Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower’s Second Quarter 2023 Earnings Conference Call.

As a reminder, today’s conference call is being recorded.

Following the prepared remarks, we will open the call for questions. [Operator Instructions]. to Senior call Relations. Vice like host, to now Smith, Adam President would turn over the your I of Investor go ahead, Please sir.

Adam Smith

quarter thank American And for XXXX second morning. call. earnings Good conference you Tower’s joining

update posted our Treasurer, prepared will under Executive After our website, and international President will our open www.americantower.com. and Vice have to of Rod morning’s this and an for results our Relations remarks and these call a questions. will your will outlook. CEO, the our business, we We refer on President, which discuss call, throughout On revised then tab Investor our presentation, Tom provide Smith, we up year XXXX the QX CFO full Bartlett, comments,

that that expectations our forward-looking will outlook; and are our India that and you our capital our any of statements risks including and Before comments involve performance; Vodafone not Examples number regarding future we statements statements facts. collections matters of these Idea regarding expectations XXXX historical other in associated allocation, uncertainties. with include I’ll contain a growth, begin, future remind operating

ended forth results to subsequent should our remind this expressed differ consider factors the You months the that may actual and circumstances. Tom. factors us in XX, you over turn call We materially in in filings with the other for that, the in this the as I’ll factors include or December forth year aware set XXXX, our SEC. no release, call we contained future to statements. to upcoming cause undertake set information could and Form Form to you we from press XX-Q ended reflect With obligation that certain June in XXXX, events those Such forward-looking six update XX, for urge those in make these and risk updated these affect in factors be to the the earnings morning’s XX-K

Tom Bartlett

segment joining for emerging high with portfolio this my a will everyone past practice to States. geographies today thanks and consists and comments United of our key of international the outside Consistent well-diversified, morning’s Adam developed Thanks which call. of our across on assets growth focus

Before in business, months I'd the profit potential to moment X% of where highlighting surrounding spend seen of from AI recent the the though excitement in and and light diving operations international the operating we've into arising CoreSite seeing our the both revenue first we're like center data our workloads, six year-over-year growth, a in for year. demand

in centers profitable we business and demand a continue in Following pre-leasing points for in opportunity growth. extended that XXXX, underwriting for our expectations, increasingly see record new of QX of elevated levels pipeline to an XXXX data signing outstripping to supply initial

terms from expansions of value be interconnection and all of ability growth, in commencing and business to AI we is in trends, existing overall AFFO Each used demand for expectations signed strong new the selective and signing is customers, record of logos the half. the to ecosystem over accretion ensuring remainder from new these once pricing This factoring factors contributing of the year to the the last before particularly elevated cases. begin a we've and

demand for is arising coming immediate term and is several significant like drivers. the longer of today as in interconnection scale just requirements, much from hyper is the demand While market CoreSite, opportunity from the key hub

CoreSite for access cloud and in relevant hybrid as First, more across are all workloads. multi seen IT an outsourcing we've digital becoming transformation to already continued acceleration

scalable time, requirements their centers expected existing building into in and support and model power At models cooling to space cases expand speed customer AI to As we need will used the well is positioned handle. can flexible on enterprise for deploy and these expect that business leverage new applications, generative servers same to operating and than they'll already and data require more models are increasingly enterprises their benefits, today. power premises customers market its and products AI CoreSite who with typically

large to high datasets as models and an language use models incremental training cloud land requiring compute a And from to which cloud we're which for Second, and a hybrid our distribution parcels requirements with power our distributed see language the CoreSite custom CoreSite in distributed is performance result use Tower locations compute on-ramps well of for portfolio training, proprietary on activity CoreSite elevated situated demand connections footprint these our a density sites campus for today's potential interconnection large may be low nationwide arising we existing a the is expected finally inferencing opportunity to to distributed Over seeing for more the we of latency, see and long-term. distributed serve. where enabled across for and of push over ecosystem footprint. dynamic high time, infrastructure significant ideal ultimately

space role of ongoing center the the infrastructure drive to a expected demand. provider AI from used function that's put, American technology an are to and evolution opportunity a as computing generative a data power in the play of against trends central demand an cases step Simply Tower providing up increasing emergence CoreSite backdrop

later. on which to the As continue a on we Rod a has achieved will CoreSite historically result, more capital touch that industry yields see invested delivering opportunity compelling leading

development, At assets our democracies that, profile establishing we are compelling have American high and to selected bringing that and invest of with and capabilities markets believe the various stages Tower create industries, world's an selectively business, of the supportive to counterparties. we proven market and free neutral are healthy see platform time return expertise for markets, model, regulatory host same path focused where expertise shareholders. clear, tower value to extend our over trajectory, and largest total By technology wireless together, incremental that growth ago, leverage objectives the both structures network our decades augment add our began quality on our and competitive in Tower let's in leverage and already where factors investing these in With international we scale. to since in expansion turn to two could remained we a we nationwide

critical As this allocation ongoing investment identified an measure of to initial remained on program, today. analyze the we and capital basis assets our consistent our component underwriting marriage portfolio and ensure management a and

our to with adjusted rates capital you've and support takeaways we return. As has to The appropriate seen investment approach our select and to the business divestitures including on And setting recently, these business of such evaluation and of operations allocation. risk fiber ground Poland India analyses of led Mexico our strategic experiences across criteria use our in ongoing shape review to business. global continue and together the our evolve capital the from a

contributing part would continuation markets in industry Today, consumption a two trends CAPEX X.X% tenant suggest we and growth, roughly approximately nearly over carrier seen to remained and mobile U.S., range in which including consolidated on in the several these more have in estimates trends and over XXX,XXX X.X% secular property to revenues forecasts average in billings the of driving greater Similar that XXXX. XX% set markets decades. expected of sites our XX% organic $XX of billion data consistent. a profit we've XXXX leading international are XX% XX% mark growth last next total the than growth to years, operating the deliver respectively, the a grow than non-U.S. the across is and towards international portfolio demand to better are in forecast our The

