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SBA Communications (SBAC) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Feb 26, 2026

Source: earnings call transcript

Executive summary

SBA Communications Q4 FY25 — Strong FFO Growth and Strategic Capital Allocation

SBA Communications delivered solid Q4 FY25 results, marked by strong FFO per share growth and increased dividends, alongside significant share repurchases. The company is navigating elevated churn from carrier consolidation, particularly with Sprint and international operators, while strategically investing in new leases and amendments both domestically and abroad. Management is focused on long-term organic growth drivers, including 5G densification, 6G preparation, and international market expansion, supported by a robust balance sheet and capital return strategy.

Highlights

5

  • FFO per share was $3.19 in Q4 FY25, with a cash dividend of $1.11 per share, an increase of 13% compared to Q4 FY24.

  • Domestic new leases and amendment billings added approximately $10 million in Q4 FY25, primarily from new colocations.

  • International new leases and amendment billings added approximately $6 million in Q4 FY25, reflecting healthy demand.

  • SBA repurchased 1.1 million shares for $213 million at an average price of $191.07 in Q4 FY25, with $1.1 billion remaining on its share buyback authorization.

  • The Q1 FY26 dividend was declared at $1.25 per share, a 13% increase over Q1 FY25, representing 41% of the full-year FFO outlook midpoint.

Concerns

5

  • Q4 FY25 results were impacted by higher-than-forecasted bad debt expenses related to EchoStar.

  • Sprint-related churn was approximately $17 million in Q4 FY25, and the FY26 outlook for Sprint churn is $55 million to $56 million, higher than previously estimated.

  • International churn was elevated, resulting in approximately $8 million of revenue loss in Q4 FY25 due to carrier consolidation, bankruptcy, and network optimization.

  • The FY26 International churn outlook is $36 million to $40 million, which includes $14 million related to Oi wireline.

  • The company filed a lawsuit against DISH and terminated its contract due to default on payments, removing all future recurring revenue from the 2026 outlook.

Guidance & targets

CategoryTargetConfidence
Domestic new revenue growth (new leases and amendments)
$35 million
high materiality
Medium
Sprint churn
$55 million to $56 million
high materiality
High
EchoStar recurring revenue
removed all future recurring revenue
high materiality
High
International new leases and amendments
$19 million to $21 million
medium materiality
High
International churn
$36 million to $40 million
high materiality
High
Services revenue
$190 million to $210 million
medium materiality
High
November 2026 ABS maturity refinancing rate
5.25%
medium materiality
High
First Quarter 2026 Dividend per share
$1.25 per share
high materiality
High
Investment-grade bond issuance
initial inaugural investment-grade bond
medium materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Domestic
Activity driven by new colocations as carriers densify and expand their network footprint. Getting closer to the end of consolidation churn in the U.S.
New leases and amendment billings: ~$10 million (Q4 FY25)Sprint-related churn: ~$17 million (Q4 FY25)
————
International
Healthy demand, but elevated churn due to carrier consolidation, bankruptcy restructuring, and wireless operators network optimization. Integration of newly acquired Millicom sites in Central America is ongoing, and new build program is ramping up.
New leases and amendment billings: ~$6 million (Q4 FY25)Revenue loss from churn: ~$8 million (Q4 FY25)
————
Services
Revenue increased by 13% in Q4 FY25 compared to Q4 FY24, mostly due to construction-related projects focused on network expansion.
—13%——

Deals & partnerships

Millicom Acquisition of tower sites in Central America.

Integration of newly acquired sites is ongoing. Supported by long-term master lease agreements with the leading carrier.

null Purchase of land under existing tower sites in Guatemala.

Acquired land under 3,900 sites in Guatemala, part of the Millicom transaction. Purchased at a mid-single-digit multiple.

Verizon Master Lease Agreement (MLA).

Signed late last year. Backlogs have grown significantly since signing. Assumptions built around minimum commitments and existing backlogs.

Risks & headwinds

Higher-than-forecasted bad debt expenses related to EchoStar Q4 FY25

Impacted Q4 FY25 results.

Mitigation:Company pursuing legal rights to recover revenues; removed all future recurring revenue from 2026 outlook.

Sprint-related churn Q4 FY25, FY26

~$17 million in Q4 FY25; $55 million to $56 million in FY26 outlook.

Mitigation:Expects churn in 2027 and beyond to be less than $20 million; closer to the end of consolidation churn in the U.S.

Elevated international churn Q4 FY25, FY26

~$8 million revenue loss in Q4 FY25; $36 million to $40 million in FY26 outlook (including $14 million from Oi wireline).

