SBAC - Earnings call 3 2023 | SBA Communications Corporation

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the SBA Third Quarter Results Conference Call.

[Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mark DeRussy, Vice President of Finance. Please go ahead.

Mark DeRussy

Good evening, and thank you for joining us for SBA's Third Quarter 2023 Earnings Conference Call.

are Brendan our Officer. Cavanagh, today Executive and me and Officer; our with Jeffrey 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 expectations. risks and call may SEC and discuss beyond. differ including, detail any results to, on not to release guidance we for but information that

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

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

it will over Brendan I quarter to third that, now discuss results. to our With turn

Brendan Cavanagh

We updated solid of outlook were Mark. expected. another and our exchange and Based you, our tower EBITDA, adjusted we have in Thank expectations. notwithstanding flow, quarter, fourth that cash our had had evening. results with year AFFO revenue, leasing ahead for QX, expectations the Good for per we previously results financial than forecasted these very quarter full foreign site rates weaker share, currency AFFO increased on XXXX

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

of headwind compared for compared quarter when when million represented XXXX. third with forecasted $X.X $X.X rates and quarter, the estimates of approximately a FX the previously exchange rate a benefit Foreign to million our of

calculated on of impact was XXXX, currency revenue churn. growth third including X.X% for the Same third X.X% quarter tower which the basis, the leasing constant recurring is of quarter, a of net over cash

leasing basis, gross growth On same-tower X.X%. cash a was recurring revenue

X.X% was recurring cash including gross on a a X.X% and year quarter over same-tower last net X.X% third churn. basis, leasing of on basis, Domestic of the growth revenue

from the in Domestic up third the new master operational signed primarily as a during result contract of placed revenue materially quarter July. the representing leasing second bookings was AT&T under agreement activity quarter, lease or

the of major levels impact remain networks. to activity the MLA, All their active quarter. the with AT&T quarter carriers third similar Excluding were second

levels However, to than execution continue a be ago. year agreement slower

focus naturally cost by This higher over of which caused capital made. extends and network a being control has the cash dynamic our expense management on XG-related customers. investments are The timing

with for There on operators. investments go the the network is that a of deployments mobile by sites to XG our upgraded still based way mid-band long major number remain to network spectrum be

fact, with availability, many in Wireless confidence data years organic certainly to use that combined gives This infrastructure and leasing to growth spectrum domestic will continued the require service limited over continues time to great additional to us materially, grow and enhance quality. come. for maintain

slower due a During pace quarter, prior slightly decommissioning was leases domestic legacy the third we projections than below to Sprint our had projected. of of churn

overall churn Our will but years. in next same, the expectations this the timing remain over realizing there variations several for be to likely of churn small Sprint related continue

approximately be related X% Sprint to prior with expect million. our domestic in X% line million. continues be $XX revenue. currently $XX We and churn currently of leasing to related between is related range was XXXX XXXX and Sprint churn churn to Non-Sprint domestic for projections estimated our

a X.X% third growth basis, including a quarter or basis. Internationally, net, X.X% churn cash of on gross constant currency revenue on tower leasing was same X.X%

of third again International and internal quarter in ahead our was the strong leasing activity remained expectations.

and of investment be our pockets service our drive conditions will wireless we across internationally, our opportunities continues number elevated challenges macroeconomic dedicated coverage to customers, we desire The need for leasing portfolio. of continued continue and a to network global across of and have to present enhanced While expect to markets. carrier see quality

is markets international U.S. Wireless our data growth in greater even the than

steady from see to many contributions escalators continue our inflation-based in also of markets. We

our impact inflationary TIM by X.X% was the churn, including also again X.X% on Brazil, our significantly constant a growth net which market, agreement. previously of the impacted currency index. the largest The was basis, in rate a In of Brazilian decline rate growth organic growth same-tower international rate reflects discussed

As does include to consolidation a agreement. any related with than the churn reminder, assumptions our Oi outlook XXXX other TAM associated that not the

carriers current arrangements to However, we Oi year discuss on our an international continue that consolidation the churn. potential impact other with related have could to

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

Tower cash was $XXX.X quarter flow for million. the third

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

quarter. Adjusted EBITDA was The in the in $XXX.X XX.X% the margin quarter third was adjusted million. EBITDA

