Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the SBA Fourth Quarter Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mark DeRussy, Vice President of Finance. Please go ahead.

Mark DeRussy

Good evening and thank you for joining us for SBA’s fourth quarter 2022 earnings conference call.

are Brendan our Officer. Cavanagh, today Executive and me and Officer our with Jeff President Stoops, Chief Here Chief Financial

of filings, limited future from will forward-looking, we today’s cause press XXXX the our this in In material Some is our our risks and call may SEC and discuss beyond. differ including, detail any expectations. results to, on not to release guidance we for but information that

have of today, to February Our no statements we we obligation any and make. are statements forward-looking as update XX may

the and addition, key and Relations Investor will In items our is comments include landing our regarding website. on data information metrics. non-GAAP can of page financial reconciliation of financial measures found in which supplemental other our The be these operating package, other located

that, turn will call Brendan. to now over I With the

Brendan Cavanagh

up Thank outstanding you, an quarter. XXXX with We Good evening. very strong Mark. finished another

of finish full the and results Our expectations allowed our quarter outlook XXXX year end to us high most for were fourth metrics. near or of ahead at our

Total leasing revenues site were cash and $XXX.X site revenues fourth the were million leasing $XXX.X million. quarter for GAAP

revenue constant net fourth last Domestic X.X% same-tower a a rate a Foreign and the growth for compared X.X%. leasing with basis, fourth cash which Same gross tower cash of FX represented churn. X.X% revenue basis, a for was $XXX,XXX net basis, the leasing approximately leasing same-tower revenue X.X% growth on when fourth over X.X% of XXXX, currency to the of gross year growth a churn. exchange previously was quarter is On of million X% the forecasted quarter, quarter quarter a impact on quarter rates the including including our was when basis of $X.X over of recurring XXXX. recurring benefit of benefit calculated and compared fourth of estimates the recurring on cash

during balanced meaningful outlook bookings customers. with organic the prior leasing not line representing the up of under but saw largest new each earnings our strong provided leasing fourth from as quarter, leasing revenue contract third on to and our was as contributions placed in ended year contributions call. revenue We activity domestic site Domestic or Full operational our quarter solid. still

merger-related we During signed less into we amount experienced and the amendment we represented quarter, churn leases T-Mobile, Verizon of carriers for of incremental activity AT&T, The had represented again later domestic up fourth being XXXX big reduced due quarter. still each the XXXX. bookings. to outlook expect approximately our XX% new timing than incorporated during previously than churn estimated. Domestically, and churn total to leasing decommissionings XX% of revenue DISH We domestic and of our domestic this had projected four our have incur

history Internationally, same-tower strongest leasing XX% X.X% on similar leasing a a activity international bookings. gross was was cash or on basis, revenue activity churn the quarter. of XXXX including company’s or International with gross strong very one in good for net, growth was currency third to years our results the again constant X.X% of basis. leasing

and Digicel’s another constant in strong and to consolidations international of a due primarily the was as to elevated remained continue quarter international many from basis. announced on exit fourth currency organic In quarter Brazil, escalators. contribution XX.X% Brazil in growth Similar activity customer addition churn from anticipated, In we the see previously our to third levels our Panama. healthy markets, carrier market, we inflation-based had Same-tower strong across largest quarter. very

revenue, and U.S. from fourth dollars. XX.X% revenues site non-U.S. consolidated the The the leasing Brazil During was quarter from was during cash $XXX.X dollar-denominated for excluding site the pass-through leasing fourth flow revenue million. cash was of revenue expenses. of site Tower representing quarter, cash revenues XX.X% leasing of with quarter in Brazil, consolidated XX.X% of majority cash denominated

remain as flow a cash Our the pass-through XX.X% and or of very quarter flow fourth strong XX% margins international well margin tower XX.X%, flow domestic with of an excluding tower cash margin reimbursable impact tower of expenses. cash

the in impacted margin EBITDA by fourth was $XXX.X revenue. Adjusted services adjusted outsized quarter the in The quarter, million. XX.X% was again, EBITDA slightly

Excluding business XX.X%. was EBITDA tower the of in margin expenses, impact was our the adjusted total XX% of fourth revenues EBITDA leasing to adjusted and pass-through attributable Approximately quarter. our

as with most had operating business successful another segment million million by healthy the very XXXX. quarter, measured XXXX and although with wide fourth margin. in high history We earlier off year During hit end, quarter, profit services our Services company revenue revenue in $XX.X by very record our of a services at strong year remain profit. very and both $XX.X finished in backlogs the

Our services driven quarter primarily again were fourth and T-Mobile Verizon. results by

securities fourth of ahead was quarter results the impacted funds quarter, outlook, were AFFO XX% negatively secured early of fourth XXXX. at by an million retired but or share refinancing Adjusted relative from debt. $X.XX, tower our outlook November of finished a to in operations revenue $XXX million. our interest in higher $XXX.X increase assumptions of of the AFFO our AFFO still the was rate over prior per than

million, acquiring for $XXX.X the in consideration from acquired cash expanded for included communication During of Brazil sites we sites million. X,XXX quarter, portfolio $XXX fourth which meaningfully TorreSur X,XXX approximately Grupo our total

end purchase built by purchased new we all in markets have second the existing are We an sites. $XX.X for price of to aggregate agreement XXX our or During Subsequent million. these the quarter under on to also XX we anticipate sites closing of quarter. contract under quarter, the end, sites

our towers, also the sites. continue to under addition invest to land we in In new

renewal to quarter, years. more our including leases, and remaining land ground under than our average an $XX.X options years. the we approximately to and control, the extend lease buy controlled is or we XX% our aggregate easements The XX towers, spent of land and under underneath for During million At end terms. XX the of owned life of ground the year, approximately

our this afternoon’s includes full release now, initial XXXX. Looking year outlook for press earnings ahead