Mitigation:Oi wireline churn will not continue into 2027; expects international churn to trend down over the next couple of years.

DISH default on payments and lawsuit FY26 and beyond

All future recurring revenue removed from 2026 outlook.

Mitigation:Filed a lawsuit, terminated contract, and accelerated rents due; enforcing rights under the agreement.

Potential churn from T-Mobile USM (U.S. Cellular leases) FY26 and over the next 5 years

$1 million to $2 million included in FY26 churn estimate. Total U.S. Cellular leases revenue is $20 million.

Mitigation:Assumes all $20 million will go away evenly over the next 5 years, but some may be kept.

What to watch in Q1 FY26

Sprint churn reduction

Next couple of years (starting 2027)
Current $55 million to $56 million (FY26 outlook)
Target Trend down, less than $20 million in 2027 and beyond

Why it matters

Significant churn event impacting domestic organic growth; its reduction is key to improving net organic growth.

The outlook also assumes a range of $55 million to $56 million related to Sprint churn, which is slightly higher than we estimated last quarter. The increase is due to timing, and we now expect Sprint churn in 2027 and beyond to be less than the $20 million previously provided.

Find out whether SBAC delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the expectations for domestic colocation revenue growth in 2026, and what are carriers looking for?

Management expects $35 million in incremental revenue from new leases and amendments in the U.S. for FY26, with activity levels remaining steady throughout the year, driven by a mix of densification and expansion.

“we obviously gave our outlook for the full year, which assumes $35 million of incremental revenue added through new leases and amendments in the U.S. We would expect that will be contributed perhaps slightly heavier in the beginning of the year, but we would expect activity levels with the carriers in terms of new business being signed up to be pretty steady throughout the year.”

asked by Richard Choe · answered by Brendan Cavanagh

3 min read 6 chapters

Detailed narrative

U.S. Market Dynamics and Future Growth Drivers

The U.S. market, now stabilized with three major carriers, continues to see significant mobile data usage growth, up 35% in 2024 to over 132 trillion megabytes. This demand drives ongoing network investment, primarily through amendments for technology upgrades like massive MIMO and new colocations for densification and expansion. Fixed Wireless Access (FWA) growth, now consuming over half of wireless network capacity, further fuels demand, with future growth expected from upper C-band auctions by mid-2027.

6G Evolution and Edge Compute Opportunities

Beyond 5G, SBA is preparing for 6G, which is anticipated to drive significantly more uplink data for AI-driven interactions and require a fundamental shift in network architecture. This will necessitate more compute at tower sites, higher capacity radios, and denser antenna configurations. The company believes its large distributed U.S. portfolio positions it well to capitalize on the emerging need for edge compute, bringing processing closer to end-users for real-time, ultra-low latency environments, though the specifics are still developing.

International Market Opportunities and Challenges

Brazil, SBA's second-largest market with over 12,000 sites, presents long-term growth opportunities due to network density (4 sites per 10,000 people vs. 16 in the U.S.) and planned spectrum auctions in 2027. While facing elevated churn from industry consolidation (e.g., Oi), the company is actively working with carriers on site consolidation and increased colocations. Central America and Africa also offer attractive capital deployment opportunities as they are earlier in the 5G deployment cycle, with the Millicom transaction positioning SBA as a leading independent tower company in Central America.

Balance Sheet Strength and Capital Allocation

SBA has achieved investment-grade ratings from two major agencies and maintains a comfortable leverage ratio of 6-7x for the past three years. This strong capital structure supports a growing dividend, which increased by 13% for Q1 FY26 to $1.25 per share, and opportunistic share buybacks, with $213 million spent in Q4 FY25 and $1.1 billion remaining on authorization. The company also refinanced $750 million of ABS debt and plans to issue an inaugural investment-grade bond in 2026, depending on market conditions.

Managing Churn and Legal Actions

The company is actively managing significant churn events, including $17 million from Sprint in Q4 FY25 and an anticipated $55-56 million for FY26, with expectations for it to largely wash out by 2027. International churn, including $14 million from Oi wireline in FY26, is also expected to trend down over the next couple of years. SBA has initiated a lawsuit against EchoStar for default on payments, removing all future recurring revenue from its outlook while pursuing legal rights.

Guatemala Land Acquisition Strategy

SBA acquired land under 3,900 sites in Guatemala, part of the Millicom transaction, at a mid-single-digit multiple. This strategic move was immediately accretive and derisked future concerns around these properties, aligning with the company's ongoing program to acquire land under its towers. This program aims to secure properties and remove risks that could exist as ground leases near the end of their terms, while also providing financial benefits.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.