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

services third operating $XX.X profit. quarter, of in with another million solid million business quarter, segment the our During $XX.X had and revenue,

our last activity all-time of carrier high customers. on year's backlog levels, off high-quality, high-margin and we execute work While deliver to continued our for

the development our across network million year business we for our However, industry, full $XX carrier related slower the site given the lowered have at midpoint. by pace of activity outlook

this have and from and our to EBITDA Notwithstanding to expected we adjustment, contributions adjusted business. work. our focus manage services margin on not And lowered AFFO XXXX we continue thus, costs high-margin our

our XXXX. history, We still second XXXX largest expect be only year the to revenue services trailing in

AFFO Adjusted was of of X.X% funds per increase XXXX. the AFFO an $X.XX, in over the share $XXX.X million. was operations quarter third third quarter or from

in quarter, additions to for of XX to sites building our new the invest cash third and we acquiring communication million, During $XX.X portfolio, XX continued consideration total sites.

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

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

easements million lease of terms. buy quarter, and $XX.X we and ground land During spent to extend aggregate an to the

At ground the life the more years land or owned towers, of average years. XX% leases, remaining our approximately our quarter, under we the including renewal the underneath approximately control, controlled for end under XX than of and is XX options our

very I to in extensive our telecommunications our team. over of be Before Marc like I'd take X. part will new quick and to as joined Montagner, as turn are CFO to and have him and finance, who to on welcome the things taking him background in over Marc mid-October, Mark, an moment team January with brings excited a we

of over I I also if and that have me friendship he fill, is take not to and shoes am to recognize would call for I big SBA. this the be extended call earnings remiss XX grateful the guidance has did years. to a the final I as CEO professional last Jeff's moment

provide And on with balance will now that, sheet. who turn I an things update Mark, to our will over

Mark DeRussy

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

turns EBITDA than Our quarter, leverage net debt decades. lowest annualized last of the to and ratio lower was X.Xx, level adjusted X.X

increased ratio Our interest to adjusted to of cash EBITDA third interest net quarter X.Xx. expense coverage cash net

our facility. as our During revolving and $X.X today, $XXX revolver. subsequent amounts credit we quarter of repaid under end, billion And to balance a million have we under outstanding

outstanding outstanding approximately current average rate rate The debt is current our Including interest XX% of of of on debt maturity a our fixed. years. rate balance The on total X.X%, our weighted our outstanding position, with is weighted interest interest rate X.X revolver hedging X.X%. average current the is

stock common share stock and remaining million $X of plan. During to an repurchase $XXX of billion subsequent price at currently we repurchased quarter, the our average for We have million $XXX.X under X.X million $XXX.XX. repurchase authorization our shares of per

The were $XXX.X XXXX outstanding at shares company's September million. XX,

addition, today, XX, of or Board a fourth declared XXXX. during December $X.XX on the In Directors It's million, XXXX, shareholders per declared dividend we our as a that of XX, $XX.X to on share. of November our and of close $X.XX of business share. dividend we announced the record And quarter of payable per quarter, cash paid

of AFFO. an the ago of represents over XX% approximately paid XX% dividend dividend and period, the XX% increase -- our year This full only represents year in projected

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

Jeffrey Stoops

everyone. Thanks, Mark, good and evening,

execute customers in carrier in ahead third continue of the and We to we quarter. to financial them expectations, partner well results internal produced their We our and valued helping external network continue to to meet be a objectives.

as to the bands Each XG equipment of our to coverage as new expand U.S. through spectrum add to sites customers largest colocations. brand of continue well deployment support in of new through

constant than the Although and revenues below and continued typical current environment, Even grow enhancing are in the still couple have carriers need steadily networks. a a to cash flow. tower years, last in levels wireless pace slower their our organically have invest activity of to demand expanding we of

growing assets high-quality business relationship support, providing and we quality to have By each them been continue services our our customers. of major leveraging our with able

addition, release in growth In years investment continue to wireless is additional will confident slowing next plan and strained, with usage need anytime our network and The mid-band wireless still significant material are several demand be have over little be materially. deployed for spectrum that as we the to down, networks not will additional continues spectrum be to grow there customers soon. data holdings

for portfolio us the focus tower most participant a to make effective are deliver network way growth come. connectivity, key our many years efficient to and still in Macro and sites high-quality wireless on will

