AMT - Earnings call transcript Q3 2024 | American Tower Corporation

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower Third Quarter 2024 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to your host, Adam Smith, Senior Vice President of Investor Relations and FP&A. Please go ahead, sir.

Adam Smith

you American thank earnings third and call. conference morning, for Tower's joining quarter Good

a we Rod tab presentation, throughout posted President and call have We which Treasurer. Vondran, Steve Executive remarks www.americantower.com. I'm on our the Vice today website, CFO by our CEO; will under Investor our our Relations and of and joined the Smith, prepared to refer President,

for remarks, we will your call questions. prepared the our Following up open

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

we Form documents risks reflect factors urge this subsequent to remind obligation no these certain XX-K, circumstances. other we include affect future may set from be risk You our to to those us results differ most that factors with should recent that filed could SEC. annual undertake described you and forth and contained this you consider to in the update those We in earnings information materially aware and Such the in on the expressed statements. the to press forth from actual release, cause call morning's set factors in time forward-looking report time in subsequently these in events or factors

With that, call I'll Steve. the to turn over

Steven Vondran

for to Thanks, Adam, and joining today. everyone thanks

customers' reinforce their cycle. emerging markets. further U.S., Europe the having in XG pipeline bullish support coverage In our healthy about densification global with XG of phase to upcoming discussions QX The efforts our As investment our you expectations to the assets. of remained of parts portfolio the a activity see the real address capacity U.S., results, strong demand business, mid-band continue estate customers across for particularly deploy to our our for carrier of requirements, need we're and our in our additional can tower across

center segment early leasing, our of accelerating of Additionally, another and AI-related deployments hybrid demand. delivered quarter signs fantastic from data benefiting IT

complement executing of I want American ensuring for dedication for involved process discretionary enhance by on to the the their strategic the and over to we're and portfolio all for to Brookfield. improve thank outcome stated earnings deal developed the initiative our To quality sale. teams markets Tower capital successful efforts India composition and sale focusing line top line getting our the closing in our growth, both previously finish and our our in and a

we on executing maximize managing durable, deliver Finally, expand continue rates, term. growth cost to all priorities We long our to remain strategic these committed drive to our across that Tower add position by margins, earnings over profitability American value and structure the business. high-quality our conversion to

demand to our investment CoreSite. On the us historical from capital our focus remarks on firmly Having prioritize capital today's tower our lessons deployment investments and to call, approach underwriting where markets. led intact, I developed last talked and U.S. have remains market refine learned our through to our platforms: covered key market recently Europe that developed other the I'll

appreciate customers Helene the who've efforts those U.S. really and with work. communication of first working communities hard emergency been restore critical to recognize like all I'd affected our Milton. services our essential hurricanes their I However, to teams rapidly and to by

with growth rates Europe. in of businesses, European organic to highlight So I'll now and capture high are to CoreSite I'd which our like further invest each standards. returns opportunities provide to positioned where our meet trends and start

approach we that were and European patience pay in we're disciplined highlighted to highly select our off. we've seeing scale, As enter markets calls, past on at

attractive most underwriting global of evaluate the assessment we leveraged our Our Europe, experience markets. operating effectively to

stability, Our and terms connectivity, conditions. support criteria mobile included carrier government counterparty and and macroeconomic contract critical healthy for profiles,

data we market deliver a through where rigorous new our programs true to Unico enhanced years to nationwide new in experience XX% the proposition that and support we best-in-class dynamics portfolios led where customer X various independent France, of about deal assessment auctions our level. successfully Spain at France as and believe operator Spain's EU have XG broader expected global Gigabit value activities, the the affords at and governments that subsidy and over where consumption decades Infrastructure competitive Act is of outsized could including acquisition select saw margins. advocated experience coverage the a like grow and the X across business Germany, for Additionally, CAGR spectrum with This XG to rural development over next and mobile

markets ongoing share a their carrier carriers revenues competition a XX% indexed in also strong quality markets. a are high increased for whom Germany the our Europe This and while least very Spain majority to maintaining XX% in well at through degree consolidation healthy we and to entrants these environment, provides Spain, in low of Importantly, new earnings over visibility market with in providing further Approximately growth from contract of consolidation sustained our present insulation exposure of including business. of with our as respective long risk, leaders as term. the into

us support or certain with And that that customer parts we've its objectives. mitigated of protections sharing monetize certain either well-structured a our provide impact in growth is these that revenue although ramp to allow agreements reality markets, sharing

directly can experience critical by count unlock asset our Spain uniquely positioned tower external our teams our serve persistent increased global strengthening leadership, network nascent. that and throughout vendors, reducing when operators our possible, management our closing over Telsius the the carriers our solve and decision-making align in and the customers our with Germany, reliance enhanced host Xx, neutral we to to activities further competencies, in American independent expedite improve model Tower to infrastructure is internalizing capabilities and challenges region customers our by past relatively France and Since which the acquisition, processes. is experienced still integrating help where opportunities process ability cycles. with on operational Leveraging considerable

yielded entry to effective operational growth and market approach in Our Europe. an profile execution have disciplined attractive

the side, region demand, average line of years. over carrier the over organic we X our an mid-single-digit confident of billings in in with escalators, benefit the On X% past remain with organic organic growth in And combined yielded have the tenant healthy growth driving forward. expectations going CPI-linked

the also increased To this XXXX. organic X,XXX activity, growth, rebuild in complement since of sites we new delivering start invested

own we've process tenants, vendors Additionally, This ownership. total on regulators, getting air colocations the and cost the engagement X/X of with business sets expected colocations, paying skill further growth on that's as off and is XX% which landlords, over of enhancement reduce internal of XXXX our evolve our of new carrier's rooftops. the to are through the model neutral in coming host approximately of improved organic required new

optionality a all a of capitalize sustained Taken attractive with pipeline growth, to we on further runway long development of opportunities. multiyear see together,

