SBA COMMUNICATIONS CORP — Call Transcript 2025

And infrastructure for Citi. Disclosures are available at the back of the room, and if you don't have access or would like another copy, please email me at [email protected]. We're pleased to welcome back Marc Montagner, Chief Financial Officer of SBA Communications. Mark, thanks so much for joining us. Thanks for having me. It's great to see you. It's a timely opportunity to catch up on SBA and towers. Maybe to get us started, just from a high level, provide us with an update on the strategy for SBA as you're trying to enhance financial performance and improve value for shareholders. Okay, that's a good question. I think the number one driver of value creation is capital allocation. And if you really, and those numbers are public, I'm going to round them up a little bit, it's roughly $1.9 billion of EBITDA, about $425 million allocated to the dividend, about $435 million cash interest expenses, $35 million for cash taxes, and maintenance CapEx is about $50 million, and midpoint about $225 million of gross CapEx. So that leaves you about, call it midpoint, $675-$700 million of cash to allocate every year. And it's very critical to allocate this cash in order to create value. So if you go back to 2023, in a rising rate environment with about 6.5-7 turns of leverage, we basically used $100 million to do share buyback in 2023 and $500-$600 million to pay down debt. Last year, we spent $200 million. It was balanced, really, $200 million on share buyback, $200 million of M&A, $200 million to pay down debt. This year, so far, we've done about $175 million of share buyback. I think at this stage, we think there's a lot of value in the stock, paying down debt, but also we did a $975 million M&A deal that was signed last year. We'll talk about the details next year. That's a deal in Central America that is going to create a lot of value long-term for SBA. Increase the leverage by 0.2 turns, but very accretive for the long-term. Going forward for next year, I think we're probably going to lean towards either buyback or paying down debt, given where valuations are very stretched in the U.S. domestic market, and I don't see us really expanding into new emerging markets at this stage. It's rebalance, debt buyback, dividend, M&A, and dividend. That's helpful. I just heard that our mic wasn't initially working. So just real quick, for those of you on the line that I haven't met, I'm Mike Rollins. I cover communication services and infrastructure for Citi. Disclosures were available at the back of this room. If you'd like another copy or need access, email me at [email protected]. Of course, we're here with Marc Montagner, Chief Financial Officer of SBA Communications. Okay, so back to the discussion. You said something very interesting. You talked about next year maybe having a different capital allocation. Historically, SBA has been aspiring to expand the portfolio. I believe it was like 5%-10% per year. Is that goal kind of now sunset? Capital allocation is going to be more focused on share repurchase in the future, where there's just maybe less opportunistic deals? I think we're just going to be opportunistic. I think that's a message. I think we locked the leverage at around six and a half times today. S&P just upgraded us to investment grade at the corporate level. And I mean, valuations are very stretched in the U.S. market. We're competing with a lot of private equity money that could basically put 10, 12 turns of leverage on those assets. And it just didn't make any sense. And we bid, but we lost a lot of these domestic M&A opportunities outside of the U.S. Millicom, we thought, was a very creative transaction. We paid 11 times for an asset in Central America. That market is fully consolidated, five markets with two carriers that are very healthy, basically Claro and Millicom. We have a 50-year contract in US dollars with escalator index to CPI and a BTS commitment from Millicom to build 2,500 BTS new sites over the next few years. That's going to lock in a mid- to high-single-digit rate of growth on the top line, and we like that deal a lot, so that's a deal that makes a lot of sense. To the extent we see deals that create value, we'll be opportunistic. Otherwise, buying back shares drives AFFO per share growth, and paying down debt does the same thing. Before we get to the operations, just maybe one more on the portfolio. So as the leadership a couple of years ago changed at SBA, there was a discussion around portfolio optimization. And where are you today in terms of that optimization? Are you done? Is there more to do? How should investors think about what your portfolio may look like over the next few years? That's a good question. Brendan Cavanagh, CEO at his first earnings call in February of 2024, announced basically a strategic portfolio review. I think when you look at the numbers, you realize where we are a leading tower company, number one, number two, number three. You get the call from the operators because they need your footprint to roll out a new technology, do colos, get more capacity. If you're at the fringe of their network, you're the last one to get involved, and your returns suffer. It's really difficult to cover the U.S. We looked at our 15, 14 markets around the world. Since we sold our portfolio in the Philippines, we were one of over 30 tower companies. We sold Colombia. We sold Argentina, where we are just like a very small footprint. Recently, we announced the sale of our about 400 towers in Canada. Canada is a fantastic market, oligopoly, three great carriers there. The issue for us is that it's very difficult to expand in Canada in a sale-leaseback with one of the top three MNOs. The deal they are striking is mostly with financial buyers. They are mostly financial engineering as opposed to a strategic deal where they team up with a tower company on a long-term strategic relationship where we could really support them in the long term. We basically sold to a PE firm. We like the multiple. I think, I mean, Canada is not a REIT. We pay taxes in Canada. Adjusted for taxes, we receive about 28 times AFFO, 26 times, sorry. We thought it was an attractive number. And we just couldn't see how to get scaled in Canada. So it's not a—we love Canada. It's just we didn't have the right position, so we decided to exit. Maybe shifting over to the domestic operations, over the last few quarters, you've talked about leasing activity building on a quarter-over-quarter basis. So as we're sitting here today, are you still seeing leasing activity continue to build going into the end of this year? And what does that translate to in terms of organic growth for SBA as you're thinking about the second half of this year, but as well as 2026, where that book to bill might take you? Right. So we have seen a number of applications to touch our site, do modification on site, increase for the last six quarters. Today, the majority of applications are for colos in terms of revenue opportunities. And we feel good about the momentum we have. And so if you will look at the CapEx cycle for the operators, right, they receive a new band of spectrum, roll out a new technology. In this case, it was 5G. CapEx as a percentage of revenue was running close to 25% for two years. And this year, it's a trough. It's about less than 15%. It's almost a historical low. We are rebuilding from there because traffic on our handset, the tonnage keeps increasing at double digit. Fixed wireless access is chewing a lot of capacity. The carriers have more demand for colos, densification, coverage. T-Mobile is still working on their 95%, 50% down, 50 megs downlink on 95% of the POPs for middle of next year. So the momentum is there. It has not been reflected in the lease-up number in the second quarter because the book-to-bill cycle on the colo is six to nine months. Definitely, the new lease activity in the second half of the year will be greater than the first half. And that's a good sign for next year. We have not put together a budget yet for next year. We have not provided guidance, but we feel good about where this business is going forward. In terms of the exit, I think the implied math was like a $11 million exit rate for 4Q. Is that still the expectation? I think that's what the math will tell you right now. For those less familiar, for the domestic leasing activity revenue contributions. So maybe getting into the news of last week. So as investors have been trying to think about where tower revenue growth is going, we get this announcement last week. EchoStar selling some spectrum to AT&T. And it's raised a number of questions about how this is going to impact the tower business model. How would you frame the different impacts that investors should be mindful of from that transaction and the possibility that more of that EchoStar spectrum could end up in the hands of the carriers? That's a good question. I think everybody is probably scratching their head there. What does it mean? Obviously, I don't have a crystal ball. I just have about 30 