Yahoo Finance

Marc Montagner

Thank you, Brendan. Given the solid start to the year, we are increasing our full year outlook for all key metrics, including site leasing revenue, tower cash flow, adjusted EBITDA, FFO and FFO per share as compared to our initial 2025 guidance. The primary drivers of these increases include in-line third quarter result the closing of a small portion of the acquisition of towers from Millicom earlier than expected, an improved outlook for services, slightly higher straight-line revenue due to the extension of some leases and a reduction in the share count from recently completed buybacks.
First quarter domestic organic leasing revenue growth over the first quarter of last year was 5.2% on a gross basis, 1% on a net basis. including 4.2% of churn. $20 million of our first quarter churn was related to the Sprint consolidation, which we anticipate to be approximately $50 million to $52 million for the full year 2025. previously provided SDL of aggregate sprint related churn over the next seven years remain unchanged. Beyond 2025, we anticipate approximately $50 million in 2026 and $20 million thereafter.
Non-Sprint related domestic annual churn continues to be between 1% and 1.5% of our domestic site-leasing revenue. During the first quarter, 80% of consolidated cash site leasing revenue was denominated in US dollars. International organizing leasing revenue growth for the first quarter, which is calculated on a constant currency basis, was 1.6% net, including 5.6% of churn or 7.2% on a gross basis.
Total international churn remained elevated in the first quarter due mostly to key area consolidation. We believe that procure consolidation in some of our international markets, the remaining wireless operators will be stronger in a better position to invest for the long term. This will support a steady growth rate for our operations in those countries. During the first quarter of 2025, we acquired 344 sites for total cash consideration of $58 million mostly related to the acquisition of sites for Millicom in Nicaragua.
The contribution to the 2025 outlook from closing earlier than previously assumed, is $4 million of site leasing revenue and $3 million of tower cash flow. The remaining 6,700 sites related to the Millicom transaction remain under contract and guidance continues to assume the September 1 closing date. The closing date is dependent upon regulatory approval and other requirements and may differ from this date. We also built 67 new sites in the quarter, mostly outside of the US.
Our balance sheet remains strong, and we have ample liquidity from both cash on the balance sheet and a fully undrawn $2 billion revolver. The recent share buybacks were funded fully with excess cash and did not require any borrowing. Our current leverage of 6.4 turns net debt to adjusted EBITDA remains near historical low.
As of the end of the first quarter, our weighted average interest rate was 3.7% across our outstanding debt and our weighted average maturity was approximately four years. Including the impact of our current interest rate hedge, the interest rate of [9%] of our current outstanding debt is fixed. And finally, our next debt maturity is a $750 million ABS security due in January of 2026.
Now let me turn the call over to Mark.

Mark Derussy

Thank you, Marc. We ended the quarter with $12.5 billion of total debt and $11.8 billion of net debt. As Marc mentioned, our net debt to annualized adjusted EBITDA leverage ratio was 6.4 times below the low end of our target range. Our first quarter net cash interest coverage ratio of adjusted EBITDA to net cash interest expense remains strong at 4.9 times.
During the second quarter, we repurchased 583,000 shares of our common stock for $123 million at an average price per share of $210.87. On April 27, 2025, the company's board of directors authorized a new $1.5 billion share repurchase plan replacing the prior plan that was authorized in October of 2021, which had a remaining authorization of $82 million.
This new plan authorizes the company to purchase from time to time up to $1.5 billion of our outstanding Class A common stock. The new plan has no time deadline and will continue to otherwise modified or terminated by the board of directors. In addition, during the first quarter, we declared and paid a cash dividend of $122.3 million or $1.11 per share.
And today, we announced that our board of directors declared a quarterly dividend of 1.1, -- I'm sorry, $1.11 per share payable on June 17, 2025, to shareholders of record as of the close of business on May 22, 2025. This dividend represents an increase of approximately 13% over the dividend paid in the second quarter of 2024 and approximately 35% of the midpoint of our full year AFFO outlook.
Operator, we are now ready for questions.

Question and Answer Session

Operator

(Operator Instructions) James Schneider, Goldman Sachs.

James Schneider

Maybe first, on the overall carrier environment. It sounds like fairly constructive commentary on the direction of travel here. Maybe I just was wondering if you could comment on any updates in terms of carriers' plans in the US and their willingness to devote any capacity to fix wireless access as far as you can see at this point?
And then secondly, on the capital allocation front, the buyback of $1.5 billion was encouraging to see. How are you thinking about just the overall environment for capital allocation at this point, rates are obviously probably a little bit higher than you might have thought 6, 9, 12 months ago? How about the refinancing needs potentially for 2026 and the level of buybacks you'd want to do right now and assuming nothing changes in the rate environment today? Thank you.