Our largely strong amendments we outlook due new leasing including contributions an leasing XXXX. growth the activity our across revenue organic leasing reflects leases experienced increase to continued and year-over-year business, from during in new

forecast significant results result primarily a in contributions having assets from our of from also as Brazil the in revenue non-organic year GTS in a We full acquired for growth additions, XXXX.

expected shifts $XX addition, year outlook. of mainly $XX of million estimate our these our million some fourth the in including quarter, the the Due impacts now XXXX. churn some in In are full to anticipated we is churn the timing leasing connection an of outlook Sprint-related had to contemplates decommissionings, of from of increased increase with customer revenue XXXX. decommissioning, Domestically, including during we previously Sprint-related in which in

Sprint-related Our of provided several previously aggregate estimates over years remain the unchanged. next churn

as including carryover Panama carrier churn Digicel consolidations increased includes outlook and our impacts Central America. in in well, from Internationally,

agreement In long, with exchange of with believe to from well turn into a addition, our $XX consolidation TIM longer-term commitments Wireless. have business Oi portion their million address beneficial with international mutually an Brazil, certain us for This we in us for accelerated a positions churn entered we has associated TIM. impacts includes relationship TIM, approximately of agreement and

the outlook does not accordingly adjust year, the agreements current carriers to other on the include related Our during that consolidation. XXXX this related if with further But Oi have outlook year, any enter we our churn at an to other would into that we time. assumptions were to impact any

outlook our full Services to our for EBITDA business, XXXX year of decline results, regard contribution XXXX phenomenal services our our would the reflects year outlook revenues but company’s services not outlook in ahead in With XXXX started. represent and the for best year-over-year our for the starts adjusted where history. If XXXX

As this does have services share assume acquisitions assume moment contract business. and we The also strong outlook any a very not does I any ago, as continue further for we result, mentioned those not to a backlog. year very another beyond repurchases. expect under healthy today And

repurchases to the likely invest both during or additional assets are we in share year. However, or

net leverage the with Xx we Our net approximately XXXX. excess does this the we balance. of incur further assume area, outstanding XXXX, to deploy increased for cash mid and expense activity Under still in interest repayments of but compared assumption, financing but contemplate in would we $XX cash million into outlook revolver does project cash it AFFO we end any would that year for not interest our expense

assumed is influenced assumption outlook share share per based our AFFO of which is future part prices. estimated for number average diluted million, an by weighted on Finally, in of $XXX.X shares common

We are excited about XXXX.

customers to goals. produce help Our to very network active, and build-out expect strong remain we we achieve as results their them

Jeff privilege just Mark, and those and has I’m leadership years with of would significantly the of all to I I’ve have great had to been take has grown succession of Jeff to last the moment friend of honored like this his call a the forward afternoon. years I plan to his look at the turning company. under have closely XX SBA spending the entrusted the me been to as Board. Chairman announced and counsel to to as discuss leadership. continuing a spending Before working tremendous truly company with this mentor the over

future about excited I’m SBA. of very the

We part of have industry. an great a amazing business that and is still growing

shareholders company’s to our legacy. strength of upon critical forward SBA leadership support great to greatly Our opportunities. future rewarding rest customers position us very well a working team continue on the team to be I many with to financial and building the the and talented look capitalize to and

who will update With provide that, over sheet. I’ll Mark, on an turn to balance things the

Mark DeRussy

$XX.X of ended Brendan. debt. total net the We quarter with billion of debt billion Thanks, $XX and

target annualized acquisition net below GTS the our of was significant debt adjusted range, low the fourth which is to end notwithstanding our quarter. ratio Our Brazilian X.Xx, during EBITDA leverage

cash net Our net expense of cash fourth a EBITDA strong was ratio quarter very X.Xx. interest to interest adjusted coverage

an tower amounts corporate March the continue to securities, interest used of credit revenue XXXX an purposes. amounts XXXX. million is The facility date principal on outstanding the to entire of trust securities revolving final of XX, to were of repayment proceeds under use anticipated we our date repay fourth Subsequent X.XXX%. end, XXXX January of to November quarter outstanding on the The issued certain and under as the $XXX to million had for as well XC XXXX revolver. through repay have X, company’s repayment $XXX existing this tower fixed which quarter, hand general a and of company amount which During cash pay net securities, maturity the offering an anticipated these date rate secured

of our as have debt revolver. under current a is with our our rate years. of total today, is outstanding weighted current is X.X%. The average outstanding maturity debt average revolver And X.X% interest XX% X billion weighted outstanding on rate balance current our on million interest approximately $XXX $X.X The we of outstanding The of fixed.

the GTS we shares did billion any our remaining amounts a stock the common of under repay plan. We repurchase as repurchase of $X of have acquisition. During outstanding to we not revolver our authorization quarter, capital as repurchase currently result under million $XXX allocated stock

to X.X%. outstanding shares XXXX, December XX, December at XXX reduction XXXX, million company’s at compared XXX XX, The a million of were