years of experience in that industry. And my view is that long term, it's probably a positive. If you look at the wireless industry around the world, and it happens in the wireless industry, in the airline industry, in the railroad industry, in a lot of industries that have massive fixed costs and low variable costs, those industries get driven to an oligopoly with about three operators. And once you get to that stage, it's a very stable stage. The three operators are very healthy. They could basically forecast their business long term and spend a large amount of capital to keep growing and generate top-line growth. So I think it's good for the long term of the industry. Short term, it means disruption. But it's a blip on the screen. This industry has been around for 35 years. Those towers are going to be there in 35 years. It's going to be almost impossible to overlap some of those towers in. You look on Long Island, you look at where we're headquartered in Florida, you look at Westchester County. How do you build a new site given the zoning constraints? So you see some of those sites every year you drive by and you see more equipment on those sites. So I think short term is disruption. Long term, I think it's good for the health of the industry. And so maybe just to frame the disruption. So can you remind us your revenue exposure to EchoStar? And where is the risk that that revenue gets decommissioned away? For us, it's about $55 million of revenue every year right now, run rate. And it's about 2% of our global revenues. The lease-up from this year, new leases, we're penciling $2 million. It's already called for. So there's no impact to 2025. If those leases are not renewed, and I don't think they'll be renewed at this stage, they'll probably be terminated. We'll see $25 million of churn in 2027 and $25 million of churn in 2028, a little bit on 2026, a little bit on 2029. So this is assuming the leases are being terminated and not renewed. And you mentioned the momentum you've had with densification and with activity. Is there a risk that now, at least for AT&T, which could have more spectrum post this transaction and use that as a mechanism for capacity for some period of time, is that going to dilute growth for SBA because now your customer has an alternative for capacity? They bought two bands of spectrum from DISH, the 3.45 gigahertz band. They could basically roll out 5G through software upgrades. We're not going to see anything there. That being said, on our network, AT&T has only rolled out 5G on 50% of the network. So they're still going to have to put more 5G equipment out there and roll out in a DISH band and their own band. So I think it doesn't really change that much. The 600 megahertz band, AT&T doesn't have any equipment there. It means new equipment. They have some rights and the MLA that we signed with them three years ago. It really depends what type of equipment and the timing of rolling out in that band. So at this stage, we have no idea what it means, to be honest with you. We have, I don't think we have engaged yet. So because that's been a question like whether you could get amendments. And I think there's some question of whether that 600, depending on the equipment, could fit in that. So is it fair to kind of think about this being a possibility of getting amendments, the possibility of being included, or does it really lean one way or the other? To be honest, I really don't know the answer today. It depends on what type of equipment and what timing. So we don't have, I don't have a crystal ball yet. Sure. And when the tower businesses go through these episodic events of like a carrier changes their capacity plan, so now maybe they have more spectrum with the transaction, how long does that take to trickle down to the towers where you'll have better visibility of what it might mean for growth or densification or the things that could impact 2026, 2027 organic growth? I don't know, to be honest with you. That would be pure speculation on my side. Maybe just zooming out, right, where you think about the long-term comments that you made. We talked, I think, a little bit about this on the last earnings call, but how are you conceptualizing the annual long-term domestic growth? Where should that be? I think, is it almost 4% ex the merger churn this year? Yeah, so I think the way we look at it in the US through escalator, I think it's about a 3% top-line growth rate. Then lease-up around 3%. And remember, the lease-up is a step function. It's not like one year, it's going to be three years forever. It could be 1% or 2% one year, six, seven, eight% another year. I'll give you an example. If you look at the upper C-block spectrum, that's probably NPRM and all these proposed rulemakings should be issued by the FCC this fall, probably in 12 months by the end of 2026. Auction rules will be drafted for the auction of the C-block, and then it's probably 12 to 18 months of clearing. So you could see the C-block coming to market late 2028, 2029. It's a brand new band of spectrum. That is going to drive lease-up because it's 100 megahertz, maybe 120. It's going to need new equipment. Everything is going to be new right there. And that's the opportunity for the tower company. So the way we look at it is 3% escalator growth, 3% lease-up, and ex churn about the ex-Sprint churn about 1%. So top-line growth rate at the moment, mid-single digits. Okay. Very helpful, and is there anything else just in terms of domestic growth that investors should be mindful of in terms of this current cycle that we're in and trying to think about the acceleration going into the end of the year and what it means for next year? You know, I mean, as management, we really focus on creating value for shareholders over the long term. So it really means allocated capital in order to create growth and value over the long term. So we don't really think of those like quarter-over-quarter variation because we have a footprint. It's almost impossible to really overlap with some of our, most of our footprint given the zoning in urban, suburban area. And we know that the carriers like the service we provide, the quality, we're very responsive, really help them on the service side. So we have a very good dialogue with the carriers who are trying to support them. And I think it's a good relationship. So I feel that we are really working for the long term to create value for investors and our company. You mean, oh please. So those quarter-over-quarter variations, it's almost false precision because you got the application, but the equipment didn't get on the site, so you don't book it in this quarter. That's okay. It's going to show in the number next quarter. You mentioned the services business, and the services business has been ramping this year. Investors tend to look at that, at least from the feedback that we get, as one of the leading indicators for leasing because you get the services sometimes before the leasing, but you also have a different angle this year, right, where you're also getting some revenue from third-party sites, which is boosting that figure. How should investors think about the strength of the organic services business, what that means for leasing versus the benefit you're getting from monetizing your business across a larger portfolio? Yeah. So I wouldn't read too much into it. I think Nichole Thomas, who runs that business, is doing a fantastic job, absolutely fantastic job. The team is delivering first-rate quality of service to the customers. But it's indexed towards one carrier today, and you don't have long-term visibility. So we feel good about the ramp-up for the second half. It's a good sign for the first half of next year, but there's no long-term visibility in this business, and it's a non-recurring business. Can you remind our audience in the domestic business what your exposure is to carrier consolidation? We've just talked about EchoStar, but are there other things, the T-Mobile integrations, like what's left that people should be mindful of just to think about that? I think the only thing I could think of is UScellular being acquired by T-Mobile. We have about $20 million revenues from UScellular. There will be some churn. I'm pretty much sure that not all of it will go away over, and those consolidations usually take three to five years before it's all done, so $20 million, not all of it will go away, so I just don't know how much will survive, but I think between Sprint, DISH, and UScellular, that's pretty much it at this stage. How much is left on Sprint? We have $50 million this year, $50 million in 2026, and $20 million thereafter. So really, the last big year is 2026. On the international side, where are you in terms of getting through some of these Latin American headwinds? How are you feeling about where that business sits? Yeah. So basically, Latin America for us is really Brazil. And personally, I'm very bullish on Brazil. It's the largest economy in Latin America. The GDP per capita is four or five times GDP per capita in India. It's a large