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The call emphasized multiple operational and financial positives — upgraded guidance, strong ~80% tower cash flow margins, dividend growth (~13% YoY), healthy U.S. and international leasing additions, successful Millicom integration and prudent leverage management (6.6x within a 6–7x target). Key risks include elevated international churn (peaking in 2026), an ongoing EchoStar dispute with removed revenue, dependence on refinancing assumptions (including a $1.2B ABS refinance and a market-dependent inaugural investment-grade bond), and a temporary pause in buybacks while paying down revolver. On balance, the company presented more significant and actionable positives than negatives, with manageable near-term risks.
Management raised full‑year guidance for site‑leasing revenue, cash flow, adjusted EBITDA, AFFO and AFFO per share after a strong Q1 driven by high straight‑line revenue and favorable FX; Q1 company‑wide tower cash‑flow margins were ~80%, U.S. quarterly new lease/amendment billings were up ~$10M YoY and international billings up ~$4M YoY, with a moderate increase in U.S. backlog; international churn is elevated and 2026 is expected to be the peak year while prior Sprint and EchoStar churn outlooks remain unchanged; balance sheet moves included paying off $750M of ABS debt, ending the quarter with ~ $13B total debt and net leverage of 6.6x (target 6–7x), an assumption of refinancing a $1.2B November ABS maturity at 5.25%, plans to use free cash flow to pay down the revolver, and an anticipated inaugural investment‑grade bond issuance in 2026; capital allocation actions included declaring and paying a $135.2M dividend ($1.25/sh, ~13% higher YoY and annualized at ~41% of the midpoint of AFFO guidance), prioritizing revolver paydown over meaningful buybacks this quarter but expecting buybacks to be an important 2026 tool, and continued capital deployment into new builds (just over 60 towers in Central America in Q1) and accretive land purchases (Guatemala ~7x multiple).
Company increased full-year guidance for site leasing revenue, cash flow, adjusted EBITDA, AFFO and AFFO per share based on first-quarter outperformance, high straight-line revenue recognition and favorable foreign currency rates.
Company-wide tower cash flow margins of approximately 80% in Q1, demonstrating efficient operations and direct cost control.
U.S. leasing activity added ~ $10 million of quarterly new lease and amendment billings year-over-year; international leasing added ~ $4 million year-over-year. Backlog in the U.S. increased moderately from Dec 31 to Mar 31, indicating steady leasing activity.
Declared and paid a Q1 cash dividend of $135.2 million ($1.25/share), a ~13% increase versus Q1 2025. The dividend represents an annualized payout of ~41% of the midpoint of full-year AFFO guidance, highlighting a shareholder-friendly yet conservative payout ratio.
Paid off $750 million of ABS debt with the revolving credit facility in January; ended the quarter with ~ $13 billion of total debt and net leverage of 6.6x net debt to adjusted EBITDA, near historical lows and within the target range of 6–7x.
Integration of Millicom assets progressing well with colocation demand exceeding initial lease-up projections. Built just over 60 towers in Central America in Q1 and bought land in Guatemala at ~7x multiple, positioning for returns expected to be above cost of capital.
Management remains committed to becoming an investment-grade issuer and anticipates an inaugural IG bond issuance in 2026 (market dependent). Outlook assumes refinancing a $1.2 billion November ABS maturity at ~5.25%.
Early-stage deployments and trials of mobile edge compute (micro data centers at tower sites) are underway with potential for incremental revenue. Dialogue with carriers on U.S. new-build opportunities is increasingly constructive, suggesting future organic growth avenues.
Welcome, and thank you for joining the SBA First Quarter 2026 Results. [Operator Instructions] With that, I'll turn the call over to Louis Friend, Vice President of Finance and Capital Markets. Please go ahead.
Good evening and thank you for joining us for SBA's First Quarter 2026 Earnings Conference Call. Here with me today are Brendan Cavanagh, our President and Chief Executive Officer; and Marc Montagner, our Chief Financial Officer. Some of the information we will discuss on this call is forward-looking, including, but not limited to, any guidance for 2026 and beyond. In today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, April 29, and we have no obligation to update any forward-looking statements we may make. In addition, our comments will include non-GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our Investor Relations website. With that, I will now turn it over to Marc to comment on the first quarter results and 2026 outlook.
Thank you, Louis. Given the solid start of the year, we are increasing our full year outlook for all key metrics, including site leasing revenue, our cash flow, adjusted EBITDA, AFFO and AFFO per share as compared to our initial 2026 guidance. The primary drivers of these increases include outperformance during our first quarter, high straight-line revenue and ...