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CROWN CASTLE INC. (CCI)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered resilient tower fundamentals: site rental revenues $1.011B (down 5.3% YoY on Sprint cancellations and lower non‑cash items), Adjusted EBITDA $722M (down 4%), and AFFO $479M (down 1%) while continuing operations diluted EPS was $0.65; GAAP diluted EPS was $(1.07) due to an $830M loss tied to the Fiber Business sale recorded in discontinued operations .
  • Revenue and EBITDA exceeded Wall Street consensus: net revenues $1.061B vs $1.040B estimate; EBITDA $700M vs $685M estimate; continuing ops EPS $0.65 vs $(0.23) estimate, reflecting stronger operating performance and lower short‑term borrowing rates in the quarter (seasonal timing noted)*.
  • Full‑year 2025 outlook unchanged: site rental revenues $3.987–$4.032B, Adjusted EBITDA $2.755–$2.805B, AFFO $1.770–$1.820B; management reiterated 4.5% organic site rental billings growth ex‑Sprint cancellations .
  • Dividend reset implemented: after signaling an annualized reduction to $4.25 beginning Q2, the Board declared a Q2 dividend of $1.0625 per share ($4.25 annualized), enhancing financial flexibility ahead of the Fiber/Small Cell sale .
  • Strategic catalyst: fiber/small cell sale for $8.5B expected to close in 1H 2026; plan to repay ~$6B debt and initiate ~$3B buyback at close; management reiterated no material tax implications from the transaction .

What Went Well and What Went Wrong

What Went Well

  • 5.1% organic growth (adjusted for Sprint cancellations) from core leasing and escalators underscores healthy U.S. tower demand; “demonstrating consistent growth in demand for our tower assets” (CFO) .
  • Costs/refinement: SG&A down $21M YoY; services gross margin up $6M; management cited improved operational discipline (staff reductions, office closures) and absence of prior advisory fees .
  • Balance sheet positioning: ~89% fixed‑rate debt; weighted‑average maturity >6 years; $5.3B revolver availability; ~$2.1B maturities next 12 months (supports dividend reset and strategic execution) .

Quote: “We expect the resilience of our tower business combined with our capital allocation framework…to result in predictable and durable cash flow growth.” — Sunit Patel, CFO .

What Went Wrong

  • Sprint churn and non‑cash headwinds drove topline decline: site rental revenues down $57M YoY, including $(51)M Sprint cancellations, $(16)M lower amortization of prepaid rent and $(39)M lower straight‑line revenues .
  • GAAP net loss $(464)M from an $830M loss on disposal in discontinued operations related to the Fiber Business sale; GAAP diluted EPS $(1.07) vs $0.71 in Q1 2024 .
  • Management cautioned first‑quarter margin strength benefited from timing/seasonality (repair & maintenance, sustaining capex, other non‑core costs), and straight‑line revenues are expected to turn negative later in 2025, tempering run‑rate extrapolation .

Financial Results

Metric ($USD)Q1 2024Q4 2024Q1 2025
Net Revenues$1,114M $1,119M $1,061M
Site Rental Revenues$1,068M $1,070M $1,011M
Services & Other Revenues$46M $49M $50M
Operating Income$520M $520M $521M
Adjusted EBITDA$754M $777M $722M
Net Income (Loss)$311M $(4,768)M $(464)M
Diluted EPS (GAAP)$0.71 $(10.97) $(1.07)
Diluted EPS (Continuing Ops)$0.67 N/A$0.65
AFFO$484M $523M $479M
AFFO per Share$1.11 $1.20 $1.10

Segment/line breakdown (components):

Site Rental Revenue Components ($M)Q1 2024Q1 2025
Prior Year Site Rental Billings$923 $966
Core Leasing Activity$28 $28
Escalators$23 $24
Non‑renewals$(8) $(7)
Other Billings$0 $3
Organic Contribution Adjusted for Sprint Cancellations$43 $49
Non‑renewals (Sprint Cancellations)—$(51)
Organic Contribution (Reported)$43 $(2)
Straight‑lined Revenues$57 $19
Amortization of Prepaid Rent$41 $25
Other Revenues$4 $4
Total Site Rental Revenues$1,068 $1,011

Other KPIs:

KPIQ1 2024Q1 2025
Capital Expenditures (continuing ops)$47M $40M (33 discretionary, 7 sustaining)
Dividend Paid per Share$1.565 $1.565
Net DebtN/A$24,288M
Fixed‑rate Debt / TotalN/A89% fixed‑rate
Revolver AvailabilityN/A~$5.3B
Debt Maturities Next 12 MonthsN/A~$2.1B

Consensus vs actual (Q1 2025):

MetricConsensusActual
Net Revenues ($M)1,040.5*1,061
Adjusted EBITDA ($M)684.8*700*
Primary EPS (Continuing Ops, $)(0.231)*0.65

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (3/13/25)Current Guidance (4/30/25)Change
Site Rental Revenues ($M)FY 2025$3,987–$4,032 $3,987–$4,032 Maintained
Adjusted EBITDA ($M)FY 2025$2,755–$2,805 $2,755–$2,805 Maintained
AFFO ($M)FY 2025$1,770–$1,820 $1,770–$1,820 Maintained
AFFO per Share ($)FY 2025$4.06–$4.17 $4.06–$4.17 Maintained
Net Income (Loss) ($M)FY 2025$65–$345 $65–$345 Maintained
Diluted EPS (GAAP, $)FY 2025$0.15–$0.79 $0.15–$0.79 Maintained
Interest Expense & Amort. ($M)FY 2025$982–$1,027 $982–$1,027 Maintained
Discretionary Capex ($M)FY 2025$185 $185 Maintained
Dividend per Share (Quarterly)Q2 2025Anticipated annualized $4.25 ($1.0625/qtr) Declared $1.0625 (5/21) Lowered from $1.565/qtr

Earnings Call Themes & Trends

TopicPrior Mentions (Q3 2024)Prior Mentions (Q4 2024)Q1 2025 CommentaryTrend
Tower demand/organic growthConsolidated organic growth 5% ex‑Sprint; towers +4.5% 2025 outlook towers organic +4.5% ex‑Sprint 5.1% organic (adj. for Sprint); core leasing $28M; escalators $24M Stable/positive
Sprint cancellationsNoted churn impact path $205M in 2025; ~$20M annually 2026–2034 $(51)M in Q1; headwind in 2025 Headwind peaking 2025
Digitization/operationsDrone imaging, automation initiatives Transform to best‑in‑class, process upgrades Cost control evident; seasonality noted Execution progressing
Services demandTiming shift; improving activity Reiterated service volatility +$6M services contribution YoY Improving modestly
Capital allocationReaffirm strategy; balance leverage Post‑close: repay ~$6B; buyback ~$3B; dividend ~75–80% AFFO excl. amortization Q2 dividend cut executed; IG target 6–6.5x leverage Policy implemented
Sale of fiber/small cellStrategic review active Sale signed; close 1H 2026 Separation progressing; no tax implications On track/regulatory timeline
Tariffs/macroNot highlightedN/A“Tariff policies do not impact our FY25 outlook” Neutral

Management Commentary

  • “We are focused on facilitating the successful and efficient close of the previously‑announced sale… and positioning the tower business to maximize shareholder value on a stand‑alone basis.” — Interim CEO Dan Schlanger .
  • “Our full year outlook includes 4.5% organic growth excluding Sprint cancellations, Adjusted EBITDA of ~$2.8B and AFFO of ~$1.8B.” — CFO Sunit Patel .
  • “There are no tax implications you should be considering as part of the sale.” — Interim CEO Dan Schlanger .
  • “We ended the quarter with… ~89% fixed rate debt, weighted average debt maturity of over 6 years… ~$5.3B availability under our revolver.” — CFO Sunit Patel .

Q&A Highlights

  • Guidance phasing: Management emphasized Q1 margin strength was timing/seasonality; straight‑line revenues expected to turn negative later in 2025 — caution against annualizing Q1 .
  • SG&A allocation/run‑rate: Current allocations may not reflect stand‑alone tower cost structure; AFFO bridge to ~$2.3–$2.4B at close includes revenue growth, SG&A adjustments, and interest savings .
  • Capital returns: Plan to repay ~$6B debt and pursue ~$3B share repurchase at close; program timing will depend on market conditions .
  • Regulatory path: Closing targeted 1H 2026; approvals required at federal and state levels; processes viewed as time‑consuming, not problematic .
  • Demand drivers: Carrier competitive pressure supports network investment; mix of colocations/amendments steady; ~90% of 2025 growth already contracted under MLAs .