Brendan Cavanagh

Sure, Jim. So on the carrier environment overall, as you heard in our prepared comments and in our press release, things are generally pretty positive here in the US. There's a lot of work to be done. We're seeing a greater amount of leasing activity than we've seen over the last two years. So broadly, we feel very positive about that.
And the fact that the backlogs continue to grow is an indication that there's still a lot of work to be done. And so that's, -- as I said in my comments, that's perhaps the most encouraging thing. In terms of the specifics of what they're focused on and fixed wireless access. Our belief is that fixed wireless access is certainly a contributing factor when you look at our customers' recent reports on their own results, you saw that's where a significant portion of their subscriber growth is coming from.
We know that is a very heavy broadband consuming product, and therefore, it drives a lot of usage of the capacity of the network, and therefore, would be a driver of the need for incremental investment in their networks and infrastructure. So I can't tell you specifically because it's using the same frequencies and spectrum.
Generally speaking, is their mobile network. But we do think it's a driver, and there are many drivers. So we just feel good about the pickup in activity. On the second question around capital allocation, the rates are certainly staying higher here for longer. It's hard to say for sure, obviously, in the current environment as to when we'll see rates moving lower, -- if we'll see rates moving lower.
But our positioning is very good. As you heard, our leverage position today is well below where we've historically carried our leverage balance. And as a result, that gives us a lot of flexibility. We did buy back shares because we saw the opportunity to do it here in April as there was some dislocation around some of the announcements that we're affecting the market more broadly.
We took advantage of that. And I think if we see additional opportunities, we'll continue to take advantage of it. The new plan that was put in place by our Board is evidence that we expect to be allocating capital towards share repurchases. But as we said in the past, you should expect that our approach to capital allocation should be really a mix of buybacks, new asset investments where we see good opportunities and debt repayments in addition, of course, to our dividend.
So it hasn't really changed, and we're pretty comfortable with our positioning to be able to be flexible and adjust as opportunities present themselves.

Operator

Jonathan Atkin, RBC Capital Markets

Jonathan Atkin

So I was curious about just given what you said about the current activity level, the backlog, where do you think you might end the year on a run rate basis for US leasing, any kind of product metrics you could share with us?

Brendan Cavanagh

Yes. I mean it's a little hard to say absolutely at this point because I got to see how things continue to build, but it certainly would expect to end at a higher level than we're at in terms of what we produced here in the first quarter.
And that was approximately $9 million from new leases and amendments here in the US. I definitely expect to be higher than that, we get to the fourth quarter, but I -- I'll refrain from giving an absolute number there until we see how the rest of the year progresses.

Jonathan Atkin

And then secondly, I was interested just where you stand in terms of the bilateral contracting relationships you have with major customers in terms of pay by the drink or things like amendments colocations and just give us kind of a refresh on MLAs.

Brendan Cavanagh

Yes. So we have -- we've not typically had the kind of holistic MLAs that you're referring to. We've always had master lease agreements in place with our customers, but they've usually been equipment specific in terms of how they've paid us for the use of our sites. The exception to that was the deal we did with AT&T a couple of years ago, which was more of a holistic approach.
We're open to a holistic approach with our customers, but it really is just dependent on the specific give and take within the negotiations around those agreements. So we'll just have to see how it goes. But at this point, the only through holistic agreement we have in the US is the one that we signed with AT&T a couple of years ago.

Jonathan Atkin

Thanks very much.

Brendan Cavanagh

Sure.

Operator

Batya Levi, UBS.

Batya Levi

A couple of quick questions. First, can you talk a little bit about what's driving higher network services business and versus what you had expected earlier in the year? And when we look at domestic churn, it looks like it picked up a little bit, excluding Sprint.
What were some of the drivers for that. And maybe on the M&A front, a couple of tower portfolios are available for sale in Canada. You have some exposure to the region there, slower growth market. But can you provide some color on how you would approach M&A in Canada?

Brendan Cavanagh

Sure. So first question was on services and why it's growing faster than we expected. Really, it's as simple as one of our customers, in particular, just operating at a much faster pace than we had even expected here in terms of their network investments. And so we're just seeing them frankly, just move quicker. It's kind of that simple.
And I would expect based on the backlogs growing that they'll continue to keep a fast pace during the rest of the year, and that's why we raised our outlook for the full year. So we'll continue to try to meet their needs and keep up with them. On the US churn, you said it was growing. It's basically in line with what we put out at the beginning of the year.
So I don't think it's beyond what our expectations were. I don't know if you're asking about year-over-year.

Batya Levi

I guess, yes, it's within the range you've given, it's just picked up slightly versus last two quarters, maybe used to be around 1%.