U.S., low of side are to to network combination we've to XG to expansion the deployed while band been strategy In stages points relative requiring of spectrum each structures next leading key varying network XX% markets, [ph] our of long tail geography. the portfolio mid density X%, Globally, development closer discipline with incremental contract America establishing generation to closer and Africa technology Latin X% XX%, and of presence. Critical and M&A Europe, anchored in in appropriate has of a level the has which significant in where and a approximately that is of our our number other XG reached investments coverage suggesting of in are some sell population. that over

portfolios steps enhancing certain through Although that counterparties, of international years, to growth. believe multinational our leading we've across over events past and of our experienced proactive exposure the reset driven our quality customer base, international increase the strategically we consolidation to predictability we our several churn earnings

approximately revenues property from eight Orange, we same XX% Telefonica, same revenue of over given over a versus in and XX% has Africa, little Latin still Vodafone, XX%, years our market by property property XX% Tim, In of generating XX% as compared our and our approximately Vodafone, see XX% up In In Telekom revenues the ago. time derived which of fact, roughly and in Telefonica, Europe, more than American are base, At&T, Deutsche less customer similarly Airtel, Orange, fragmented the across by XXXX. supported MTN, America, over QX we're markets, operations five to at mobile, period. a time from leaders

five-year critical real XXX with complement addition outside in focusing CPI business growth attractive average. our Europe, is a amendment terms linked to India. and and in basis reflects our combination new site market REITs, U.S. leasing done attractive new the in results of contract Latin In of including across majority evident organic leaders, growth on estate vast ability to roughly for approach to under XX.X% Africa, escalator terms, over in we've This aggregate just QX, we've generated America, gross partnerships as trailing international leasing and our growth underwritten escalators with securing our This in and operations, points the of our disciplined historically. our with contracts

looking generated and come half, monetize our $XXX operations. Latin in of the roughly and model we've and and XX franchising in our cycles, tower has of throughout through in global form Africa, Europe, region proven each In our around past again over success months, the amendment ability the fact, aggregate the colocation at network both to growth of America, amendments, various U.S. illustrating investment our in stages million

an remaining of the and And better in structure again, has boost existing together perhaps kind of linked There's acceleration have Europe, where related the X% on no these we year. activity profile. In half derive terms to expectation been growth healthy provided for our expectation organic contract Spain where a of including business several Europe, benefits growth XG are in Germany approximately as environment in organic a over from quarters, leasing last in growth CPI our of coming Billings to as in sites. as disciplined of new by escalators example XXXX, colocations of the well roughly an amendment driven exit growth an factors

the along an ongoing and in competitive region, low region cycle clear. us advantage to for leading develop our the the should the distinct importance XG the scale capabilities has future. our in to foreseeable expectation we with organic never work allow of structures a Furthermore, the built As investment been deliver contract solid for growth continues operating churn as

and long partnered with carriers customers. American To which a new partner established by our build diversified returns rapidly of operational where on for excellence, exemplified is we've track we presence, record has trusted, of global program, our highest our new Tower strategic deploy driven our invested sites, decades as leading to This some capital.

internationally, wireless and XXXX sites on one. been years, XX% deliver mid began strategic site mark. sites opportunity alone have presence in have scale In XX%. typically these XXX,XXX of of crossed afforded achieving international sites, several the XXXX recent operators Africa, NOI approximately approximately built these us expanding And shortly start over since XXXX we the day build where have key new have of fact, Nearly relationships sites the that a XX,XXX international yields with are in been which built we to yield since of teen built after we our

ongoing densification toward we region, billings our tenant move very compelling assets, utilization we to And are region. over XXXX, it, scale cycle over expect growth XG our the rounds and expectation last driving middle continue amendments, the any the growth. in colocation of which across the that as today years than coming growth key to As few capacity out existing and innings from the XX% in X% come much XG with several is the requirements next including markets assets years, an are and highest the XG approximately investments, augment of across we in result in we've greater compelling for and organic built the which

such our as have capabilities resulted in as to a Africa. in extensions, accretive opportunity the Meanwhile, scale regional power leading program in platform and invest our service

battery invested lithium you'll in ion recently primarily sustainability As report, solutions. our in XXXX and arrays million this see published in through solar approximately we've program, $XXX

sites gas our our in demand diesel XX%, As solution to a our differentiated region decreased consumption it on provides to XXXX our the business baseline. reduced result, usual by when program, extend against and Based XX.X emissions as we've compelling per greenhouse this annual estimated liters this operations we million at an clear by to intensity customers. tower that seems the value compared

At and supports toward investments the progress advances our our similar Meanwhile, return our sustainability highest goals. been customers program, this based opportunities we've seen. meeting extending more begins to the broadly, scale among network we'll these And new positioned program well program our time, the same return time. the targets build science new to to XG as to over high intensive we at be reach power believe continue of deployed more geographies be have

business. the of leveraging our we're maximize focused margin the profile the to scale ever, Finally, of than benefits more on

we our in to and already transform organization a our significant and lease to Services truly suit Drive margin begin capable have transactional on to maximizing we our in leverage inherent an organization and and scale productivity components annual global, opportunity buyer will cost energy and leverage one processes significant operations comes business both chain profile. while believe Organization, run invested input Global as rate operating that our driving these other truly the standardization basis. across programs. management And critical today, in through to realize our that's savings build it our other beginning reduce example, procurement Through on is to expand to to of efficiencies. in of initiatives we to increase incremental supply vendors an to power For work we've the the and with optimization in our into a when Business many attractive benefits we're other see costs

a outlook. our wave believe a we advancements capabilities to international to scale, on and Rod the investors, over U.S. to market leveraging and continued focus years compelling two required can technological return we results assets summary, U.S. the for and massive come. of capabilities go growth for provide infrastructure that, With demand international what today. the to and of complementing to many By the and our be benefit differentiated our and margin a opportunity to a from platform, with incremental In I'll augmented decades global expect in and to we is we're platform beginning approach support exceptionally our see network disciplined growth, positioned from through quarterly to value learnings for over customers of expansion, turn operations call proposition updated

Rod Smith

morning. Good for call. you thank Thanks, Tom. And joining today's

press second of release, and As diversified our portfolio, global you our reflecting across operational continuation our strong saw we execution had a for quarter solid organization. demand in a resilient

from outlook, of year Before through walk a results, revised details the quarter. I'll QX the with start full our I few items and highlighting