exporter of corn and soybeans, mineral oil. The central bank has done a phenomenal job getting inflation under control. The real has appreciated by over 20% this year. And we are the number two tower company, 12,000 towers behind American Tower. The industry is going from four to three, which is healthy for the long term. It's painful in the short term. So Oi has been parceled out to Claro, Vivo, and TIM. And Oi wireless went into reorg last year. We had another $20 million of annual revenue to Oi wireless. That eventually, we don't see Oi wireless surviving. So over the next two or three years, we'll see that $20 million revenue going away. So those consolidations take three to five years. But long-term, 5G in Brazil is only less than 35% deployed. The country is going to need 5G. The fixed line, I think infrastructure is really not what it is in the U.S. So I think fixed wireless access has a huge potential there. And I'm bullish for Brazil long term. Listen, I was at Nextel with a large operation in Brazil, and it's either white-hot or no one wants to touch emerging market. It's totally driven by interest rates in the U.S. The minute interest rates go down in the U.S., everybody's chasing growth and higher return. And Brazil is the number place they go because of the size and the macroeconomics of the country. So it's the country of the future. We feel good about Brazil. It's just we are being very patient there. So what we've done in the short term, I mean, cost of capital is very high. You get 15% in the checking account in Brazil now. So obviously, when we look at new site build, we're looking for a rate of return much greater than this. And our competitors, either the smaller companies, have much higher cost of capital than we do, so they can afford to build a lot of sites. And I think our number one competitor is we pull back in the region. So when we build site, we're going to build sites this year. We are teaming up with our carriers and making sure that we get a return commensurate with the cost of capital to operate in that country. But I feel good about Brazil long term. And what about Africa? How's the business doing there? Are you happy with the investments that you've been making? And where does that go over time in terms of exposure for SBA? Right, so we have two countries in Africa, Tanzania. Tanzania is a fast-growing market for us. A lot of new sites are being built, mostly for coverage. The government is really pushing the carriers to build more sites, and our operations are growing very well. Very pleased we see operations in Tanzania. South Africa has the highest return on invested capital of all of our international market because we got in early. We saw tremendous growth, and I think we are number four, number five carrier in South Africa. And once again, South Africa has its ups and downs, but in the long term, I think it's a good place to do business. And then just thinking about the competitive landscape and over time, just like the positioning of towers for your wireless carrier customers, are you seeing any impact or a conversation about how these LEO constellations might affect their interest for rural towers, whether it's in the U.S. or some of your emerging markets? Honestly, it's hard to say for us. LEO is probably complementary to the fixed wireless network, just because, I mean, first of all, the antennas are expensive. So it's never going to be as ubiquitous as it is big. It needs to be plugged to the grid. So it's never going to be as ubiquitous as the handset. I think it's a complement in very rural areas in the US. We don't see that as a disruptor. You don't get the capacity. You don't get the cost basis. The cost per bit to deliver a bit over satellite versus terrestrial wireless is probably 100-500X. It's more a complement than a threat to the wireless networks. Maybe shifting over to capital allocation for a few more minutes. So you mentioned earlier the potential pivot next year into buybacks. Do you look at that as opportunistic, where there might be moments to really leverage the financial flexibility that you have? Or do you see kind of going back to maybe the way I perceived SBA used to manage the balance sheet, which was you had a certain leverage ratio you wanted to be at. And if you weren't there because you had flexibility, whether it was because of growth in the business or there wasn't M&A, you just bought back stock. So by the end of that quarter, you got to kind of in that range that you wanted to stay within. So it was a very prescriptive way of managing the balance sheet and capital returns. Where are you in terms of that opportunistic discretionary approach versus more of a programmatic experience? First of all, I just want to correct. So I don't think I say we'll pivot towards share buyback. I just say it's going to be a mix of share buyback, dividend, debt paydown, and M&A. It's going to depend on opportunity, the level of our stock. So it's a totally flexible approach on this $700 million of extra capital. And then to me or to us, the leverage is an output. It's not an input. The input is, what are your cash interest expenses every year? And what are the opportunities on the M&A side? If there's another Millicom deal at 11 times EBITDA, 15-year contract, USD, single-digit growth for 0.2 turns of leverage, I think you'll spend the money and increase the leverage. I think I like the kind of where we are at 6.5 times. I mean, if interest rates were to go up and we don't see any opportunity, I think we probably pay down debt, right? I want to highlight it's like a flexible capital allocation approach, and we want to be flexible and be able to react quickly. When you spoke earlier about your outlook for domestic leasing growth, when you combine that with international, what's the right expectation for organic AFFO per share growth on an annual basis? Yeah, that's the billion-dollar question. I think if you relook at it, you say, okay, the top-line growth rate about mid-single digit, probably mid to high single digit at the EBITDA line. And then if you really exclude, I mean, rate impact, I think it's probably high single digit. But then the billion-dollar issue is where interest rates are going to go in the future. That's why we need to be nimble and flexible. If interest rates stay higher for longer, we need to index towards delivering. If interest rates were to go down, I mean, there's no reason not to relever the balance sheet and do M&A or buyback. When you think of the opportunities in front of SBA, what do you think is the most underappreciated part of your future financial opportunities when you look at how the market values you? I think, obviously, we are highly dependent on interest rates. You could see the volatility in our stock when interest rates fluctuate. I think you need to realize that, and I've been in this wireless industry for 35 years. People have underestimated the growth in that industry for the last 30 or 40 years, 35 years, and you started doing voice at $1 a minute. Then voice is basically free today. Then you do text, then you do data, then you do video, now you're going to do AI, you do fixed wireless access. We saw that the wireless network would basically cannibalize the fixed network eventually. No one uses a landline anymore. I think no one expected that when that industry started 25-30 years ago. So if you take a long-term view and even 10, 15 years with AI, you don't even know where this is going because, I mean, look how much video traffic goes through wireless network with Mark Zuckerberg and his AI glasses. You're going to have even more video flying over those networks. You have no idea what it means on the capacity on these networks. I mean, 20 years ago, the carriers had 35-40 megahertz of spectrum. And now they have 300 or more. And you see like another 100 and 120 coming from the C-block. You're going to see government spectrum. You're going to see blocks of 100 megahertz of spectrum coming to market over the next 10 years. And that's just going to drive more traffic. The cost per bit on those wireless networks has dropped. It's almost like Intel and their production of how many semiconductors you could put on a chip. Same thing has happened in the cost per bit in the wireless industry. It's probably gone by over 1,000X over the last 20 years. And it's going to keep doing the same as more spectrum comes to market. And the problem for the operators is that it's very difficult to build new towers in those neighborhoods. No one wants to see a new tower coming up. We have that infrastructure. It's there. There's capacity on it. And we are there to support them. So I think it's a symbiotic relationship. And if you take a long-term view, I think I feel really good about our business. I mean, I always say after the Google search business, just show me a better business. It's 85% gross margin, 70% EBITDA margins. The fixed costs to get into that business are so high, it's going to be very, very difficult to come and compete with us. Marc, thanks so much for your time. Thank you.