As rapidly decade we've meet deploy densify the learnings we'll to insatiable using principle carriers demand, to and continue to institutionalized. opportunities for that mid-band assess both their the shaped data spectrum continue over a and recent investments networks our

center Now I'll our data switch business. to

a and demand segment, are each deliver platform which, attractive we've high to Since trends We of XXXX, center closing within provides pace our data CoreSite U.S. portfolio, return a very in European like at also achieved at opportunities record-breaking year our on the the profiles. leasing underwritten transaction for XXXX. again see incremental new development end long-term mark

believe seamless, benefit highlighted nationwide cases, customers. ability distinct the of that edge. due past revenue for access latency with diverse represents tower distributed low-latency a we've its assets for potentially As campus be demand option to and at to CoreSite's portfolio multi-cloud a new secure, to and endpoints set our optimally we architecture synergistic use is can facilitate low efficiency for when the to model, on cost extended calls, future positioned including from hybrid cloud interoperability, native required interconnection opportunities which combined Critically, accelerating IT to our to support

And CoreSite workloads over delayed long to synergies infrastructure term. present timing for future expect due meaningful like Today addressable might the I'm the is convinced accommodate in more deployments latency-sensitive initial edge the our while platforms and continue to the of to us, required the that between ever to and a acceleration going market inferencing. rapid tower part AI to expectations, we than mobile relative be our

the AI directed term. of CoreSite. In results the the requirements growing workloads function are will we're the step realizing to meantime, of our medium of are near at leasing benefits CoreSite's indicating demand a only component and AI in and customer demand grow that leases, signed

started the on-ramps through either a connecting past have own virtual offering. to the several architectures, OCX GPU-based quarters, to build enterprises Over cloud or their

but hybrid deployments they're larger and a typical These more architecture, resemble power dense. IT

facilities our to workloads the equipped all need. across spectrum, virtually accommodate with As are this well AI

key capacity supporting favorable demand also benefiting is record portfolio the our supply markets, foreseeable exacerbating absorption indirectly, and the leasing consuming a of environment hyperscale data new our a further use and that's into future. More center and both renewals from for AI through pricing imbalance

demand healthy to catalyst several CoreSite plan XXXX to in exceeding see to rates the activity, allocate next for spend likely many persisting pre-leasing years, at development or guide. that return midpoint the $XXX capital that meeting of through are derisked we of million come, the years attractive over at we Given accelerated assumed more our the

CoreSite's mid-teens We our certain taking have our market see be hyperscale place long as basis as expectations the and, interested development ahead cases, facilities exceed meet received to initial we'd has sustained for we questions for participating returns industry-leading retail-oriented continue approach, the yields. yielded on which in whether in to Recently, extensive runway a today. stabilized in a in

by was campus what and our markets. [indiscernible]. compelling adjacent long-term deployed serve potentially invest on expansion a colocation campuses existing enhance within facilities, customers to priority expansion the curating of our campuses, variable focused single-tenant if ecosystem of seed Thus, interconnection we're new opportunities there for and facilities developing mix were unless establishing ground-up our as a existing national and a campuses, absorption not to there new remain for a new for opportunities effectively partners are JV clear the methodically planning We to Today hyperscale on opportunity the multi-tenant or power selected or facilities prioritizing to ecosystem of new needs.

Tower of in data on closing, demand. are rise positioned capitalize the built has platform American In exponential a to assets well global that

experience deploy quality creating of applications Our today for leading CoreSite operation data the are best-in-class both critical and our asset as and operations, a and customers their future. networks business differentiated and they center tower by European

American strategic returns shareholder total to for well ongoing progress position are we're making optionality portfolio future deliver us across for assess our organic portfolio the with provide sustained attractive, growth global catalysts priorities uniquely and in earlier years out growth to This deliver many executing These I this and come. to and earnings laid extremely demand opportunities Tower investment. combined for the businesses positioned year, high-quality strength, to

I'll that, it Rod? updated With to outlook. and our QX Rod to performance turn over discuss

Rodney Smith

Thanks, morning, thank Steve. today's you joining Good and for call.

global India release, quarter, As you in morning's certain for disciplined the highlight including our closing press capital ATC cost These demand approach solid management strong our to over across loss this saw with portfolio focus our earnings assets. balance third continued upon and results the sheet the deliver quarter combined demand . on high-quality exceptional strong us trends, to our sustained items and sale, continue returns of long taken adjusted to term. in durable growth noncash allocation, shareholder position

want into India as change successful our sale relates Before of closing XX. highlight ATC to reporting on it I results, key September the I dive to our a

as business the reported represented You balance attributable item will now India reconciliations sheet discontinued as results in to see our our statement, stand-alone and on operations historical AFFO. with income a associated line

for As on exclude not as measures our footnotes will such to EBITDA be in QX the including you statement, and the reflected adjusted our billings of to measures, definitions to clarity discontinued throughout press revenues operations presentation income how discontinued is release and within expenses in reported such, operations. the treatment encourage results. I certain non-GAAP earnings presented and tenant refer a

new stockholders full of metrics and AFFO AFFO attributable attributable a as or investors the share. AFFO the would useful from believe have period Additionally, continuing per share with attributable common baseline to believe future attributable India interest AMT periods. provide AMT we expense represent to common our AFFO continuing adjusted for of per what be adjusted. operations results AFFO these introduced associated in operations AFFO and with from adjusted, per to share [indiscernible] stockholders use appropriate savings These as in we proceeds attributable The for sale. produce attempt We this an as-adjusted of attributable will determining is or metrics

the Now few a from highlights quarter.