X.X%. U.S. debt strengthen cost our $X.X weighted dollar and combination approximately continued sheet, fixed through in to denominated we average notes of of Euro a at First, balance raising rate billion senior a

our debt exposure billion of decreased XX% the than floating second as of outstanding or less end approximately our result, quarter. $X to to of As total we a the rate debt

global the and outperformance into expectations new continued our us momentum Next, our escalations business Europe, across experienced in of Africa with another Latin across the churn, over X% tenant and quarter segments. business, our year raise full America, second organic in across billings resulting growth, to allowing QX quarter

and X% CoreSite revenue business at trends, interconnection quarter another our further the quarter. of and also with solid of growth where into by volumes our We strong high since together were approximately had elevated in drove continued which renewal acquisition pricing over property XX%, QX, tower growth rates, leasing supported

Once cash year-over-year, cost and quarter, a maintaining I to elevated normalizing XX strong approximately as an over points despite XXX an Complementing or are VIL on flat we basis expansion XX.X% reserves. we in QX, EBITDA roughly management. to highlighted environment, basis adjusted margin focus inflationary SG&A top points growth, kept for again when last line of support helping

with assess completing in anticipate second equity we a a to and potential we India engage year. around market, the majority the in group continue strategic our in investors options discussions business interest of in the of exercise half of sale Finally, we active the focused as

with As best the and remain its patient always, shareholders. and of American will goal Tower the we disciplined for achieving outcome

that, tenant growth X With our I'll to property and quarter. for turn please Slide revenue review organic and the billings

impacts X%, revenue QX was growth and of As X%, the This short year-over-year over collection X%, of on were revenue center X% you of associated or patterns can and basis. data VIL X% consistent revenue of with reserves Canada QX payments, currency that neutral over quarter the QX. we property recognized see, over growth fluctuations, relatively consolidated or million In growth X% international business. in over an nearly included FX U.S. excluding with $XX in over approximately in U.S. property as growth our

the approximately strong tenant which Moving stood organic and U.S. amendment In sprint elevated basis. slide, including organic the right X.X% and growth absent to and X.X% our we at side billings tenant a growth was of contributions another achieved Canada segment, churn, related of of quarter $XX of colocation quarter X.X% billings million. consolidated nearly on another growth,

Our all amendment than a combination resulting churn due X.X% across growth colocation delays, X.X% reported of international segments, in in of billings organic saw growth higher and segment QX. outperformance tenant up and primarily continued from anticipated nearly to

region, points Africa, growth continued year. we since level, our CPI produce international a in driven quarter, anticipated each associated and last our expectations pre-Telsius Latin QX, the and of to vast APAC QX we record of Latin average. the [ph] its XXXX, the delivering in churn of quarter while XX.X%, with Consistent expected. X.X%, the a America off Europe, XXX as Africa In basis in representing and the demonstrating its first reported with At delay of did markets escalators to over a across above segment has acceleration consolidation half highest respectively, X.X% kept realize APAC growth of continued churn X.X% favorable see linked of for Europe through initial deceleration with majority modest benefits America, a of

across trends leasing approximately at associated an XXX to improvement footprint construction rates in strong level. contributions resulting in the colocation billings Finally, Organic international the sequentially our with of we as segments, growth by capital acceleration return. basis demonstrate driven consolidated point XX step amendment down tenant deployments all volumes, further our international has an business our was all and a nearly growth prioritize sites of more across of than attractive QX India to projects that with complemented most the virtually continue to of relative across risk-adjusted

to Turning X, X% on quarter. Slide approximately for or over to billion an nearly grew X% FX-neutral basis adjusted EBITDA $X.X the

as mentioned, XX.X% growth, for which with I revenue conversion percent controls business, to expanded on prior adjusted basis. organic a revenue was cost normalized improvement of SG&A throughout total a again, to EBITDA and around the Cash, over XX XX% As basis elevated year. adjusted by driven prudent of VIL EBITDA X.X%, a point allowed margin growth, to property compared combined over of

Moving and driven AFFO attributable slide, share financing and X% decreased rates headwinds respectively, AFFO the share attributable by X% over by X%, decline X% includes attributable respectively. the approximately past AFFO cost year. per in interest AFFO per attributable to rise and growth, side This the the against of of right and approximately than less

reviewing start full revised key a the turn drivers. high-level our by I'll of outlook, year where Let's now few to

AFFO performance and adjusted First, attributable as an of the and our continues to to per EBITDA, share. for core business expectations strong the a AFFO, supporting had revenue, second remain quarter, mentioned property attributable solid increase earlier, we

VIL for maintained Next, million our reserve we assumption prior outlook, have the year. $XX consistent with our of revenue

in this outlook made to to potentially a VIL to could reserves we the Subsequent VIL I assumption. bringing full quarter end, year-to-date committed paying for July's the In similar has upside approximately least see of payment second our at billings our As to XXX% saw compared QX moving with to some quarter and as million. associated trends $XX we forward. noted, billings collection case,

believe we time. prudent assumption the is However, this full year leave it at to unchanged

approximately volumes margin compared prior through have assumed as year, $XX U.S. the the outlook. lower services of gross million resulting we in in balance reduction our to an Additionally,

still recent activity While healthy seen year we and Despite past back our of to following activity annualized initial million industry our generation an network levels our margin than in more of assumes in cycle. is contribution the guide consistent the the the unexpected $XX pullback historic this moderation seeing is was levels abrupt investment expect basis, isn't throughout excess we've with cycles. recent carrier in expectations, and the XG over reduction, sites, on in year spend on in the any which of which services still still continue, gross half of we're

rate, our note and high billings and to protection continue assumed us is in comprehensive billings contractual activity that tenant a services XXXX well is and revenue of and It property against we've U.S. our as tenant more MLAs non-run important to activity in-period visibility Canada although degree business guide, with also organic as our susceptible growth in to nature, in provide target. carrier variability long-term our organic the cyclical growth

the This side, in with partially with outlook interest and have on the versus Starting negative revised Nigerian portfolio, associated of prior strengthening the our macro of minimal resulting the denomination other USD our roughly devaluation our by tenant FX FX impact is market. FX impacts Finally, of Naira assumptions. includes revenues in impacts mitigated with offset recent in the the in outlook. the further revised our our we through half currencies

modest interest side, forward interest to increase the of expense on offset our interest the estimates a partially reflects income. based SOFR, updated guidance by On curve