In share close to a XX, of of Directors payable of million the quarter dividend quarter, of March during business record And paid declared addition, on over March or $X.XX XX% our represents today, the XXXX, of of as cash dividend the that This we Board per fourth fourth approximately $XX.X on dividend paid announced shareholders in share. quarter. an XXXX. $X.XX the per increase XX, of we a and dividend declared first

the I that, to with And now Jeff. over turn call will

Jeff Stoops

history. best evening, a operational Thanks, the fourth quarter Mark everyone. strong The and our of was to end years in good one

the in For has tower AFFO of including year XX%, almost strong gone per into year including Tanzania, of X% XXXX, had We We by year share guidance well. lease-up, the for best a for by X%. ever one the full market our internationally. we revenue entering our full for portfolio over which by a new beat midpoint grew very original very

year for Our of our revenue Services ever, for and a we services largest original XX%, our future. customers business expanded relationships setting the outlook midpoint our us bright best its had by grew up with and worldwide, beating

our the of same year. quarter, revenue leasing domestic fourth the the was growth tower During highest

during balanced equipment they sites busy contributions remain continued deployment of with new from quarter largest each bands. adding our All of spectrum as customers support of of them relatively the U.S. the in to

of activity we stay relatively expect we leases busy evidenced although the revenue outlook, slightly have in again all with XXXX. year, from our growth and good amendments expect largest be this deployment contribution to to domestic U.S. network during customers XXXX, perhaps below largest As by of levels significant carriers periods year experienced at still to our full remaining of the network XXXX and peak additional we needs. the Each

see will come. to portfolio we activity So our years we are solid confident for on domestic power

leasing another Internationally, organic we ended the year strong quarter. with very

leases in business contribution for amendments led is signed primarily fourth internal well particular, Brazil realized portfolio South Brazil growth our from gain in of the to ahead the quarter, result a from We larger-than-anticipated XXXX, leases. very the Tanzania, through expectations activity Brazil, year a quarter as strong we International came material internal our smoothly. in year. expectations, from the ahead XX% new the strong acquisition GTS Lease-up of a of In new was had, also which escalators. Africa existing and up in Brazil, leasing contributions had largest XX% and CPI-based During and by of integration very for going was markets. and

tailwind stabilized XXXX to rate foreign have fluctuations year a exchange over were and last slight results. our the The actually

agreement carriers relationship, issues our driver. that the with Brazil broader the are opportunities do may of believe we Brazil, particularly market. address and for to As our XG We an in options Brendan as X other major with recent in Oi entered we spectrum with in future consolidation into major there something similar growth long-term mentioned, customers X recently in great

relief always had One to continue to item we that providers. no for pay in including Brazil payments. debt rents We from tower operational expect collection watching their some date, of will recent their vendors, have injunctive and currently we to are issues. filing And must Oi is

with mobile representing Our approximately their revenue. financial to in to Brazil, of of is Oi X most other sale operations the given much our international Oi carriers reduced total X.X% of the exposure wireless recent

Oi’s Our sites of operation we are to long-term leases. critical and have network, the very

we filing. result, a impact As a latest will likely little this see from

closely. However, we will, situation the of course, continue to monitor

we to very our sheet, in strong on remain a Moving now position. balance

we significant maturity level a And During fourth in offering. the we of have new very completed X-year demand pleased rate our for address were interest the than liked, ABS was the quarter, the we would order date, to while offering. nearing higher with

to be access extremely continue with a good preferred capital. issuer We to

acquisitions very for While debt maturities when any similar to until environment, this be thoughtful XXXX. we With debt this to now use additional which be would we capital, do not Tanzanian of good have only a access will completion of the we XXXX. compelling current October refinancing, debt year issuing incremental rate capital, of in our GTS in considering have done

an payments. time only outlook, sheet flow additional and again AFFO the of largely in dividend in significant portfolio our a with year we from Even growth for stock capital us increase once XX% XX% GTS our steady interest our of the growth, and quarterly rate of debt us XX% with with cash This to our represents below investment The keeping us dividend. revolver still strength finished allowed substantial and our We announce adjusted repurchases approximately to XXXX of in acquisition, our increased balance nearly and the projected leaving leverage operations fluctuations. fixed, ended insulated the year our target ratio annualized for range. X.Xx, being of the net debt EBITDA

and The Standard S&P capital by below only strength Since the & our rating agency recognized investment corporate was earnings business of recently third one grade. structure BB+, our increased to our release, Poor’s. notch quarter rating

leverage, a being we continue pay down an revolver that the guaranteed of goal higher While not, a investment-grade a rate tactical and compared use good reduce generate we other to be to to of Should uses our have company. to development, a interest however, We the strong choice value to environment use AFFO long-term offer do and return we specific more of to capacity next for our views believe biding attractive financial and time leverage. building additional rates. be incremental opportunity in on for would the strength our stability debt provides not opportunities capital at issue shareholders change We the creation. and would a

external Brendan many and candidate The internal been I candidate the been be to growing succession as an of appropriately our years. CEO. CEO want appointment our of succession responsibilities. next internal has, working for I cons to with internal pros news. the search end next external on the an several planning leading have versus and as increasing and our We considered Board on years, for

and equal. investment involved confident our right the of bright respected talented in the His with of extremely without industry hands, known our creation. Brendan to have internal made and in shareholder knowledge and call. is are external and Board. that value He’s the future well We we adept as strategy an matters, SBA community. the Chairman an SBA are I equally and extremely in invested his get very and has future remain executive,

love for you XX in I my while I imagine, the simple. bit while little like reasons in reached spending It’s a at But this various and my I for XX reasons want grandchildren, of all as basic I’ve growing been Carolina with in can very where And Things SBA time. our years. than our charity time a very a life. some life home travel, still number involvement about do that can, So year. given running decision. South things work, to point but we do with are at spending more more difficult, I turned can’t more times family, consider believe time SBA full I very

things and right that turn clear attention, exceptional now the the it of time these our to became time vying for is With Brendan and next over to leaders. my generation leadership

and see want are financial can this on role when our call quarter I success that in a full played fourth XXXX I you otherwise or years. help strong. year have time all extremely retiring am and a from over SBA’s prospects of results thank outlook, you As the at to SBA’s

as I interact talented has able and relationships success. lead to larger partners fortunate who with individuals build SBA, others certainly have it our to and such have have group extremely had been constituents, we taken group the consider and lot, at of a opportunity to myself friends, business a accomplished contributed many. of customers, all have a the to of We much and have work

