SBA Communications (SBAC) The Bank of America 2024 Media, Communications and Entertainment Conference summary

Industry trends and carrier spending

• Carrier CapEx peaked above 20% of revenue in 2021–2023, now down to about 14% in 2024, reflecting a moderation in network investment.

• 5G deployment is about halfway complete, with T-Mobile leading and AT&T catching up; Verizon remains steady.

• Fixed wireless access is driving higher data usage, with each user consuming 15–25 times more data than handset users.

• Carriers are expected to increase CapEx again as network demand grows, especially with new applications and AI-driven use cases.

• Announcements from Verizon and T-Mobile on network expansion and investments are expected by the end of 2024.

Growth outlook and revenue guidance

• Lease-up revenue is expected to be $42 million in 2024, with a similar level anticipated for 2025.

• Exit run rate for new leasing revenue in Q4 2024 is projected at $8–9 million, with gradual growth into 2025.

• Domestic growth is expected to be modest, with mid-single digit growth in the U.S. after accounting for Sprint churn.

• Sprint churn will persist through 2027, but non-Sprint churn is declining.

• Dish revenue is $45 million, with future growth dependent on their ability to fund expansion or find partners.

Capital allocation and financial strategy

• $700 million in annual free cash flow is available for allocation after expenses, taxes, and dividends.

• In 2023, $560 million was used to pay down debt and $100 million for share buybacks; in early 2024, $200 million was spent on buybacks.

• Current leverage is 6.5x, with a target of 7–7.5x; maintaining flexibility and discipline in capital allocation is a priority.

• Investment grade status is not a short-term goal; high-yield market flexibility is preferred.

• Dividend payout ratio is about 30%, with double-digit dividend growth expected for the next few years.