Brendan Cavanagh

I think that's really just a timing thing. If you look at our full year outlook, we didn't change it. And I think the implied percentage for the full year for the US is around 1.2%. So it was 1.4% in the first quarter.
So you should take that to imply that it will be a little bit lower at other points during the rest of the year. And then, on the Canada side, really, we approach that the way we approach most major M&A opportunities and portfolios that come to market anywhere really around the globe, particularly obviously in the markets where we already have operations.
We will look thoroughly at any of those opportunities. And if we can see value there and see at a price point that we think makes sense and is competitive and is better, then we'll certainly will be interested in pursuing that. I think you've heard us talk about our approach to our international markets over the last year or so in terms of what we'd like our positioning to be.
Obviously, in Canada, if you have the mobile network operators up there, divest their towers, whoever ends up buying those will certainly be in a lead position in terms of their size and scale in the market. So that would be something that we would consider in our analysis of any deal. But as you should expect that we'll look at any opportunities that come to market. And I can't say whether it will work or not. But if it does, it's something we will certainly pursue.

Batya Levi

Got it. Thank you.

Operator

Walter Pieyck, LightShed.

Walter Piecyk

I guess I'll ask about our friends at DISH. I think there was a press reports about them on lease -- or looking to lease their spectrum. I think there might have been some rural areas. So maybe there's no impact there. But in general, just can you just characterize kind of what they've told you about some of their longer-term plans, what role you may play?
And then alternatively, I suppose, has there been any inbounds from cable companies who might be considering spectrum that's available in the market. And they want to redeploy on their own, I would guess that they want to do a little due diligence ahead of that to see what type of expenses that you want to take on. So I mean, basically, the same question about DISH.

Brendan Cavanagh

Yes. Well, you're probably not going to love my answer because there's not a lot of detail to offer there. I'll take the cable one first. There really hasn't been much in the way of direct conversation. We talked to them periodically that there's no there's nothing really along the lines of what you just described.
So I think until they have something firmer in hand, they frankly don't really need to spend a lot of time talking to the tower companies just yet, but we'll see if that develops.

Walter Piecyk

Can I just interject on that one before you go back to it. Even on CBRS because I think Comcast has made mention at least in some investor meetings that the initial tempo CBRS might be tied to a vendor that didn't really deliver. They moved to, I think it was Samsung or something?
And I know a lot of that is kind of in home, but I thought there was an opportunity, especially with the current SEC to increase the power ability of CBRS for them to start hitting towers. No early indications of them looking to try and offload the rising expense at Verizon?

Brendan Cavanagh

Very limited. Will I mean, we have conversations with them? We've actually talked with them about CBRS over the years at various times. But when I look at it from a materiality standpoint to us, it's really completely immaterial

Walter Piecyk

Got it. And then on the flip side, like the dish, what do you, have you heard, have you seen this stuff about them leasing out specimen world does that touch any part of your contract? And otherwise, what are they saying in terms of their intermediate term plans, let's call it.

Brendan Cavanagh

Yes. There's at this stage, there hasn't really been any specific conversations in terms of the leasing. If they do lease their spectrum, their contract doesn't allow for that to change in somebody else's hands. So there would have to be a conversation, and we've not had that conversation as of yet. In terms of is their broader commentary and feedback with us, we work pretty closely with them.
They on the operations side are very clear about their desire to continue to pursue their stand-alone greenfield network. At this stage, obviously, things are much slower in terms of leasing activity with them. So we're hopeful that that changes. But at this stage, it's really just meeting some very basic needs. There's some basic upgrades going on.
They are signing a few leases here and there, but it's pretty small at this stage. So I don't have much feedback for you there either, but I would -- I'll be interested to hear what they have to say on their call.

Operator

Michael Rollins, City.

Michael Rollins

Thanks, and good afternoon. Two topics, if I could. So first, on the international front, just curious if you could share an update on how the visibility is trending for organic growth as well as the churn dynamics and specifically in Latin America, both for this year and over the next few years. And then second, I was just looking at the supplemental, and thanks for the refresh that I think you began on this last quarter.
The supplemental looking at the straight-line revenue. And what caught my attention was the straight-line revenue is negative this year for the first time in like five years and goes more negative next year. And so as these contracts on average are getting further into their life. Does that increase the potential for some renewals?
And is that something that significantly just impact the way that results look over the next few years that might be different than what the schedule is currently inferring.

Brendan Cavanagh

Let me try to answer that second one first while I'm thinking about it. I don't think so. I mean basically, if you think about what straight line revenue is, it's essentially revenue that -- from an accounting standpoint, we're booking, but we haven't actually received the cash. So eventually, it's going to all go negative and reverse out and end up at zero cumulatively.
I think what you're seeing is that as we've had less new leases and moved further in terms of the dates and the timing of our portfolio as it gets more mature. You should expect that it would move back towards that sort of breakeven point. Now having said that, we are signing more new leases today and perhaps that will have an impact.
And as we in some cases, extend out the length of the terms. We'll see some adjustments up. And actually, that did happen in the first quarter. We extended some leases out. So that pushes the timing. But I don't think that there's anything to be right into it other than just we're a more mature business, and we're in a more mature place in terms of our life cycle with our biggest customers.
So it's going to move up and down over time, but eventually, if you went to the end of time, it would be zero cumulatively. And so the other question was on international. I think, Mike, right, organic growth and churn? Is that what your question was on? Dynamics?