And ready with we that, questions. Eric, for are now

Operator

Ric [Operator the ahead. Please question go line Instructions] of from first comes Raymond with James. And our Prentiss

Ric Prentiss

Thanks, Jess.

in Jeff, as with fun First, them looking to role. fine. I congrats. Brendan, with have you’re forward new Grandbabies and know you I working am are going to your

Brendan Cavanagh

you, Thank Rick.

Jeff Stoops

Rick. Thanks,

Ric Prentiss

I bet. You questions, Two could. if

you carrier sure start all means? question. out First, that need actually customers do most they that’s what the to think demand are coming? spending do there, about for make are to you revenue get first wireless, think when as And what XG there exciting is applications the So obviously, and XG

Jeff Stoops

Yes, on needing the think until that to the comes to and have invest that ones ahead. category. doesn’t And a of promises believe get on. see on. question I I And ecosystem I think I that for make along, XG think, it’s wireless honest today when happens, And be that’s with that application that heightened cash that’s some not But name and what what’s and that can’t is too have whole question, in the I that, of Rick. free think, exists of the particularly customers, the our what is competition kind that when, you’re think sensible on sure of seminal far Ericsson the going And Street I mean going yesterday, moderate. to a flow from it’s if, and heard commentary is got to things you, all like to I based to sense we a waiting I

Ric Prentiss

have the for for we in loaded. the should it And and in U.S. site then items like the leasing pacing revenue of a growth million And loaded revenue $XX front-end the the one. $X of about looked years more rear-end think into boring major second million international. other, versus couple that question kind for How

are. little So maybe those what about that a unpack bit

Brendan Cavanagh

Yes, Ric.

of pretty first pacing of higher leasing year. we here the business a how we part the down locked will a the this first much the half end year. I the new That in success on the the But expect somewhat based second the dependent part breaking for activity activity So just growth would saw of be second half up year of signing half up with the half bit. goes of is at on slight obviously the mean leasing most in step is year, terms you in the in year. little your last of the were first in

other I international. were about that... on think the you Is asking

Ric Prentiss

think And U.S., What U.S., million million like $XX are? those it $X was we international. should

Brendan Cavanagh

Yes.

bag. So the it’s in U.S., the things. some which other, variety is And some to of will first there mixed then of the international, half. we of what that call, the we’ve assumed case pass-through are is revenue in There basis increases cash expenses, main a kind In come driver. it’s a

That’s to opposed those So that. just our an gets a things as of it’s bit little to change things year-over-year like the business the as really estimate absolute tend change grow. bigger,

Ric Prentiss

the the time of congrats, Again, Jeff, enjoy grandbabies. and

Jeff Stoops

Ric. Thanks,

Operator

JPMorgan. line And our Phil go ahead. with comes of next question from the Cusick Please

Phil Cusick

Hey, Jeff Well both Brendan. of congratulations you, deserved. to and

Jeff Stoops

Thanks, Phil.

Brendan Cavanagh

you, Thank Phil.

Phil Cusick

talk It up. about of pace of wonder And of last I expectation year. carrier this to year, pick looking sort of just slowing the that somebody if your do we acceleration you or customers sort sort for maybe this could visibility either What of down among be seems today? year. will deceleration like you assume haven’t yet, you have kind while others they were through

Brendan Cavanagh

visibility. decent got we’ve Well,

declining the terms year the a The rate of extremely from in second into Ric, generally, As couple to the carriers. expect half things mentioned year. we first growth of of We varies busy that last the be of had mix I were the year. just by to half carriers

busy to the be them but expect year, still not at perhaps pace. We this same

see picking driver, will the are So we that’s the when of and accelerate. I dependent timing really think on main be just up that probably those that

increased it it of was I more last probably So the and this if increase bit you at a pace at an year at little than a modest think the look it’s decline throughout year. year, look you which last year

Jeff Stoops

accelerates. think. let’s just versus see really, moving, up. one, several But they all more or are it’s We picking And not than what still I decelerates the delta say, what between

terms all have As they build-outs accomplished. what of you they equal in and their not know, are

and ahead be ones are likely ones go more deceleration accelerating. have the to have a that long So side, to the will still are on way that furthest the

Phil Cusick

pretty the current Is mentioned we’ve Jeff, acceleration fair the you’re it orders the cautious in a acceleration you until guidance say build on that guide? that been to few in to where coming past in through. you’ve your that fairly years cautious in see

Jeff Stoops

yes, the But individual certain in respect we I some an not is to the will acceleration aggregate, guide with that U.S. carriers, aggregate, In there mean individual again, the XXXX. carrier. know to be just

Phil Cusick

thought if you. on just where Thank then a do now, and clear I one lot buybacks made how at borrowing price can, current coming today more, the that either sort make for stock I around borrowing going sort the of think And between stock current you given of buying Or are in right? waiting was money of that think the markets terms interesting. current about where rates opportunities private math was sense and the ratio of about better Do you the didn’t you quarter, you are? will then rates it accretion. just Last rates start the anticipate to your comment that change? do

