American Tower Corp Earnings - Q4 2025 Analysis & Highlights
American Tower Corporation reported strong full-year 2025 results with robust leasing demand across towers and data centers, while navigating significant headwinds from DISH's default and managing a strategic pivot toward developed markets with enhanced operational efficiency initiatives.
Key Financial Results
Attributable AFFO per share as adjusted grew 8% for the full year, including over 13% growth in the fourth quarter.
Consolidated property revenue grew approximately 4% year-over-year, or approximately 5% when excluding non-cash, straight-line and FX impacts.
Organic tenant billings growth was approximately 5%, complemented by data center revenue growth of approximately 14%.
Adjusted EBITDA grew approximately 5% year-over-year and approximately 7% excluding non-cash net, straight-line and FX impacts.
Consolidated margin expansion of 20 basis points was achieved through record services contribution and disciplined cost management.
Leverage was brought back down to 4.9 times, within the company's target range of 3 to 5 times.
Share repurchases totaled approximately $365 million in the fourth quarter, the largest quarterly and annual buyback since 2017, with an additional $53 million repurchased year-to-date in 2026.
Business Segment Results
Tower business delivered organic tenant billings growth of approximately 5%, driven by robust leasing demand across the portfolio.
Data center business achieved approximately 14% revenue growth, with strong demand for hybrid and multi-cloud deployments and positive pricing actions.
CoreSite is achieving mid-teens or higher stabilized yields on new data center deployments, supported by sustained migration of enterprise IT infrastructure to interconnection-rich colocation facilities.
US and Canada tower portfolio represented approximately 4% of consolidated property revenue from DISH in 2025, with DISH now in default.
Africa and APAC regions demonstrated strong performance with record sales growth in 2025.
Europe benefited from strong demand for new sites with top-tier carriers, with 5G progress lagging slightly behind the US.
LatAm experienced challenges with expected low single-digit organic growth through the end of 2027 due to elevated consolidation-related churn in Brazil.
Capital Allocation
Dividend growth of approximately 5% is planned, resulting in approximately $3.3 billion in distributions to shareholders, subject to board approval.
Capital deployments of $1.9 billion are planned for 2026, of which $1.8 billion is discretionary in nature and includes the construction of 2,000 sites at the midpoint.
Approximately 85% of discretionary spend is directed toward developed market platforms, including over $700 million in success-based investments in the data center portfolio.
Maintenance capital is planned at approximately $180 million, a reduction of roughly $15 million due to acceleration of maintenance capital projects into 2025.
Share repurchase authorization of approximately $1.6 billion remains available for opportunistic deployment.
The company remains disciplined in capital allocation, assessing opportunities among internal CapEx, M&A, share repurchases, and further delevering.
Industry Trends and Dynamics
Mobile data consumption continues to grow rapidly alongside growth in mobile customers, 5G adoption, and fixed wireless access.
Wireless network capacity is expected to require doubling between now and 2030 to meet secular demand growth.
Trillions of dollars are being deployed into AI, which is likely to propel mobile data consumption higher and require greater bandwidth, lower latency, and more uplink capacity.
US carriers are in the middle stages of the 5G cycle, having broadly completed initial 5G coverage-oriented activity and shifting toward capacity-oriented activity.
Fixed wireless access is accelerating as a percentage of mobile data usage, with carriers raising their targets for fixed wireless subscribers.
AI-related use cases like inferencing and machine learning are driving an increasing portion of new leasing at CoreSite.
6G spectrum of 800 megahertz of higher frequency has been earmarked, with deployment expected to drive significant activity on towers.
European 5G progress lags slightly behind the US, with strong demand for new sites prompting exciting levels of new build activity.
Emerging markets continue to see 4G-related activity dominating, but increasing levels of 5G rollouts are occurring in key metros.
Competitive Landscape
American Tower maintains the highest like-for-like tower cash EBITDA margins amongst its peer group.
The company has best-in-class SG&A at approximately 4.5% of revenue for its tower business.
Disconnect between private and public multiples persists in the tower market, reflecting the attractiveness and durability of revenue in the tower business.
The company is not seeing significant active deal flow in M&A that it finds attractive at current valuations.
Macroeconomic Environment
Inflation and tariffs are creating cost pressures in the data center business, though the company is able to pass these through in the form of higher pricing.
