American Tower (AMT) Q4 2025 Earnings Transcript

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Date

Tuesday, Feb. 24, 2026 at 8:30 a.m. ET

Call participants

• President and Chief Executive Officer — Steven O. Vondran
• Executive Vice President, Chief Financial Officer and Treasurer — Rodney M. Smith

Takeaways

• Attributable AFFO per share as adjusted growth -- 8% full-year increase, with over 13% growth in the fourth quarter, supported by leasing demand across tower and data center businesses.
• Consolidated property revenue -- Approximately 4% growth year over year, or 5% excluding non-cash straight-line and FX impacts.
• Data center revenue growth -- Approximately 14% increase year over year, driven by CoreSite and demand for hybrid and multi-cloud deployments.
• Adjusted EBITDA -- Approximately 5% annual growth, or 7% excluding non-cash net straight-line and FX impacts.
• Consolidated margin expansion -- 20 basis points increase year over year, attributed to record services contribution and cost management.
• Leverage -- Reduced to 4.9 times, now within the 3 to 5 times target range.
• Share repurchases -- $365 million of stock repurchased in Q4 and full year 2025, the highest annual buyback since 2017; an additional $53 million purchased year to date in 2026.
• DISH revenue removal -- 100% of DISH’s revenue, representing ~2% of consolidated property revenue (or ~4% of U.S. and Canada property revenue in 2025), removed from guidance as of January 1, 2026 due to default, with resulting churn fully embedded in 2026 outlook.
• 2026 consolidated organic tenant billings growth -- Expected at approximately 1% (or 4% excluding DISH churn); 0.5% for U.S. and Canada, or 4.5% excluding DISH churn.
• Regional organic tenant billings outlook -- Africa and APAC at 8.5% (with 10% first half, 7% second half); Europe at 4%; Latin America expected to decline by 3% due to 8% churn, CPI-linked escalations of 4%, and colocation/amendment growth of 2%.
• 2026 property revenue guidance -- Approximately 3% expected growth excluding non-cash straight-line and FX; 5% growth normalized for one-time DISH-related churn and on a cash FX-neutral basis.
• 2026 adjusted EBITDA outlook -- Approximately 2% growth excluding net straight-line and FX impacts; 5% cash adjusted EBITDA growth when normalized for DISH-related churn.
• Cash adjusted EBITDA margin -- 66.8% projected for 2026, down 20 basis points due to lower-margin data center and services contributions, and 60 basis points pressure from DISH churn.
• 2026 attributable AFFO per share guidance -- 1% growth expected; normalized for one-time DISH churn and excluding FX and refinancing, implies roughly 5% growth.
• Dividend growth -- Forecasted at approximately 5%, with $3.3 billion projected for 2026 distributions subject to Board approval.
• 2026 capital deployment -- $1.9 billion planned, with $1.8 billion discretionary; 85% directed toward developed markets and CoreSite, including success-based investments in data centers and over 700 new site builds in Europe.
• Cost efficiencies -- Over 300 basis points of global tower cash EBITDA margin expansion since 2022; 200 to 300 basis points of additional expansion targeted over the next five years through land cost management, unified sourcing, standardizing asset care, and platform simplification.
• CoreSite returns -- Achieving mid-teens or higher stabilized yields on new deployments due to pricing and interconnection-oriented offerings.
• AI initiatives -- Early-stage adoption aimed at process automation, predictive maintenance, power utility management, and workflow optimization, with incremental efficiency targets expected as projects mature.

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Risks

• DISH default impact -- "DISH has defaulted on its payment obligations"; management stated it "negatively impacts our 2026 outlook," with DISH revenue fully excluded from guidance and all future collections uncertain and outside run-rate expectations.
• Latin America churn -- Management identified approximately 8% churn in Latin America for 2026, resulting in a 3% regional revenue decline and attributing the higher churn to "a combination of delayed churn initially expected in 2025 and accelerated churn initially expected in 2027."
• Data center margin pressure -- 2026 data center cash margins expected to decline approximately 270 basis points year over year, citing the absence of one-time property tax adjustments and legal settlements realized in 2025.
• Services margin dilution -- Higher services contribution in 2026, including a greater share of lower-margin construction services, "weighs on consolidated growth and margins."

Summary

American Tower (NYSE:AMT) presented data-driven growth in its core AFFO and property revenue metrics while confirming substantial regional variability in tenant billings and clearly identifying the near-term impact of DISH's default. The company provided explicit forward guidance for capital allocation, outlining targeted investments heavily weighted toward developed markets and CoreSite, and detailed operational efficiency initiatives with quantifiable targets for further margin expansion. Management also discussed emerging data center demand drivers, including sustained AI-related leasing growth and the implications of higher churn in Latin America, while maintaining that long-term growth algorithms remain intact outside the temporary DISH disruption and emerging market volatility.

• Management explicitly stated, "we have de-risked our business going forward by taking it out of the numbers," confirming that all future DISH-related collections will be treated as upside outside of current guidance.
• Recent share repurchases totaled $365 million in 2025 and $53 million year to date, with $1.6 billion in remaining Board-authorized buyback capacity as of the call.
• Operational margin guidance includes a 200 to 300 basis point tower cash EBITDA margin expansion target by 2030, encompassing recent cost initiatives but excluding any prospective AI-driven operational benefits.
• CoreSite demonstrated sustained mark-to-market pricing gains, enabling the company to "continue to underwrite mid-teens or better returns on the new incremental capital."
• Geographic portfolio management remains active, with the company reiterating that all significant new M&A, capital deployment, and portfolio rationalization are to be "focused on developed markets," while continuing selective opportunity-driven investments elsewhere.