Europe which acceleration strong by saw growth in doubled in nearly new application continued billings the growth organic margin. business supported prior First, similar of mid-single-digit another demand year in of for in gross tenant global we volumes the in quarter, our U.S., double-digit Africa. organic contributions was and in portfolio assets the those period, third our remained quarter services as accelerating Internationally, and growth of

International and approximately selective construction, site organic by was fourth XXX Europe, sites sites complemented consecutive including in overall. of over new quarter growth the XXX new

mentioned, initial its of demand in center in underwriting track as on supporting U.S. third strong consecutive new leasing, and is of our record excess remains Steve of revenue growth As for exceptionally data XX%. year business our well year-over-year over CoreSite

XX year-over-year, prior to excluding our basis debt, the Next, side, quarter adjusted period. third on earlier the execute cash driving top expansion continue complementing X% strategic points priorities out demand management this supporting results, laid nearly roughly to compared margin trends year year SG&A, EBITDA the line as we declined of cost bad

portfolio, also interests and optimizing in India progress We our sell signing our our in New land Australia sale closing to and made Zealand. agreements

balance we India strengthened the further debt, we sale ATC repatriation reductions efficient proceeds reduce Additionally, using sheet further near gross term. the expect by in and from to

our sheet strength, momentum growth executing in the credit to key commitment total BBB focus financial to flexibility our and we long enhance can and drive These upgraded signaling portfolio balance the earnings our during S&P reinforce strategies operating financial quarter, on outsized term. achievements where from to portfolio rating shareholder our actively earnings global assess over high-quality our BBB- and quality. value compelling and returns to Importantly, platforms

to certain and WOM, of the outcome be to speculate. uncertain this reorganization filed for another million, cash of and customer portion quarter, straight the a recognized related on as provisions $XX Colombia Any basis took is a in million debt. debt line we on began would bankruptcy equivalent front, this including earlier as the reserves AR of who in revenue U.S. revenue of year. $X Finally, million potential But third outstanding premature we expense. $X in and reserved resulted In bad bad recognizing the it

our Colombia's WOM and context, and respectively. total Latin For less gross makes X.X% of X.X% approximately up revenue America property revenues, than consolidated

Turning and in reserves roughly period to increased Growth growth by to year-over-year, approximately nonrecurrence in the property FX, declined by revenue. year excluding third billings tenant prior on straight of X. X% well in certain as X% taken in revenue the property and the negatively as X% was Consolidated U.S. nearly revenue current due quarter and period Slide noncash onetime organic benefits impacted revenue the Colombia. line

in As consecutive the I mentioned, data our performance was supported by U.S. business. third quarter of double-digit growth center

of billings In the X% to segment, Canada was growth Moving side was absent approximately X%. Sprint tenant churn. right slide, X% consolidated over and growth or related U.S. the organic our

of to indicated, of X% As to down assumptions. outlook towards growth we we previously expect have prior QX commencement tranche consistent the a Sprint see due in final with churn, the step

over exclusion India On business. enhancement through the the of representing compared expectations XXX prior to was basis international side, an the growth of X.X%, points

approximately noncash benefiting management declined gross EBITDA just year-over-year. was drivers the margin X% Adjusted increase was FX revenue Growth, with impacted discussed. tower X. straight an XXX% X% by approximately Growth X%, to over line, roughly in cost I just excluding our from negatively increase a Slide in services activity. disciplined to associated Turning primarily headwinds. and due

cash nearly CapEx the stood partially offset of common Moving driven X%. sale. of an year-over-year, side AFFO to our by have share interest the to per AFFO of stockholders maintenance growth high attributable growth right adjusted taxes, the to costs, would as-adjusted effective On Tower the basis, American management increased of conversion and through X.X% the slide, EBITDA India timing by cash at

our a few outlook. with full to start I'll shifting year Now updates. key revised

of the transaction. close for our India adjusted been has outlook First,

as organic As full treated results exclude will historical the as property our India and will discontinued be billings EBITDA now result, India a such, adjusted operations, year. revenue, tenant and for contributions

been Our common reported adjusted include operations AMT AFFO up have the year accordingly. closing. stockholders from to of periods to Prior discontinued date attributable contributions will

underpin that drivers the and performance business solid. remains core our Next, our

capital a across and manner that a new sustained on in discipline driving allocating business pipeline creation. on and of strong the expansion company, value business As cost demand a global focused effectively our supports we're margin executing

WOM, in including you'll As $X million we're debt in absorbing $XX in in incremental AFFO outlook to additional our our $XX of straight $XX to to relative $XX million related consisting reserves, to provisions outlook. million line which expense, and downside bad in million combined see, an revenue adjusted and EBITDA represent million prior

and However, associated upside. the through customer we're with $XX a an more anticipated Brazil exposure million in direct than offsetting expense latter savings obligations, of cancellation future with of that the lease contributing settlement

million $XX FX adjusted revised common EBITDA million, our AMT million $XX attributable stockholders, an property headwind incremental to AFFO $XX and assumptions of to revenue, and respectively. Lastly, include

Turning to X. Slide

anticipated increasing approximately upside, primarily our Brazil, for customer driven operations continuing expectations an includes pass-through outperformance $XX of in and now our data are certain from and in delay by U.S. WOM million partially is in by We onetime offset center to million. the This property outperformance reimbursements revenue revenue segment expect non-run in reserves $XX partially Noncore by by core Total was FX. line. we offset by driven related which XXXX. outperformance receive straight rate the in settlement and increases

for of outlook our consistent Organic enough expectation did X%, U.S. points consolidated with approximately increase and basis from X. providing Latin to our move expectation expectations, billings Slide trends modest company the Europe X%. Canada, to unchanged to and assumptions. consolidated though our a America XXX to not with the remain international lower-growth approximately by catalysts prior benefit growth roughly prior of business our Africa, and and India The removal Moving expectations tenant

XX. Turning to Slide

million. This operating expectations modestly I expenses $X through by recurring Partially We revenue bring associated WOM margin million initiatives mentioned expense initial from together we've project with outperformance various strategic the services achieved are revenue certain drivers in estimates. continuing unfavorability. increasing as intact, into for of certain EBITDA of assumed combination likely upside our U.S. $XX just Gross below additional well although adjusted debt savings delays our offsetting from as another to bad will business incremental adjusted a benefits. nonrecurring anticipated EBITDA, is remain and outlook our $XX the XXXX by with million benefits operations driven FX for

midpoint dilution, FX. consistent Moving closing, $X.XX per outlook of Relative $XX.XX communicated Adjusting timing $X.XX, reflects the our include the for AFFO expectations from past adjusted prior in by is India revised per is from with to cash per our to midpoint in a moving $XX.XX leading our the XXX% prior a dilution to to of of share. date approximately attributable resulted India This of directionally XX. offset the September operations share. conversion the share outperformance of outlook, on upside upside the Slide impacts closing outlook to the EBITDA approximately India of ATC business basis, of through midpoint our continuing currency-neutral on and closing $X.XX adjusted XX the largely Improvements $XX.XX calls. which

basis, $X.XX at continuing outperformance midpoint operations, remains by as-adjusted share, FX. an the offset the per consistent reflecting outlook core our in On