With into dive let's the that, numbers.

associated our items and U.S. our our benefits we're core increasing segment, also onetime the includes data $XX million expectations international along approximately million, prior which increases Slide U.S. straight and are the revenue driven segments. and Canada primarily supported center with $XX for by revenue. revenue by core increasing of our to Turning in property $XXX to non-recurring property Outperformance upside, to by compared X, million pass-through outlook Complementing by several line as with another was outlook. approximately our we

for by consolidated with are churn, guidance least continued delays increased greater Europe, raising up X% by our Latin anticipated excluding and in X% X%, consolidation-related to our our we amendment our a contributions. growth churn. we together $XXX international are approximately are with X%, in increasing previously, X% of expectation our approximately to colocation escalator in modest to America, In to improvements contributions, guidance for X% from growth supported million colocation organic and Germany we the an an end over expectation largely continue outlook amendment sprint our leasing In X% rooftop we tenant and X, as make growth progress expectations from billings at we to level. at up to maintaining be of assumption or In to closer for operational to driven on X% Moving and Canada, X% upper initial the have in than assets. Slide U.S. our approximately

Next, increasing our new greater solid X% to demand. to Africa from than we're outlook approximately due continuation XX%, of business primarily a

approximately at billings we APAC QX, our maintaining in time. with acceleration pleased in X% in growth are tenant organic outlook we are this of the prior Although

$XX Moving million on margin, with the to of to property an an EBITDA I facilitated Slide in million, This controls through reduction offset the $XX XX, prudent along million. additional of U.S. our conversion by we cost incremental This straight a business. million cash line. $XX $XX was growth primarily associated with incremental services property revenue partially resulting gross are due in strong our reflects by just adjusted mentioned, outlook raising

Slide to XX. Turning

$X.XX stockholders including midpoint the minority the a interest product approximately center Updates million and raising adjusted EBITDA million is moving $XX representing $XX increase per expectations $XX million, on midpoint, to share. in per attributable of a items, to of by at slightly the which also for higher are outperformance expectations data our the U.S. of We share $X.XX impacts our AFFO by to cash include partially expense other offset the our in common basis interest, approximately business.

support Slide $X.X while expenditures, outlook, remain demand. moment continued capital to our for like a our common consistent approval backlog billion spend capacity to I'd allocation of on and as prior approach our Moving plans Board expectations business dividends, subject adequate stock an in consisting review to to future and to to CoreSite $X relative billion XX, primarily we ensure in capital elevated our for

On left of data record slide, a level cash of the you in discretionary of spend our closing backlog, at $XXX in driven of side watermark to plans our approximately center levels see XXXX. XXXX. to continue of by spend business supports leasing the assume allocated our the million since high the U.S. acquisition This end

Similarly, of our ecosystem and future high-performance capacity excluding leasing new which differentiated network, nature The and conjunction of the at scale platform is hub, the strength in AI incremental business produced including support needs. demonstrating drive interconnection CoreSite the and continuation purpose-built and expect and to also we hyperscale, uniquely diversification which of with today backlog, assets, value digital core the CoreSite retail a in representing a the workloads of historically. returns expected of incremental industry-leading has cloud record rich large-scale, levels, adjacent capacity positions to CoreSite the

industry, the with flows demand stabilized of seeing yields high Tower further drive dynamics cash favorable we're our largely across partner, the investments, center and with in double-digit ability development supported reinvestment own by degree confidence of we Combined supply Stonepeak. have data support to a our from on American CoreSite's and the our

In the robust capital the approximately was further pre-leasing seeing and we're the space. XX%, our the illustrates quarter investments demand fact, at derisks end which of our across

while selective need and return disciplined drives future business eager proven, and realize historically of rates the development the in remaining attractive incremental investment, priorities support has such While we CoreSite the and to and demand current are for decisions.

debt, billion to while earlier, Moving balance to below as $X.X I execute quarter we raising to continue in the initiatives on years right maturity side our over the slide, six our reducing mentioned average floating our rate debt the extending in and financing XX%. fixed of to rate

our net leverage deleveraging approximately own times. of path X range of towards ahead quarter with X.X We of also the closed X targeted our times to

Moving manage forward, our accessing the investment-grade markets we'll remain opportunistic debt sheet. to in potentially balance capital further appropriately

XXXX our through across and our and Slide trends and customer and largely We midpoints efficiencies certain XX organization sheet, agreements. risks tower best-in-class to allocation, drive believe to year shareholder capabilities, variability our key for full operator, while With a metrics, has demonstrate demand and positioned up disciplined resiliency able our our sustained Supported summary, focus across QX, in our can close our continuation we balance outlook to ongoing and capital operations Tower data global open the by segments. business growth to of we in to approach the of the long-term strength term. the American Turning majority growth returns portfolio, by continues keen benefit the questions. operating across in that, as center effectively we well deliver were strong, mitigating to supported over and positive long outperformance across line from strong property increase core

Operator

And question from Eric Instructions]. is our [Operator ahead. Fargo. Wells Please Luebchow go with first

Eric Luebchow

good for Hi, question. Thanks morning. taking the

XXXX, the that beyond in beyond takes long-term but put guide know just guide, but and locked So leasing could risk I domestic walk of slowed a U.S. It but you we tenant heard one you potentially substantially of think, your Obviously, carrier had XX% bit revenues, some organic talk I from seeing the activity I it of slowdown environment. about this look activity, peers wanted like number into service in to little you puts sustain there? through your your the have wanted reiterated to could I year, you're growth. touch maybe in We QX. carrier that that on more your at during X% looks billings XXXX, as