Industry glossary

• CoreSite: American Tower Corporation’s data center platform, specializing in interconnection-rich facilities supporting high-density, cloud and AI-driven workloads.
• Churn: The percentage reduction in tenant billings or revenue, typically attributable to lease terminations, non-renewals, or defaults (notably DISH in 2026 guidance).
• Colocation and amendment growth: Revenue increases from the addition of new tenants to existing sites (colocation) and modifications or upgrades to existing tenants' equipment or lease terms (amendments).
• FX impacts: Financial effects stemming from translation of foreign-currency-denominated revenues and costs into U.S. dollars.
• CPI-linked escalations: Lease revenue increases pegged to local Consumer Price Index inflation rates, prevalent in international tower agreements.
• Stabilized yield: The projected, ongoing annual return (typically mid-teens percentage) from a data center investment, once fully leased and operational.

Full Conference Call Transcript

Steven O. Vondran: Thanks, Spencer. Good morning, everyone. Thanks for joining today's call. As you can see from our published results, we had a great year and excellent fourth quarter. For the full year, we delivered attributable AFFO per share as adjusted growth of 8%, including over 13% growth in the fourth quarter. These results were underpinned by robust leasing demand across our tower and data center businesses and strong execution against our strategy. Over the past year, we have taken meaningful steps to improve our earnings quality and durability. We have steered capital toward developed markets, globalized and simplified our operations, and brought leverage back down to our target range.

These actions put us on strong footing to capitalize on future growth opportunities and deliver on our goal of industry-leading AFFO per share growth.

Before turning the call over to Rod to review our detailed financial results and 2026 outlook, I would like to spend a few minutes discussing our key priorities for 2026 as outlined on Slide 5 of our earnings presentation. First, driving durable revenue growth. The backbone of our revenue growth is mobile data consumption, which continues to grow rapidly alongside growth in mobile customers, 5G adoption, and fixed wireless access. This secular demand growth is expected to require a doubling in wireless network capacity between now and 2030.

On top of this, with trillions of dollars being deployed into AI, it is likely that new AI applications will propel mobile data consumption even higher and require greater bandwidth, lower latency, and more uplink capacity than today's typical usage.

In our largest tower market, the U.S., carriers are in the middle stages of the 5G cycle, where they broadly completed their initial 5G coverage-oriented activity and are shifting toward capacity-oriented activity. We anticipate carriers will densify their networks not only to meet the capacity demands of 5G, but also to plan ahead for the 6G cycle. We are excited about the 800 megahertz of higher frequency spectrum that has been earmarked for 6G and believe its deployment will drive significant activity on towers. As carriers invest in this capacity, we expect our U.S. portfolio to deliver durable, long-term, mid-single-digit organic growth. As you saw in our 8-K from January, DISH has defaulted on its payment obligations.

We continue to pursue legal action to recover the value of its remaining lease obligations, and while DISH's default negatively impacts our 2026 outlook, in the long run, we expect our business to benefit from a healthier, well-capitalized customer base that can invest more heavily in their mobile networks.

Internationally, we see parallel trends of rising data consumption driving durable network investment. In our European market, 5G progress lags slightly behind the U.S., and strong demand for new sites is prompting exciting levels of new build activity with top-tier carriers. In our emerging markets, 4G-related activity continues to dominate, but we see increasing levels of 5G rollouts in key metros with significant runway for growth. We continue to expect our international tower portfolio to deliver faster organic growth than the U.S., as our less mature portfolios lease up over time.

In our data center business, strong demand for hybrid and multi-cloud deployments and positive pricing actions continue to yield impressive double-digit growth. Demand for AI-related use cases, like inferencing and machine learning, is driving an increasing portion of new leasing and CoreSite’s AI-ready platform is equipped to accommodate these higher-density, interconnection-heavy workloads within its existing cost structure. CoreSite is also benefiting from sustained migration of enterprise IT infrastructure from on-premises to interconnection-rich colocation facilities. These powerful demand trends combined with our unique interconnection-oriented infrastructure continue to support CoreSite's achievement of mid-teens or higher stabilized yields on new data center deployment.

Our second priority is operational efficiency. This has long been a key operating principle at American Tower Corporation. Over the past three years, we have worked diligently to improve our cost structure by centrally aligning our regional groups, divesting non-core business units, and automating leasing transactions. These initiatives have helped deliver over 300 basis points of cash EBITDA margin expansion across our global tower portfolio since 2022. And today, we have the highest like-for-like tower cash EBITDA margins amongst our peer group. The bulk of our recent cost efficiency efforts have focused on reducing SG&A, which for our tower business is best in class at approximately 4.5% of revenue.

With the creation of our global COO position last year, we have undergone an extensive review of the direct costs within our tower business in an effort to bend our cost curve and grow direct expenses at a slower rate than revenue. We identified four key areas of expense savings across our global tower portfolio. First, managing land expense, which is our most significant direct cost, by expanding our highly successful U.S.-based land optimization program to other markets. Second, implementing a global unified sourcing and supply chain to enable economies of scale, gain pricing advantages, and improve inventory management.

Third, accelerating the adoption of our well-developed standard of care for U.S. assets across our global portfolio to improve repair and maintenance costs. And fourth, simplifying and standardizing internal technology platforms to optimize customer service and accelerate automation. We expect these new initiatives in conjunction with continued strong conversion rates to drive 200 to 300 basis points of tower cash EBITDA margin expansion over the next five years. On top of this, we are investing in AI to accelerate efficiency gains even further. While we are still in the early stages of AI adoption, we expect AI use cases to target process automation, predictive maintenance, power utility management, and workflow optimization.

We look forward to updating you on our AI endeavors and accelerated efficiency targets in the future.

Moving to our last priority for the year, capital allocation. We remain disciplined stewards of capital and strive to generate durable cash flow growth with high returns on invested capital. Now that we are back within our target leverage range, we have significant flexibility. After funding our dividend, we will opportunistically assess the best uses of our capital among internal CapEx, M&A, share repurchases, and further delevering. This year, we plan to deploy the vast majority of growth CapEx to our developed tower markets and CoreSite and we will continue to manage our global portfolio in ways that accelerate growth and reduce volatility.

Before turning the call over to Rod to discuss our 2025 results and 2026 outlook, I would like to thank our incredible employees for delivering another excellent year. We have established a best-in-class platform for capitalizing on strong industry demand drivers, and I am confident that we are well positioned to execute our 2026 priorities and drive accelerating durable growth into 2027 and beyond. Rod, over to you.