Michael Rollins

Yes, the visibility into this year as well as in the next few years as you're managing through some of the Latin American churn dynamics.

Brendan Cavanagh

Yes. We are -- each market is a little different. And in some of the markets, we have experienced churn over the last few years due to consolidations that we're pretty close to being on the other side of that in a number of markets we are on the other side of it. If you look across many of our Central American markets, you have that consolidation take place. You had most of the rightsizing of those leases happen as a result of that.
And so I think we're going to be in a good spot there. And actually, you're going to have carriers that are more interested in their network development and investing further in their networks, and therefore, we're going to actually see some pickup in activity in that area. In other spots like in Brazil, we're really just kind of in the throes of the consolidation impacts and everything that comes with that.
We talked about a bunch over the last year or so, everybody knows that was replaced by the other three carriers taking a piece of them, each of them but that leaves a lot of overlap, and a lot of rationalization needs to take place, and we're seeing that take place. We're also still seeing the impacts of the Nextel acquisition by Claro and that was done years ago.
So I would say for the next few years, we probably will see some elevated churn internationally as a result of those dynamics. And that, -- I think the hidden cost of that is not just the churn, but it is the fact that, that rationalization takes a lot of the focus of the existing carriers and so the organic growth in terms of new lease-up is also impacted, I think, a little bit by that.
So I would say the next few years will probably be a slower growth period in Brazil, in particular, which is the lion's share of our international business. But as we move beyond that, based on what we've seen in other markets, including the US by the way, I would expect there to be an acceleration of leasing activity as we start to get further down the maturity cycle of that process.

Operator

(Operator Instructions) Matt Niknam, Deutsche Bank.

Matthew Niknam

Just two, if I could. First, on the macro front. I'm wondering if sales cycles, conversations with carrier customers, particularly in the US lengthening at all? Or are you seeing carriers even potentially reevaluating spending plans in light of what's developing into a choppier macro backdrop?
And then just secondly, on the US as well, if you can give us any color on the mix of colo-relative to amendment for new leases signed in 1Q and how that compares to prior quarters?

Brendan Cavanagh

Yes. We -- so the answer to your first question, Matt, is we have not seen an impact on any of our sales or leasing discussions with our customers. But I also think that it is pretty fresh, and it's not something that I can square won't take place over the coming months. I do feel very good in the sense that we obviously have no direct impacts from tariffs.
Carrier customers have limited relative to most companies here, international companies. Obviously, in particular, the impacts on our carrier customers are very limited. So I think we're not going to see a lot because there's still such significant network needs. And there's a competitive dynamic that exists among our customers that I think is also favorable to continued investment.
But we'll have to see how the macro environment around this topic evolves and where it ends up going. And obviously, there's a possibility that has an impact. But as of today, we've not seen any of that. And your second question was Colo versus commitments, right?
Yes. So we've definitely seen a pickup in the collocation that started last year and has continued into this period now where we're seeing the vast majority actually of new revenue added in the US coming from new lease collocations versus amendments. I don't actually have the percentage handy to give you, but that's something our team could probably provide to you in a follow-up call afterwards.
But most of it is coming from new leases. And based on the backlogs and the way they're building, I would expect that to continue for the balance of the year.
Thank you.

Operator

Nicholas Deldeo. Moffet Nathanson

Nicholas DelDeo

First, Brendan, in your prepared remarks, you noted the driving efficiencies for new technologies and systems, which is a priority for the year. Can you expand on that at all and maybe frame some of the areas that you're looking at, the sort of savings that you're expecting?
And then second, you decommissioned a lot of towers overseas this quarter. Is that all oil related? Or are there other drivers, anything we should be aware of there? And how should that trend in the coming periods?

Brendan Cavanagh

Executive
Sure. Yes. So on the efficiencies, we are I mean, this is stuff that you should expect that we would be doing anyway, Nick, but I call it out because it's an internal focus area that we are definitely spending some time on. We have a number of new systems that we are putting in place in various areas of our business, some on the operational and front-end side around leasing, others around back-office operations, including our ERP system, getting a total refresh.
And as we do that and we incorporate AI and other things into the solutions that we're providing, we will look for efficiencies in the way that we run these processes. And I think through that, we will actually gain not only cost savings but opportunities to drive additional revenue sources as well. It’s too early at this point to probably quantify that for you. But over time, I would hope that I'll be able to give you some idea of places where we've actually realized real savings that make an impact on the financials.