XX. Slide to Moving

allocation plans consistent, in relatively outlook. to remain our India $XXX Our allocated capital capital removal million except expenditures for of the of prior

to growth distribution all dividend share, at in with $X.XX the per remains expectation subject to planned Our resume Board approval. XXXX,

start data criticality continue of year, demand reflective durable we summary, highlight strong assets. our In of expectations the the to the trends XXXX, a that laid real out compelling estate set the of of for at

our the our demand ongoing continuation assumed record-setting U.S. near and accelerating Europe, a data center across targets XG leasing in growth densification markets, Our and and XG of top segment. coverage in emerging through line financial

strategic customers' refined set our asset manage demand, aimed our and portfolio our and capture to new allocation optimize a enhance drive earnings capital and selective of sales quality to established and opportunities, we needs profile. To structure, our priorities and capital through costs margins support that the of effectively business priorities

come. we of position enabling years this for Our across and the shareholder to of accomplishments successful high-quality to momentum will stronger believe an attractive future, us even to growth date execution us duration these and the value for expectations the each reflect priorities, drive for year

operator, can the that, we for open questions. line With

Operator

[Operator Instructions]

Rick of Prentiss Raymond We'll with go to the James. line

Ric Prentiss

going One the given of kind on in below I we'll top the lease on to line. of questions. 'XX goalpost." the 'XX got But on some split we'll X and at guidance color of one the new at gave goalposts, you "Hey, areas Last levels. activity year America call, bottom the third line quarter saying, kind above but No be slip level, we're directionally, time. the North

positive stuff through at directionally, activity look in North lease the went should America? think new about on you your versus we the 'XX As how green presentation, we shoes just 'XX and

Steven Vondran

the good of what about that, give right in to pieces take we I'll was a conversation still Rick. happen. thought in you phase. it. too we moving in densification our are if guidance for still hearing It's year. at, particular, And the look There's Yes. to line lot early next business, the beginnings But from some with that's of U.S. customers going

that's if terms next the of this hitting churn of leasing so a year year, final still October think And weigh the the Sprint will this have in U.S., in that on U.S. bit. in you we tranche about

And that's going down that committed terms most to you kind seeing, U.S. the does that year. of in bit with which rate growth little for see likely next us contractually so of a environment comprehensive mid-Xs that the just year, you're next in couple growth kind of range MLAs, our leasing of tick already we're kind under what's when

you And Sprint 'XX about with through point, 'XX, to long-term guide if that's that the Because churn. our 'XX from think consistent at least 'XX. at X% and of we're

through churn And we XXX still so in coming tranche. XXXX that final Sprint of from lens, if you that points look basis have about at

year. next So that of mid-Xs normalize if out, you in would the kind or be that

think that that's do comprehensive. of exactly the where be, going it. customer sizing And mid-Xs way X sure yet. have on in to we're not range So not We that's about kind to we're

So that. things volume-driven there's with some

figure the fall outside that's of hearing will 'XX. some are 'XX, part early trying later We're our the to also We know don't 'XX, to that comprehensive in or We from customers be part going interest of of if colocations that still and out. MLAs. new

So there's few a pieces moving there.

you kind that in mid-Xs But directionally, think range. it about of being can

Rodney Smith

of Rick, of the maybe of in quarter way terms the up, and XXX new amount of in I that you range of a terms is loaded consistent we the shaping provided levels on. new year business, had would just XXX. XXXX, guys And add all biz each it's to we pretty that, between

up We similar to end QX expect so range, X them landing around which into us that $XXX last lower be kind all was the that's mid-XXs, talked as that of at or supportive similar about. of well, of And around in pretty to of just million. next a about contribution $XX million hitting the for end Steve quarterly that the and all quarters, kind transitioning and of year would numbers so. That

Ric Prentiss

morning, And in 'XX question, would X.XX, How deck. from XX I be think had the attributable would to accounting this I'll what we operations. the growth been sure which to head I'll we our going discontinued thinking down sounds impact, I to like Slide to I be about funds an $X.XX is from that XX.XX jump-off as from X.XX, should How look? that want think far adjusted adjusted the helpful. call understand as the year India line XX.XX, about a kind Okay. in stepping thinking appreciate ops quarter, originally net-net-net. how point XX.XX is to spin AAAFFO, admit. the about should should Slide my We a bottom not of to then make makes maybe a on XX that completely, CPA, $X.XX XX.XX

Rodney Smith

Yes, I right, that's think Rick.

with accounting the appreciate under of discontinued fully can the sale numbers be So a for that little ops. addition India bit the that and complicated of

anyone the to wants our go to group a detail, to details. certainly granular call for So Investor more the it that walk the you here. I'll is all through of through in hit try highlights couple And on here Relations

sold First, beginning of XX.XX outlook. original the AFFO going is as which maybe the -- over XX.XX, our the was at So We of numbers XX.XX you reported, here. the right? $XX.XX a fourth I'll from share the take India the quarter kind

out our that's So for the fourth of numbers quarter.

the just the for India pulled that longer So no $X.XX. share there. in out QX, AFFO to per of they're That's which elimination contribution

$XX.XX. So we share to stepped $XX.XX from per

by And apples-to-apples items, and basis, cash cash refunds us India is way, Then on in the we other this outperformed headwind, few bridges then outperformance That FX largely million across over a another $XX the was million an $XX primarily of there's tax $X.XXX countries. the adjusted $XX about show. with Latin million. equal a to which that That $XX.XX. little going to bit America billion, of EBITDA other