Rodney M. Smith: Thanks, Steve, and thank you all for joining the call. I will start by walking you through our 2025 highlights and then share our 2026 outlook. Slide 7 shows a snapshot of our full-year highlights. Consolidated property revenue grew approximately 4% year over year, and approximately 5% when excluding non-cash straight-line and FX impacts. Our growth was primarily driven by organic tenant billings growth of approximately 5% and complemented by data center revenue growth of approximately 14%. Adjusted EBITDA grew approximately 5% year over year, and approximately 7% excluding non-cash net straight-line and FX impacts. Property revenue growth was magnified by record services contribution and disciplined cost management, resulting in 20 basis points of consolidated margin expansion.

Attributable AFFO per share as adjusted grew approximately 8% year over year, firmly within our long-term range of mid to high single digits. This growth was supported by strong conversion of adjusted EBITDA growth and management of below-the-line costs. Excluding refinancing headwinds of approximately 1% and normalized for FX impacts, AFFO per share as adjusted grew approximately 9% year over year, demonstrating the underlying strength of our business model. Finally, on the capital allocation front, we brought leverage back down into our target range of 3 to 5 times, and we ended the year at 4.9 times.

Also in the fourth quarter, we repurchased approximately $365 million of American Tower Corporation common stock, our largest quarterly and annual buyback since 2017. We have continued to repurchase stock in 2026, buying back approximately $53 million year to date.

Now let us turn to our full-year 2026 outlook starting with organic tenant billings growth on Slide 8. As Steve mentioned, DISH failed to meet its payment obligation and is in default. This did not impact our 2025 financials, and for the full year 2025 DISH represented approximately 2% of consolidated property revenue and approximately 4% of U.S. and Canada property revenue. In order to reset true run-rate expectations for the U.S. and Canada, 100% of DISH's revenue was removed from organic growth beginning on January 1, reflected in churn. Any payments collected from DISH subsequent to year-end 2025 will be reflected in other non-run-rate revenue.

For 2026, we expect consolidated organic tenant billings growth of approximately 1%, or approximately 4% excluding DISH churn. In the U.S. and Canada, organic tenant billings growth is expected to be approximately 0.5%, or approximately 4.5% when excluding DISH churn. This is comprised of colocation and amendment growth of approximately 2.5%, escalations of approximately 3%, DISH-related churn of approximately 4%, and normal churn of approximately 1%. We remain constructive on growth for towers in the U.S., supported by a healthier, well-capitalized customer base.

In Africa and APAC, organic tenant billings growth is expected to be approximately 8.5%. This is comprised of colocation and amendment growth of approximately 7%, representing a modest acceleration off of 2025 levels, CPI-linked escalations of approximately 4%, and churn of approximately 2.5%. 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 tenant billings growth is expected to be approximately 4%. This is comprised of colocation and amendment growth of approximately 3%, consistent with 2025 levels, CPI-linked escalations of approximately 2%, and churn of approximately 1%.

In LatAm, organic tenant billings is expected to decline by approximately 3%. This includes steady colocation and amendment contributions of approximately 2%, CPI-linked escalations of approximately 4%, churn of approximately 8%, and other run-rate revenue headwinds of approximately 1%. As communicated over the last couple of years, we have expected low single-digit organic growth in LatAm through the end of 2027 due to elevated consolidation-related churn in Brazil, and for organic growth to accelerate in 2028 once the churn passed. On average, our multiyear expectations remain consistent, though we now expect more acute churn in 2026 and the acceleration in organic growth to commence in 2027, one year earlier than previously expected.

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 for the forthcoming acceleration of organic growth in 2027. As a reminder, we still have an ongoing arbitration with AT&T Mexico. We remain confident in our legal position and note that the outcome of the arbitration may impact organic growth.

Turning to property revenue on Slide 9. We expect our outlook for approximately 1% organic tenant billings growth to be complemented by the selective construction of approximately 2,000 new tower sites at the midpoint of our outlook and approximately 13% growth in our U.S. data center business. Excluding non-cash straight-line revenue and FX impacts, property revenue is expected to grow approximately 3%. Normalized for the impact of one-time DISH-related churn, our outlook for property revenue implies approximately 5% growth on a cash FX-neutral basis.

The FX assumptions contemplated in our 2026 outlook, which reflect our standard methodology and are conservative relative to current spot rates, contribute approximately 1% of incremental growth, and non-cash straight-line revenue represents an approximately 2% headwind to our GAAP outlook for property revenue.

Moving to Slide 10, adjusted EBITDA is expected to grow approximately 2% when excluding net straight-line and FX impacts, as growth in towers and data centers is partially offset by a decline in services. Normalized for the one-time impact of DISH-related churn, our outlook for cash adjusted EBITDA implies approximately 5% growth. Cash adjusted EBITDA margins are expected to be 66.8%, down a modest 20 basis points versus last year as steady margins in towers are offset by contributions from lower-margin data centers and services.

In towers, due to a continuation of high conversion rates and cost savings initiatives, we expect cash margins to be flat year over year, even while absorbing approximately 60 basis points of one-time pressure from DISH-related churn. In data centers, we expect cash margins to decline approximately 270 basis points year over year as one-time benefits from property tax adjustments and legal settlements in 2025 are not expected to reoccur in 2026. Normalized for these one-time items, we expect cash margins to hold steady as strong lease-up of existing facilities is offset by putting new capacity into service. In services, we expect healthy levels of carrier activity to drive our third-highest services contribution in the history of the company.

While this level of services contribution is robust relative to historical standards, following our record 2025, and taking into account an increasing contribution of lower-margin construction services, it weighs on consolidated growth and margins in 2026.

Turning to AFFO on Slide 11. Our 2026 outlook assumes attributable AFFO per share growth of approximately 1% year over year. Normalized for the impact of one-time DISH-related churn, and excluding the impact of FX and refinancing costs, our outlook for attributable AFFO per share growth implies approximately 5% growth. Bridging from our 2026 outlook for cash adjusted EBITDA, tailwinds from lower maintenance capital and share repurchases executed in 2025 and year to date in 2026 are partially offset by higher interest expenses as debt is refinanced at higher rates, higher cash taxes, and higher minority interest and distributions, consistent with our expectations.