Speaker 2: And infrastructure for Citi. Disclosures are available at the back of the room, and if you don't have access or would like another copy, please email me at [email protected]. We're pleased to welcome back Marc Montagner, Chief Financial Officer of SBA Communications. Mark, thanks so much for joining us. And infrastructure for Citi. and infrastructure for citi Disclosures are available at the back of the room, and if you don't have access or would like another copy, please email me at [email protected]. disclosures are available at the back of the room and if you don't have access or would like another copy please email me at [email protected] We're pleased to welcome back Marc Montagner, Chief Financial Officer of SBA Communications. we're pleased to welcome back marc montagner chief financial officer of sba communications Mark, thanks so much for joining us. mark thanks so much for joining us

Speaker 1: Thanks for having me. Thanks for having me. thanks for having me

Speaker 2: It's great to see you. It's a timely opportunity to catch up on SBA and towers. Maybe to get us started, just from a high level, provide us with an update on the strategy for SBA as you're trying to enhance financial performance and improve value for shareholders. It's great to see you. it's great to see you It's a timely opportunity to catch up on SBA and towers. it's a timely opportunity to catch up on sba and towers Maybe to get us started, just from a high level, provide us with an update on the strategy for SBA as you're trying to enhance financial performance and improve value for shareholders. maybe to get us started just from a high level provide us with an update on the strategy for sba as you're trying to enhance financial performance and improve value for shareholders