So in basically by you're quarters. contributions X out of the $XX.XX to still another almost interest and and those down million. offsetting drop billion got $X India reducing which that which that pulled there with for that third AFFO the reduce to closing $XXX $X.XX, we using you the and When cash second -- by Using $X.XX, pay India our interest debt all the cost. the that has is first combination savings have pulling the out proceeds we we down out proceeds than will earlier third to quarter, in the also

the of the savings proceeds out you taking is the to debt down $X.XX $X.XX. down also to using India net So to the combining from interest gets that the with pay that contributions AFFO

of core the number some million is in issues from really And about then And the of about timing going in basically I terms just there there some cash and largely in discontinued as $XX million India, And is the outperformance talked taxes. that outperformance business, AFFO the that well, $X.XX that share grow point forward. XXXX. for per think how to representation business, that good operations ongoing the will starting is a continuing our best

kind XXXX. for mid-single-digit to said, that of look we and true going growth as And we rates forward, holds forward

next and from into put can that $X.XX. to be grow we year would operations. We XXXX, that basis into would that us range for the think $XX.XX an So on apples-to-apples continuing AFFO

know that may going you it, there's with team. it a take much But through people I to few kind look But in lot only bit I clearly. on through through it of it lot little understand Relations gotten a there's press of about the you Rick, me, once release had it. and you've minutes you'll this think get digest. and of morning a time a becomes here, the after I when phone appreciate And trust easier have again, to numbers earlier it, it our pretty Investor think

Ric Prentiss

mid-single then line keep it's it digits? share, And up, tailwinds, you kind kind kind What helpful. digits? mid-single-digit digit now that high you back cleaned bottom very would Can of a really me attributable growing headwinds in to single That's is per of get is AFFO of versus single business? for high

Rodney Smith

Yes.

certainly is Rick, digits possible. above absolutely getting mid-single think, I

portfolio the have you are business. the happy across positive the that. when certainly We been from of selling a the we and earnings improve very working We've is India volatility that think that to the very diligently with of quality Removing business globe. the

-- growth still for business just year, digits, in the holds the that that like we've OTBG, true, So track period, with final guide 'XX averaging churn, U.S. grow long-term next and We mid-single X%, talked to past, will spring low that And U.S. back just 'XX. Steve certainly. and the that over you in about be on whole that. will watermark, the as We guide walked the the average, that think do it through still think Sprint tranche algorithm on track long-term can longer-term we're in then X%. on still of we're up think

new we're and CoreSite going and X of growth our hitting annually. We're faster we've will is even in XXXX. business international can grow for pretty record that quarter maybe And expectations. set all had new that, years this than well-set record forward The now tie in or to either -- outperforming CoreSite, know and in a growth double-digit we original We certainly. business expect double-digit that QX,

going is controls, sheet taxes, CoreSite very exceptionally expanding margins, managing balance debt. and to reducing watching We've rate So on cash cost focused the well. been exposure floating

You put and portfolio gotten go together, getting up, all yes, that the headwind. and this as is quality of stronger earnings the we've and strong interest it's through

where watch that growth still and interest that think from beyond our uncertainty so mid-single-digit America Latin we The about term, coming So Africa, to will yes, earnings the go. we when there is rates can XX% rate. we there. and you of that get something always There's longer FX, have watch areas

will So watch as well. we that

Steven Vondran

about just we'll And out in, there. growth think add if couple a our long-term for would components Rick, of of algorithm you Yes. kind I watch

are that's going of with And be is consolidation believe the challenges But growth the single first next time, Once high more years, consolidation that based think a primarily we may won't map. some Latin growth. be WOM, digits. low that, bit we we back also next We're some we [indiscernible] it's there few The consolidation will that that we low get past few kind come there projecting Over on potential why for but to be that on headwind that's in That's care the for single-digit for and years, single-digit little seeing see America. there. to us. churn. a

the spread past And end we the are churn year. U.S. after of this

that us. be positive So will for a

is of happen still And FX And so the emerging time. swing markets. to it, factors what's attributable will our AFFO exposure going we reduced be attributable our really XX% our over to to with while have

resulted So there. the FX for few just few little just there negative which seen a degradation weeks. year the last bit some risk trend we've in is weeks, past in of that, a for And next still in

headwinds. is think And And years. to the guess with piece I other the next rate what interest as it's happens interest exactly rates over then few anybody's

that of high single those digits be So those even long-term algorithm mid- in there. costs of holds are watching. to true some absorbing the But while things we'll

Operator

to David the line Barden of of We'll go next America. Bank of

David Barden

for Thanks all color, that Rod.

record CoreSite flagging you've what what revenue is the have about business, and in on of number number we kind like the a the that conversation leasing. have and leasing on Could make guys you to a the Steve, the been not is, terms now disclosed. the of Just historical available up book-to-bill of the pipeline looks you're what growth double-digit situation context what throwing It's happen?

could, second up the then follow if to And on question, Rod, discussion. just I this

XXXX an AAA, ongoing think basis. Is to it and you're conversation I in will fair? this it on growth going our this basis, called the for a what Rick be quarterly So of anchor is on the AFFO, attributable report the number a adjusted kind that about that

Rodney Smith

base metric India while Yes, the the and India or applicable, number as little a what you David. we talk let this until the We'll certainly sale. it know prior for be which our will comparable discontinued we as in But will sale while numbers, lap is is. operations long about it's that year

Steven Vondran

It's comes think sold. megawatts terms the you when XX build sales of about that's in capacity specific we've think can reference, just of today. pre-leased construction to about That and And given are. got don't XX% ongoing pipeline, doing number for it over today, I what what we've factor as CoreSite, But a pre-acquisition. replacing of about it they we've were

is first the year before of So to and leasing now is think And have that kind between XXXX, them. half remainder the of bought that. of $XX and commencing majority the million today beyond the than the we higher backlog we is that their about our way significantly today is

a we the about are specific haven't guys sale and to growth. that's think revenue you So given way giving number, we the that backlog,

most double But commencing double-digit revenue XXXX accelerate. all bread by in confident we expecting demand have in that likely just in and digit general the terms it. those in continue point, infrastructure butter. very for we're where well. And seeing dynamics of there. next And enterprises we high At are -- several for feed as our feel to is sales is a we're continues strength see the to and or a hybrid That's -- this industry in to that continue pipeline rate cloud strength that single healthy that years pipeline, to continued growth

for the GPUs. And CoreSite. It's AI-based we're own kind their models. that, deploy to again, perfect kind customer see is now starting those And of enterprises of

the customers pipeline installations. that's our come. to feeding going their size years that keep So And we're seeing existing of for to increasing

that like for feel is right foreseeable growth future durable we So now. the rate