While our outlook for 2026 growth is negatively impacted by churn events in the U.S. and Latin America, we believe that we are well positioned to deliver our goal of leading attributable AFFO per share growth and compelling total shareholder returns in subsequent years.

On Slide 12, I will review our capital allocation plans for 2026. We expect to grow our dividend approximately 5%, resulting in approximately $3.3 billion in distributions to our shareholders, subject to Board approval. Next, we are planning for $1.9 billion in capital deployments, of which $1.8 billion is discretionary in nature and includes the construction of 2,000 sites at the midpoint.

Approximately 85% of our discretionary spend is directed towards our developed market platforms, including over $700 million in success-based investments in our data center portfolio to replenish elevated levels of capacity sold over the past several years, increased spend in the U.S., primarily toward land buyouts under our tower sites, and continued acceleration in European new builds with over 700 new sites planned. Our plan also includes approximately $180 million in maintenance capital, a reduction of roughly $15 million due to an acceleration of maintenance capital projects into 2025, reducing 2026 anticipated spending.

Moving to the right side of the slide, we remain disciplined as we utilize our balance sheet, which is well positioned for a variety of macroeconomic scenarios, and we are focused on allocating capital to optimize long-term shareholder value creation. As I mentioned, we repurchased approximately $365 million of American Tower Corporation stock in 2025, plus another approximately $53 million so far in 2026. We will continue to be opportunistic in utilizing the remaining approximately $1.6 billion that the Board has authorized for share repurchases.

Turning to Slide 13, and in summary, we are pleased with our 2025 results, which demonstrate the fundamental durability of our business model. Robust mobile data consumption growth and demand for our interconnection-rich data centers underpin a long runway of growth opportunities for American Tower Corporation. With our best-in-class portfolio of towers and data centers and strong balance sheet, we are well positioned to capture these growth opportunities and deliver on our goal of industry-leading attributable AFFO per share growth. And with that, Operator, we will open the line for questions.

Operator: Thank you. At this time, we will conduct the 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. Our first question comes from the line of Batya Levi of UBS. Your line is now open.

Batya Levi: Great. Thank you. On the domestic side, can you provide a bit more color on the pacing of activity that you are seeing from the carriers as we enter a lower contracted revenue cycle that you had under the deals in the prior terms? And are you seeing a change in the amendment versus densification activity today? And maybe just to compare that 2.5% leasing growth guidance for 2026. How does that compare to 2025 if we exclude DISH? Thank you.

Steven O. Vondran: I will start out with leasing trends, and then I will let Rod talk about the numbers on it. So what we are seeing, Batya, is we are seeing the customers providing a steady level of activity, kind of broad-based across the entire ecosystem there. And we are seeing a higher incidence of new colocations coming in, but we still have a pretty healthy amendment pipeline as well. And this is what we would expect to see at this point in the cycle. Some of the carriers are broadly done with their initial 5G overlays. So there will be some fill-in sites that happen there, but they are broadly done with their initial targets.

One is still a little bit further behind on that. So we are still seeing some amendment growth there. And when it comes to the densification, we are seeing both some amendments because we are adding more equipment to existing sites that they have already overlaid, but they are also adding new sites. So we are seeing a little bit of a shift in that. But we still would expect the majority of our new leasing to come from amendments this year as we have historically.

Rodney M. Smith: Good morning, Batya. This is Rod. I will take the other piece of your question relative to the colocation and amendment contribution to organic tenant billings and how it relates to prior year. So if you look at our 2026 guide for organic tenant billings growth, it is about 0.5%. Within that, there is about 2.4% contribution coming from colocation and amendment revenue. Now that does not have any contribution from DISH at all in it. If you go back to the prior year, the 2025 numbers, we were at about 3.1%, 3.2%, which included some activity from DISH in terms of the contribution from colocation amendment revenue.

When you remove that contribution in the prior-year number from DISH, you come right in at that 2.5% level. So we are seeing, as Steve outlined, very consistent activity levels in the U.S. marketplace ex DISH, and we are seeing about 2.5% contribution from colocation and amendment revenue in each of those years from the carriers in the U.S. ex DISH. The only other thing I would add to the pacing of the new business, as Steve said, it is pretty consistent. You will see a little bit higher number in the first half of the year, and it drops down just slightly in the second half of the year.

Steven O. Vondran: Yes. I think you made it a 2.5% contribution from new leases and amendments this year.

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

Richard Hamilton Prentiss: Thanks. Good morning, everyone. Hope you are doing okay with the snowstorm. Can you hear me okay?

Rodney M. Smith: Yes. We can. Good morning, Rick.

Richard Hamilton Prentiss: Want to start on the DISH. Appreciate it is out of the guidance. We had taken it out of our numbers as well. Can you provide us the amount owed, like Crown Castle mentioned that they are owed $3.5 billion when they terminated the agreement with DISH. Are you able to tell us how much is owed and that you are looking at trying to work out a payment from them?

Steven O. Vondran: Yes. Thanks, Rick. Yes. I think the key takeaway we want everybody to have about DISH from today's call is that we have de-risked our business going forward by taking it out of the numbers. And we, you know, we fully plan to fight in the litigation. We think our contract is enforceable. We are going to do everything we can to collect that, but that would all be incremental upside to the current guidance that we are giving out there. And when it comes to the exposure on DISH, we have given you guys the numbers we can kind of back into it, where it represents about 4% of our U.S. revenue.

So that is approximately $200 million a year. And we have disclosed that it goes through 2035 into 2036. So that gives you guys kind of the ballpark on that. We have not put a specific number out there and do not plan to put a precise number on it, but that gives you guys kind of the ZIP code of where that exposure is or what the opportunity is actually, now that it is out of the numbers. And so in terms of, and I will go ahead proactively address this for some of the other questions I know are coming, we do not plan to speculate on the litigation.