Internationally, strong with had We we Central quarter Africa. Brazil for solid experienced we greater markets, organic of South had including activity contributions than anticipated. broadly again and another our also leasing many America,

network. again Brazil, big busy, of our and was in wireless internal ahead the expectations, X Oi of carriers outside the coverage our remain each market that expansion, integration densification legacy largest U.S., of with of market and the

up expectations, of our is those demand in and customers customers growing ahead evidence also Lease the for of need wireless American of to Central markets. our of data across markets the wireless meet many constantly was

significant and operational I'm needs markets. network future for on many execution pleased our our I'm the of across based optimistic internationally, with

strong cash and for very the healthy third we significant again During discretionary allocation. quarter, dividend coverage AFFO, providing generated

allocated high-quality new additions and to organic sites that quarter, acquisitions our we the in selectively future During new we both and be builds, the capital additive adding tower believe site dividend to years. will through growth

prices very good value nice and We share on represent at a believe produce repurchases will also time. over return spent we $XXX a million

immediately adjusted growth debt, in quarter of on to benefit paying ending with X.Xx, in balance continue produced is believe interest reducing adjusted ever in our this the of highest We a net solid public level outstanding We our revolver. some also continued our company history. debt our EBITDA leverage lowest the from ratio EBITDA reduction obligations. our The rate by I along cash down which outstanding

deleveraging power leverage growing growth, and we turn months, reduced portfolio have full our repurchases XX dividends, the of stock in X continued with last Even almost our business. demonstrating the by

leverage At optionality have this near-term level, achieve believe an to rating. investment-grade the we we

the we for However, allocation order being, to all time flexibility in options. comfortably are capital assess maintaining

expect dividend years we of our the rate low our to ratio. higher next rate maintaining a forward, the at a than AFFO Going growing payout several growth over AFFO continue of while

And will of flows directed debt, for cash buybacks. opportunities likely as portfolio is will, repayment being, beneficial the excess opportunistic and additional term. the most and of stay short also future stock be is it we the course, term also around time into long But accretive

balance XXXX, that with under operations have from entirely shape, our repayment maturities revolver. the satisfy to flow Our remains availability great we until cash no and in sheet with or debt capacity October

comfortable current the we capital are to thus continue around of Overall, very opportunistic good financings. access be about very to have We position. our to and timing feel good future capital,

of have this earlier, these this to have as call be the honored XXX earnings CEO organization XX and years, the been calls of over I SBA. the approximately mentioned of on final Brendan time with have this call. many spent the represents participated appreciative in of I years. my I for past As leader of you

team shape, Thank your I goodwill with satisfaction company lead knowing and management throughout know SBA enjoyable support in and this the ride. will it I that to the you and is heights. very great of with new will comfort great retire for a

customers thanking our to by success. for and conclude team I our shared members want to their our contributions

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

Operator

our And RBC with Instructions] [Operator question goes Capital Markets. to first Atkin John

Jonathan Atkin

for question Jeff, I tenure maybe given the in wish industry. want you the your a to all best. And you,

many changes. have and lot a company of your Your of of seen kind peers

at company doing was shared backhaul. one think I wireless your point

You've data gone centers. into

DAS. like You've outdoor things evaluated

active be observer, we about anything see should that, company of you investors? But it as any brush you sector model structural the on ancillary But way the changes see out for looking an imagine. your that affecting of that broad or the as as anything I tower to kind

Jeffrey Stoops

been that there's spectrum in John, and in the has years, necessary its XX XX, physics think the works. laws in way wireless steady my a really over connection say, would I of roots And growth demand infrastructure. between I radio

fiscal like We've more be of seen perhaps repeated prior cycles I time. it's current elongated our over going to themselves The demonstrating. didn't some own need than deploy cycles demonstrate it seems to feels particularly are than that will Not they it. think that racing and over cycle have prudence the as bit higher years, a they when customers it the be priority they spectrum, which deploy to a but

the haven't changed really But basics much. that

macro customers We We any communications. that to that And that, watch wireless continues have us the really haven't backbone. basic model. sites to the and the the technology satellites macro of And expect obsolete watch site backbone like we conversations the with and they small be our to seen will things we tell power really continue business cells. be

think twists and ago. it downs was So But it ups the think pretty I -- don't directionally, much and I and many turns. remains always there's way years

Jonathan Atkin

and perspective. cadence demand on that That's next the as journey the kind the But operating great of one thinking guess I be forward, the trends drivers, gets the spectrum the kind Great. of the year deployed as And sense towards XG might continues any further so. you. see kind and over of directed of it to MNOs? the would behalf or Brendan,

Brendan Cavanagh

Yes.