Rodney Smith

And Yes. when prior with add, years. the range, couple those would from bought the million in numbers, $XX in relationship the we of $XX first million number terms of range or a maybe in that I David, of backlog so CoreSite in that's up just our

And a new biz similar XX% that's it's increase the roughly. of level so. or up So that we're seeing in

Operator

go the Morgan Flannery of to Stanley. line We'll Simon next of

Simon Flannery

you policy. about give you talked could some just Rod, that. around you're how the context us about dividend thinking Perhaps

it, here, and how leverage right growth you're that ratios the digits, dividend works from and so mid-single about the that way is to and forth? call bottom line, into If growing think payout

CapEx, ahead be of, would CoreSite I the sort for of to said were in some you I this, CapEx. could back coming think of on update you does love you say, $XXX much million, capital a million. the it that be us? the you know go just parameters point, like what million how or to, past understand to at $XXX or much are ring-fencing go you're kind and opportunity deploy to spend how Can but I would how great $XXX money prepared centers? commit opportunities mean to this And you want when to it extent, hyperscale at the attractive you that don't you bought you sound do to thinking might you big data go. Obviously, about see levels. to But

Rodney Smith

Yes.

for Simon. Sounds Steve CoreSite. dividend talk and I'll you good, to question, CapEx will then take the about the

call, the what average it that the talked be. view closely much the the about dividend per dividend, growth long-term rate AFFO it in time. calls, as forward on terms we've too prior discussed growth will growth is do way XXXX. But mirror to want resuming the of into growth into last over share to might similar don't we rate we in dividend rate detail of that the with I we get So to get as look

about So that's think we way it. the

per that if the that to same AFFO would would of a are it. hitting rate. kind time, the over So That's average rate equal on rate dividend we growth on growth period time share roughly expect average about same growth over we think mid-single-digit a way that

puts could I there the trajectory over of get kind to But there. takes. every that apply really can't time, you You and think individual year be because

course, and Board Now we do policy, ask quarter, every always dividend dividend and them distribution; to that. go declaration our the with and approve of dividend would to we

everything do stronger. that is So subject earnings again, balance talking I'm the of to -- about strong. approval. the But have sheet quality increasing, It's getting the we stronger portfolio Board with becoming here is we

that driving Rick's mid-single-digit from the So per kind question, AFFO of share dividend. growth that that about with maybe there achieving would as our talked tie grow all we to rate, ability into up

between it that in if it it roughly excess or allocate of another buy we in see if around the range. AFFO percent with can the call CapEx leaves or globe is, dividend as to us shares, And where line to. capital we dividend still run with that to reductions billion XX our share, of which to of debt $X plenty programs billion-ish we into That leaves grows it payout the AFFO and But a mid-XXs, to deploy use it per $X.X wanted staying us do kind to back business.

Steven Vondran

constraining Yes, on the the CoreSite, CapEx for not business. we're

it of the that beauty have fund a entity we is CoreSite has reiterate into that the to partners also lot we've optionality additional capital about. that range number capital talking constructed how as deploy of opportunity business how you're private And growth. So could and as the of you that with see much just would I our in we our so capital terms kind wants, grow that of

as partners next time how for the to our be So real we in budgets rely the American on we're put able year. to versus determination much kind at how we'll much of wants make Tower looking

yield So it's the get at underwrite percentage sooner. those mid-teens capital. even or levels, a better what very tell what stabilization it's high development able stabilization. to actually the pre-leasing you too and pay. early going a of But budget historically And risk a still we're to because use capital, deploy and way is low we to very to is to We're going it's be and good

our continue capital a of our aggressively campuses So we in do great sell build. We'll use to as it's that. we can fund developments those to think and as

numbers expectations suggesting we that be the in you our And you're something out kind for reasonable lands. very so us that But for we'll where be. could of that to of where know lay ballpark let are XXXX, the

Operator

Sachs. We'll James to Schneider of line Goldman go next the with

James Schneider

been more same basis. have of owners I Steve, guess, they're of the assets European that strategically, tower vocal sales. of laid all, open some on first of attractive business the out you At to the potential European tower an some time, of qualities organic

CoreSite where CoreSite Is business, things a there all might new to then And the couple I of guess, I scale comment you it land think be related materialize inference then being conclude initial on a consider a bit this site you're slower the that to a purchase fair that is is maybe and on years? And an I would in quarter. acquisition over quarters So of or else to anticipating? in secondly, also area your the coming made little One large expectations. equal, development a noted. an you

great. maybe a unpack X things if be could those that would you bit, little -- So that

Steven Vondran

Sure.