It is public, and you guys can follow along as you go. This is going to take time to work out. And so we do not necessarily expect this to get resolved this year. We hope it does. We do not necessarily expect it to. And so as we go forward in the year, we will keep you updated on anything material that happens. But otherwise, we are just going to continue to fight this out in the courts and see where it goes.

Richard Hamilton Prentiss: Excellent. Along those lines, obviously, settlement or payments would be upside to the capital allocation. You mentioned, you know, opportunistic stock buybacks, also pursue M&A. How should we think about M&A out there, what you are seeing across the global landscape? And maybe address also kind of the disparity between public and private multiples?

Steven O. Vondran: Yes. Thanks, Rick. You know, we continue to evaluate everything that is out there. As you probably know, there are a lot of portfolios that are talked about right now. There are not a lot of active deals that we are seeing. But we are still seeing a disconnect between private and public multiples. And we think that reflects the attractiveness and the durability of revenue in the tower business. And so that has kept us on the sidelines the past few years because there has been that delta there that has made it hard for us to participate. But just to reiterate to everyone, our capital allocation strategy is to focus on developed markets.

And so you should not expect to see us participating in M&A in emerging markets. We will continue to invest a small amount of capital there, you know, opportunistically doing redevelopment to support our organic billings growth there. And then we do have some build-to-suits that we are doing as part of multi-year commitment we entered into previously. As we think about capital allocation going forward, it is really focused on developed markets, predominantly the U.S., and then if there is an opportunity in Europe or elsewhere that is developed, you know, we will certainly evaluate that. But we are not seeing a lot of deal flow out there that we find attractive today.

And, you know, we hope that changes. We hope that there is an opportunity for us to scale in some of those markets. And if there is, we will keep you guys apprised when it happens.

Rodney M. Smith: Hey, Rick. I would just add a couple of quick things here. Once you had mentioned that any possible future settlement from DISH could be a balance sheet item, I will just highlight the fact that DISH is in default at the moment. They are not paying us. There is the potential for future collections that may come in, and if they do, it could be accounted for in other non-run-rate revenue. So there could be some P&L impacts to the extent that there are future collections from DISH as we go forward.

And the only other thing I would highlight on capital allocation is we are now down below our 5 times, you know, within our 3 to 5 times leverage target. As you have heard Steve and I talk about over the last several quarters, that brings us into financial flexibility. Just to remind you of the bits and pieces here, Steve talked about this, we are a REIT. We provide the dividend. We think that is essential to our long-term TSR, total shareholder return. Then we have been consistently investing between $1.5 billion and $2.0 billion in CapEx, and we have been able to, as Steve said, into the areas where we see the best returns.

Today, that is going into developed markets, and it is increasing capital investments in CoreSite. And then we look at M&A and buyback, and we will make the decisions between those two pieces in terms of which one provides the best outlook for long-term total shareholder return. And, of course, paying down debt and building capacity for future deployments makes sense, then we will do that. So we have a lot of options available to us. We are willing to use them all, and we are now in a place where the balance sheet is very strong, and we have regained full financial flexibility.

Steven O. Vondran: Thank you.

Operator: Our next question comes from the line of Michael Ian Rollins of Citi. Your line is now open.

Michael Ian Rollins: Thanks and good morning. So the margin guidance for cash margins to go up by 200 to 300 basis points by 2030, how much of that is just organic from the natural operating leverage in the business? And then how much is represented by the acceleration of the activities that you outlined earlier?

Rodney M. Smith: Hey, Michael. Good morning. This is Rod. Let me take that one. So as you highlight in our 2026 guide for cash EBITDA margins, we are guiding to about 66.8%. That is slightly down from the prior year, down about 20 basis points. Of course, within there, there is organic revenue growth. There are the benefits of cost management that I would remind you and other listeners that we, as a company, have been focused on cost management and efficiencies over the long term historically and certainly over the last several years, as you have seen us talk about absolute reductions in SG&A year over year over the last few years.

So this is not new to us in terms of focusing on cost. A couple of things that are offsetting those pieces that are driving the margin is it is offset by contributions, higher contributions from our data center business, which is lower margin, as well as contributions from our services business, that also has lower margin. And I would highlight that it is absorbing about 50 basis points of contraction because of the DISH churn. And within there, it has a step back in the CoreSite margins by about 270 basis points.

A lot of that is a one-time nonrecurring benefit we got in property tax as we reversed the prior property tax accrual in 2025 that is not expected to be recurring again, of course, in 2026. With all of that said, I am not going to go through and try to break out the bits and pieces of that margin expansion that we are expecting. We have increased margins about 300 points over the last several years. We expect to do that again going forward in the next, the next several years going out to about 2030.

Michael Ian Rollins: And just to confirm, over the last several months, I think you and Steve have been talking about the incremental effort to drive efficiency, and we were going to get an updated, I think, some point. So does today's target for 2030 fully encapsulate the activities that you have been describing over the last several months just to continue to push those efficiencies forward?

Steven O. Vondran: It encapsulates the things that I talked about in my script where we talked about the four initiatives that we are taking on today. We do think that AI could offer some incremental upside to that, but it is too early to predict exactly what that is going to be. So when you think about what we are doing here, the direct costs typically rise with inflation. And so we thought the best way to explain a target to you guys was to do it in terms of margin.

We could put out a number that is sort of a voided cost number that would not mean anything to anybody, but we did not think that was the right way to explain it. We thought it was really to focus on what it is going to be in the bottom line and what is something you could actually model out in terms of our expectation. And so when we looked at it and we looked at what the growth would have been in terms of margins, just from the operating leverage and where we were in terms of directs, we set a stretch target for ourselves.

And we do think that 200 to 300 points of margin expansion represents some nice improvement over what it would otherwise be if we were not able to recognize these cost savings. So that is the guidance you are going to get from us, that margin expansion piece. If there is a chance to do something else with AI and we think there is, once we have been able to sort out exactly what those numbers look like, we will share it. But until then, focus on margin expansion. As Rod said, look at it on the tower side, not on the data center and services side. And we give you guys enough information in supplemental to do that.