FX assumptions in the 2026 outlook reflect the company's standard methodology and are conservative relative to current spot rates, contributing approximately 1% of incremental growth.
The company expects its business to benefit from a healthier, well-capitalized customer base following DISH's default, which can invest more heavily in mobile networks.
Growth Opportunities and Strategies
Durable revenue growth is a key priority, underpinned by mobile data consumption growth, 5G adoption, and fixed wireless access.
Network densification is expected as carriers invest in capacity to meet 5G demands and plan ahead for the 6G cycle.
US portfolio is expected to deliver durable, long-term, mid-single-digit organic growth.
International tower portfolio is expected to deliver faster organic growth than the US as less mature portfolios lease up over time.
Operational efficiency is a key priority, with over 300 basis points of cash EBITDA margin expansion achieved across the global tower portfolio since 2022.
Four key areas of expense savings have been identified: managing land expense, implementing global unified sourcing and supply chain, accelerating adoption of standard care for US assets globally, and simplifying internal technology platforms.
200 to 300 basis points of tower cash EBITDA margin expansion is expected over the next five years from new efficiency initiatives and continued strong conversion rates.
AI adoption is being pursued to accelerate efficiency gains, targeting process automation, predictive maintenance, power and utility management, and workflow optimization.
CoreSite expansion into new markets is being pursued selectively, with land purchases in various areas as exploratory forays.
New data center deployments are expected to take approximately two to three years from ground breaking to opening and revenue realization.
Inferencing demand at CoreSite is one of the leading new use cases, with more demand than current supply can meet.
Financial Guidance and Outlook
2026 consolidated organic tenant billings growth is expected at approximately 1%, or approximately 4% excluding DISH churn.
US and Canada organic tenant billings growth is expected at approximately 0.5%, or approximately 4.5% when excluding DISH churn, comprised of co-location and amendment growth of approximately 2.5%, escalations of approximately 3%, DISH-related churn of approximately 4%, and normal churn of approximately 1%.
Africa and APAC organic tenant billings growth is expected at approximately 8.5%, comprised of co-location and amendment growth of approximately 7%, CPI-linked escalations of approximately 4%, and churn of approximately 2.5%.
Europe organic tenant billings growth is expected at approximately 4%, comprised of co-location and amendment growth of approximately 3%, CPI-linked escalations of approximately 2%, and churn of approximately 1%.
LatAm organic tenant billings is expected to decline by approximately 3%, including steady co-location and amendment contributions of approximately 2%, CPI-linked escalations of approximately 4%, churn of approximately 8%, and other run-rate revenue headwinds of approximately 1%.
Property revenue is expected to grow approximately 3% excluding non-cash, straight-line revenue and FX impacts, or approximately 5% growth on a cash FX-neutral basis when normalized for DISH churn.
Selective construction of approximately 2,000 new tower sites at the midpoint is planned, with approximately 13% growth in the US data center business.
Adjusted EBITDA is expected to grow approximately 2% when excluding net straight-line and FX impacts, or approximately 5% growth normalized for DISH churn.
Cash adjusted EBITDA margins are expected to be 66.8%, down a modest 20 basis points versus last year.
Tower cash margins are expected to be flat year-over-year while absorbing approximately 60 basis points of one-time pressure from DISH churn.
Data center cash margins are expected to decline approximately 270 basis points year-over-year due to one-time benefits from property tax adjustments and legal settlements in 2025 not recurring.
Attributable AFFO per share growth is expected at approximately 1% year-over-year, or approximately 5% growth normalized for DISH churn and excluding FX and refinancing costs.
DISH exposure represents approximately $200 million annually and extends through 2035 into 2036.
Europe is planning a record number of new builds with over 700 new sites planned, primarily in Germany and Spain.
DISH Default and Legal Proceedings
DISH failed to meet payment obligations and is in default, with the company pursuing legal action to recover the value of remaining lease obligations.
DISH represented approximately 2% of consolidated property revenue and approximately 4% of US and Canada property revenue for full year 2025.
100% of DISH's revenue was removed from organic growth beginning January 1, 2026, and reflected in churn.
Any payments collected from DISH subsequent to year-end 2025 will be reflected in other non-run-rate revenue.
The company does not expect DISH litigation to be resolved in 2026, though it hopes for resolution.
The company plans to continue fighting the litigation in the courts without speculating on outcomes.