Rod Smith

and good thanks joining morning. thanks And Eric, the the for Hey, call. question for

we're experiencing seeing So as the companies the carrier with well. tower the as other slowdown spend, are that

the point rightly see mostly in revenue. out, you You it services

over were guide better So our relates increase is noticed kind that softness. still half we it of it's continuing even also from our the activity of as In activity the to watermark into about that million down high margins some experienced through year, services level the the of the there or of see equal cycle. XG thing back of the out slowdown, we down throughout than $XXX level we I $XXX million. to that able you mitigate point we process, of to took to and us, would The for

CAPEX still other that upgraded And this what and an healthy. levels in the with their typically to you services a initial higher new than with spending see level the seen is not network we that's on view of is they what as the the So carriers we're last cycle. pretty burst pullback under And CAPEX technology. new cycle we've we and of sustained upgrades the Then have inconsistent that's technology business get in expect. activity what seeing,

in very shape the comprehensive up, we of think, now agreements is longer-term XXXX. really the terms our way think that are to good are In guidance out from set we you

terms I'll just So in of our was. what you remind long-term guide

majority the from of until We because way impact And Without are seeing vast And X%. the at there tenant or average we an fully be slowdown X% the were. the comprehensive pullback the view as does billings that slowdown that growth because organic now carriers of of That from incremental again, see XXXX. of don't sprint because churn. includes agreements is about described holistic or our change changing U.S. this that, we'd that in about not our contracted.

from business the base, through. So coming of or in really we new us nature have. that's of those these kind strong protect that's comprehensive It X% even within that quarter-to-quarter of of do And that year-to-year. from -- fluctuations X% kind spend have to guide, we agreements does activity

perspective, think pretty from good I in So shape. that we're

Eric Luebchow

on with in or data guess, perhaps we've might Great, kind see terms tied about CoreSite? a seen cloud demand retail there. deals starting the color colocation or heard to where with business wanted you've I the in are future from give the market thanks center that to traditional just your you up more Is of feel I of do you in backdrop, to on some the service think and providers, of do given for in Rod. go larger one more footprint that comfortable AI demand need maybe coming you CAPEX needs capital And requirements intensity the it demand at of to could increased Maybe you're with you business. years follow-up. touch strength the little

Tom Bartlett

then maybe on. this Eric, I'll start Rod can finish one, and

pretty and I cloud has think been network. across enterprise the customers of actually and mix the consistent the

a Even on see We basis. see rate, revenue XXXX. up going a his rates renewal into Rod roughly that's little kind remarks, into the prepared a contracted as levels see up and pricing it's XX% of the a that's is pipeline X% balance we level. year-over-year to think We mentioned backlog I XX%. of bit in that's cash and renewal year XXXX record a and [ph] MLR at up this hit of the

assets. these a is demand for significant there So

have under amount pipeline. the significant a We and amount development significant in a

transaction even outpacing So we with. way the really the we're to begin underwrote

center across So the we're pleased seeing data really what with platform.

Rod Smith

Tom's Eric, add in is other growth high QX. to really a just answer growth saw seeing comments we're in growth We're of would overall We seeing single-digit healthy. Yes, in The that CoreSite there. QX. XX% revenue overall I maybe couple

put that is which single half you robust. the high first and up So for revenue together was really the digits,

range. controlled to The range, churn X% higher the growth, high high healthy the in escalators The X%. X%. within is of well end of We end continue We're in business. always Interconnection still to we've seeing range, today. X% that the to even cash that at mark-to-market than is our range X% of a growth level see beyond up targeted and our of our

we make backlog. the time, the run that have that's $XXX that then CAPEX, to about but hitting we satisfy to kind rate. million fluctuate part good of to do had in a available is of year. purpose work It the sure we $XXX for think demand will that last CAPEX your really new our have that's year what hope we the capacity adequate And million CAPEX time in we this the of from business course, at and the got So to program, we've producing And produce. question, ecosystem

you So average $XX of XX can be so. we to deployed the months or see million, which over next XX from backlog will chart, have the an about

have are we that capacity ensuring we available. So that

we those the into with adding either to that buildings that is sure $XXX see. keeping campuses is And locations XX buildings make the into the existing space going within So million have, robust. we we're that really the pace demand demand campuses or conditioned adding

even with deploy But more is we place performing. and in between the to And demand the ensuring current staying opportunities the area growth XXX do that data returns certainly, meet and the in the think available right continue of sorts our have a terms in, XXX the we to center capacity to rates in capital. in facilities. to those business that and bit way is around all evaluate of little things. We'll So pleased we're exceptionally the there's

Eric Luebchow

Great, you thank for the questions.

Operator

move Simon we to Next, go Stanley. with Morgan Please Flannery ahead.

Simon Flannery

on Thank Good could. to if balance we morning. debt you come the leverage. rate and the wanted Rod, Good much. very the sheet I floating updates back to

this delever there, in in guess said you also and want I You Tom. to brings continue to

haven't deals you've this since kind sheet done the CoreSite of a lot You And been the know in deal. period. of focus of kind balance I on

the find but about commentary the at the So you the to side where about little on about a perhaps you reasonable India and to rates, get to you in maybe starting offer Thank talk know the see opportunistic leverage etcetera? value, things bid on you to just any do you. what given on spreads, does you side think bit, being and things M&A -- where want a are move I the talked deal opportunity of more

Rod Smith

thanks Yes. the Good call. morning Thanks for for joining Simon, the question.

comes quite a overall about that debt, reducing on well. forms, outright that as we're a priority talked So a delevering We've It in couple for of us. focused in for is while.

target is times. X and between X Our range

QX saw just over ended that X.X we times. at about that You at

So that's down really a little on going get window. X focused to and We forward. want we're times, what outside that below

We and very capital so NOI in yields We With key. growth that's changed. overall that and new when see program. good we returns look priorities one build dividend still said, dividend haven't at day our the our program, prioritize the

markets we're of X.X We for talked don't look criteria. anything shareholders. pipeline in M&A, when good use billion beyond that, So and capital. our about deploying this think about our a resources as And in and that's Tom at you where available has very today, and terms year, they're a compelling. past, capital combination then That's in of see different conditions in we the just

globally, that we look the we we review. continue we So compelling. have But is look a at pipeline nothing pipeline, again, to