And we will continue to expand those margins and update you on that quarterly like we always have. And, Michael, I would just add that margin expansion is off of a base that is already industry leading.

Michael Ian Rollins: Thanks very much.

Operator: Thank you. Our next question comes from the line of Nick Del Deo of Moffett Nathanson. Line is now open.

Nick Del Deo: Hey, good morning. Thanks for taking my questions. I was hoping you could expand a bit on two of the tower revenue growth drivers you highlighted, fixed wireless and AI. So with fixed wireless, are you seeing the carriers invest behind it as, you know, the primary motivating factor for work on a site versus it piggybacking mobile edge deployments, both in the U.S. and overseas? And what AI use case do you see as most promising for driving wireless traffic growth?

Steven O. Vondran: Sure. I will take that one. When it comes to fixed wireless, you know, the carriers are still using their existing installations to support that. So you would not necessarily see a standalone deployment for fixed wireless. The way we think about it is overall mobile network traffic and mobile data demand. And when you look at the percentage of mobile data usage that is coming from fixed wireless, it is accelerating. We also look at our carrier customers and what they are saying publicly, and they are all raising their targets for fixed wireless subscribers.

So what that tells us is that is driving demand on the network and that is underpinning growth in our sales even though we cannot necessarily pinpoint this amendment or this colocation to fixed wireless. We know it is kind of an overall driver. And when it comes to AI, we are in the early days of this and most of the AI that we are all doing on our telephones is text or maybe a still photograph. That does not put a ton of stress on the networks. It is really video that puts the stress on the networks. And it is both video upstreaming and downstreaming.

That is what we think is going to drive a lot more activity over time. Some of the projections we have seen are showing that the upstreaming effects of AI could require a change in network architecture, where most networks today have about 10% dedicated upload and 90% to download. Varies by customer, so some of them could be different. We think that in the future, AI could change that trajectory a bit so that you are seeing north of 20% in terms of upload capacity. So again, it is early days, too hard to predict exactly when it is going to happen or exactly what app is going to drive it.

But it is really that video upstreaming, video manipulation, as well as things like the Meta glasses that are live streaming everything around you, those types of applications that we think are going to really result in some network traffic over time.

Nick Del Deo: Thanks, Steve. And can I ask one on CoreSite as well? I saw there were some local news reports that indicated that you recently bought land in the Bay Area and might be pursuing a new campus in the Dallas-Fort Worth area. Assuming those reports are accurate, kinda what is the time frame for the Bay Area land and how many megawatts do you think it will be able to support? And talk a little about the vision and rationale for de novo market entry in Dallas.

Steven O. Vondran: Sure. So we are not ready to announce any new markets yet. We are selectively looking at opportunities in other key metros that would be complementary to our existing portfolio. And we have purchased some land in various areas, sort of an exploratory foray into those. And when we make a decision to break ground there, we will tell you guys that we are doing it. The rationale is we are seeing incredible demand on our campuses. And, you know, this is our fourth consecutive year of record sales growth. And this is the first year we have seen AI really manifest itself as a huge use case.

So when you look at what is driving the success of CoreSite right now, we still have our kind of bread-and-butter customer, and that is the enterprises that need to be in interconnection-rich data centers that are directly connected to multiple cloud on-ramps. That is our core customer. There is still a huge tail, a long runway of demand from that customer. But we are also seeing AI workloads like inferencing and machine learning, things like that. And that is our fastest growing new use case. So from our perspective, to maximize the value of CoreSite, which is what we should be doing, it is both investing in our current campuses and expanding those.

It is looking at what other markets our customers would like for us to be in to drive even more accelerated sales over time. From a timeline perspective, from the time we break ground till the time we open the facility, it depends on a couple of factors. Power availability is one of them, but also just the size of the facilities, et cetera. But you can expect it to be approximately two to three years from the time we break ground to the time that we can bring that capacity online and start realizing revenue from it.

Nick Del Deo: Okay. That is great. Thank you, Steve.

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

James Edward Schneider: Good morning. Thanks for taking my question. Was wondering if you can maybe just elaborate on the cost reduction program. Maybe specifically talk about what it sounds like many of the actions you mentioned, Rod, would be things you would have done in normal course already. So I am trying to understand, are you basically saying you will be able to achieve this 50 basis points on average per year in spite of some of the cost headwinds and margin headwinds that you mentioned earlier? Or is there something sort of above and beyond that? And would you expect any nonlinearity in the achievement of those?

Rodney M. Smith: Yes. Thanks for the question, Jim. And I would highlight the fact that in the last several years, you have seen us really manage our SG&A and manage that down. We do not, of course, announce when we are reducing staff and those sorts of things, but some of that activity certainly happened over the last three years as we rationalized SG&A across the board. When I mentioned a continuation, it really is a continuation of the mindset around cost management and cost controls. The thing that is different going forward is that we have a different global structure.

We have the addition of a Chief Operating Officer that is going to be bringing best practices around the globe in terms of the way we manage land expenses, the way we, on supply chain and sourcing, we are going to be looking to expand the standard of care and the way we manage tower operations in the U.S. globally, which we expect really will drive efficiency and bend that curve down, and that will be a contributing factor to the margin expansion that we expect going out to 2030.

James Edward Schneider: And then as a follow-up, can you maybe comment on the Europe property growth expectations, 9% new site? It seems like a lot. I am just kind of curious where that is coming from and maybe talk about any kind of the flavor or underlying color on a country-by-country basis? Thank you.

Steven O. Vondran: Sure. I will take that one. So we are seeing a lot of good opportunities in Europe right now. And, you know, we have a strong portfolio anchored by Telefónica that is largely insulated from some of the potential consolidation that is out there. So as we look at Europe, you know, we are continuing to see a long runway of mid-single-digit organic growth that we expect to realize there. And as part of our acquisition, but also as part of some of our other agreements out there, we have the opportunity to build these sites. So we are expecting to bring on board a record number of new builds in Europe next year.