Speaker 1: Okay, that's a good question. I think the number one driver of value creation is capital allocation. And if you really, and those numbers are public, I'm going to round them up a little bit, it's roughly $1.9 billion of EBITDA, about $425 million allocated to the dividend, about $435 million cash interest expenses, $35 million for cash taxes, and maintenance CapEx is about $50 million, and midpoint about $225 million of gross CapEx. So that leaves you about, call it midpoint, $675-$700 million of cash to allocate every year. And it's very critical to allocate this cash in order to create value. So if you go back to 2023, in a rising rate environment with about 6.5-7 turns of leverage, we basically used $100 million to do share buyback in 2023 and $500-$600 million to pay down debt. Last year, we spent $200 million. Okay, that's a good question. okay that's a good question I think the number one driver of value creation is capital allocation. i think the number one driver of value creation is capital allocation And if you really, and those numbers are public, I'm going to round them up a little bit, it's roughly $1.9 billion of EBITDA, about $425 million allocated to the dividend, about $435 million cash interest expenses, $35 million for cash taxes, and maintenance CapEx is about $50 million, and midpoint about $225 million of gross CapEx. and if you really and those numbers are public i'm going to round them up a little bit it's roughly $1.9 billion of ebitda about $425 million allocated to the dividend about $435 million cash interest expenses, $35 million for cash taxes and maintenance capex is about $50 million and midpoint about $225 million of gross capex So that leaves you about, call it midpoint, $675-$700 million of cash to allocate every year. so that leaves you about call it midpoint $675-$700 million of cash to allocate every year And it's very critical to allocate this cash in order to create value. and it's very critical to allocate this cash in order to create value So if you go back to 2023, in a rising rate environment with about 6.5-7 turns of leverage, we basically used $100 million to do share buyback in 2023 and $500-$600 million to pay down debt. so if you go back to 2023 in a rising rate environment with about 6.5-7 turns of leverage we basically used $100 million to do share buyback in 2023 and $500-$600 million to pay down debt Last year, we spent $200 million. last year we spent $200 million It was balanced, really, $200 million on share buyback, $200 million of M&A, $200 million to pay down debt. This year, so far, we've done about $175 million of share buyback. I think at this stage, we think there's a lot of value in the stock, paying down debt, but also we did a $975 million M&A deal that was signed last year. We'll talk about the details next year. That's a deal in Central America that is going to create a lot of value long-term for SBA. Increase the leverage by 0.2 turns, but very accretive for the long-term. Going forward for next year, I think we're probably going to lean towards either buyback or paying down debt, given where valuations are very stretched in the U.S. domestic market, and I don't see us really expanding into new emerging markets at this stage. It was balanced, really, $200 million on share buyback, $200 million of M&A, $200 million to pay down debt. it was balanced really $200 million on share buyback $200 million of m&a $200 million to pay down debt This year, so far, we've done about $175 million of share buyback. this year so far we've done about $175 million of share buyback I think at this stage, we think there's a lot of value in the stock, paying down debt, but also we did a $975 million M&A deal that was signed last year. i think at this stage we think there's a lot of value in the stock paying down debt but also we did a $975 million m&a deal that was signed last year We'll talk about the details next year. we'll talk about the details next year That's a deal in Central America that is going to create a lot of value long-term for SBA. that's a deal in central america that is going to create a lot of value long-term for sba Increase the leverage by 0.2 turns, but very accretive for the long-term. increase the leverage by 0.2 turns but very accretive for the long-term Going forward for next year, I think we're probably going to lean towards either buyback or paying down debt, given where valuations are very stretched in the U.S. domestic market, and I don't see us really expanding into new emerging markets at this stage. going forward for next year i think we're probably going to lean towards either buyback or paying down debt given where valuations are very stretched in the u.s domestic market and i don't see us really expanding into new emerging markets at this stage It's rebalance, debt buyback, dividend, M&A, and dividend. It's rebalance, debt buyback, dividend, M&A, and dividend. it's rebalance debt buyback dividend m&a and dividend

Speaker 2: That's helpful. I just heard that our mic wasn't initially working. So just real quick, for those of you on the line that I haven't met, I'm Mike Rollins. I cover communication services and infrastructure for Citi. Disclosures were available at the back of this room. If you'd like another copy or need access, email me at [email protected]. Of course, we're here with Marc Montagner, Chief Financial Officer of SBA Communications. Okay, so back to the discussion. You said something very interesting. You talked about next year maybe having a different capital allocation. Historically, SBA has been aspiring to expand the portfolio. I believe it was like 5%-10% per year. Is that goal kind of now sunset? Capital allocation is going to be more focused on share repurchase in the future, where there's just maybe less opportunistic deals? That's helpful. that's helpful I just heard that our mic wasn't initially working. i just heard that our mic wasn't initially working So just real quick, for those of you on the line that I haven't met, I'm Mike Rollins. so just real quick for those of you on the line that i haven't met i'm mike rollins I cover communication services and infrastructure for Citi. i cover communication services and infrastructure for citi Disclosures were available at the back of this room. disclosures were available at the back of this room If you'd like another copy or need access, email me at [email protected]. if you'd like another copy or need access email me at [email protected] Of course, we're here with Marc Montagner, Chief Financial Officer of SBA Communications. of course we're here with marc montagner chief financial officer of sba communications Okay, so back to the discussion. okay so back to the discussion You said something very interesting. you said something very interesting You talked about next year maybe having a different capital allocation. you talked about next year maybe having a different capital allocation Historically, SBA has been aspiring to expand the portfolio. historically sba has been aspiring to expand the portfolio I believe it was like 5%-10% per year. i believe it was like 5%-10% per year Is that goal kind of now sunset? is that goal kind of now sunset Capital allocation is going to be more focused on share repurchase in the future, where there's just maybe less opportunistic deals? capital allocation is going to be more focused on share repurchase in the future where there's just maybe less opportunistic deals