them, increase early expect based I year customers into be needs have. that lower they've I think, time. There's that part a for that has will just spectrum on that our conversations been, to I And they work on our there of be but of see John, would things of with answer deployed we the a over in are see really that still than we'll . mostly heading quite probably certain our customers to bit still there's to to on out that There that the meet. next be that have some sites. of based done. need deadlines suggest ton And

little needs as of kind data to I moment that But as financial and in increases. think, more a start cost to, way current But I of network bit give naturally wireless a mobile control. consumption to think there's Jeff will the in alluded focus on constraints time, and

year. So I that would we into it up get expect start of to as see move we'll middle next the

Jonathan Atkin

Jeff. the best, All

Operator

with Our Raymond goes to next Prentiss question Rick James.

Ric Prentiss

with of I've calls on think those been earnings I Jeff, XX XXX you.

fun So grandkids you're with I'll charity so I echo and know Jonathan's active comments. your And have the with. work

Jeffrey Stoops

Well, Rick. a thank We together. you, had good run

Ric Prentiss

Yes. to dividend rate I dividend I that, comments want the to growth AFFO. over come The a policy. appreciate of rate couple of items. on the

of ratio as versus at total about payout time? over versus should others are that do to qualified it looking policy, at the kind subsidiary, tied be kind of looking the Some AFFO. towards How think of should the the dividend dividend in the subsidiary you minimum the have versus AFFO, REIT we more qualified total and you all think REIT space about you

Brendan Cavanagh

fortunate Rick. which in, some we be NOLs, gives we're us in We're to where flexibility have still fairly actually that there, sizable Yes. the position

you it a as look a we as, But -- satisfy and order out mix and paying maintain at using of it of REIT NOLs produce you taxable amount income, dividends certain of kind in through to our compliance. and

necessary fairly is to so continue a we to at comply that which when exhausted to has that at -- greater by pay pace that REITs, at degree, and expect a I AFFO to share we grow certainly whatever REIT our NOLs, those we I allowed us most is the dividend we'll starting point than high did, reach have us continue requirements. would with allow to our do that point, a Until will is some think will a per at dividend pace it's And it growth. and to across

coming we'll gives other discretionary at uses ratio So flexibility our based a kind we have continue that's for which over of fairly projections as on on that that dividend in look that low, keep years. lot of a to the percentage growth the we'll payout is means, And our What AFFO able of way to capital. nice be it. our us

Jeffrey Stoops

Yes.

I to think, we're AFFO not broken the dividend from reason Rick, is AFFO income requalifying close of those any haven't out is just versus levels. total that we calculated,

about philosophy for to understand is think change, we're people to and AFFO. if never kind I our have It's think only another what think, when on pay that mean, which I And going people will we it easier using I also we're confuses out we introduced calculation. just, to of metric.

the the us dividends perhaps we But others. long our increase that before faster to exhausted have NOLs. where way we've we a gives ability to go get to And than point

But at increase AFFO. several as we're to faster a going the we're time, the ratio total at pace dividend and payout keep payout both, do for a percentage able watching relative And be same next lower a the of to the years.

Ric Prentiss

Makes sense.

if the you possibly, You you're that range. think, lowest, mentioned at not, publicly in mid-X% levels the ever decades,

to grade -- if How through always to story. interest obviously, kind a you've think appreciation of the people capital pursue about in caused it? what levered kind level things. should means to you, you has been investment But look environment What rate were of we we're always

on this we leverage to stock should calculus your how do then you rates? that But quarter? and buyback allowed And that interest about think view

Brendan Cavanagh

Yes.

appropriate relative terms cost adjustment, to the a price really, some trajectory investing And for of capital. haven't and couple levels that terms cost, we potential I the in And of alluded shift those So certainly the investment It's overall the of on as of guess, as the rates of the of of an front environment, in return to things. in it's points the the is to, of what you of relationship a us but lately. also leverage in see obviously, our capital, and opportunities seen it's capital broader in we cost combination the influencing items.