So a that's with was And LA me campus. have The land start because CoreSite expand continue sure just to continued to our that's you did purchase the that's the the serve most let recent to asked. to our L.A., we with make I'll we -- start in customers runway that there. and

to continue and campuses, us gives grow that's -- build to that So see land around one that over that's, was. just more continue you'll our in time. and again invest And capacity what us to

to very I terms that's That was we're learning a for place interact lot contracts how channel, develop to be inferencing that's inferencing, to develop than the about been thought. large taking there. it's slower we're with bit ideal in we've demand than really that. you The inferencing been that that we with we of able an models. and a talking selective certainly distribution the layer, little thought. we're are some about in was think don't we're seeing the interest In edge some we robust counterparty that, of think We And risk that. writing the because slower And seen that for I fact,

kind being are risk. of out counterparty But very that of selective unproven we're so there about there, businesses lot a

like we Europe, have that. we to we do of markets. replicate terms what be would to feel to able love in Telsius other We with don't In did

to value in we if in number adequate we scale seen scale there. just be to bit could, that But long-term in and Germany shareholder a Spain. We'd in had it. see We've conditions to and Europe France, have terms of some and a aren't way have We we're terms that like trade growth little disciplined. conducive subscale we more portfolios patient the of find because

reiterated we've times. those factors few so of a And kind

colocation very are have overall is working But in us us, what's as counterparties the bought And low have low dynamic. are we we tenancy, towers a as a very risk so conditions the as we're well competitive that terms Europe so the churn, some with, seeing well dynamics to today some important emerge and in markets. people And And very contracting past. builds. for some we there in past other of compared decade and competing on little network Spain we're what consolidation to little where a they of in the bit were we're the you're just seeing Europe or seeing in that weren't that's promoting the in quality

for by the couple dynamic great rural coverage the get area, you that ubiquitous including a with it's push And the everywhere, governments us. to real

So value more going going long-term available valuation, conditions at criteria characteristics, the that we'd be But right are anything, into to don't certainly chain. terms things to that that portfolios our we're meet rush create Europe there not investment interested. that we're came and not that had buy some in and similar

Rodney Smith

when of Europe, couple highlight it to maybe for maybe items a just comes here. James, I'll revenue you

on the billings with that us expectations. that heard just in business you've we past growth. I'll So in It's say the happy have. we're European tenant the very our original hone outperforming organic

We're year. another for full quarter about that's we very for X% the X%. had And a OTBG X% We were at balanced looking Europe. over where

from X% higher been last we're X quarters or we several organic accelerating last were quarter, was the So is -- It a any it the quarter in for over so. than has That new biz. quarters. contributions in the little in

the accelerated churn we like seeing The right below escalator be in to lot. we're the around activity So an market, level of which is a And X%. X%. continues rate

that durability very we've have It business could that to platform that the of very able So looks model it's the balanced in U.S. the those like we the that numbers. build way much And a about we're there. very and revenue excited generation grow. been terms of

Operator

Schneider? Anything Mr. further,

James Schneider

you. great. thank No, That's

Operator

UBS. next to Batya go with the line We'll Levi of

Batya Levi

Can operations. if the the is seeing domestic mix? you Or the about there expand you're And colocation that mostly upside? versus be to this in to holistic right in network, Back have any starts amendment it change could to its that the extent agreement included now? you talk

one gross And quickly domestic thing margins. on

I think there? they little bit anything out a Is year-on-year. there down were to call

Steven Vondran

consistent is demand we're Sure. new you mix and, about pretty I'll more in we're today, can interest but the seeing talk that Overall, colos. gross about the trends the margin. Rod, talk seeing

shift the information, we're we're they're doing ] rent like typically applications colos. into phase the kind the [ -- more getting structural we're as precede will request that what So for to moving our we're those certainly indicate densification available, conversations that planning, what RF centers having of a a and new capacity, are having

encouraged by what we're there. seeing So we're

In terms a differently. of works how our is agreements one work they comprehensive of little every those a in little agreements, differently -- bit bit

of Some them are just amendments only.

And in colocations of agreements. limited some the of colocations include agreement, once that outside reach be agreements, they And that's comprehensive So those of new of all in a that number amount would may they extra the the comprehensive the over incremental. incremental those, in are colocations.

would densification several factor. we long-term comprehensive knew what our over this to a And get And contribution we phase agreement become so the next would larger years. and that's as expect always the outside see we that colocation that from the guide, we new constructed of

several that We the for And to that's over development. phase next from consistent we're will we're into network as planning starting they're expect years. to very what growth see hear to this the the colocations their with in customers see add ramp-up that next expecting of

Rodney Smith

joining Batya, the call. for thanks

to for margins, I'll So to domestic down and on as of ago XXXX margins the the for about because margins But well the applies of I'll total the XX.X%. we things this business. year had just QX That's XX.X%. really the a are margins, domestic in quarter hit describe of the

at So XX basis a it's look that, point you and reduction.

you about XX the straight-line margin. would The point a highlight largest to callout that negative for is impact I hit there that is basis

it's noncash as dwindling a curve. we of kind course, of -- through kind it just all and run know here line So goes a that we straight-line balance of is straight item,

XX really cash So XX, bps, on basis, margins not increased the a decreased.

But it a -- that And like the biggest come settlements other going impact that. things, then balance the there's reoccurring, things but makes up. some straight-line small the cash is the prior coming -- few actually are change that's onetime is margins not through in the year the down, reported biggest margins

Steven Vondran

a more on DISH comprehensive the is Batya, clarification new lease one largely agreement. MLAs.

maximum that lease to to colocation get So the the comprehensive [ until new ] one, of be which they don't time. number some will happen included agreement we expect for

Operator

Nathanson. Moffett the of We'll go next Del Deo to Nick line of

Nicholas Del Deo

other your Steve, help more that longer level taking you us can than there even going if data are eventually specific or bit it's to, prepared remarks, understand a of you points or in that convinced is mobile conversations to transpire. an I to things I you're edge ever that be to think opportunity guess, increased said conviction? point

Steven Vondran

Sure.

on with on we're partners I is niche underlying seeing I whole say would the ecosystem kind and the seeing got we're from some of theme we've you're kind really working some of the to what is CoreSite, But that few proof use point So ecosystem, at of that decentralization. concepts more a would cases.