So debt portion lock environment think still the the prioritize go-forward very and interest on a with uncertain, we prudent and the rate debt -- it's of interest rate We so that think very prudent debt. our to specific rates where delevering the in to larger rate said, it's is amount we reduce floating our of in reduction.

in floating in opportunistic range in in We've XX%. that think So are the continue QX, where U.S. to going about forward, And rates depending the where for U.S. around XX% be and the our on and us debt. benchmark I target got XX-year down the see is the to over rate Europe. is you'll

X you'll us capital You well down times. our debt below reduce year prioritizing could this markets And in see trying us forward back into rate delevering get next to going below the floating XX%. to and the see and exposure to even

Tom Bartlett

Yes, Simon, I think I'll just underscore.

more I I mean, is strategic it our that own There's investing is capital. business to find through in think through nothing our nothing through much to shares, there's out trading. it comes saying back We we're there. that buying Rod's That's where compelling. advantageous is back that what given invest through deleveraging,

time much it allocate capital find out our more we we valuable way at So the to this market. see anything than in that in point

Simon Flannery

Great, thank you very much.

Operator

Matt And Please Bank. next ahead. from question with our is Deutsche Niknam go

Matthew Niknam

the taking for thanks Hey, question.

international. Just churn I two on the on expectations. first guess,

whether reduced a updates in I us on both of for Africa any think, to wondering or churn churn reduced maybe been then at on alluded secondarily, this the if And this color expectations could any give outlook, in of if have deferral terms had India, in the some of for give more updates additional ultimate Rod, you you LatAm, and terms of us can year and LatAm expectations you just than else? least anything is sort discussions. maybe just

color you'd think, so in when have great I would any completed, second process of mentioned, terms You like half the be additional there? Thanks. to

Rod Smith

Hey Matt, Thanks question. morning. for the good

delay a that is So really going for our the expectation the year churn, the in lower debt, here is answer tenant billings the term. balance churn simple of increases in regarding be the not the is over -- organic an of to the materially long some

primarily is which Latin churn, America delayed. it's by in So, oi the driven

And anticipate is XXX oi of within organic it's year billings of our that of the pick in points about revised churn X%. -- do growth, QX that QX. that tenant up and view we in basis So that later kind to X% in overall our approximately

So is timing there. it a really issue

We're South in material, down it's Africa. AirtelTigo and in of our in not off in C Africa, seeing consistent. Ghana churning some overall looking We're but too long-term and nothing Africa. a delays, pretty in sites view Cell then churn still some it's change in And some is at terms

Latin So in it's up total about African in X.X% for And America, of churn the approximately being year. market. kind X% ends the

business would other I The of thing in levels Africa, highlight is new activity. elevated and are we seeing

been we've really that. So with pleased

So that's the piece. churn

make guess I'll just over comments jumping to couple on there. our a I process India, of

the of as India. It out particularly market the you of evaluating impacts started as capital fully uses we a we're process. past, under and that of a result So may a take know of talked this engaged with potential as that in scenarios. process in And also full of we've that the evaluation future different about market, we're in market

business We stake we in details be anywhere, the and that we're is to any want continuing don't focused to anywhere sale. here, continue XXX% focus a investors. I few than I'll engaged with kind about XX% selling a select are to broad process of very stake that. remaining We're -- but from more highly on and talk majority

and time. through we've moment, it we're made on the We've Of us key as Terms work been some And at course, progress valuation important. we always They would date. important. for primary the is say working are are always happy with that quite considerations to conditions I it. for

But update we're stages the the of our of disciplined, this of all year. late during to stages in prepared shareholders the late for That's we the our a we steps in hope my half in And very to as expect through soon We're for. the the again, what patient and at going this to process. said and process. get do thoughtful, is best final transaction of I we very terms of sometime second process as And through are outcome you goal in looking stages here. We drive kind point we're remain remarks, the very next to process. And complete here. some

Matthew Niknam

you. thank Excellent,

Operator

go Michael we to ahead. the Next, Rollins with Please go line of Citi.

Michael Rollins

activity that XXXX come then and form morning. of in the to that future? hoping given carrier a certain the the if and backlog relative and expectations and to carrier under Thanks American not the to year changed capacity the of that is full specifically, some was Tower create taking the then amount activity is revisit customers to I there around comments of greater in they're for providing system of comprehensive earlier does these of full some in mean activity need MLAs advantage the good the less, can deployments they're what for that that may through U.S. way execute capacity paying year you're frame the have a had and

Tom Bartlett

them I come back, and looking we've second step to of investment But then I you're that spending see Hey has of historically. out absolutely you maybe more kind progressed. mean kind the out carriers. we saw their my network going cycles We've talk wave. how seen I cycle rolling and perspective, Verizon and deployment seeing that that's mid-band seen And more of and long Rod from at no them. types to think if drive of about both they're of and I the of pullback how been reflective for cadence XG the for prior with that And say probably is seen least and We've of kind have different, are enough T-Mobile cadence for, most meet around and the cycles. all asking you in. appropriate more of start questions Michael, I'll kick today is than what them we're in can think, the

growth comprehensive expectations those had in when -- we it mean having had I for our and anticipated at looked and XXXX, place. U.S. long-term Canada we MLAs in

some talked our kind will, line so we overall this obviously of of of But at growth are from signed straight in as we've you if wave, -- protects a the cycles And what of terms initial including cost typically themselves their It's their to existing to and carriers consumers largely in the and stage overall about progress development. ourselves coverage will I per more kind looking dropping that upgrading there's and coverage cycles, enterprise cycle. XG. at kind their to elevated at mean new on. capability. able customers new time. as be It's aimed customers, bring infrastructure. an offer and technology it's as period in It's bit that's seen see spectrum CAPEX, then of then the perhaps to starting go the well followed as this of in what are in we've G and XG It's multiyear positioning technology tied more past it's that cost grooming point And by we're based. down to

back it a to And then where into later in capacity see we'll the cycle, will densification on. start more fill stage going

difficult kind think of is the cycles the we the if when are from services it so customers of different. to and you time each every cadence, And predict the so because of will,

north of services million Rod $XXX I that there the year kind a the million is range. on or the think, of As for our it $XXX business. third But looking is said, up, years, sizable service, to two -- record. largest we're still Last so we're

still So spending record versus -- and they our XG. customers where spending are level themselves were in

anticipation So in and on pull in XG, of what's a going I lot there's know back XG. this is spend this why of

of of continue period through we our deploy. for of value more then the services and drive they to We take activity kind obviously, they're look as to need have see to customers from investment deployed them broader a still here do for enterprises we over further decade all move to more a levels of would extent, to think well saying, a value okay, expect consumers. large and continuing at as I time as XG

we've consistent. that technologies. we investor really And any well as our to of we're with spot continue, by on as I'm The customers investments So this the going -- our is what do, seen time. other a heavily that get XG is cadence hopeful with pullback. It's over doesn't in base very spooked networks the fact

Michael Rollins

Thanks.