of cost is balances a as revolver. to our on debt. And so best of most the outstanding of time, pay result, the the as off know, capital, And our you of had we use some

the down for cost it's rate, that so just that easy highest floating as use some And debt. our it's pay and us to of given capital, of it's

appropriate to at the We of would be stock do that opportunities where we're trading jump short opportunistic and we to capital, into accretive time, will going the time to the it But expect certainly was Both over the to to a So in, buyback. around we felt and just we it be that. long started invest representative look and term our are would of to that to to capital an buybacks invest little bit to down continue stock us. see levels same that. in term, the

about So I we forward, one to grade, the naturally great but think think, this leverage things as investment you delever drop. necessarily term, to it -- a naturally haven't And business, to targeted and being start lot flow, longer cash you has free that's quickly. we of the as we continued grow EBITDA, continue of produce

those we're so move could investment towards certainly we where And levels grade. approaching now

going cost produce that we better have go there's invest in mentioned for returns we of that we to are our And capital, scripted other see as greater if go. places a shareholders, being then in how that decide and and maintain our time for to to that, optionality do But it. that's going of that think improving And if direction. way not, comments, our we'll to the we go we terms flexibility are to things

Ric Prentiss

quick One on my Great. one end.

that 'XX, digit, of to double you in to million? share $XX think $XX update $XX of mentioned it Sprint going been the to Sprint kind can think now million kind Has 'XX, maybe And was you what of [indiscernible]? [indiscernible] you 'XX million on expected be previously I 'XX. thought be in

Brendan Cavanagh

Yes.

$XX quarter, around think a we last gave range I $XX million you to million. that was

now the little And same. we 'XX. is we a we're we more saying in to is this seeing here 'XX little And bit still thinking the giving total originally a guidance, expected were so bit by as When it year. $XX lower 'XX and now, million end lower. bit a But see we're probably little

is trying kind It's bit a close. again, the be number So going little challenging total the Rick. think do exactly to I same, to with -- is the of it's that pretty basically to been we've precision. pinpoint year-to-year timing But been just from

Ric Prentiss

Right.

hearing Okay. from next Look hearing Marc Again, the forward to Jeff Look best wishes, and CFO. Marc. quarter. with to you forward

Operator

Our next Morgan Flannery Stanley. comes with question from Simon

Simon Flannery

also Jeff, you best, And insights my industry. on these and calls your will miss on the

things. of couple A

lot to financial the dual-band authority release extent a being about market. some the talked radio in or not issue. like subdued, conditions and the might given the might get 'XX FCC You the Do having you spectrum, near are what be To think spectrum in demand a things the the 'XX? turn any year-end that back some of spending, term here off those to holding just calendar solved even the from

in just you M&A then M&A great And did get the the some broader to quarter. It some would environment. be thoughts on

on I a think and color able what get between big difference you to great today. the there were but past, the we've it'd and in any be just you private public market what out see find in multiples, to heard

Jeffrey Stoops

Yes.

trying the time, authority. I out governmental authority be other issue soon. are the spectrum FCC has long-term to spectrum White same to figure lost resolved here their has plot At and think House and agencies FCC availability. The the spectrum

needs So it knows it -- get will. and to everybody and done,

time to believe, I dual-band X.XX And Simon, and be done or equipment done, be go. C-band been it will the has ready the by will

will year's think next So to contribute we that's something absolutely that leasing.

are just fiscally lot it right deployment the and before shows for looking of they and a things return being towers. There's waiting we lot spectrum spectrum of to percentage go. prudent I think as think results left there's But certain that our on or a and bands still, a of deploy. just customers about And completion our

beginning the of to changed, data they infrastructure the somehow connection has wireless since have the for between need But physical unless wireless. growth and ultimately, that in changed and deploy, hasn't

Brendan let question. I'll M&A your handle

Brendan Cavanagh

Yes.

earlier, where of capital. private to continue And environment. public So directed elevated. the gone, continue some Notwithstanding M&A have obviously where to a that I valuations very competitive . valuations comments see made on to remain influence our that's environment, the we've we

the in internationally, is So And high. even U.S., pricing in seeing some to that we're staying degree. particular,

I Although I of the more little market. think sellers perhaps supply, say, less internationally, of that ton in out cautious things been potential There's are timing bringing to market. still a their there's there a would but in being

Operator

And our question with next Batya goes to Levi UBS.

