Sign in
AT

AMERICAN TOWER CORP /MA/ (AMT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was mixed: revenue grew to $2.563B (+2.0% YoY) with property gross margin up to 75.9%, but diluted EPS fell to $1.04 due to $345.7M FX losses; Adjusted EBITDA rose to $1.744B (+1.9% YoY) and AFFO/share was $2.75 (as adjusted +6.6% YoY) .
  • Versus estimates: revenue slightly beat consensus ($2.563B vs $2.544B), EPS missed ($1.04 vs $1.57); SPGI EBITDA consensus $1.726B vs SPGI actual $1.693B*, while company-reported Adjusted EBITDA was $1.744B . Values retrieved from S&P Global.
  • Guidance raised on FX tailwinds: property revenue midpoint to $10.12B (from $10.07B), Adjusted EBITDA to $6.955B (from $6.925B), AFFO to $4.94B (from $4.92B), AFFO/share to $10.54 (from $10.50); net income midpoint cut by $185M on unrealized FX losses .
  • Key catalysts: accelerating U.S. 5G amendments and services strength ($74.6M, best since 2021), CoreSite leasing/pricing momentum, portfolio optimization (South Africa fiber sale; DE1 data center acquisition), and $1.0B notes issuance lowering refinancing risk .

What Went Well and What Went Wrong

  • What Went Well

    • Strong U.S. services activity: services revenue $74.6M (+147% YoY); gross margin in services up >140% YoY; company cited fifth consecutive quarter of sequential gains and highest services revenue since 2021 .
    • CoreSite data centers momentum: high single-digit property revenue growth (~9%) with elevated pricing and robust sales funnel; added 11 MW across NY and CH sites with high day-one leasing .
    • Cost discipline and balance sheet progress: cash Adjusted EBITDA margin ~68%; net leverage 5.0x; $1.0B notes issued at ~5% to reduce refinancing risk and extend maturities .

  • What Went Wrong

    • FX headwinds: $345.7M losses vs $127.7M gains last year drove EPS down to $1.04 and net income down 45.9% YoY; also pressured SPGI EBITDA actual .
    • Straight-line revenue normalization: non-cash straight-line revenue fell to $17.1M vs $79.1M in Q1’24, dampening reported growth in property revenue and EBITDA .
    • International softness: U.S. & Canada property revenue down 0.9% YoY; Latin America down 10.4% YoY amid churn; international FX translation headwinds (~300 bps) .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Total Revenue ($USD Millions)$2,512.6 $2,547.6 $2,562.8
Property Revenue ($USD Millions)$2,482.4 $2,483.9 $2,488.2
Services Revenue ($USD Millions)$30.2 $63.7 $74.6
Net Income Attributable to AMT ($USD Millions)$917.4 $1,229.6 $488.7
Diluted EPS ($USD)$1.96 $2.62 $1.04
Adjusted EBITDA ($USD Millions)$1,712.2 $1,692.0 $1,744.2
Adjusted EBITDA Margin %68% 66% 68%
AFFO per Share ($USD)$2.79 $2.32 $2.75
Q1 2025 Actual vs ConsensusConsensusActualBeat/Miss
Primary EPS ($)1.57*1.04 Miss*
Revenue ($USD Billions)2.544*2.563 Beat*
EBITDA ($USD Billions, SPGI)1.726*1.693*Miss*
Values retrieved from S&P Global.
Segment Revenue ($USD Millions)Q1 2024Q1 2025
U.S. & Canada$1,311 $1,298
Latin America$446 $399
Africa & APAC$297 $213
Europe$205 $946
Total International$947 $946
Data Centers$225 $244
Services$30 $75
Total$2,513 $2,563
KPIsQ4 2024Q1 2025
Total Tenant Billings Growth (%)5.7% 5.2%
Organic Tenant Billings Growth (%)5.0% 4.7%
Property Gross Margin (%)74.9% 75.9%
Cash From Operations ($USD Millions)$1,199 $1,295
Capex ($USD Millions)$453 $340
Free Cash Flow ($USD Millions)$746 $955
Net Leverage Ratio (x)5.1x 5.0x