And so that is underpinning a lot of that growth. And, you know, it is largely in the countries you would expect it to be. Our two main markets are Germany and Spain there. So you are going to see a lot of towers there. We will bring some new towers online in France as well. We would like to bring more online there. We like that country, and we just do not have as much presence there as we would like to have. But what you are seeing there is a reflection of some really solid performance by our teams and earning the trust of our customers and then giving us more opportunities to build sites for them.

And that is what is underpinning the growth there along with good leasing expectations over time. I would note that Europe in general is behind in deploying 5G compared to the U.S. And so I think that from that perspective, there is a lot more runway to continue to deploy 5G there as well. So we feel good about the market. We feel good about the investment there. And what you are seeing in that 9% is really us continuing to build new sites as well as realizing our sites growth there as well.

James Edward Schneider: 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: Hey, guys. Thanks so much for taking the questions. I guess regarding capital allocation, we talked a lot about returning capital and making new investments, but something we have not talked about for a while, Steve, was kind of the pivot away from emerging markets. And I think the term of art is called capital recycling. If you go to Slide 11 and you kind of look at that left-hand side, it looks like there are a lot of markets that, you know, are small enough to be distractions, and, you know, that money could be put to a higher and better use.

So if you could kind of talk to us a little bit about what the strategy there is, you know, at this stage, whether currencies and market valuations have stopped you from doing things or things are on the burner. Then I guess my next question is a little offbeat, but you know, for the last five years, if anyone asked how satellites are going to affect the terrestrial wireless business, you know, you would roll your eyes and you would say, you know, it is never going to have an impact.

But now that you are starting to talk about 2030 margin expansion, 2030, 6G is a driver, and, you know, the reality that these LEO constellations are going to evolve over those five years in material ways, how do you kind of get comfort right now looking into 2030 that, you know, this kind of evolution of connectivity, towers in the sky, so to speak, you know, is not an equivalently disruptive, you know, an equivalent to, say, the AI evolution, which you also expect to happen in the next five years? Thanks.

Steven O. Vondran: Yes. Well, let me take the emerging market question on that, and you know, our goal is always to establish a real estate portfolio that is giving us industry-leading AFFO per share. And we made a pivot a couple of years ago to focus more of our development CapEx in the developed markets because we thought that was going to give us the best durable growth over time. And because we had gotten a little ahead of ourselves in terms of emerging market exposure, given some of the challenges that we saw there, India and other things. So we have already made a number of changes to our portfolio mix there.

I referenced some of the smaller countries, and we will always evaluate those countries to see what the best use of capital is on that. And you could see us do something there, but only if we think we are realizing the value of those that is accretive to our shareholders. So we are not going to do any fire sales. We are not going to eliminate something because of the distraction. What we have done to fix that is we have changed our operating model so that they are operating from regional hubs or through these global organizations. So it is really not a distraction for us.

So it is all about what value can we realize and does that make sense. And if it does, you might see us take action. Otherwise, we are going to harvest that cash flow and redeploy it into our capital priorities that we outlined there. So again, just when there is news there, we will let you know. But until then, we are not going to talk to you about those. When it comes to satellites, the reason that we made an investment in AST SpaceMobile was to get a board seat so that we would have a front-row seat to this technology as it unfolds. And we certainly continue to monitor that.

We talk to the engineers in the space. We talk to the dreamers in the space and what they are trying to do. That gives us a lot of confidence that satellites will be complementary to the terrestrial networks. 6G is likely to be designed with satellites being an integral part of an integrated network. But the simple physics of spectrum, the simple economics of having a constellation that has to consistently be replenished over time means that towers will always be the cheapest and best way of deploying the level of content, the volume of mobile data that consumers demand.

So while we think the satellite business is a great business, it is going to be a good complement to the networks, and we certainly are excited about the developments we are seeing in that area. We see no risk at all to the tower business over the long term because, again, towers will always be a cheaper form of delivering a mass amount of data to the consumer, and the satellites just cannot compete with that.

Rodney M. Smith: Hey, David. I want to add a couple of just data points for you to think about to support Steve's discussion around us being an active portfolio manager. The evidence here is that we sold India and we took the proceeds from that sale, and we delevered and helped us get down below our 5 times. You also saw us exit in different markets around the world. And, again, we used those proceeds from those sales to delever the balance sheet and to help us regain that financial flexibility. And most recently, and we announced it in the prepared remarks and in the press release, we sold half of our stake in AST SpaceMobile.

And that was just a modest investment. We really invested in it to stay close to the satellite business and to learn about that business going forward. There is no secret. The stock has done well. The company has done well. And we looked at it as a good opportunity to recycle some of that capital. So we sold half the stake. We used that to actually buy back shares in the last quarter, and we maintained a board seat on AST SpaceMobile. So we still have the ability to continue to learn.

David Barden: Thanks, Rod.

Operator: Thank you. Our next question comes from the line of Brendan Nispel of KeyBanc Capital Markets. Your line is now open. Brendan, if you would like to unmute.

Brendan Nispel: Can you guys hear me?

Operator: Yes. We can hear you. Great.

Brendan Nispel: Two questions. Obviously, the U.S. ex DISH is pretty safe. I guess if we can remove DISH from, like, the last three years, it still seems like colo and amendment activity is down. Is that right? And just to nitpick a little bit, why is the second half of the year lower than the first half, and how should we be thinking about that in terms of the exit rate? How should that inform our view in terms of 2027? And then separately, in Africa, one of your largest just announced their intent to acquire some towers for their own, I guess.

So wondering how you are thinking about that in terms of your view when one of your largest customers now wants to own a captive tower portfolio? How does that impact your growth expectations for that market? Thanks.

Steven O. Vondran: Thanks. I will take the Africa question first. We do not expect it to have any effect on our business there at all. We view that transaction as unrelated to the business we have there. If you look at sales success that we had in 2025, we are doing very well in Africa in terms of our new business there. And our projections for 2026 are to have another good year of that. We do not think that the acquisition of the other tower company really has any bearing on that at all. As we have said previously, our goal is to reduce the incremental capital that we are putting into Africa over time.

