Executive Summary

Q3 2025 revenue and EPS topped Street estimates; total revenue of $732.3M vs consensus $715.3M and diluted EPS $2.20 vs $2.17, while Adjusted EBITDA expanded sequentially to $493.3M; management highlighted robust U.S. and international leasing and an 81% YoY surge in services revenue .
Guidance was updated: site development revenue raised by $20M, while site leasing revenue, Tower Cash Flow, and Adjusted EBITDA were modestly reduced vs the Aug 4 outlook due to the earlier-than-assumed Canada sale closing and later Millicom site closings; AFFO midpoint held, AFFO/share nudged up $0.03 .
Strategic catalysts: a new long-term master lease agreement with Verizon (minimum colocation commitments) and a revised target leverage range to 6–7x that supports an investment-grade transition (Fitch BBB-); management expects cost of debt and refinancing risk to improve over time .
Capital allocation remained active: $154.1M repurchases in Q3 (748k shares), $40.2M post-quarter (210k), and $119.1M dividend; YTD repurchases total 1.6M shares for $325.0M .
Watch points: margin compression vs prior year (Adj. EBITDA margin 67.5% from 70.9%) and elevated net cash interest expense (+29% YoY), plus ongoing churn (Sprint $51M FY 2025; DISH churn expected in 2027–2028) .

What Went Well and What Went Wrong

What Went Well
- Services revenue surged 81.2% YoY to $75.9M on construction-related network expansion; site development outlook raised by $20M .
- International leasing remained strong: int’l site leasing revenue +15.8% YoY to $186.2M; inflation-linked escalators and FX tailwinds supported results .
- Strategic wins: long-term master lease with Verizon including minimum colocation commitments; management: “a contributor to our growth for a long period of time” .
- Portfolio optimization: completed Canadian tower sale earlier than anticipated (CAD$446M) and finalized remaining Millicom closings, advancing portfolio review .
What Went Wrong
- Margin compression: Adjusted EBITDA margin fell to 67.5% from 70.9% YoY; Tower Cash Flow margin to 80.4% from 81.3% .
- Higher financing burden: net cash interest expense rose 29.2% YoY to $114.6M, pressuring EPS and AFFO .
- Guidance trimmed for site leasing revenue, Tower Cash Flow, and Adjusted EBITDA due to transaction timing (Millicom and Canada), partially offset by higher services revenue .
- International churn remained elevated due to carrier consolidation; management expects churn to step down over the next couple of years as consolidation factors abate .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Total Revenues ($USD Millions)	$667.6	$664.2	$699.0	$732.3
Diluted EPS ($USD)	$2.40	$1.77	$2.09	$2.20
Adjusted EBITDA ($USD Millions)	$472.6	$457.3	$475.5	$493.3
AFFO per share ($USD)	$3.32	$3.18	$3.17	$3.30

Margins	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Adjusted EBITDA Margin (%)	70.9%	69.0%	68.1%	67.5%
Tower Cash Flow Margin (%)	81.3%	80.9%	81.0%	80.4%

Segment Breakdown (Site Leasing – Q3 2025 vs Q3 2024)

Metric ($USD Millions unless noted)	Q3 2024	Q3 2025
Domestic Site Leasing Revenue	$464.9	$470.2
International Site Leasing Revenue	$160.8	$186.2
Domestic Cash Site Leasing Revenue	$463.9	$470.8
International Cash Site Leasing Revenue	$160.8	$184.0
Domestic Segment Operating Profit	$396.0	$400.0
International Segment Operating Profit	$111.8	$129.1
Domestic Tower Cash Flow	$394.1	$398.8
International Tower Cash Flow	$113.6	$127.6

Selected KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Sites Owned/Operated (Total)	39,709	44,065	44,581
Dividend Paid ($USD Millions)	$122.3	$119.4	$119.1
Shares Repurchased in Quarter (000s)/$	—	618 / $130.7	748 / $154.1
Revolver Outstanding ($USD Millions)	$0	$35.0	$385.0
Total Debt ($USD Billions)	$12.5	$12.6	$12.8
Net Debt ($USD Billions)	$11.8	$12.3	$12.3
Net Debt/LQA Adjusted EBITDA (x)	6.4x	6.5x (6.3x pro forma)	6.2x

Guidance Changes

Metric	Period	Previous Guidance (Aug 4)	Current Guidance (Nov 3)	Change
Site Leasing Revenue ($USD Millions)	FY 2025	$2,565.0–$2,590.0	$2,568.0–$2,578.0	Lower (timing impact)
Site Development Revenue ($USD Millions)	FY 2025	$215.0–$235.0	$240.0–$250.0	Raised $20.0M
Total Revenues ($USD Millions)	FY 2025	$2,780.0–$2,825.0	$2,808.0–$2,828.0	Raised $15.5M
Tower Cash Flow ($USD Millions)	FY 2025	$2,058.0–$2,083.0	$2,061.0–$2,071.0	Lower $4.5M
Adjusted EBITDA ($USD Millions)	FY 2025	$1,908.0–$1,928.0	$1,909.0–$1,919.0	Lower $4.0M
Net Cash Interest Expense ($USD Millions)	FY 2025	$435.0–$441.0	$434.0–$440.0	Slightly lower
Non-Discretionary Cash Capex ($USD Millions)	FY 2025	$53.0–$63.0	$56.0–$60.0	Maintained
AFFO ($USD Millions)	FY 2025	$1,365.0–$1,405.0	$1,373.0–$1,397.0	Flat midpoint
AFFO per Share ($USD)	FY 2025	$12.65–$13.02	$12.76–$12.98	+$0.03
Discretionary Cash Capex ($USD Millions)	FY 2025	$1,255.0–$1,275.0	$1,290.0–$1,300.0	Raised ~$30M

