SBA Communications (SBAC) J.P. Morgan 54th Annual Global Technology, Media and Communications Conference summary

Growth opportunities and market outlook

• U.S. tower portfolio expected to grow 4.5%-5% annually, driven by escalators and new lease activity, with potential upside from new use cases and Starlink spectrum deployment.

• International markets show high single-digit growth, with Central America benefiting from recent acquisitions and Brazil contributing 15% of revenue, though facing churn from market consolidation.

• Densification and co-location remain ongoing trends, with carriers at different stages of 5G deployment and new master lease agreements supporting future activity.

• Edge computing and new technology use cases like drone delivery and self-driving cars could further boost demand for tower infrastructure.

• Expansion into new communities and collaboration with real estate developers present additional growth avenues.

Capital allocation and financial strategy

• Maintains leverage around 6.5x, now rated investment grade by Fitch and S&P, with plans to issue investment grade bonds.

• Free cash flow allocation prioritizes share buybacks, with $500 million spent last year and similar plans for the current year.

• Dividend increased by 13% last year, with expectations for low-teens growth over the next three years and a payout ratio of about 41%.

• Ongoing ground lease purchases ($40-$50 million annually) protect site control and improve margins.

Portfolio management and international strategy

• Focuses on being a leading operator in each market or exiting subscale positions; recent exits include Colombia, Argentina, the Philippines, and Canada.

• Central America acquisition includes a 15-year lease in U.S. dollars with CPI escalator and a commitment for 2,500 new build-to-suit towers.

• Brazil viewed as a long-term growth market with favorable demographics, under-penetrated tower density, and stable macroeconomic conditions.

• Willingness to expand or exit smaller markets based on yield and free cash flow generation.