Jeff Stoops

pay guaranteed accretion, least a have you repurchase. today’s the is acquisition X%, on or a right, revolver, the with to Well, to corollary XXx, at XXx back. And return that AFFO a stock that

opportunities against do to and picking question right may this to that the year be and will that stock cost it’s time do going always and We’re a right of very capital of well debt Phil, that. – we really there may the be repurchases,

narrow I is very gap acquisitions, did look. a but gap. financially-driven. is to the think GTS, still a like of But we or starting we the a market we’re take little there Tanzania will opportunities if hard we And do see terms In bit,

than look I over do come to repaying medium have that will better, mean we we revolver. short, term will something And think down rates our interest long, time.

have be We X% that the when will going that debt we side great reduce doing, happy to put that time. to wait incremental will we’re plays what they of be access prices time, to we over that Fed will interest on inflation know to a in that have much position And betting effect to out, ourselves and are and accretive more itself for do rates. and at the on what that we’re

Phil Cusick

Great.

Congratulations you. thank again. Okay,

Jeff Stoops

Thanks.

Operator

And comes ahead. Flannery go Stanley. the line Simon question with next from Please of Morgan the

Simon Flannery

leverage, Thank you, couple leverage level. Brendan. the evening, congrats Jeff X.X%, times, Good below to On think of I noted you. and and a you’ve target

So mid-Xs, X% there getting environment long-term it like referenced of even in to no the is to despite change rate you sounds target X.X%. though really your perhaps

Just companies? in wanted your of to carriers the on portfolio. those on would call with earnings that? And that activity half could clarify spectrum peers just you three great seeing of January then what in adding only comment about seeing to big one are your mid-band their they their the It noted be from if towers you’re

Jeff Stoops

Yes.

the we at additional create But may temporary We an of prices don’t, You’re until tactically we we’re we value, steering absolutely and thinking than only you not. do, about X%. how if will – we time the what may see believe time that we paying we what we down of do. And will much said deleveraging, the we’re about be as that’s the is available a period debt – if incremental will looks acquisition be at leverage generate cash will better it flows is correct, tomorrow and result Simon. that that but such that’s what revolver then will natural This do.

Brendan Cavanagh

on half only the others Yes. are what adding talking And speak the then sites, the to mid-band about. can’t I carriers

sites yet. have and the lot to with will a our the A message it over that, is is expect go, expectation still come years. vast and I way of belief to customers, sites. their And will That of But to majority we think, which have communications been backlogs our based been coming add long that our the here. they it’s think related parity. overarching there where comment may I they that on today, touched not are

Jeff Stoops

Yes. speaking if actually for three. less today, bit on think a And you’re little aggregate that than actually, the all we Simon, that we’re

me to asked ties left lot a I get really I going – is spend what there the that going do app that year that. But Ric is it see to everything work we to to have is done. question first XG to and impetus think XG carriers the provide So the this be into cause to of is to the said there, app. the XG killer app,

Simon Flannery

Right.

probably where to is XX% you growth. necessarily this X% not will year hit portfolio a So that

opportunity were last it you’re to but year. you’ll keep You the up strong of sort going just if not do target. to it, that But there, do is

Jeff Stoops

at what growth, no. that if of we’ve I XX%. north of over portfolio years No, on look you And think done metric XX we’re last the

So it’s do did This may we that that, last not year every year the year. be not necessarily. XX% but we

So I and views changed. leverage think portfolio have around not our overall, growth

Simon Flannery

Great. Thanks a lot.

Operator

comes Cowen. Please And Greg the from of Williams next go ahead. line question the with

Greg Williams

for Thanks my question. Great. taking

Just and congrats Jeff to Brendan. echoing the

Just could capital two private revisit headed going be there and in up to that’s M&A assets. going mean One bit. on to come the question. eventually the dry seems I is is multiples down camps landscape – where private the are some – a is sideline private wanted to believe multiples on to

will for rates should of I’m assets, especially stay just waiting curious assets views. hear The sounds elevated. stay those the It so other to camp, and on U.S. come thoughts to down the the like multiples scarcity you’re your tower higher. multiples

understandably I type Thanks. service year-over-year? margins. how service on and revenue service think just levels. activity is question the down should coming But of we about your the record Second margins mean is from

Jeff Stoops

versus multiples. rates Well, I mean

relationship over at other. should a one the analysis, traditional lot look years. see didn’t kind there We of between the and any you that a be If of last couple of economic

and little had, have starting way to change gone we at least up, did have will bit, have not they a see. math. to multiples the As rates drop really our using should That’s

on have returns push long-term across will see of capital sidelines in to amount acquisition the will whether We market private the the board. down the

to We’re not prepared returns. higher and invest goals, with got and pick choose. those we We’ve

And we’ve be that the to with I it I pretty invested think versus think but we’ve far, we’re seeking, pleased so seen. return the remains been capital

Brendan Cavanagh

of – that’s question, sorry, whether our on and site assumes just services And margin then Greg, a on your or in shift a services construction for this work lower it’s year, outlook mix work. slight act shift margin based slightly of primarily type the mix

a of the a for stuff some standpoint, mix who impact. from little doing and lower we’re big it’s But out. a on up how also what will slightly shakes construction it the picture will a has have we the If is the bit and projected. usually So had from work type margin, results same, last than fairly see ends we it we being small drop year, better work we

Greg Williams

Thank it. you. Got

Operator

the And of with ahead. Please the line from question next Rollins Citi. Michael comes go

Michael Rollins

the the and call transition put Jeff, is question, feel XXXX But And first XXXX I just leasing it. and the been saying growth? greater this realized wondering realize half of guidance. preface if over look that opportunities that about us like this if just broadly you’ve today’s full secondly, if hours few might you it more around year some on opportunity, X to on on next like accelerate hasn’t can release that a the investors way you’d the U.S. since an to could those coming made there in you growth could the keeps For is the give some given decelerates, how program by But does multiyear update that build-to-suit what then I’ll And up mean XXXX? get question portfolio I even years. about of both in you if a what And guardrails some color for business you comments more put to in second prospects.