Management attributed the downward adjustments to the actual timing of Millicom closings and an earlier-than-assumed Canada sale closing; estimated negative impacts vs Aug 4 assumptions: Site leasing revenue ~$11M, Tower Cash Flow ~$8M, Adjusted EBITDA ~$7M, AFFO ~$2M .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
U.S. leasing demand and colocations	Strong U.S. activity; backlogs increased; early Millicom closings supported outlook	Continued robust leasing; new Verizon MLA with minimum colocation commitments	Improving
Services business (construction)	Sequential growth in Q2; activity reflects network investment	+81% YoY; FY site development revenue raised +$20M	Improving
International leasing and churn	Solid activity but churn elevated; FX assumptions updated	Strong demand; inflation escalators, FX tailwinds; churn elevated but expected to step down over time	Mixed → Easing over time
Capital allocation & leverage	New $1.5B buyback authorization; leverage ~6.4–6.5x	Repurchases sustained; target leverage reset to 6–7x; Fitch IG rating BBB-	Positive (debt market access)
Spectrum/technology roadmap	5G use cases; spectrum earmarked; higher bands require densification	Upper C-band/adjacent bands likely require Massive MIMO; incremental antennas/radios	Structurally supportive
Rural & direct-to-cell	Fixed wireless expansion; regulatory factors	Satellite D2D provides data on usage clusters, informing macro tower builds	Supportive (targeted builds)
Churn risks (Sprint/DISH/T-Mobile USM)	Sprint churn outlook unchanged; DISH annualized revenue ~$55M	Sprint $51M FY 2025; DISH current on rents; DISH churn expected in 2027–2028; USM overlap churn over next 2–3 years	Known headwinds (timed)

Management Commentary

“Our carrier customers continued to invest meaningfully… leasing space on our sites as they expand and densify their networks… Internationally, we benefited from solid leasing demand, inflation-linked escalators and stronger foreign currency rates” — Brendan Cavanagh, CEO .
“We are officially revising our stated target leverage range to 6.0x to 7.0x… This new target range will allow SBA to transition into an investment-grade Company… reduce borrowing costs over the long term” .
On Verizon MLA: “It definitely has components… colocations and amendments. There is a minimum commitment around colocations really for the next 10 years… a contributor to our growth for a long period of time” .
On investment-grade path: “Fitch just issued their corporate rating on SBA at BBB minus… the investment-grade bond market… will provide many benefits including reducing overall cost of debt over time” — Marc Montagner, CFO .
On international churn: “Total international churn remained elevated… mainly due to ongoing carrier consolidation… once we get beyond those items, I would expect a significant step down in churn” .

Q&A Highlights

Verizon MLA details: Minimum colocation commitments; amendments remain; structure “much more linear” vs AT&T’s prior agreement; existing base largely untouched except term extensions .
DISH status and outlook: Current on rents; SBA expects DISH to honor agreements; DISH-related churn expected ~$25M in each of 2027 and 2028 based on lease agreements .
Investment-grade transition: Fitch BBB- rating; revised leverage target supports IG issuance; expected to lower cost of debt 50–75 bps vs HY, extend tenor, and reduce refinancing risk over time .
International churn trajectory: Elevated due to consolidation (e.g., Brazil/Oi); management expects churn to diminish in coming years following integration/rationalization .
Rural coverage and direct-to-device: Satellite pings inform macro tower builds where usage concentrates; fixed wireless expansion remains a driver in rural markets .

Estimates Context

Metric	S&P Consensus	Actual	Surprise
Diluted EPS ($USD)	$2.17*	$2.20	+$0.03*
Total Revenues ($USD Millions)	$715.3*	$732.3	+$17.0*
EBITDA ($USD Millions)	$490.0*	$471.3*	-$18.7*

Values retrieved from S&P Global. Note: Company reports Adjusted EBITDA of $493.3M, a non-GAAP metric, which differs from S&P’s EBITDA definition; Adjusted EBITDA rose sequentially and is the primary management measure .

Key Takeaways for Investors

Revenue/EPS beat and sequential Adjusted EBITDA growth highlight resilient demand; services strength is a notable tailwind into Q4 and FY 2026 .
Guidance reset is a timing issue (Millicom, Canada) rather than operational softness; site development raised, AFFO midpoint maintained, AFFO/share slightly improved .
Verizon MLA adds multi-year visibility to domestic organic growth; expect more predictable mid-single digit domestic leasing growth contributions over time .
Investment-grade trajectory (Fitch BBB-) plus new leverage policy should compress funding costs and extend maturities, supporting buybacks and selective M&A without sacrificing balance sheet strength .
Watch margin dynamics: EBITDA margin compression YoY and higher cash interest expense are headwinds; leverage policy and IG access aim to mitigate over time .
International churn remains a near-term overhang but appears to be normalizing; FX assumptions updated and escalators support int’l revenue resilience .
Portfolio review continues to optimize market exposure; opportunistic divestitures (e.g., Canada) and Central America scale-up via Millicom enhance strategic alignment and returns .

SBA COMMUNICATIONS CORP (SBAC)·Q3 2025 Earnings Summary