And that means that we are not going to be building as many new sites for the carrier customers there. And so I think that what you are seeing play out in the various changes that are happening in Africa are reflective of our customers that are looking for other alternatives versus American Tower Corporation in terms of how they are going to build some of those sites in their network. So we feel good about that business. We think we are going to continue to have a nice long runway of organic growth there.

Rodney M. Smith: Hey, Brendan. I will answer your second question, which is the timing and the pacing of new business. So I referred to the fact that there will be a slightly higher number or contribution in the first half of the year, and it ticks down really ever so slightly. It is simply just a function of the way that our holistic agreements work as well as the timing of activity that we expect to see. And there is nothing more to it than that. Your first question is related to kinda going back over several years and the contribution and activity level that we have seen in the U.S., how it relates to our organic growth.

I will point out a couple of things. A few years ago, you did see us achieve record levels of new business. There were a couple of drivers to that. One is there was an initial phase, initial wave of 5G networks, carriers deploying and upgrading their network with C-Band spectrum. That came with an initial spike in CapEx where we saw the carrier CapEx of the U.S. come up over $40 billion. So there was a significant push to begin that 5G launch, and that is typically what we see in the industry when a new technology is deployed.

After that initial wave, we do see a moderation of the CapEx and a more steadying, albeit a step up in terms of CapEx. So we may not be seeing a repeat of the all-time high that we saw in the initial wave of 5G. But the steady state now more in the mid-$30 billion range is higher than the steady state that we saw in CapEx under the 4G cycle. So it moderates. There is a step up that is consistent over time. And the other thing I would highlight is over the several years, you saw contributions from DISH to new business and organic growth for the tower companies over the last several years.

Going forward, that is no longer in the numbers. So that said, when you think about the state of the industry today and the three wireless carriers, they are well capitalized, healthy, and they are contributing a consistent level of activity in 2026 that we saw in prior years, and we expect that to continue going forward.

Brendan Nispel: Thanks for taking the questions.

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

Brendan Lynch: Great. Thanks for taking my questions. Rod, maybe just a follow-up on that commentary there. That was very helpful in kind of framing out the longer-term outlook. You previously guided to 5% organic growth through 2027. Obviously, with DISH now in the picture now, that is coming down a little bit. How should we think about that long-term growth going forward? We get back into about 4.5%, and that is what you are suggesting for this year. Should we anticipate that continues out into the future as well? And maybe just one on the data center front. Could you describe to what extent you are seeing actual inferencing demand and specifically low-latency inferencing demand at CoreSite?

Steven O. Vondran: I will actually take that one. Back in early 2021, when we set out that expectation for U.S. and Canada organic growth of 5% or better between 2023 and 2027, that was based on the growth drivers that we saw at the time. And what we did not have in our viewshed then was the DISH trying to sell its spectrum and exit the market effectively, and also T-Mobile action of UScellular. So those are things that have taken us off of that guide, as you know, this year in particular. However, everything else is kind of playing out the way we expected it to.

And if you look at the past several years, you know, we achieved 5% up until last year when those transactions were announced. And so as we think about going forward, and we are not going to give 2027 guidance here, but as we think about going forward, our long-term growth algorithm that we have laid out for you guys, we believe still holds true. And that is organic growth in our developed markets in the mid-single digits, a little bit higher in our emerging markets, higher contributions from CoreSite because we see double-digit growth in revenue in CoreSite, and we are going to have expanding margins because of our cost control.

So as we think about that long-term growth algorithm that we laid out, we are still confident in our ability to deliver that even in a three-carrier market. On inferencing demand, I can speak to inferencing demand. It is hard to say if it is low latency because the whole campus is low latency based on the way we have organized it. But what we have seen is an uptick in inferencing. It is one of our leading new use cases that is coming in. And quite frankly, we have more demand for it than we can meet with our supply.

We are able to curate our mix of inferencing partners there, and that is helping us keep the risk, the business model risk, down. We are only choosing the best names in the space in terms of who can go in our facilities. We could do more if we had more space, quite frankly. There is a lot of demand out there for it. But because we are still curating our customer mix, we are still trying to make sure that we have that right balance of clouds, networks, and enterprises, and I would throw inferencing in as kind of the new fourth characteristic of it.

But because we are still curating that mix, we are just not taking everything that comes in the door.

Brendan Lynch: Great. Thank you.

Steven O. Vondran: Thank you.

Operator: Our final question comes from the line of Richard Choe of JPMorgan. Your line is now open.

Richard Choe: Hi. I wanted to ask a follow-up on the data centers. What kind of renewal pricing are you seeing and overall pricing for new business? And then back to the tower business, if you can give us a sense of what kind of pipeline of applications you are seeing, and has that shifted at all? And at some point, do you see it kind of inflecting higher?

Steven O. Vondran: Sure. So I will start with the data center question. On pricing, we are seeing generally higher pricing. Our mark-to-market continues to exceed what it has been over historical norms on that. So that is a really good indication of that. And then the market-level pricing does continue to rise because there is this imbalance between supply and demand. And so, you know, do not have any specifics for you in terms of percentages there. We are not putting that kind of level of information out there. But overall, it is going up.

And that is enabling us to continue to underwrite mid-teens or better returns on the new incremental capital that we are putting in because, you know, as we are creating that new space, even though you do have a little bit of cost pressure from inflation, tariffs, things like that, we are able to pass that through in the form of higher pricing to keep those stabilized returns kind of in that mid-teens range. So we feel very good about that over time. In terms of the application pipeline on towers, we are expecting slightly fewer number of total applications this year.

But that is not reflective of anything other than a couple of the carriers are largely through their initial 5G overlays. And so a lot of that was amendment business that was likely covered in a lot of our holistic agreement anyway. So there is no real read-through on that in terms of customer demand or property revenue. And in terms of an inflection, what we are seeing is that inflection is a higher number of new colocations coming in, which is very positive because those come in at higher revenue per transaction than the amendments do.

But I would say, again, it is an overall consistent level of activity year over year, and it is consistent with what we expected to see at this point. And we expect it to be at that level or better in the future as they switch against buying their networks.

Richard Choe: Thank you.

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

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