Jeff Stoops

Yes.

a there at and Michael, how is will the and of fast assets ultimately, want multiple far work leasing, how on But what goes years’ that pace to spend think how done internationally depend left deploy think XG, worth of to I much and carriers our whether – work. on about be way lot domestically to money. we is

done. work So a it’s lot is question But of we we’re – the a yet going confident going done be to to – what just It’s left just tremendous. pace. and is is when to that to at occur. it’s physical be There

could going – they that spectrum just were all the are forward. to take could that if bit to because be money seems you spend that take they you guess a on, all the you position that deploy never but I a that, Now well, naysayer,

we more is are the going could and change weighted are a half business of XXXX, pushing very we that the in looking that guardrails right first certainly the U.S. are back activity, pickups terms now, to we that And heavily are in where in than internationally. on half. at. those based So, both have the build-to-suits, this And strong line, and

the area. We continued in that that investments make financially-driven be in we to

are our and seek going ones every capital. that think But take view, not do try appropriate we goals. and is on least the all an those build-to-suit So, to out fit we in return at necessarily,

Michael Rollins

year program? for curiosity, a returns where are just one the And build-to-suit

Jeff Stoops

looking X%, there. that’s that’s every returns, XX%, and not cash-on-cash for are We XX% opportunity out

Brendan Cavanagh

analysis Yes. M&A, the deals typically bid are on And new will different not with are vary that a They these And opportunities handing is multiyear. lot that competitively depending opportunities. opportunities the it of than that’s where bid situation. frankly, obviously are. just around for is specific build competitively out those with the Mike, like Year is M&A a one carriers

to our best there obviously are able when volume we is opportunities do build, we less. find So, strategic the but to

build-to-suit opportunities, a are the financial decision. On making we

we we to returns, we are there to our selective financial just about So, it’s like but like M&A would the will continue all market. be on so certainly portfolio boost the and numbers,

Michael Rollins

Thanks.

Operator

with And next, we Please ahead. Goldman Feldman go Sachs. will to Brett go

Brett Feldman

if the wasn’t to just you and than anticipate tax your as something pointed AFFO. a to the be could the the Thanks. sure will you payout year. of your is assets on And of I a of that low higher is we AFFO, to or I some income? a any able the And or few this relatively still the flowing percentage there be pressures quickly that are remain related over payout a that going very inflationary taxable just year your the through portion P&L you to in step-up looked low that Thanks. else’s thoughtful of out SG&A dividend where at both, is need about wondering next payout the component of do And everyone congrats thought. years? we quarter, we Jeff echo relative model out next in terms you change that am acquired questions. maybe Two One, Brendan. the then to little if are that’s I

Brendan Cavanagh

Yes.

on dividend first. so the I – one Just will the do

is the pretty have $XXX believe NOL number of million We significant somewhere end of around I year. still. the as of the NOLs

us grow our manageable continue certainly on And runway, at I same if have dividend we we although each AFFO we out. we model how got we So, the our many, it that and a grow should based to years gives able it to percentage at of be left will year, level. think a decent pace been, have keep many still

the outlook On certain costs. giving average, SG&A is in did our are our bigger forward, Most bigger we And around people-related this largely we people include are side, in have of that we SG&A inflationary-type years. than going on increases increases year past to costs.

cost of and marketplaces the to be Just we is also living are in increasing, in. competitive that

it it’s nothing on otherwise. that, I think particular, is there in mostly out So, call to

Jeff Stoops

going ought not increase would echo same assume be Thanks. pace of that Brett. over that’s you to I But multiyear Yes. period, a the

Brett Feldman

Thank you.

Operator

with SVB ahead. next from Deo And go comes the question Please Del MoffettNathanson. Nick line the of

Nick Del Deo

I ticked in bit. typical these business echo as lines? contract wasn’t in my down questions placed to upcoming consider Hey. of on guess expected? changes. in course and strong Brendan, Thanks congratulate both to and along ‘XX kind QX changes magnitude and your in under taking Are noted and as I you year-to-date comments Jeff your you also the in other’s the about can want and remarks you of a what And the QX for prepared you of be share those of again, seen revenue anything first, the have you backlogs quite that have

Jeff Stoops

to basis, of last charts a Nick. We going XG the about charts the are XX of the have over some – actually time really of activities part today and of upgrades. mean was to deployments on they – – we quarterly are clearly looking back internal longest years, XG period cycle I that the pace the we seen this wireless one before at of

because somewhere, So, and losing they amount it’s left. our things that. to a made two community. some ground be kind a deep assets, comments And on thing the yet is going unusual. work this free I competitive And would great promise I to the think is we our did XG, and physical at what their flow, from is Are not least they investment balance coming But lot bring customers earlier steer about there is down, simply is about. the of care done there of now to cash a what’s what there really of still that temporal being people to because pressure

Nick Del Deo

I also then you agreement drill a wanted reached little down And into with Okay. the to bit TIM.

be that the to extension? of would about just in TIM. aside you from Does term expected from benefits And any think generally. your from I of care $XX Oi said churn million SBA in there about that more take think all XXXX. Are churn there Oi

$XX should tighten done, deal about to million in past, other or $XX assume, now million call you think $XX we you some? million from said that $XX acquirers, up you total I expected the this to With to million are it, churn. in the able

Brendan Cavanagh

Yes.