Speaker 1: I think we're just going to be opportunistic. I think that's a message. I think we locked the leverage at around six and a half times today. S&P just upgraded us to investment grade at the corporate level. And I mean, valuations are very stretched in the U.S. market. We're competing with a lot of private equity money that could basically put 10, 12 turns of leverage on those assets. And it just didn't make any sense. And we bid, but we lost a lot of these domestic M&A opportunities outside of the U.S. Millicom, we thought, was a very creative transaction. We paid 11 times for an asset in Central America. That market is fully consolidated, five markets with two carriers that are very healthy, basically Claro and Millicom. I think we're just going to be opportunistic. i think we're just going to be opportunistic I think that's a message. i think that's a message I think we locked the leverage at around six and a half times today. i think we locked the leverage at around six and a half times today S&P just upgraded us to investment grade at the corporate level. s&p just upgraded us to investment grade at the corporate level And I mean, valuations are very stretched in the U.S. market. and i mean valuations are very stretched in the u.s market We're competing with a lot of private equity money that could basically put 10, 12 turns of leverage on those assets. we're competing with a lot of private equity money that could basically put 10 12 turns of leverage on those assets And it just didn't make any sense. and it just didn't make any sense And we bid, but we lost a lot of these domestic M&A opportunities outside of the U.S. and we bid but we lost a lot of these domestic m&a opportunities outside of the u.s Millicom, we thought, was a very creative transaction. millicom we thought was a very creative transaction We paid 11 times for an asset in Central America. we paid 11 times for an asset in central america That market is fully consolidated, five markets with two carriers that are very healthy, basically Claro and Millicom. that market is fully consolidated five markets with two carriers that are very healthy basically claro and millicom We have a 50-year contract in US dollars with escalator index to CPI and a BTS commitment from Millicom to build 2,500 BTS new sites over the next few years. That's going to lock in a mid- to high-single-digit rate of growth on the top line, and we like that deal a lot, so that's a deal that makes a lot of sense. To the extent we see deals that create value, we'll be opportunistic. Otherwise, buying back shares drives AFFO per share growth, and paying down debt does the same thing. We have a 50-year contract in US dollars with escalator index to CPI and a BTS commitment from Millicom to build 2,500 BTS new sites over the next few years. we have a 50-year contract in us dollars with escalator index to cpi and a bts commitment from millicom to build 2,500 bts new sites over the next few years That's going to lock in a mid- to high-single-digit rate of growth on the top line, and we like that deal a lot, so that's a deal that makes a lot of sense. that's going to lock in a mid- to high-single-digit rate of growth on the top line and we like that deal a lot so that's a deal that makes a lot of sense To the extent we see deals that create value, we'll be opportunistic. to the extent we see deals that create value we'll be opportunistic Otherwise, buying back shares drives AFFO per share growth, and paying down debt does the same thing. otherwise buying back shares drives affo per share growth and paying down debt does the same thing

Speaker 2: Before we get to the operations, just maybe one more on the portfolio. So as the leadership a couple of years ago changed at SBA, there was a discussion around portfolio optimization. And where are you today in terms of that optimization? Are you done? Is there more to do? How should investors think about what your portfolio may look like over the next few years? Before we get to the operations, just maybe one more on the portfolio. before we get to the operations just maybe one more on the portfolio So as the leadership a couple of years ago changed at SBA, there was a discussion around portfolio optimization. so as the leadership a couple of years ago changed at sba there was a discussion around portfolio optimization And where are you today in terms of that optimization? and where are you today in terms of that optimization Are you done? are you done Is there more to do? is there more to do How should investors think about what your portfolio may look like over the next few years? how should investors think about what your portfolio may look like over the next few years