Nicholas DelDeo

You mentioned -- sorry to jump in. You mentioned the ERP system. I know sometimes that's been problematic for some companies when they change that out. Do you feel comfortable from a risk profile because that's typically a big change for folks.

Brendan Cavanagh

I do. It is a big change, and it's actually a multiyear project, but I feel very good about where we are today and the progress, we're making on that. But yes.

Nicholas DelDeo

And then the decommissioning question?

Brendan Cavanagh

Yes, the decommissioning. So just to be sure that we're clear because you probably are looking at the total number for international. That includes the divestitures of Colombia and the Philippines, which took place. So just to be clear, that's the vast material right.
So if you strip that out, though, we are decommissioning some sites primarily in Brazil, and that is, -- it is an association with the Hawaii consolidation where we're seeing places where we have taken towers that we don't think how much progress -- promise, sorry in those cases will take those towers down to save the cost. But most of that number is the sale of those two countries.

Nicholas DelDeo

Okay, great. Thank you, Brandon.

Brendan Cavanagh

Sure.

Operator

Eric Luebchow, Wells Fargo.

Eric Luebchow

Ben, I think you talked a little bit about the increasing Colo mix in your backlog. Any sense you have for how much might be related to regulatory requirements that certain carriers have a specific time that need to be deployed versus kind of any early signs of densification in your footprint from early mid-band deployments.

Brendan Cavanagh

Yes. Well, first, let me -- since you gave me the opportunity here to go back and answer Matt's question on the actual percentages. It was about 75% of the new leasing business signed up in the first quarter. in the US came from colos as opposed to amendments.
So then to your question, it's a mix of things. Definitely, the regulatory requirements is a part of it. And I only know that with confidence because when we look at least one of our carrier customers and we look at the locations and sort of the more rural nature of some of those, that gives us a pretty good sense of what they're trying to accomplish there.
But it's really hard to say in every case because they have real network needs in all these different spots. And so whether it's for commercial reason or a regulatory reason. Sometimes we don't have that clarity. But I would expect that we'll continue to see a balance of both of those factors as a driver.

Eric Luebchow

Okay. Great. I appreciate that. And on the services guide uplift, I believe you over indexed to one carrier in particular there. So would you attribute that uptick to that customer? Or is it a little bit more broad-based than that?
And I guess, do you think there's any correlation here between the services upside and some of the higher leasing activity that you've talked about in your backlog?

Brendan Cavanagh

\Yes. I do think that there is a correlation to the leasing at least a little bit because most of the work that we're doing virtually all the services work we're doing now is on our own power sites. So, it's definitely tied into leasing activity. And yes, I mean, we do have a significant percentage of our services business with one particular carrier, but the increase, at least proportionally among them, is more broad-based.
But obviously, that one customer makes up a bigger percentage. And therefore, as they get busier, that makes more of an impact to our outlook.

Eric Luebchow

Thanks, Brandon.

Brendan Cavanagh

Sure.

Operator

Brandon Nispel, KeyBank

Brandon Nispel

Thanks for taking the question. Brendan, I want to go back to your comments around new bookings and backlog. From a historical standpoint, what period is most comparable to the new bookings you saw this quarter? And then I was hoping you could help us contextualize what the book-to-bill ratio looks like today.

Brendan Cavanagh

Yes. I don't know if I could say absolutely, but it's been a couple of years. It's been over two years, I'd say, since we saw this level of applications that drive our backlog. So it's pretty good in terms of recent history. We were pretty busy back in the '22’ and ‘23 window.
So it's probably as good as it was any time since then. I'm sorry, Brandon, your second question?

Brandon Nispel

Just curious on book-to-bill backlog and sort of where that -- what that looks like.

Brendan Cavanagh

Yes, it's still -- because of this shift in the mix to new leases, it's obviously more elongated than it's been historically. It's typically a six to nine months for a new colo, we've seen a little bit of improvement in that. It's probably been a little bit shorter than that, on average, at least this far into the year, which is not that much history, but they're turning them around a little bit quicker and getting them deployed quicker.
So let's say, three to nine months just to kind of hedge it. Every lease is a little bit different, but that's the typical range.

Brandon Nispel

Great. Thanks for taking the questions.

Brendan Cavanagh

Sure.

Operator

Michael Funk from Bank of America

Michael Funk

Thank you all for the questions today. So first one, just what do you attribute the increase in new leasing activity from the carriers based on your conversations with them? And then any maybe split between the carriers would be helpful as well.
And then second one, kind of more bookkeeping. You mentioned during the prepared remarks that CPI rates have a potential better escalators throughout the year internationally. If you can quantify that would be helpful.