There in ballpark, GTS the based be all not consolidation-related TIM. account would more churn we it’s agreement I because total little you be should the if struck. recall. of Oi that would of bit the on remaining This yes. that The for with the First, – acquisition say any a higher would

So, I million. minus to – $XX sorry, XX% XX% $XX would $XX to it million, I call is total million that’s am a the

we mean with the conversations. things have we there – are other where go I yes, will we I see So, carriers as down think

it. for but are to TIM, seen, this those be be would Nick? So,

Nick Del Deo

term to sorry. then our from from Yes, extension, nothing side And else the aside of the consider deal?

Brendan Cavanagh

the there are discount variety commitments and other this gist smaller that including I commitments part a business agreements main entire commitments. mean things. accelerated and some of future some is across are Yes. business are other as agreement their portfolio, of leases, is related non-Oi to the There well, there long-term the But some of some things.

Nick Del Deo

Okay. Thank you.

Operator

from ahead. the go Barden of And line Please our Bank America. David of next with question comes

Unidentified Analyst

Dave. is This Alex on everyone. for Hi

know congratulations for our ramp we just send then recent international Maybe on and exiting that to I the in kind Thanks. both you cadence the Brazil. on through the touch kind year-over-year, year? the carrier first leasing as to should up Jeff presidential that, should just the want – just just some just touched and I auction on off, maybe Could see as And of you of flat year well does Brendan. of you last First new the spectrum that election expected XXXX? dynamics

Brendan Cavanagh

year. throughout about fairly be year. a be Yes. carriers The I the other really – I pretty of balanced those auctions other mean cadence should the auctions. it then Internationally, U.S., steady expect revenue hands U.S.-related. on would that’s spectrum these to in the decline, the we XG leasing when we throughout the put Yes, sorry, am international carriers. the – And are talked into the Unlike we in have

some is of the we order years as done actually they it’s beyond get now Oi, be With we But it’s be going I of kind merger. first U.S. that pay now to in here to in get believe spectrum going is to and long-term. in to compete much to way services, think consolidation beyond be expect this the as big these to – post that Once only they the that year investment growth get synergies, believe positive there X to or XG on of the put network a they going forward. markets, that and to leasing in to it we here as off. And quality need driver will other more just work work happens

result. is in of Brazil a opportunity lot as longer So, believe we term there a now

Jeff Stoops

group And Bolsonaro took the but the landscape, obviously presidency, in terms of of rest Congress. political the the Lula took

that same it’s the endures very when have which And is occurs have ultimately, to split that think the anything States, I benefit here, get materially. existing a the that hard to typically similar which you of Congress. done And what you United is it’s happens, businesses. So, there to

So, current you anticipate kind we we coming out. in split anything representation, landscape, where – material that don’t a have the of don’t

Unidentified Analyst

you. Thank

Operator

Brendan comes go of next Barclays. question And line ahead. Lynch our Please the from with

Brendan Lynch

a on new could you Philippines Brendan Thank to developments. And could lot Tanzania. potential and Maybe discuss give of congrats was if And you new correctly, I related There heard and Thanks. the but what’s some us did up tick you markets Maybe and on update behind Jeff $XX that. questions to then an Great. the Brendan, on any M&A. color accounts receivable you provide Oi, collections weren’t quarter-over-quarter. there issues million secondly, about

Brendan Cavanagh

Yes.

were down timing really fall of issue will as over payments On It’s made, the holidays we last of one, actually a plus and where simple the just collections AR is expect because services-related the actually terms in tick-up there year-end. where come the time. were that as some

Jeff Stoops

Yes.

new In an terms of M&A, to approach I to mean opportunistic markets. take we continued

into a and go operational country our based stability, market currency. will as We analysis new on as well demographic taxation, risk,

under So, our Tanzania doing opportunity. of any optimistic the country It is a Tanzania the a that growing, we with is well. dynamic of in future very not country that about is are today certainly the look some we we never internal are into is exceptions the that that ahead very circumstances, and in go projections is and acquisition. And did potential to current time we modeling Tanzania. at would

Brendan Lynch

Okay. Thank you.

Jeff Stoops

question. Next

Operator

Batya Levi line the with of Please UBS. ahead. comes Next go from question

Batya Levi

Great. A you. both. couple questions. of Thank to Congrats

amendment is the timing, on both? of carrier carriers too decommissioning is you the of First, just or you. or in throughout that it started from that early some out where actually you that or it Is going that out, have to it the Thank to some not year you churn, incremental wireless mixture And pan activity region, see activity a domestic do support tell? been truly you to the last they or extent pushing to it service, so. activity see think that anticipated fixed is have

Brendan Cavanagh

which timing. the merger-related truly On churn, is domestic all just the is T-Mobile Sprint, timing,

that don’t in incur takes the get We little will total just the kind think of that we we same it to of bit expect as any have some expect We to what but amount longer will we past. that a be done, the changes. guided

