American Tower Corp Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
American Tower Corp's Q3 2025 earnings call highlighted strong financial performance with double-digit growth in attributable AFFO per share, driven by robust leasing activity in both tower and data center businesses. Management discussed industry trends, including mobile data consumption growth and developments in satellite-based networks, and emphasized the company's strategic priorities: maximizing organic growth, expanding margins, disciplined capital allocation, and maintaining a strong balance sheet. The call also addressed the impact of carrier consolidation and spectrum deals on the tower industry.
Key Financial Results:
Total revenue grew by nearly 8% year-over-year.
Adjusted EBITDA also grew by nearly 8% year-over-year, with 20 basis points of cash margin expansion.
Attributable AFFO per share as adjusted grew approximately 10% year-over-year.
The company is raising its full-year outlook across property revenue, adjusted EBITDA, attributable AFFO, and AFFO per share.
Business Segment Results:
US and Canada property revenue was flat year-over-year but grew approximately 5% when excluding non-cash straight-line revenue and Sprint churn.
International property revenue grew approximately 12% year-over-year, or nearly 8% excluding non-cash straight-line revenue and FX impacts.
Data center property revenue grew over 14%, driven by record retail new leasing and consistent pricing growth.
Consolidated organic tenant billings growth of 5%, was in line with expectations.
US and Canada segment grew approximately 4% organically, and greater than 5% when excluding Sprint churn.
International segment organic growth was nearly 7%, reflecting double-digit growth in Africa and APAC, steady mid-single-digit growth in Europe, and low-single-digit growth in Latin America.
Capital Allocation:
After funding the dividend, the company evaluates internal uses of CapEx, inorganic opportunities, debt repayments, and share buybacks.
The company recently prioritized developed tower markets and CoreSite.
The company repurchased $28 million of shares since quarter end.
The company expects to distribute approximately $3.2 billion to shareholders as a common dividend in 2025, subject to board approval.
The company expects $1.7 billion in capital expenditures.
$1.5 billion of capital expenditures are related to discretionary projects of building approximately 2,150 new towers and $600 million of data center spend.
Subsequent to quarter end, the company executed $28 million of share repurchases and will continue to be opportunistic in utilizing the remaining $2 billion that the board has authorized for share repurchases.
Industry Trends and Dynamics:
Mobile data consumption continues to rise at a torrent pace.
Mobile data consumption in 2024 increased approximately 35% year-over-year for the third straight year.
Experts believe that the rapid growth in mobile data consumption will require a doubling in overall network capacity over the next five years.
Satellite-based networks will remain complementary to terrestrial towers due to capacity and economic constraints.
Approximately 75% of American Tower's towers have been upgraded with 5G equipment.
Data consumption has grown at a CAGR of roughly 20% to 25% since 2020 across other tower portfolios.
5G mid-band coverage is still progressing and stands at an average of roughly 50% in Europe, 20% in Latin America, and 10% in Africa.
Strong industry tailwinds also continue to propel the data center business.
Significant new demand from early-stage AI-related workloads.
Competitive Landscape:
The tower industry benefits when its customers become healthier.
Financially strong customers tend to invest more heavily in their networks.
American Tower's portfolio of assets is unmatched in quality, scale, and operational excellence.
American Tower's balance sheet, with an investment-grade credit rating and leverage now below 5 times, provides a cost of capital advantage and superior financial flexibility.
Growth Opportunities and Strategies:
Maximize organic growth as the best operator of towers and distributed real estate.
Expand margins by leveraging global scale and world-class teams to drive cost efficiency.
Capital allocation philosophy optimizes long-term shareholder value creation.
Strategic priorities are designed to deliver the goal of industry-leading AFFO per share growth.
Financial Guidance and Outlook:
The company now expects to deliver attributable AFFO per share, as adjusted, growth of approximately 7%.
Net of FX headwinds and financing costs, the outlook implies attributable AFFO per share, as adjusted, growth of approximately 9%.
The company is raising its property revenue outlook by $40 million at the midpoint, which implies approximately 3% year-over-year growth, or approximately 5% when excluding non-cash straight-line revenue and FX impacts.
The company continues to expect organic tenant billings growth of approximately 5% and data center growth of approximately 13% year-over-year.
The company is raising its adjusted EBITDA outlook by $45 million at the midpoint, which implies approximately 4% growth year-over-year, or approximately 7% growth year-over-year, excluding non-cash net straight-line and FX impacts.
The company is raising its attributable AFFO outlook by $50 million, which now implies growth at the midpoint of approximately 7% year-over-year on an as-adjusted basis, or approximately 9%, excluding financing costs and FX impacts.