Operator

Raymond Rick go Prentiss ahead. Please to go with we Next, James.

Richard Prentiss

ones Thanks, transaction for maybe India, questions everybody. to look extra on of is couple good Can remind some the updates ones. you had. a the that we now few us in much morning you up follow your books to India, on how as on we A but right of Thanks spent a hopefully? getting where again up wrapped here,

Rod Smith

the Yes, of range $X Rick, books our about is we've the billion. What have invested into today around billion on we market. $X.X in

Richard Prentiss

earlier, And is in review, to getting on and I pause some wrapping kind related also as you the down strategic slowed did through you you the the hear have go maybe up say of is builds they're of process? you India, that Idea XXX% the I of India's thought take like that At current you color stake and a what Vodafone on looks kind that appreciate receivable, forward. might point going Okay. that

Rod Smith

piece, the first of of say the a the you on stake instrument. converting of guess you I might different be VIL with a the some idea when in receivables financial talking receivables, into about type

done Rick. that, have We

a of that So prior we've note we've a converted receivable. got or $XXX receivables note into million financial of about more

will So in that think certainly time. to is our I over place, it and work advantage

our market. the it's mean builds the not accelerate higher It on are not some there a we returns. the higher and terms of is -- opportunities new We by being pricing kind higher of if a build. again on and the our down. very in But are of And slowdown appetite But those because builds to driven India. come have the overall partly invest in focused capital returns India. cost doesn't It's to view, through of in demand reviewing a highest pricing in might that it driving is with seeing and opportunities disciplined reduction we're that seeing new we And kind the patient. overall we're really the

America. towers we're and Latin in continuing build Africa to a and in Europe And handful also

that just this we're our and our environment, this and return some highest delever the highest the being to and selective risk-adjusted putting year capital rates and that growth, forward, we delevering in us next. towards of towards capital desire balance give with prioritize sites going into the very So

Richard Prentiss

to to place particularly priority, M&A get mentioned make that low also leverage delevering you might be then have a But does is sense. plan in What to sense putting there. And Okay. would stock compared think out in a how future, timing the makes buyback about the maybe? and

Rod Smith

also X of would I times. opportunistic to down Yes. to there. a we things, of get couple we we're mean, want There's -- below But Rick. be I want a combination say,

think you to watch said our I I've rating below is where the times. delevering of ahead to getting be past leverage we want agency. schedule in down continue with and X the the

want all that of we down experienced. from today, the uncertainty the agreed cost very high as you've below perspective, of rates because carrying So ahead X times agency well the plan delevering where that comfortable. get debt to accelerate and and around sit days interest of these We rating we're

and to little our And might a kind allocation. So it that of bit lower closer the where down hit of overall goes below in the gets more flexibility we leverage times, times, you kind get want when we leverage to X X certainly, capital gets. watch our

come high that that when watch. unfolds, will or we bets prioritize stay are on not be to sooner and not able to will continue this how thing to begin that around the peak happen, watching And any but maybe where rates. and they and continue rather depending other if continued environment may we is rates be that buybacks down, than to later little we're less uncertainty. be uncertainty when something there we making when And goes, that on a will rate The and

the lot be borrowing watching rate as And looking well, price well. you denominated a part in helps. we'll we'll know, that environment And do course, So leverage. that share our at in and overall of Hopefully, of both the debt here we be Euro U.S. is of as as the

Richard Prentiss

the thanks. all look at. sense, Great, all it makes well. Yup, stay you Everyone that calculus

Operator

Please with go Atkin Jon to go we RBC. ahead. Next,

Jonathan Atkin

Thanks much. very

then applying higher CoreSite it the On a retiring and ask strength, should for around Dave base connects, cabinets is this new we uncertainty bit broadly And about renewal as then strength? the I kind the taking for their cross with and like tell action and a think that, you're of think quick wondered, about you Mayo about -- a beyond both wanted us of that spreads little I sense? of the price Tom, pricing. on U.S. on source just in Thanks. some list year deliberate leasing if can is DISH kind or happening and just positive -- to talked you about I a business how real result that of that qualitative to of trends

Tom Bartlett

as DISH, as forward has the I business. to think relative been entire great well ours of partner Dave a going

place So there, will be I'm got I've he missed Jonathan. great while sure in a team

I think don't they're beat. miss going So to a

person like we a would the changed to very, the ours. As a lost business. guy, business, thing. with I and driving I great instrumental of said, the Dave great business if is a that a sad really mean, has But engineer, very big direction technical be and one they're and that been

large and a institution, a well ours. of they're positioned partner I they're So and good think

I first your change -- don't all. there question, Jonathan, see at So any was? regard With

Jonathan Atkin

course, a little are of CoreSite, you around Yes, color seeing? bit more the strength the

Tom Bartlett

they our robust, A market, pricing were lot of XX% as put pricing at up right. I mean the XXXX. function that first initiated is half healthy. The funnel at of are the ourselves. by volumes The Right, said, was I place. demand, increase above own of we looking the looking is it a in

million, on scale. As funnel of and the actually a on think is it I fact, matter the $XX retail of XX%

X% in major a on piece the been even to opposed as by enterprise having historically, we've largely X%, So the driven scale. that to And rate. X% driven

with pleased fact those renewal rates very up historically. above the significantly of we've being been So where

Jonathan Atkin

I think EDGE nature? anything around data around things innovation that of initiatives centers,

Tom Bartlett

Yes.

of a several potential business, going candidly, news projects customers. pilots No with number on Jonathan. on have We to report. within Working the different

have of them. significant at capacity are each one ability a mentioned I the -- of past, we have power sites add number that in a of As to

very in out of inferencing AI the need particular, prem. still innings of early that. Hopeful even will that early that So drive customer days, more at

projects, but report nothing different continue we So new to work this through to at number and explore, to a of pilots continue point.