Estimates Context

  • Revenue beat: $1.061B actual vs $1.040B consensus*; strength in site rental billings and services contribution .
  • EBITDA beat: $700M actual vs $685M consensus*, aided by lower near‑term rates and cost timing*.
  • EPS beat (continuing ops): $0.65 actual vs $(0.23) consensus*; GAAP diluted EPS $(1.07) driven by discontinued operations loss .
  • AFFO delivered $479M; S&P consensus tracks FCF rather than AFFO — not directly comparable*.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • The core U.S. tower franchise remains intact: 5.1% organic growth (adjusted), stable core leasing and escalators, and cost discipline support FY25 delivery despite Sprint churn .
  • Expect near‑term reported margins to normalize as seasonal/straight‑line dynamics unwind; avoid extrapolating Q1 margins to full year .
  • Dividend reset to ~$4.25 annualized enhances flexibility ahead of fiber/small cell separation; IG leverage target of ~6–6.5x preserves balance sheet strength .
  • Transaction close (1H 2026) is a pivotal catalyst: ~$6B debt reduction and ~$3B buyback planned; no material tax friction cited .
  • With ~90% of 2025 growth contracted under MLAs, the setup is for predictable cash flow; upside could come from incremental carrier activity amid intensifying competition .
  • Monitor Sprint tail churn (post‑2025 ~$20M/year) and straight‑line revenue trajectory; both are known, manageable headwinds within guidance .
  • Focus near‑term on execution: digitization, customer service and land control initiatives aimed at improving top/bottom line and positioning CCI as best‑in‑class U.S. tower operator .
Citations:
Press release and outlook: **[1051470_1c223c6630e745279986910aef7a644e_0]** **[1051470_1c223c6630e745279986910aef7a644e_2]** **[1051470_1c223c6630e745279986910aef7a644e_3]** **[1051470_1c223c6630e745279986910aef7a644e_4]** **[1051470_1c223c6630e745279986910aef7a644e_5]** **[1051470_1c223c6630e745279986910aef7a644e_6]** **[1051470_1c223c6630e745279986910aef7a644e_14]** **[1051470_1c223c6630e745279986910aef7a644e_16]** **[1051470_1c223c6630e745279986910aef7a644e_17]** **[1051470_1c223c6630e745279986910aef7a644e_18]** **[1051470_1c223c6630e745279986910aef7a644e_19]** **[1051470_1c223c6630e745279986910aef7a644e_20]** **[1051470_1c223c6630e745279986910aef7a644e_21]** **[1051470_1c223c6630e745279986910aef7a644e_28]** **[1051470_1c223c6630e745279986910aef7a644e_29]** **[1051470_1c223c6630e745279986910aef7a644e_30]**
8‑K and supplemental package: **[1051470_0001051470-25-000124_cci-20250430.htm:1]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:0]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:1]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:2]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:3]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:8]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:9]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:10]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:11]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:12]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:13]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:14]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:15]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:21]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:22]** **[1051470_0001051470-25-000124_q12025earningsrelease.htm:23]** **[1051470_0001051470-25-000124_q12025supplement.htm:0]** **[1051470_0001051470-25-000124_q12025supplement.htm:6]** **[1051470_0001051470-25-000124_q12025supplement.htm:8]**
Q1 2025 earnings call transcript: **[1051470_CCI_3424271_1]** **[1051470_CCI_3424271_2]** **[1051470_CCI_3424271_3]** **[1051470_CCI_3424271_12]** **[1051470_CCI_3424271_19]**
Q4 2024 earnings call transcript: **[1051470_CCI_3420518_1]** **[1051470_CCI_3420518_3]** **[1051470_CCI_3420518_4]** **[1051470_CCI_3420518_7]** **[1051470_CCI_3420518_14]**
Dividend declaration: **[1051470_0d1c69ecaeb24770a588bb8d1ccdb634_0]**
S&P Global disclaimer applies to all consensus values marked with *