SBA Communications Corporation SBAC reported first-quarter 2025 adjusted funds from operations (AFFO) per share of $3.18, beating the Zacks Consensus Estimate of $3.12. However, the figure implies a drop of 3.3% from the prior-year quarter.
SBAC results reflect a significant improvement in site-development revenues during the quarter. However, higher costs and interest expenses undermined the performance to some extent. The company revised its 2025 outlook.
Quarterly total revenues increased marginally year over year to $664.2 million. The figure also surpassed the Zacks Consensus Estimate of $657 million.
SBAC’s First Quarter in Detail
Site development revenues increased significantly 62.4% year over year to $48 million.
However, site-leasing revenues decreased 1.9% year over year to $616.2 million. Quarterly site-leasing revenues consisted of domestic site-leasing revenues of $461 million and international site-leasing revenues of $155.2 million. The domestic cash site-leasing revenues came in at $459.9 million, growing 0.7% year over year. International cash site leasing revenues came in at $155 million, falling 7.5% year over year.
The site-leasing operating profit was $500.7 million, marking a decrease of 2.5% year over year. Moreover, 98.1% of SBAC’s total operating profit in the quarter came from site leasing.
The overall operating income grew 3.6% to $334.9 million.
The adjusted EBITDA totaled $457.3 million, down 1.7%, while the adjusted EBITDA margin decreased to 69% from 71.2% in the prior-year quarter.
The cost of site development increased significantly to $38.2 million, and interest expenses rose 8% year over year to $104.1 million.
SBAC’s Portfolio Activity
In the first quarter, SBAC acquired 344 communication sites, including Milicom’s 321 sites, for a total cash consideration of $58 million. The company also built 67 towers during this period. It owned or operated 39,709 communication sites as of March 31, 2025, of which 17,447 were in the United States and its territories and 22,262 internationally.
SBA Communications also spent $8 million to purchase land and easements and extend lease terms. The total cash capital expenditure was $109.6 million in the reported quarter, of which $95.4 million represented discretionary and $14.2 million was non-discretionary.
Subsequent to the quarter-end, along with around Millicom’s 6,700 sites under contract, SBAC is under contract to buy 18 communication sites for a total consideration of $10 million in cash. It expects to complete the acquisition by the end of the third quarter of 2025.
In the first quarter of 2025, the company disposed of all its towers and related assets in the Philippines and Colombia.
SBAC’s Cash Flow & Liquidity
In the first quarter, SBA Communications generated nearly $301.2 million of net cash from operating activities compared with the year-ago quarter’s $294.5 million.
As of March 31, 2025, it had $0.7 billion in cash and cash equivalents, short-term restricted cash and short-term investments, down from $1.7 billion recorded as of Dec. 31, 2024. SBAC ended the quarter with $11.8 billion net debt and a net debt-to-annualized adjusted EBITDA of 6.4X.
As of April 28, 2025, the company had no amount outstanding under the $2 billion revolving credit facility.
Following the first quarter, SBA Communications repurchased 583,000 shares of its Class A common stock for an aggregate amount of $122.9 million at an average price of $210.87 per share under its $1 billion stock repurchase plan.
SBAC’s Dividend
Concurrent with the earnings release, SBAC announced a cash dividend of $1.11 per share on its Class A common stock for the second quarter. The dividend will be paid out on June 17 to shareholders of record as of May 22, 2025.
2025 Guidance Revision by SBAC
SBAC now expects AFFO per share in the range of $12.53-$12.90 from the previously guided range of $12.40-$12.76. The Zacks Consensus Estimate is currently pegged at $12.67, which is within the guided range.
Further, adjusted EBITDA has been revised within the $1,891-$1,911 million range.
Site-leasing revenues are projected to be between $2,536 and $2,561 million. Site-development revenues are expected between $180 million and $200 million.
SBAC’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SBA Communications Corporation Price, Consensus and EPS Surprise
SBA Communications Corporation Price, Consensus and EPS Surprise
We now look forward to the earnings releases of other REITs like Ventas VTR and Cousins Properties CUZ,slated to report on April 30 and May 1, respectively. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The Zacks Consensus Estimate for Ventas’ first-quarter 2025 FFO per share is pegged at 82 cents, which implies a 5.1% year-over-year increase. VTR currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Cousins Properties’ first-quarter 2025 FFO per share stands at 71 cents, which indicates 9.2% growth year over year. CUZ currently has a Zacks Rank #2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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