Guidance Changes

MetricPeriodPrevious Guidance (Midpoint)Current Guidance (Midpoint)Change
Total Property Revenue ($USD Billions)FY 2025$10.07 $10.12 Raised
Net Income ($USD Billions)FY 2025$2.98 $2.79 Lowered
Net Income Attributable to AMT ($USD Billions)FY 2025$3.01 $2.83 Lowered
Adjusted EBITDA ($USD Billions)FY 2025$6.925 $6.955 Raised
AFFO Attributable ($USD Billions)FY 2025$4.92 $4.94 Raised
AFFO per Share ($)FY 2025$10.50 $10.54 Raised
FX Impact (vs prior outlook)FY 2025N/A+$50M Property, +$30M EBITDA, +$20M AFFO, +$0.04/share N/A
Capital Expenditures ($USD Billions)FY 2025$1.69 (midpoint) $1.69 (unchanged) Maintained
DividendFY 2025~$3.2B distributions ~$3.2B (subject to Board) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
U.S. 5G rollout and densificationRobust activity led by mid-band deployments; expectation of acceleration into 2025 5th consecutive quarter of sequential application/services gains; early signs of densification; steady U.S. amendment cadence Improving
CoreSite demand and pricingRecord sales pace; hybrid-IT and AI-related workloads fueling demand High single-digit growth, elevated pricing (>2–4% historical), strong pipeline and day-one leasing on new capacity Improving
Cost optimization/globalizationOngoing SG&A reductions; globalization initiatives progressing New COO focus on global synergies; additional SG&A cuts (~$13M planned in 2025 ex bad debt) Improving
FX/macro uncertaintyFX swings and macro volatility impacted 2024 results and outlook FX tailwinds in outlook, but Q1 realized large FX losses; cautious stance on emerging markets Mixed
Latin America churn and leasingContinued churn (Oi) and mixed leasing cadence; low single-digit OTBG outlook Pockets of Brazil improvement; multi-year churn continues; ~5% escalators (CPI-dependent) Mixed
Capital allocation & leverageNet leverage ~5.1x; notes issuance; portfolio sales (ANZ, India) Net leverage 5.0x; $1.0B notes issued; buyback authorization of $2B remains available Stable

Management Commentary

  • “We’re off to a strong start to the year, exceeding our initial expectations across property revenue, adjusted EBITDA and attributable AFFO per share for the quarter” .
  • “Q1 represented our fifth consecutive quarter of sequential increases in both application volumes and services revenue… highest quarter of services revenue since 2021” .
  • “CoreSite… adding 11 megawatts of capacity with a high degree of day-one leasing… continued pricing favorability” .
  • “We’re focused on enhancing the quality of our earnings through active portfolio management, organizational and operational efficiency, disciplined capital allocation and a strong balance sheet” .
  • “Stock buybacks are absolutely on the table… we do have a $2 billion authorization that’s outstanding” .

Q&A Highlights

  • Services cadence and new business: Targeting ~$75M services revenue again in Q2; full-year $240–$250M with lower Q3–Q4 given visibility; U.S. new business ~$165M for 2025 with Q1 ~$38M, acceleration expected in H2 .
  • Cost efficiency/globalization: Teams assessing O&M, SG&A, supply chain for savings; 2025 SG&A reductions planned (~$13M) on top of prior-year cuts, aiming for durable long-term AFFO/share growth .
  • Capital allocation: Leverage at 5.0x; $2B buyback authorization; opportunistic M&A with discipline on terms/valuation; Canada seen favorably but only with attractive economics .
  • EchoStar exposure: Expect to be paid under minimum contractual commitments; built into multi-year guide .
  • CoreSite pipeline: Strong interconnection-led enterprise demand, multi-cloud proximity, elevated pricing; confidence despite hyperscaler headlines .

Estimates Context

  • EPS missed Wall Street consensus (Primary EPS $1.04 vs $1.57)* driven primarily by large FX losses and lower non-cash straight-line revenue . Values retrieved from S&P Global.
  • Revenue slightly beat ($2.563B vs $2.544B)* on services strength and CoreSite momentum . Values retrieved from S&P Global.
  • SPGI EBITDA missed ($1.693B vs $1.726B)*; note company-reported Adjusted EBITDA was $1.744B, reflecting definitional differences versus SPGI EBITDA . Values retrieved from S&P Global.
  • Near-term estimate revisions likely to reflect FX volatility and strong services trajectory; full-year midpoint raises on property revenue, EBITDA, AFFO/share anchored to updated FX assumptions .

Key Takeaways for Investors

  • Despite the EPS miss, underlying operations are solid: property gross margin expanded to 75.9%, Adjusted EBITDA rose, AFFO/share held steady and as-adjusted grew 6.6% YoY—supporting dividend growth and the long-term cash flow thesis .
  • U.S. tower cycle is gaining momentum (amendments, early densification), supporting services revenue strength and H2 acceleration in new business—watch application volumes and services cadence into Q2/Q3 .
  • CoreSite remains a bright spot with pricing power and strong interconnection demand; data center development (~$610M) is a meaningful capex driver with attractive returns .
  • FX is the swing factor: Q1 losses hit EPS and net income, but guidance midpoints benefited from conservative FX rate updates—monitor spot vs conservative assumptions through 2025 .
  • Balance sheet de-risking continues: $1.0B notes priced at ~5% and floating-rate exposure in low single digits reduce refinancing risk; net leverage at 5.0x provides flexibility for buybacks or selective M&A .
  • International mix is stable but watch LatAm churn path (Oi) and FX translation; Africa & APAC and Europe show steady OTBG but are sensitive to macro and FX .
  • 2025 outlook raises on property, EBITDA, AFFO, AFFO/share midpoints; net income midpoint lowered on unrealized FX—watch subsequent quarters for FX realization and services/new business execution .

Additional Q1 2025 items:

  • Dividend declared at $1.70/share (+4.9% YoY) payable April 28, 2025 .
  • Portfolio actions: sale of South Africa fiber (gain ~$53.6M) and Denver DE1 data center building acquisition enhancing control and capacity .

Footnote: *Values retrieved from S&P Global.