Batya Levi

Jeff, I wish best as you well. the all

I on had leasing activity. question growth a the

You even has it Can ago? slowing if provide more some down had mentioned that has down. slowed been what you you than sense months it expected a few

And activity you're is the to MLA coming other there approach some from providing provide you AT&T how maybe is them? is and if similar you color, deals Can when would down. visibility the some -- tenants replicate if appetite your

Brendan Cavanagh

I than how year when play growth, it's months what thought ago originally at It's out. we what say we different were X all than would it. the talked the that leasing The this beginning thinking year we really that thought slower we perhaps than about wouldn't of

that laid quarter, it's we expectation what last we with changes the that we any where in pretty described And even didn't staying make you much that we gave, guidance in see out. But line that there. could

it's On with the potential for AT&T MLA the others. that and --

trying works customer, other can and vary that agreements master what for the win-win situation form negotiation. have that accomplish and creates agreements in carriers, but what and best they're to specific of upon really with it's dependent carriers. given The particular for the needs the in those them of us We among place best

over as that So all open vary, they're needed, they're others with and those on very, we conversations the depending I we time time. to needs. certainly agreements the though, carriers' are well, would Exactly how may have structured say

Batya Levi

one it. quick follow-up. Got And

Roughly on XG is mentioned towers have your putting deployment. that of that activity on pretty seen I low. you think towers the equipment still X%

Brendan Cavanagh

Using the approximately XG-related spectrum, XX%. it's

Operator

next our comes Rollins from Michael question And Citi. with

Michael Rollins

Jeff, your best also thanks move to as you and want chapter. to next wishes on And I my extend

Just level, the need, side just curious, a structured to to and time the at not structure have there Or may curious opportunities find in thought to similar markets some a to what international for scale adjust of they shift over growth greater the to we is structure market operations? ancillary be those where as over minutes. about you few create alternative more you ways some for -- Have maybe those U.S.? or

Brendan Cavanagh

-- our in don't with necessarily we've relationships seen don't our in agree to be have know with impactful they markets, in the those benefits and where markets structure. we would ability of I for customers projects it's that if reference the I I your have. in build-outs carrier that to Yes. more scale, that scale, their

to So is scale something these markets. definitely we're paying that attention within

of period time. we're additional strengthens It add also to longer sort able that generates value then of other incremental to places, level we there of associated provide. add, things but currently revenue these we some an extra in a streams, might of And that of do terms opportunities with in it that that what for kind provide of are somehow that services are relationship related or

explore So power, hubs, things opportunities. around our that. C-RAN we're certain of markets. to And some things doing continue those in we'll around some things exploring some security We're around

Michael Rollins

company metric that aspiration where financial a whether has you And there's an environment provided terms north it's just in one targeting. been other question. In of a or or star moments the environment, in or the operating a some past were guide uncertainty,

the on targeting, of? growth aspiring domestic for mindful next average just the for And organic activity given SBA is to it there of some what would an is be over helpful might few or be rates to rate growth a range investors years, that questions that leasing and mean

Brendan Cavanagh

not No, target. specific a there's

lay mid-single expect able be long-term comfortable I that U.S. churn, produce would Sprint not rate we're a to target. out in excluding think, . we'll digits the But growth I at to point, this

a deployments, network able are bit it's customers to And to it be there clear, need to that, aren't just little terms wireless really some that our perhaps needs. we that comfortably. do do If would of a -- Mike, do what their be about just of of lot in factors was about more

I think that. and customers things some spending of affect other of our these factors may are when that around timing cost influence of capital

naming of little targets. to in So specific that a just us leads bit be kind more cautious

Operator

And Del with our next MoffettNathanson. question comes Deo Nick from

Nicholas Del Deo

just you the appreciate thank with the Jeff, you and all, spent years. really echo insights all all for over first I to I us of and comments, with time shared you us, that. others' want the

You you the support Jeff, think I dispute people many they over to that. have. -- don't emphasized traffic comments just in growth to your need always carriers that invest like time, will

do reason capacity rolled the they've there I that think case? spectrum over than the you is more Or amount guess, today have of the typically to have any they that's years, had out? given they not runway XG believe

Jeffrey Stoops

of a do spectrum or generation, are know would largest there's Don't all of lot now have have that, available believe deploy is have, out why all, it technology's either worked in last beginning to out. there, the that now I wireless. X that carriers fixed or the which been

I from spectrum read, on point, capacity. XXx wireless that fixed the subscriber XXx things some takes the that up I've mean, to the -- just wireless

time, it's wireless the mean, around, connection that, continue. I connection data for give at confidence physical to the and statistics the like been is Nick, us that's additional growth between I've going that as over So that as great need long forever, infrastructure existed least

success get up. spectrum And But but used fixed rapidly yes, I mean used with the out up now, continue more it's that there's getting customers going to a the have to wireless. lot rapidly there of it's

Nicholas Del Deo

Okay.