Jonathan Atkin

Thank you.

Operator

Next, ahead. Please we go with to Cowen. Greg TD Williams go

Gregory Williams

for thanks questions. Great, taking my

one new of would cadence going Just be on your first U.S. the the forward. leasing

So mark new by in you're you like in hit implies about of that XXX the a million $XXX quarters. first to guidance. next in XXX $XX the full per give half guiding the here notable step did But for quarter leasing yourself in year, saying down the least year, million at room two you leg and full

this deployed conservatism just radio much of and our spectrum XXs? question, or not, lot of how and understand And to get being estimates ready could versus trying just scaled dual-band DoD another see we down of growth leasing as you dual-band leg then DoD the new radios if I'm seeing these So is spectrum are deploy? that and to second in low taking a to

Rod Smith

thanks question. Hey the Greg, for

see you XX QX. here, get a plan certainly from that to to lower want out cadence think deceleration the you to slight the QX QX. We'll time by for I do Regarding

that's you do get business range. So the U.S. in line mid-XXs going sort plus very the see the of and that in to maybe terms by of time of it's new we XXX, in in you're kind QX, with the expect the XXs up forward. XXX low what but And and

and new growth So it that, drives business overall with a growth. X% contribution certainly tenant happy organic very we're to that balance about

not that the our the see much clearly year. And if and extent to then term, with well impact. in and Greg, terms out go short is would, a be that here And not an wouldn't be that, that probably deployed holistic would it may upside not lot of sure, if expect seeing certain we're of carriers. the small it the later to would this We is of as some within in that. I it I'm certainly of DoD spectrum, say agreements

Gregory Williams

thank you. it, Got

Rod Smith

You are welcome.

Operator

UBS. Please is next our with And Batya question from Levi ahead. go

Batya Levi

Great, thank you. couple A of follow-ups.

the installation the an is your you're you that And two and one the clients getting that? services services of in for the board of and Thank about or that think there slowdown how do did business, specific across abrupt in do how installation business split maybe to growing that or data First, against on versus side, activity. do you. think carrier mention peers provide you Was managed current one you your about center experiencing? the was you the demand out scale

Rod Smith

joining the Batya, Thanks call. Hey morning. good for

centers, it really the there We've think with is Their we eco got -- markets. about across happy facilities facilities, scale when we're I kind the backdrop a the and rich of we're very not you footprint ecosystem the And XX have. eight companies scale. network and seeing of think data headwinds that that customers. lack great enterprise key any we And really gives and on-ramps us because cloud of with need.

great So of quality the ecosystem distributed we're that we're because the of do the financial results that the U.S. are able way all facilities throughout seeing, and it, to the these

data really center So with to from date. that good our feel investment we perspective,

When want before by right in you've continue adding some ramp have we unexpected our the seen the like view. plug a we've to Again, did on are carrier but to board. it's slowdown there, abrupt down -- bit. kind be along to really carriers carrier, we is I don't know cards certainly, past. do in I scale that the forward. say would of it's do as But and bit comes us focused to going a into we Now here not not a if little slowed don't assets slowdown. right CoreSite. there, say little a the -- talked use certainly it specific the seeing we bought of others about I location word to services, it's even see from We're I wouldn't the get or across course. overly up trying have. could that a That But we

of maybe part kind Most and services a of do not business. some of than of different and is our When construction to some in question, those competitors been be final always a small services, it in piece pretty of preconstruction We small been our it continues zoning our do little small perspective. a a It terms the we construction what the activities. piece to permitting that's from your business. that part is the deployment but comes engineering lot. a of of We've

Batya Levi

Thank it. you. Got

Rod Smith

welcome. are You

Operator

Please our And ahead. Cusick last with question Phil J.P. will go come from Morgan.

Unidentified Analyst

Richard for Phil. Hi, this is

comment wanted I just or one you few follow-up that the more. have longer? on to for earlier. quarters a something then last typically grooming Does made is that that Just And

Tom Bartlett

gets depends we've it the Yes. on be things themselves. I will sign as time network build said past, form ahead be of until money I in the in see the I We -- the Typically, going depending happen mean, the build, it we'll the demand. filled. carriers mean on customer aren't the a then ways. as to see carrier, it heavy lighter they mean, spending of see

more will certain and geographies, certain there of side. so the mortgage shorter be suburban, grooming the urban parts you And on of see can locations, the is where market, cycles

average, up you you an So if depends with And it's will, -- come a on it can't of overall. really kind really customer. the

Unidentified Analyst

And Got it. on on CPI pressure inflation are then you expense where given seeing ground lease renegotiations in any is? or on domestic side, the the renewals, business

Rod Smith

have on XX%. really sites XX-year No, leases sites. we majority than mean have on of say these own vast I XX% I the more leases not. of We long-term would approaching we're our either or Richard,

ahead shape the of buy of exploration to land we work good in And capital of out or through expirations leases these things do we're program. of So from ground data our that the kind and the renew a well perspective. lot move

goes environment. we're X%, land average, not rent line with up range. we any short-term and So see that of significant revenue because in really our don't an X% On to spikes X% to exposed our in in land inflationary

Unidentified Analyst

you. Great, thank

Rod Smith

welcome. are You

Operator

closing the I'll now turn team for leadership the comments. conference to back

Adam Smith

free the today's feel Thanks, everyone for or myself to further joining out any Relations Investor reach with to questions. Please Thank call. team you.

Operator

your for conference Thank gentlemen, for and your conclude Ladies that today. you participation. does

You disconnect. may now

American Tower (AMT) 27 Jul 232023 Q2 Earnings call transcript