Brendan Cavanagh

Yes. So the increase -- I don't want to get too specific by customer in terms of what they're each doing. I think you can look at their own reports and get a sense of the things that they're focused on. that would be the logical drivers of activity in terms of leasing on macro tower sites. But it's broadly increased subscriber activity, certainly, certain product offerings that are more network bandwidth intensive such as fixed wireless access.
There are some regulatory requirements, which we referred to a moment ago, for at least one of our customers that's T-Mobile who has some need to meet obligations in terms of downlink speeds and coverage that they committed to as part of the Sprint acquisition. So that's ongoing as a driver as well. So there's a variety of things. I think we'll continue to see a mix of those things.
But overall, it's going to be strained on the network and competitive pressures between the carriers. And on the CPI question, yes, I mean, particularly in Brazil, we've seen an increase in the CPI rates down there. We’ll have to see whether that holds up. We obviously didn't raise our outlook around international escalator contributions for this year.
If we continue to see elevated CPI rates down there, there's a potential that we would actually be able to raise our leasing outlook. And we're really talking about on our total for the full year, you're talking about $1 million or $2 million of impact. So it's not a massive number, but as a percentage, it's a reasonable contribution increase.

Michael Funk

Great. Thank you for the question.

Brendan Cavanagh

Sure.

Operator

Rickard Prentiss, Raymond James

Richard Prentiss

Hey, good afternoon, everybody. I think I messed up my pound too here. I appreciate the questions.

Brendan Cavanagh

Sure.

Richard Prentiss

First question, I want to follow up on the lines, a lot of people touched on the colocation amendment. I appreciate the 75-25 for 1Q number. Was that revenue base, I assume, instead of application-based. Because I would expect new colocations come in on a significantly higher amount of revenue than an amendment.

Brendan Cavanagh

Yes, that's revenue-based dollars.

Richard Prentiss

Okay. Which also then lead activity. Also associated with that, kind of looking at new colocations versus amends, what's your outlook as far as when spectrum new spectrum, not just secondary like Walt was asking about, but when new spectrum could be found auctioned and put into the system. That would drive for spectrum deployments instead of having to split sites.
Any update from Washington that you're seeing on the spectrum front and when we might see some blocks come out and when they might show up on your towers?

Brendan Cavanagh

Yes. I don't obviously have any insight that is specific to when you're going to see it. But the general commentary that we get back in the conversations that we have and that our industry association WIA has is that there's definitely much more of an interest in this administration and the FCC to get new spectrum out there and auctioned off.
And so we're encouraged by that. I think even if they get that done, in relatively short order by the time it gets cleared and is available and then is actually deployed. You're talking four or five years from now, probably before we would see an opportunity for increased leasing activity as a result of that, Rick. So it's a ways off. But the faster that we get it done and out there get this process started, the quicker we can get to that point. So we're definitely pushing for that from our industry.

Richard Prentiss

Industry could definitely do some more spectrum, but it's going to take time, which means we should probably count on colocations, more so than amendments being a trend, it feels like.

Brendan Cavanagh

Yes, which obviously isn't bad. I mean, we're fortunate in terms of where we're placed in the ecosystem and that if you don't have the spectrum, the only solutions you've got are to densify your network and that typically means more locations for us and more equipment, which is a good thing.

Richard Prentiss

Last one for me. Obviously, good capital allocation, jumping on the dislocation in the stock price. But when you think about M&A that might be out there as out the Canada Towers. But are you still seeing private multiples being well above or just above the public multiples are going forward? Kind of how is that still impacting the ability to compete and win for external towers?

Brendan Cavanagh

Yes. We are still seeing that. If you're talking about the US because there is a limited supply of potential assets, and there are a lot of people very interested in acquiring US towers. When those opportunities come about, the private valuations are much, much higher than the public valuations, and that makes it a challenge for us.
Internationally, in some of our emerging markets, we've seen that rationalize a little bit more. But what you're actually seeing is very few assets trading hands at all. So I think what's happening is sellers are not getting interest at the levels that they'd like to or that perhaps they were getting in the past and buyers aren't willing to come up to those levels.
So you end up having deals just not trade. So I'm feeling better about there being a little bit of rationalization in most of the international markets, although I'm not seeing that so much in the US. And hopefully, we will see that kind of balance out because I think it will be good in terms of that the health of the overall industry if we have more rationality brought to some of these analyses.
You can't have cost of capital rising the way that it has and have no change in the approach that people take to valuing these assets. So hopefully, we'll start to see that.

Richard Prentiss

Makes sense. And in the US, that's much, much higher. We think in mid-20s, high 20s even into the 30s? Is that kind of what we're seeing out there?

Brendan Cavanagh

Yes. I mean, it just depends on portfolio to some degree because of the maturity of it makes a difference, but we're definitely seeing assets that are trading in the mid-30s, in some cases, even higher.