Jeff Stoops

deployed would so seen the it just and wireless, product network spectrum. as we results really terms that in bat in fixed And of least anything off lot exists that clearly what after have that haven’t they mid-band of say currently from macros Yes. believe customers yet, at where capacity incremental. the that our we works the we That basically excess identify existing a a particularly is

where Although but seen yet. help broadcast there initiative. happen comes we that microwave, some hope obviously, have would pass, macro with wireless the millimeter that wave been spectrum off just to haven’t to the reports fixed be sites We

Batya Levi

you. Alright. Thank

Operator

go with And question our Nispel ahead. Please comes KeyBanc. next from Brandon

Brandon Nispel

way I my the everybody a to Brendan, at am Hey. million, has for you, million just for a the questions. $XX the Thanks guidance for on am for ask leasing, for else I this exited numbers. question you afraid going different it. than this quarter guidance leasing taking $XX about But

So, grown an in historically, Thanks. rate $XX have that guys And exit rate ‘XX to seems in holding ‘XX that million keeping then $XX cap. imply it right? terms versus forecast $XX to What million. $XX the our that I steady trending is factors million exit million swing in lower? you ‘XX as leasing building maybe of by the new $XX be of $XX to million would million exiting guess about if we to think around level, are for you

Brendan Cavanagh

would impact signed pace our is What have to that not it’s swing on terms pace, the going bookings but of much in it million drive this in after assumed it’s in Yes. our up what That new sort will not happens happens in have Brandon, dependent what is impact $XX that right range. it pace, happens what will ahead assumed obviously, our the to of that. of That’s in the terms during XXXX, second we where on would it’s terms year, exit half of we of ballpark, think XXXX. If that what’s really of number. going in that of in on much

year. based to able half the about biggest the obviously, business what’s that, to So, signing little a are it’s impact to early new be talk of on but terms second happening we be is going of this up in

Brandon Nispel

sort your capital lower of guided guess spending I customers of follow-up us in to Two and have on ‘XX that. a ‘XX. larger just

better another to to what the of Do be be going I be use leasing sort we of in $XX massive XG spectrum new ground curious would get So, customer? XG the ever need to going drive a densification number there that see million. sort sense Is of case, am a existing bands? of to than It’s another holistically Is regard. just a new it of thoughts around more trying spectrum to your auction?

Brendan Cavanagh

Yes.

anything of really at it’s are how more concentration that of usually hitting think all a function else. I many it than same our customers is on the time. just cylinders It’s

biggest have when lease-up of time. biggest Our driver. throughout that’s our the customers busy all same have at Usually, come been our periods the history

it total. you basically doesn’t it just have change do necessarily out more, it them time, it spreads If the over but

in certain course, clearing So, are that’s that. of answer. things spectrum got well really specific. I more at of That the that’s a as DISH C-band be I probably there other there end biggest obviously, activity are with year that could haven’t driver mean are that the out mean They has obligations deployed levels as them. this to of T-Mobile’s any XXXX. X.XX.

that is given point to things there terms timing. at a those to expect that by incremental could you drive Ultimately, site, be accelerated when time, that’s drivers really of things just specific to seen of of business of happens. a to the could we question it’s that all a though variety our activity of in be carrier but in point So,

Jeff Stoops

and throughout just the add, goes comment comments. I would Yes. And all this

with are to careful going is other what going to spend commentary to of They I decided customers. competitive ultimately, the to they under not We and to get they to capital much – and have they mean are are been with going money we decide money the to dynamics. question answer not our how spend. our guidance ahead they going they our need change are current spend that of your amount the

Brandon Nispel

you. Thank

Operator

with Street. our question Guarino And Please David line ahead. from go comes last the Green of

David Guarino

Thanks. I questions both your guidance. upfront. on will Two on Hey. ask

you or I center markets, international number – on comment wondering your like in no year. for other discretionary CPI up CapEx then guidance in Thanks. Is there it’s the why if looks And type seeing we higher acquisitions investments, significantly given driving is going CapEx escalation the last why in versus I to are guidance, is on flat year, data was that any higher could year-over-year? are there, growth last one included that ‘XX? your that that’s we it first just on am pretty but there assuming be some of The

Brendan Cavanagh

Yes.

elevated escalations, the international was amount dollar XXXX. flat. on during So, the certainly The is CPI

by far, international year, XXXX. take We our it is in – of place are impact. escalations when those it’s to projecting be market it’s in has largest next But lower Brazil, the lower which while timing an

bit So, particular. benefit acquisition of some some have some a we assumed base of ‘XX, in lower that that escalations our then and business, over of of of carries the course, with benefit. higher Plus, into offset the little obviously rate of bigger GTS XXXX,

dollar put So, the all that amount come it when the of about impact, we rates are with we down CPI but same together, year-over-year. assuming basically you growth up ended

in, contracted the and you of lumpier which only discretionary an it’s made guidance be of what center disclosed But kind actually there we M&A The have there balance offsetting otherwise as our rest builds, that in those investing that’s increase. networks made we discretionary much So, everything a that of hard release. because the under might is press are there, going we that DAS to in data around CapEx, the to obviously plans, we But an sitting up that’s some else. here reflects our what is on include today. new assumption around identify around thing how upgrades, the assumptions is don’t amount basically small assumptions. investment in M&A around see of of is contract And

David Guarino

Great. Thank you.

Operator

And to we the conference back have over questions queue. you. I no will other in turn

Jeff Stoops

you And thank move us. to year. joining XXXX everyone We through we forward on you our progress Thank look you, in advising the for Eric. as

Operator

AT&T for conclude for conferencing that gentlemen, Thank you for using does and and service. today. Ladies participation your our conference

now may You disconnect.

SBA Communications (SBAC) 21 Feb 232022 Q4 Earnings call transcript