SBA Communications (SBAC) 47th Annual Raymond James Institutional Investor Conference summary

Industry trends and outlook

• Carrier consolidation churn in the U.S. is nearly complete, with minimal exposure to DISH and related revenue removed from guidance through 2026.

• Verizon is expected to be the largest contributor to new revenue by 2026, with a 10-year MLA agreement providing strong visibility.

• T-Mobile's rural coverage and densification are nearing completion, shifting new lease growth toward Verizon.

• Long-term industry cycles are driven by new spectrum and technology rollouts, with CapEx as a percentage of revenue expected to remain around 15% until the next cycle.

• 6G deployment is anticipated post-2027, with significant new equipment needs and top-line growth rates normalizing at 4%-5%.

Financial performance and capital allocation

• High fixed-cost, high-margin business model supports single-digit bottom-line growth, with 85% gross margin and 7% EBITDA margin.

• Annual excess cash of $600–$700 million is allocated to share buybacks, M&A, and debt reduction.

• Recent buybacks totaled $200 million in 2024, with $1.1 billion remaining in the program.

• Dividend payout ratio is currently 41%, with double-digit dividend growth expected for the next few years, potentially reaching the mid-50s.

• International expansion includes the Millicom deal in Central America, with a 15-year USD agreement and high single-digit returns.

Market dynamics and growth drivers

• U.S. tower acquisition market is highly competitive, with private capital driving up multiples and limiting large-scale acquisitions.

• 5G rollout is largely complete for T-Mobile, with Verizon and AT&T still expanding; 6G and AI-driven applications are expected to drive future demand.

• AI and edge computing are anticipated to increase tower activity by 2030, with a shift toward more balanced upload/download traffic and new equipment needs.

• Satellite is viewed as a complement, not a replacement, for terrestrial towers, especially in rural and underserved areas.

• International portfolio is being optimized for scale and economic stability, with divestitures in subscale markets and focus on stable, growing regions like Brazil and Central America.