Richard Prentiss

Appreciate it. Thanks guys.

Brendan Cavanagh

Sure.

Operator

Benjamin Swinburne, Morgan Stanley

Benjamin Swinburne

Thanks. Good afternoon. Two questions. Brendan, we touched on it a few of your answers. Just trying to -- can you give us a sense of your visibility into sort of the full year domestic site leasing growth. Should we look at the activity, the service revenue growth and the mix shift to colocations is adding to that visibility?
I just want to get a sense sitting here in late April, sort of the line of sight into the improving revenue trends domestic in the district business as you look through the rest of the year? And then I just thought a move up of a housekeeping.
Can you just update us on if there's any change to how we should think about the Millicom contribution to revenue and gross profit when the rest of the bulk of the acquisition closes on. Assuming it closes September 1. Thank you.

Brendan Cavanagh

Yes. So we do break out in our press release, our outlook for the contribution to leasing that we expect during the full year. And the range that we set for that for the US, we did not change after this quarter. It's only been two months since we gave that outlook originally. And I think at this stage, while my commentary is accurate in terms of the accelerating pace and that we're feeling very good about it as the backlogs have been bigger and the lease-up was a little bit ahead of pace.
I think that it's a little early to think that we're going to be outside of the range that we gave. But we'll see where we are next quarter. We'll certainly have a much better sense by then as to whether there's an opportunity to beat the range. But perhaps will be more towards the higher end of the range if things continue on this track. So stay tuned on that.
At least we're talking about it being towards the higher end and not towards the lower. That's a good sign. And then on the Millicom question, I mean, at this stage, the outlook that we put together originally hasn't really changed outside of the sites that we closed on early. Obviously, we adjusted for that. There's -- I don't know, Ben, if you're looking for something in particular, but basically, what we laid out in terms of the total expectation when it's all said and done, that's still the same as what we put in our original press release when we announced that deal. No real changes there, but we'll be excited to get it done as soon as we can.

Benjamin Swinburne

Okay. The only change, I guess, is as part of that acquisition is close to ready, right?

Brendan Cavanagh

Yes, just a timing difference. So it's a fairly small piece of it. There were 320 sites that we were. And if we can close other pieces early, we will do that, too. I think there's not a great an opportunity to break off other pieces -- this particular market, there was an opportunity to buy the asset separately as opposed to an entity, and so that allowed us to close a few early.
But we'll see how it goes. If we can close them early, we'll do that.

Richard Prentiss

Great. Thank you so much.

Brendan Cavanagh

Thanks.

Operator

Richard Choe from JPMorgan.

Richard Choe

A follow-up on the services side. Was the increase more in near-term activity? Or is it just feeling more confident about the level through the year? And then also, how much more services revenue could you fulfill or how much capacity you have in that services business kind of from this 180 to 200 level?

Brendan Cavanagh

Well, the services, the increase in guidance for services is a mix of the contribution from the first quarter, where we did little bit better than we had anticipated when we set the original outlook as well as the increased backlogs, which gave us some confidence that we will do better during the balance of the year, which is our original projections as well.
So it's really a mix of both of those. And on your question on capacity, I'm not sure what you're getting at. I mean, obviously, we've given an outlook for this year of now updated of 180 to 200. In the past, we have had even bigger years. A couple of years ago, we did almost $300 million in services revenue, high $200 million.
So we have the capacity in terms of our capabilities and scalability to handle increased volume if we can find the right work. And so if we see that opportunity, hopefully, we'll continue to see it grow. But we're not restrained in terms of our capabilities or capacity

Richard Choe

Great. Thank you.

Brendan Cavanagh

Sure.

Operator

Jonathan Chaplin, New Street.

Jonathan Chaplin

Thanks guys. Just one clarifying question for me. So I think in the past, Ben, you said that the 2.5 gigahertz and 3.5 gigahertz spectrum that the carriers have deployed on their sites as sort of 55% to 65% of sites. Is that of your site of their sites. The way I understood it initially was the sort of 55% to 65% of their sites, and they've still got a lot of growth to go.
And I would have thought that would have translated into a lot more amendments still to come as opposed to what you're seeing, which is the bulk of growth coming from new leasing?

Brendan Cavanagh

No, it's -- when we give those statistics, we're giving it on our -- their presence on our sites, the leases that we have with them on our sites. Yes. It's not to their overall position that's up to them to comment on. So -- and the carriers are not balanced in terms of that. Obviously, T-Mobile is further ahead because they have 2.5 spectrum. Well ahead of the other incumbents having their mid-band C-band spectrum.
So it's a mix between them. And that perhaps is what's contributing to the shift of who's moving towards new leasing versus amendments faster. But either way, they're through on a consolidated combined basis, cumulatively, they're through about close to 60% of our leases with the three incumbents have been upgraded for mid-band spectrum.