And centers. providers seeing and providers going the looking to more that more you're is the architecture start AI the So at cloud phase first distributed today. of regional

that's the out people more you're that's activity of seeing And what you're is seeing to there, a diversifying driving regions. hyperscale lot

and get that to the to end also Some of of the take lower that advantage closer is user cost, is some transport but to costs. and power latency of

will as think And that We see we so that continuing emerge. to continue.

they continue conversations are those with diversify the that players we're to having want And of over time. to types

to our CoreSite, go of exploring of Tier X markets, looking which is They're So at couple markets. for is at they'll with something period X a that in facilities we're presence Tier expanding regional looking more time. a

years We're You for a opportunities ago. saw that. in still us Miami do to do of that couple looking

And then it to believe, over edge, we kind continue the of that until time. out gets will diversification wireless

that's look infrastructure stand-alone And globe, to we're as the about look XG at XG our happening that more stand-alone versus the the you customers seeing talking at non-stand-alone time, go compute seeing XG what's same date. to to mobile across deployed more. carriers carrier and you're been edge start going At

at of wireline the kind of both and the the into going suggests compute they're look wireless, an more sides that both we as edge. So that system, the architecture for at need

to have with to as what plan at that's conversations talk kind those them what more look happen. point to. is of I'd what convinced you that And talk we we're than eventual and that the that so And really edge, like that's about ever about going and infrastructure needs becoming

thought. Again, it's we taking longer than

the XG that wireline sense. the wireless get out pushing for further And on that bit a happen toward to architecture. consumer. they'll to But into that further starts, distributed had has You once on to that of more we side, momentum once stand-alone make get evolution -- side and keep the little to there's the

Nicholas Del Deo

helpful. markets. super about That's then thinking on -- one of emerging some Okay. other your And tower

builds CapEx customer new that and words maybe put any all in So willing sort example, clear with reaction been has for those guess engagement respect as to much your you're been that to anything you're up or tightening lines? there You've to there. decision? customer discussing actions not behind CapEx larger if commitments, of I

Steven Vondran

with business the engaging been We've they're that. people. issues. They our good I understand customers mean on

creates Of value. there. a would need that to run to in they more understand capital love course, our way business invest shareholder that But they for us

talk to that more and agreement been that result find of lower together those what continue working love solution. you we and if think a customers. we at renegotiated we the to colocations, with customer appreciating to do where so were that's we'd And CapEx the we've in have look an to -- to win-win that a situation about publicly, And the we we're able opportunity

That's Tier emerging want we We time. across to see an do We support in important that globe. business over our us. think markets will X growth MNOs continue the for those to do

capital. And we're spend so focusing markets. not We're in more no reducing developed and the just capital we're the there saying spending

working of So on to our listening the who for of And with they've certainly, customers for with been us. I that. you I receptive us for that. thank customers to understanding very and them are all are say guess to a and find us piece huge right working solution should

Operator

We'll of KeyBanc of to go Nispel next Brandon Markets. line the Capital

Brandon Nispel

in another next that? Do heard growth MLA year? next I down I your Great. guys Steve, you who year. question you earlier, Rick's to under Why think comes holistic said MLA off contracted your steps is answer their have customer

in churn, that should organic assumption next growth assumptions couple year U.S. Steve, quarters? for be mid-X% which of do billings sub-X% for Rod then the And includes it's maintained the the or Sprint, excluding range, last the the in been

Steven Vondran

Sure.

anyone we're we a we have the money. towards don't we value agreement. to don't agreements, structure When because rolling typically we comprehensive structure of So seeing revenue lose the off activity the that those want time to try levels

of network, don't the that. in for have densification you when you a time have to earlier the don't want so smooths It when smooth it peaks you XG lose want phased or value to you a phases And some, of building the out. completely out money a but and valley

of the also that new in bit So an it. down colocations a of there's there. But step increase just little phase a in to densification corresponds

in we we the that was We which be to can range. lower mid-Xs. is specific to so still to of terms too X%. at early. of too what our end And give the X% that get up end do range, expect the exact numbers. lower you at it's before to be on we still -- But that historical churn We're waiting size want don't expecting of the because of We're kind to

Operator

of JPMorgan. come Chen last from our with And Richard the question line will

Unknown Analyst

markets. you feel think divestitures the where And in CapEx like I turnaround? potential on in of just on guess, with trends you're I a But should some we the you emerging markets along some the to long enough update that, scale about pulled how not initiatives. wanted cost time these of get management back could to an or take

Steven Vondran

Sure.

progress we to work continue fruit, that's we're cost on has particular to So and of the a because been we low-hanging SG&A that. on continue make management for -- focus us and kind

you SG&A year-to-date 'XX it's down September bad of at over million look debt, versus X% about cash kind year-over-year And excluding kind the debt, time. so of that 'XX, if bad excluding of $XX or period

still seeing we're So some savings there.

different of and to that realize we ways overall, comprehensive at at globalized Our is business. to like those. management longer more looking our We're get that. we synergies continue looking can of things to though we'll take some finance of terms and explore think global parts more than cost That the in will a approach to operations,

some So time continue won't over as that. see It we SG&A, think probably you'll do we can but rapid the as had in we over with to savings margins savings. expand I be time think

Richard? your there, question of what sorry, was part I'm second the

Unknown Analyst

And where emerging guess, you enough then or... you scale like that, markets I on the have feel don't

Steven Vondran

on the to few I of we But land us at the scale an nothing and we there's to and Zealand. some New would were there's price we that right would India. no Australia on that sign but might the certainly that, fiber line, like And active nothing you third-party if do In agreement I and look of quarter, to, kind businesses, to sell you had realize we portfolios, point did able see in So process point a that. have that. things

kind to We India. divested. Poland. divested we exited of But we've Mexico fiber, reiterate, just

And business more our And real for look someone we us, creates continuing we to to the more that portfolio. the the can, than else if probably at realize value then on can shareholders they it. for So question can? are monetize value is,

And I nothing out that team point the is to figure aspects the Board each right solution so management there's all the would at specific looking to, trying market. is business, of and for the but always what

Operator

it for closing turn to our speakers remarks. back I'll And you. any Thank

Adam Smith

out questions and of if there's you. for you discontinued representation feel please regarding if the operations, said the questions joining everyone today. you outlook call Investor or regarding any for free reach to Thank Rod Thank have earlier, Like the other general, to any results in Relations.

Operator

American The and replay will ladies the Thank for available you. on be is replay. And conference this gentlemen, available website. information Tower

That does Thank conclude you conference Event your for Conferencing. our for for using and AT&T participation today.

disconnect. now may You

American Tower (AMT) 29 Oct 242024 Q3 Earnings call transcript