Speaker 1: That's a good question. Brendan Cavanagh, CEO at his first earnings call in February of 2024, announced basically a strategic portfolio review. I think when you look at the numbers, you realize where we are a leading tower company, number one, number two, number three. You get the call from the operators because they need your footprint to roll out a new technology, do colos, get more capacity. If you're at the fringe of their network, you're the last one to get involved, and your returns suffer. It's really difficult to cover the U.S. We looked at our 15, 14 markets around the world. Since we sold our portfolio in the Philippines, we were one of over 30 tower companies. We sold Colombia. We sold Argentina, where we are just like a very small footprint. That's a good question. that's a good question Brendan Cavanagh, CEO at his first earnings call in February of 2024, announced basically a strategic portfolio review. brendan cavanagh ceo at his first earnings call in february of 2024 announced basically a strategic portfolio review I think when you look at the numbers, you realize where we are a leading tower company, number one, number two, number three. i think when you look at the numbers you realize where we are a leading tower company number one number two number three You get the call from the operators because they need your footprint to roll out a new technology, do colos, get more capacity. you get the call from the operators because they need your footprint to roll out a new technology do colos get more capacity If you're at the fringe of their network, you're the last one to get involved, and your returns suffer. if you're at the fringe of their network you're the last one to get involved and your returns suffer It's really difficult to cover the U.S. it's really difficult to cover the u.s We looked at our 15, 14 markets around the world. we looked at our 15 14 markets around the world Since we sold our portfolio in the Philippines, we were one of over 30 tower companies. since we sold our portfolio in the philippines we were one of over 30 tower companies We sold Colombia. we sold colombia We sold Argentina, where we are just like a very small footprint. we sold argentina where we are just like a very small footprint Recently, we announced the sale of our about 400 towers in Canada. Canada is a fantastic market, oligopoly, three great carriers there. The issue for us is that it's very difficult to expand in Canada in a sale-leaseback with one of the top three MNOs. The deal they are striking is mostly with financial buyers. They are mostly financial engineering as opposed to a strategic deal where they team up with a tower company on a long-term strategic relationship where we could really support them in the long term. We basically sold to a PE firm. We like the multiple. I think, I mean, Canada is not a REIT. We pay taxes in Canada. Adjusted for taxes, we receive about 28 times AFFO, 26 times, sorry. We thought it was an attractive number. Recently, we announced the sale of our about 400 towers in Canada. recently we announced the sale of our about 400 towers in canada Canada is a fantastic market, oligopoly, three great carriers there. canada is a fantastic market oligopoly three great carriers there The issue for us is that it's very difficult to expand in Canada in a sale-leaseback with one of the top three MNOs. the issue for us is that it's very difficult to expand in canada in a sale-leaseback with one of the top three mnos The deal they are striking is mostly with financial buyers. the deal they are striking is mostly with financial buyers They are mostly financial engineering as opposed to a strategic deal where they team up with a tower company on a long-term strategic relationship where we could really support them in the long term. they are mostly financial engineering as opposed to a strategic deal where they team up with a tower company on a long-term strategic relationship where we could really support them in the long term We basically sold to a PE firm. we basically sold to a pe firm We like the multiple. we like the multiple I think, I mean, Canada is not a REIT. i think i mean canada is not a reit We pay taxes in Canada. we pay taxes in canada Adjusted for taxes, we receive about 28 times AFFO, 26 times, sorry. adjusted for taxes we receive about 28 times affo 26 times sorry We thought it was an attractive number. we thought it was an attractive number And we just couldn't see how to get scaled in Canada. So it's not a—we love Canada. It's just we didn't have the right position, so we decided to exit. And we just couldn't see how to get scaled in Canada. and we just couldn't see how to get scaled in canada So it's not a—we love Canada. so it's not a—we love canada It's just we didn't have the right position, so we decided to exit. it's just we didn't have the right position so we decided to exit

Speaker 2: Maybe shifting over to the domestic operations, over the last few quarters, you've talked about leasing activity building on a quarter-over-quarter basis. So as we're sitting here today, are you still seeing leasing activity continue to build going into the end of this year? And what does that translate to in terms of organic growth for SBA as you're thinking about the second half of this year, but as well as 2026, where that book to bill might take you? Maybe shifting over to the domestic operations, over the last few quarters, you've talked about leasing activity building on a quarter-over-quarter basis. maybe shifting over to the domestic operations over the last few quarters you've talked about leasing activity building on a quarter-over-quarter basis So as we're sitting here today, are you still seeing leasing activity continue to build going into the end of this year? so as we're sitting here today are you still seeing leasing activity continue to build going into the end of this year And what does that translate to in terms of organic growth for SBA as you're thinking about the second half of this year, but as well as 2026, where that book to bill might take you? and what does that translate to in terms of organic growth for sba as you're thinking about the second half of this year but as well as 2026 where that book to bill might take you