Jonathan Chaplin

Got it. So that 60% of their sites. So they've done amendments on 60% of their sites from mid-band spectrum already. And so there's another 40% they could still do amendments on as a group?

Brendan Cavanagh

Yes, as a group. When we're talking about their leases on our sites.

Jonathan Chaplin

Yes. And so they're not doing incremental -- so but that's not where the activity is coming from at the moment. It's mostly coming from them putting equipment on new sites.

Brendan Cavanagh

Well, yes, I mean we're still signing a bunch of amendments though. And the amendment activity is largely around that. It's largely 5G-related upgrades yes.

Jonathan Chaplin

Perfect, thanks for that clarification.

Brendan Cavanagh

Sure.

Operator

David Guarino, Grey Street

David Guarino

Brendan, going back to your comment on the transaction front. You said the bid-ask spread might be too wide for some deals to cross the finish line. Was that comment in reference to the past few weeks and the volatility we've seen? Or -- is that something you've observed over the course of the year?

Brendan Cavanagh

Yes. No, it's something we've observed really for the last year or so internationally where you're seeing this, we've seen a number of potential transactions come to market, processes run, some we participated in others we have not. And there are a number of them that did not actually get completed. So it's been a dynamic that's been happening for the last year.
So really, if you look at the timing of when cost of capital started to increase sometime following on that time period, you started to see this dynamic

David Guarino

Makes sense. And then you had a comment in your press release talking about the business, having very reliable cash flow miss economic uncertainty. And that's definitely been true in the past. But since the tenant landscape has evolved since that, we really had any sort of economic stress test, how should we think about it's portfolio performing if the US economy were to hit a soft patch?

Brendan Cavanagh

Well, I think, David, if you look at it from a big picture standpoint, we produce a tremendous amount of cash flow. Our AFFO is about $1.4 billion a year. And even if there's softness in the US or anywhere else. You're talking about a variation of leasing activity and incremental dollars being added that is relatively small in the in the big picture of the cash flow that we're able to produce, the amount that we're able to return back to our shareholders.
There's no risk to our ability to continue to operate or quote some saying, sell our products. It's already been sold. It's already happening. So we're talking about impacts happening on incremental additions. And right now, that it's a positive environment, and that's great. But even if things were to slow down, you're talking about fairly small amounts.
So my commentary is that compared to most businesses out there, the cash flow that we're able to produce can be relied upon. It is very steady and consistent. And that's a good place to be in a in an unstable environment.

David Guarino

Good point. Thank you.

Brendan Cavanagh

Yes.

Operator

Ari Klein, BMO Capital Markets

Ari Klein

The commentary on domestic leasing activity and signing continues to get better. Based on the conversations with carriers, is that something you expect to continue to accelerate and maybe build here for the next couple of years? Or does it level off kind of in the range where you're at now?

Brendan Cavanagh

I think that's a hard question to answer to look out multiple years. We've seen this play out over decades of being in this and there are some periods where the carriers are busier than others, but it tends to move in cycles as different events happen. And I think if you look out over the coming years, -- this year, we're obviously feeling very confident and excited about the level of activity as it's continued to increase based on the specific drivers that are in place today.
That -- there are a number of factors that could come along that caused that to slow and there are factors that could come along that caused that to increase. As we look out longer term, we know that there will be new spectrum that's eventually made available and that will be a driver of increased activity. There's eventually a 6G cycle that will take place down the road.
And so over time, I feel very good that there will continue to be cycles of investment in networks by our customers, and we will see, -- we will be a beneficiary of that. But to say from one year to the next, whether this year is going to be higher or lower year, it's hard to say without too much precision if we look out multiple years.
So I'll just leave it at. We'll see how it goes, but you should feel comfortable that there's always another cycle of something needed.

Ari Klein

Got it. And maybe if I can just kind of -- moving that leasing activity to from backlog to two leasing or leasing revenue. I think one of the things is the guide this year is the midpoint is down a little bit from last year despite the improvement in activity. Is that something when we look at the '26, we should expect a decent rent given how active you've been.

Brendan Cavanagh

Yes. If we continue to see it move the way that it's moved thus far this year and it stays with the same trajectory as we move through the balance of the year. That should be favorable to next year because that's -- the reason this year is down on last year, even though the activity is better this year than last year is because there's a drag.
There's a lag time between when you sign up these agreements and when they start to hit your financials. And so we will see this benefit into the balance of this year, but particularly into next year as it carries over.

Ari Klein

Thanks for the color.

Brendan Cavanagh

Well, thank you all for joining the call today, and we look forward to reporting our second quarter results at the end of July.

Operator

That concludes out first quarter of 2025 results Conference Call. You may now disconnect.