SBA Communications Q2 Earnings Call Highlights

SBA Communications modestly raised its 2026 outlook for site leasing revenue, funds from operations (FFO) and FFO per share after reporting second-quarter results in line with expectations. Q2 FFO per share was $3.05, and the company declared a $1.25 quarterly dividend, about 13% above the prior-year payout. Leasing remained steady, but international churn stayed elevated because of carrier consolidations, bankruptcies and network rationalizations. SBA added approximately $9 million in U.S. and $4 million in international new lease and amendment billings, while expecting lower U.S. leasing contributions in the second half. SBA reshaped its capital structure and plans to prioritize share buybacks after issuing $3.5 billion of investment-grade bonds and repaying its term loan and revolver balances. Management considers repurchases more attractive than high-priced acquisitions, while longer-term growth could come from international tower construction, spectrum deployments and emerging edge-computing opportunities.

SBA Communications NASDAQ: SBAC reported second-quarter results in line with its expectations and modestly increased its full-year 2026 outlook for site leasing revenue, funds from operations (FFO) and FFO per share, citing higher straight-line revenue and improved net cash interest expense. Chief Financial Officer Marc Montagner said second-quarter FFO per share was $3.05. The company paid a quarterly cash dividend of $1.25 per share and declared another $1.25-per-share dividend payable Sept. 17 to shareholders of record as of Aug. 20. The declared dividend is about 13% higher than the dividend paid in the prior-year period, according to Montagner.

“We had another good quarter, and our results were in line with our expectation,” Montagner said. SBA said its companywide Tower Cash Flow margin was just under 80% during the quarter.

In the U.S., SBA added about $9 million of new lease and amendment billings during the second quarter, with most activity coming from new co-locations as carriers densified networks and expanded coverage. Internationally, the company added about $4 million of new lease and amendment billings. President and Chief Executive Officer Brendan Cavanagh said U.S. application volumes entering the second half remained relatively consistent with the first half of the year. One customer was more active than the others, though he said changing levels of activity among carriers were not unusual. The company expects U.S. new-leasing contributions to be lower in the second half than in the first half, consistent with its prior outlook. Cavanagh said the company had not changed that expectation. International demand remained healthy, though churn continued to be elevated because of carrier consolidations, bankruptcies, restructurings and network rationalizations. Cavanagh said SBA is working with customers on longer-term arrangements intended to provide more stable and predictable cash flow, sometimes involving rental relief in exchange for greater contractual certainty. SBA expects it is nearing the end of its period of heightened international churn, though Cavanagh declined to provide a specific outlook for next year while discussions with customers continue.

In July, SBA issued $3.5 billion of unsecured investment-grade bonds, its first such offering. The company used net proceeds to fully repay its Term Loan B and outstanding balances under its revolving credit facility. As of the call, SBA’s revolver was fully paid down and it had about $570 million in cash. The offering included: $1.35 billion of notes due in 2030 with a 4.78% cash coupon; $1.35 billion of note...