your also insignificant a which thought a left the I that site Okay. margin. -- implies in line then not contribution you expected bump revenue And development interesting you your pretty but was forecast, bottom unchanged, it lowered

So can we behind about it how dynamic I and be coming into might look sustainable the year? talk guess, as what's that you

Brendan Cavanagh

not level sustainable -- at moment. Nick, I don't does the work right are we Yes. experiencing higher-margin doing. type that speak think, I'm at it's sure we're same the to it that that that I

Some completion ending up the these really percentage and come as to of up we're on [indiscernible] lower you operate jobs that at helps. basis, finding estimate an cost a they're costs of as to kind books, we is of for tied of those then and put accounted on more actually since And jobs, ways in levels. efficiently that

the long continue term. margins of is do high-quality, But story focus the it think, I on know But that XX% just I we'll work. intent for high-margin And are to evidence don't to our that.

Operator

with And Eric next, from hear we'll Wells Fargo. Luebchow

Eric Luebchow

just retirement. I and for echo wanted wishes to best Jeff

grade. decision how make a as buybacks, whether wanted staff impact or investment look you coming your to in I allocation M&A balance you'll to policy a your material excess and XXXX get have Brendan, cash? capital pursue on the how in that of into don't for more way prepare with the deleveraging of But XXXX. due takes latest maturity I might today, know debt just of kind sheet the you puts that further kind on at you thoughts just that's

Brendan Cavanagh

we have Well, all, I Yes. access to that first tremendous think capital. of

of costs a our confident us. terms in not concern higher from Obviously, that. of of perspective, -- But the markets options evaluating So part there I'm about actively than We're in there. numerous past. concerned me. to they've are so available that capital, access refinancing all are to it that And the I'm been doesn't that

what think, most return is best of I of about think on a shareholder to capital, going matter investment, is the the we though, what really is value. allocation when create it just

simplistic. that's But what that we're So looking at. sounds ultimately,

so in we'll our that. little higher, buybacks we maybe use leverage new capital like we assets, to We'd And or past, do bit into which that been the to goes either and see it's capital, if do certainly, a that. our opportunities can because invest

And found but of to point, retain the where shift. cost the And way But the a best some we'll finding us going grade. paying recently, structure matter a has be natural that right doesn't that then debt be a it's fit to possible. will level shift capital instruments allow at flexibility, be also we the investment to at to get just change, it's If that natural just been better down to go. our

Jeffrey Stoops

Yes.

we we if said operate and us, things the a so material not commitments to the way and continue matter will we have differently, optionality is is changes the quarters, for of being couple last more reduction leverage That issuer. as naturally an much think investment-grade of I have like really, that. of it policy

not XXXX higher things to around increase allocation that, materially a the about of end than where think, it's that we we pricing and very kind portfolio lower a end look path. But world, right advance at And we at leverage certainly of on would, hard we a long leverage or XXXX. Eric, leverage course, of likely we it XXXX. of capital, before level, like that as do level, look would and we whether the was for thing is in We think

Eric Luebchow

question. appreciate that Okay. I one color. follow-up just And

Just churn. quickly domestic on

couple the Sprint think, years. excluding million revenues. for this that your year, of I $XX churn, And in been ballpark you'll at X% be about the maybe around it's last of

are tower that to to moving We've over rate about from further next X% of of rate heard As level some some run lower? churn there opportunities peers revenue. you closer years, churn their the bring few run look out

Brendan Cavanagh

definitely I do bring Eric, there's lower. think, Yes. to opportunities it

less For our supply of frankly, less one, less they of start big opportunity is them to a there's are for kind or smaller a less of to business, that that as chunk and of or customers of have you churn. due percentage obviously, that

our churn of from I would as well. come agreements some customers, that's bigger our them with any then And significantly expect with reduced that be will

Operator

with Next, Barclays. we'll Lynch hear from Brendan

Brendan Lynch

as well. Jeff, want congratulations echo everyone's to

Maybe with we could international start just the market.

You your above backward expectations. are component believe I kind those of understand correctly, the mentioned, described I demand more escalators. you was being if a looking. that, internal And But of

year. So have that for you on that good I'd pretty visibility imagine the

into the could higher you international had just of and are what maybe than been the So exposure drivers profitability other get that you driving international some expecting?

