C-band deployments and adding more small cells. Is that consistent with the business trends that you're seeing from them right now?

Brendan Cavanagh: Yes. We've seen them get -- it's consistent in the sense that they have done a lot of the C-band upgrades. There may be some -- we still have a small percentage of sites where I would expect to still see a little bit of activity there. So it's consistent in that respect. And I think when they talk about the small cells, they're talking about those upgrades with that spectrum or deploying that spectrum through small cells. And that piece, we have not a lot to do with because we're not a small cell company. But what we do have is a very significant embedded base with them.

And under our agreement, it's clear that they have expectations for really expanding out their network through new colocations. Plus we would expect to see some of their existing AWS and PCS deployments be upgraded with massive MIMO radios. So that should drive some amendment activity as well.

Operator: [Operator Instructions] Our next call is from David Barden, New Street Research.

David Barden: So I guess I had 2. One was just maybe for you, Louis, or Marc, on the Brazilian real forecast. American Tower made an assumption that the real for 2026 is going to be 5.5 and you guys made an assumption it's going to be 5.2 and it's trading at 5.13. And I would love to kind of understand how you guys come to your assumption, so we can kind of figure out maybe who's right. And then the second question, if I could, I've asked this of others.

And, Brendan, if DISH is not paying their bills, filing a lawsuit is one thing, but why are you not sending guys out in the field with a pair of snippers and just turning off the network and tearing down the gear and selling it for scrap metal? I'm fairly sure if you ask [ Jeff ] to go do that for you, he would volunteer. So like what's the strategy around this? And why would you not do that?

Brendan Cavanagh: David, first of all, you don't know what we're doing and what we're not doing.

David Barden: Okay.

Brendan Cavanagh: And second of all, we follow the law, and [ Jeff ] is busy right now. So I don't have to tell him about it. But, yes, we're -- I mean we obviously have been fully -- as I'm sure our peers have, have been fully evaluating all of our rights and opportunities to enforce our position. So I can't really say much more about it. And your other question, I mean I can let Marc answer the one on the BRL.

Marc Montagner: Yes. Thanks, David. I think the only thing I can tell you is that both 5.50 and 5.20 will probably be the wrong answer. We debated that internally a lot. I'll give you one data point. The Federal Bank of Brazil is forecasting 5.50. Economists forecast of anything between 5.50 and below 5. The spot is at 5.14. And I could tell you that Brazil basically exported -- had an export of over $4 billion just in January. They're exporting more than importing. So everybody is buying real and the short-term interest rates of 15%.

So based on this, we think the real is going to be strong and probably closer to 5.0 than 5.50 by the end of the year. So we have to take a shot, and this is the best shot we have, 5.20, and I'm sure it's going to change. But we expect the real to be strong in 2026 just because of short-term interest rates are high and the country is [ an ] exporter.

Brendan Cavanagh: Yes. And David, at the end of the day, we're giving you an estimate, and we're telling you exactly what it is. If you think it's something different, you can come to your own conclusions on that. That's why we tell you what we're assuming. But as Marc said, neither of us is going to be right. We just don't know which one of us further off.

Operator: Our next caller is David Guarino from Green Street.

David Guarino: Thanks on the land in Guatemala you purchased. We often don't really get comps or valuations for land underneath tower sites. So it would be great just to hear how you underwrote the deal, whether it was from a multiple perspective or an IRR perspective. And then are there any other land -- large land portfolios underneath your sites that you guys might look to acquire in the future?

Brendan Cavanagh: I mean we have a constant program to look at the land under our towers, first of all, just generally speaking. We do that in the U.S. and internationally and look for opportunities to buy land where we can for 2 reasons: one, because typically, we're able to negotiate deals that are very accretive. So there's a financial reason. But the other reason is that it secures those properties and removes a risk that could exist at some point as they near the end of terms. So for both of those reasons, we do that.

In the case of the Guatemala deal, it was kind of a special opportunity because it was so concentrated together so that we could do one transaction and essentially buy in the land under 3,900 sites. This was part of the pool of sites that we bought in the Millicom transaction. So that's why that opportunity arose. And we bought it at a high single digits or actually mid-single digits multiple. So the valuation was very, very good. It was immediately accretive to us. And as I said before, on the overall strategy, it also derisked any concerns around those properties and those assets that we have on.

David Guarino: All right. That's helpful. [indiscernible] color on the multiple on that. And then maybe switching gears on the data center side. I know in the past, you've made some, let's call it, smaller R&D-like investments, but obviously, nothing needle moving for the company. But should we think about SBA looking to invest more heavily in the data center space going forward based on what you've learned? Or do you still think towers are the best ownership model for the company?

Brendan Cavanagh: Yes, we do. I mean, obviously, data centers are hot these days. But the data centers that we own were helpful to us in becoming educated around how to run that type of operation with the idea that we were looking at more edge computing type of solutions down the road that would largely be based at our tower sites. That was the thesis and why we spent the money on it. It performed fine as stand-alone operations, but it's not our intention to continue to add those types of data centers. However, I do think that the development of incremental edge compute opportunities is starting to advance more than it has in the past.

I mean this has been something we've been talking about for a decade, and we haven't really seen much of it. But I would say in recent times, we're starting to see more indicators that, that may become something that's a little more prevalent with pushing out AI-based solutions further to the edge compute, needs to be a little bit closer. And I think we're going to be a player in that space that will be able to help people just because we have such a large set of assets and locations all across the country. So that element will definitely be participating in, and I'm excited about what it might bring.

But in terms of the bigger stand-alone data centers, we don't think we need to have those to support that effort. So I wouldn't expect to see us invest any more there.

Operator: Okay. And there are no further questions in the queue.

Brendan Cavanagh: Well, great. Well, thank you, everybody, for joining. We appreciate it, and we look forward to sharing our first quarter results with you in a couple of months. Thank you.

Operator: Thank you to our speakers and everyone in the audience for joining us today. The call has concluded, and you may now disconnect.

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