Brendan Cavanagh

-- that new what new associated signed average, were And and us business, up across -- is originally obviously Yes. intelligence from than more The target telling we through we in was kind leasing numbers of on expected. and backlog, with dollar market. think we based was in above are amendments. successful comment revenue international those our our expectations signing look standpoint each business market to going specifically what leases new on up a like And than we

So that's that comment.

markets needs of we I think both before, basic is customers for our greater in that these And much and of exists XG that have some our the continued the The in cases. it significant driven just in bit about across little coverage things it's coverage. of U.S., talked even XG a expansion is by so not certain markets there's nearly that the where all really needs

where of And number varies certain inflation The really part not out our a escalator is piece seeing of was on play a just markets. a of that. been in inflation and higher. we're has markets, -- that is, in so and That moves our based bit little

So rates that's helped elevated. stay growth the

Brendan Lynch

helpful. one the That's And program. build-to-suit Great. just maybe on

some quarter. next couple see had you of on over the there an more You in Maybe where those activity us give update just opportunities quarters? the

Brendan Cavanagh

Yes.

that of continue in most the of that being internationally, -- done you all. I'm sure that And there's first think is I to our probably be release. see will case.

In these that lot as There's builds, in reasons same just the needs of just I definitely opportunities mentioned. responding previous question, a there's the exist for to new for markets. coverage

the build The several for you investments, of addition making that we're at going we're sure are us given and second the the a capital increased, next over requires that's that years some that building -- making just cost we're a question return, doing is after make that real worthwhile we're site. tenant usually point to nice sites, of confident the

kind watching in we're sites. So pretty of diligent those

going opportunities where about selective think But we're we to build I sites. be exist.

Operator

Guarino David comes Green with from Street. Our next question

David Guarino

for this I one you. think be will Brendan,

last you I'm on in I color the over interest about because guess validation given you why staying surprised, asked meaningful some Could you high. that just rise had rates few And U.S. more I tower pretty we've On made comment is? provide the months. think a

some time, While tower have lower growth we've macro emerged. at the about had concerns same that

be any additional color great. So would

Brendan Cavanagh

Yes.

you've have think capital invest that parties been infrastructure. raised that or their -- out got of a mission demands already that's digital needs their get to in different lot have is And they there I to deployed.

that it. that a in role think I so And has plays --

still investing. different tension limited, competitive frankly, exists so many supply, The in there parties are that that somewhat the some among there's U.S. is

that's really a So driver.

you've different what public including got got a we're expectations, make. growth you've and make if SBA, like, the the that's profile be of decision different you seeing on than look so may assets And return to views companies, able different

David Guarino

market I away. maybe year, Okay. one, second know accessing That's few you. next to some guessing you a secured be refinance quarters that, are helpful. guys going debt. that's still to the sticking the I'm And And with

where give maybe us tower you costs could assets? idea of secured an today But sit borrowing for

Brendan Cavanagh

it on market mean you're what Yes. depends in. I

If about been ABS source in would likely Xs, we market, secured mid- play out. today, be of where primary you're the you'd somewhere high be to financing the which talking our has

Operator

Markets. KeyBanc And our with next question comes from Brandon Capital Nispel

Brandon Nispel

about during you're for perspective. activity one [indiscernible] me. what an seeing from hope haven't And quarter, asked. more hopefully, it been Jeff, Just the talk But could you specifically

perspective, was unsigned from how from hoping understand I could of trended help Specifically, and where year-over-year backlog applications, last you a versus you us a lease are that quarter?

Brendan Cavanagh

have than are a have have about. the Yes, little bit it down. general lower Brandon, they've That backlogs past. backlogs little probably direction. same been executions a surprise, bit been in we've slower talked investment given -- our -- the And shouldn't be obviously, the been carriers' trended as levels we've The

forth. interesting that and get be into out plays budgets as have we year, will as in place the to how it so But next new carriers see

now, for definitely So though, it's trended down.

Operator

And we questions have no time. this further at

Jeffrey Stoops

sign going off. I'm to Well, I But off. sign Brendan let usually

Brendan Cavanagh

We all Well, Jeff, thank your of appreciate years. it. us. it. joining And thank you, for you for all Appreciate again,

Jeffrey Stoops

I in I'm It's And able honor I XXX, been an my next look last that good -- in to we and But say, a to not quarter. to you have you're talking forward privilege. hands. that as

Brendan Cavanagh

Thanks, everyone.

Operator

your Thank That does conclude for our today. participation. conference you for

You may disconnect. now

SBA Communications (SBAC) 2 Nov 232023 Q3 Earnings call transcript