Speaker 1: Right. So we have seen a number of applications to touch our site, do modification on site, increase for the last six quarters. Today, the majority of applications are for colos in terms of revenue opportunities. And we feel good about the momentum we have. And so if you will look at the CapEx cycle for the operators, right, they receive a new band of spectrum, roll out a new technology. In this case, it was 5G. CapEx as a percentage of revenue was running close to 25% for two years. And this year, it's a trough. It's about less than 15%. It's almost a historical low. We are rebuilding from there because traffic on our handset, the tonnage keeps increasing at double digit. Fixed wireless access is chewing a lot of capacity. The carriers have more demand for colos, densification, coverage. Right. right So we have seen a number of applications to touch our site, do modification on site, increase for the last six quarters. so we have seen a number of applications to touch our site do modification on site increase for the last six quarters Today, the majority of applications are for colos in terms of revenue opportunities. today the majority of applications are for colos in terms of revenue opportunities And we feel good about the momentum we have. and we feel good about the momentum we have And so if you will look at the CapEx cycle for the operators, right, they receive a new band of spectrum, roll out a new technology. and so if you will look at the capex cycle for the operators right they receive a new band of spectrum roll out a new technology In this case, it was 5G. in this case it was 5g CapEx as a percentage of revenue was running close to 25% for two years. capex as a percentage of revenue was running close to 25% for two years And this year, it's a trough. and this year it's a trough It's about less than 15%. it's about less than 15% It's almost a historical low. it's almost a historical low We are rebuilding from there because traffic on our handset, the tonnage keeps increasing at double digit. we are rebuilding from there because traffic on our handset the tonnage keeps increasing at double digit Fixed wireless access is chewing a lot of capacity. fixed wireless access is chewing a lot of capacity The carriers have more demand for colos, densification, coverage. the carriers have more demand for colos densification coverage T-Mobile is still working on their 95%, 50% down, 50 megs downlink on 95% of the POPs for middle of next year. So the momentum is there. It has not been reflected in the lease-up number in the second quarter because the book-to-bill cycle on the colo is six to nine months. Definitely, the new lease activity in the second half of the year will be greater than the first half. And that's a good sign for next year. We have not put together a budget yet for next year. We have not provided guidance, but we feel good about where this business is going forward. T-Mobile is still working on their 95%, 50% down, 50 megs downlink on 95% of the POPs for middle of next year. t-mobile is still working on their 95% 50% down 50 megs downlink on 95% of the pops for middle of next year So the momentum is there. so the momentum is there It has not been reflected in the lease-up number in the second quarter because the book-to-bill cycle on the colo is six to nine months. it has not been reflected in the lease-up number in the second quarter because the book-to-bill cycle on the colo is six to nine months Definitely, the new lease activity in the second half of the year will be greater than the first half. definitely the new lease activity in the second half of the year will be greater than the first half And that's a good sign for next year. and that's a good sign for next year We have not put together a budget yet for next year. we have not put together a budget yet for next year We have not provided guidance, but we feel good about where this business is going forward. we have not provided guidance but we feel good about where this business is going forward

Speaker 2: In terms of the exit, I think the implied math was like a $11 million exit rate for 4Q. Is that still the expectation? In terms of the exit, I think the implied math was like a $11 million exit rate for 4Q. in terms of the exit i think the implied math was like a $11 million exit rate for 4q Is that still the expectation? is that still the expectation

Speaker 1: I think that's what the math will tell you right now. I think that's what the math will tell you right now. i think that's what the math will tell you right now

Speaker 2: For those less familiar, for the domestic leasing activity revenue contributions. So maybe getting into the news of last week. So as investors have been trying to think about where tower revenue growth is going, we get this announcement last week. EchoStar selling some spectrum to AT&T. And it's raised a number of questions about how this is going to impact the tower business model. How would you frame the different impacts that investors should be mindful of from that transaction and the possibility that more of that EchoStar spectrum could end up in the hands of the carriers? For those less familiar, for the domestic leasing activity revenue contributions. for those less familiar for the domestic leasing activity revenue contributions So maybe getting into the news of last week. so maybe getting into the news of last week So as investors have been trying to think about where tower revenue growth is going, we get this announcement last week. so as investors have been trying to think about where tower revenue growth is going we get this announcement last week EchoStar selling some spectrum to AT&T. echostar selling some spectrum to at&t And it's raised a number of questions about how this is going to impact the tower business model. and it's raised a number of questions about how this is going to impact the tower business model How would you frame the different impacts that investors should be mindful of from that transaction and the possibility that more of that EchoStar spectrum could end up in the hands of the carriers? how would you frame the different impacts that investors should be mindful of from that transaction and the possibility that more of that echostar spectrum could end up in the hands of the carriers

Speaker 1: That's a good question. I think everybody is probably scratching their head there. What does it mean? Obviously, I don't have a crystal ball. I just have about 30 years of experience in that industry. And my view is that long term, it's probably a positive. If you look at the wireless industry around the world, and it happens in the wireless industry, in the airline industry, in the railroad industry, in a lot of industries that have massive fixed costs and low variable costs, those industries get driven to an oligopoly with about three operators. And once you get to that stage, it's a very stable stage. The three operators are very healthy. They could basically forecast their business long term and spend a large amount of capital to keep growing and generate top-line growth. So I think it's good for the long term of the industry. That's a good question. that's a good question I think everybody is probably scratching their head there. i think everybody is probably scratching their head there What does it mean? what does it mean Obviously, I don't have a crystal ball. obviously i don't have a crystal ball I just have about 30 years of experience in that industry. i just have about 30 years of experience in that industry And my view is that long term, it's probably a positive. and my view is that long term it's probably a positive If you look at the wireless industry around the world, and it happens in the wireless industry, in the airline industry, in the railroad industry, in a lot of industries that have massive fixed costs and low variable costs, those industries get driven to an oligopoly with about three operators. if you look at the wireless industry around the world and it happens in the wireless industry in the airline industry in the railroad industry in a lot of industries that have massive fixed costs and low variable costs those industries get driven to an oligopoly with about three operators And once you get to that stage, it's a very stable stage. and once you get to that stage it's a very stable stage The three operators are very healthy. the three operators are very healthy They could basically forecast their business long term and spend a large amount of capital to keep growing and generate top-line growth. they could basically forecast their business long term and spend a large amount of capital to keep growing and generate top-line growth So I think it's good for the long term of the industry. so i think it's good for the long term of the industry Short term, it means disruption. But it's a blip on the screen. This industry has been around for 35 years. Those towers are going to be there in 35 years. It's going to be almost impossible to overlap some of those towers in. You look on Long Island, you look at where we're headquartered in Florida, you look at Westchester County. How do you build a new site given the zoning constraints? So you see some of those sites every year you drive by and you see more equipment on those sites. So I think short term is disruption. Long term, I think it's good for the health of the industry. Short term, it means disruption. short term it means disruption But it's a blip on the screen. but it's a blip on the screen This industry has been around for 35 years. this industry has been around for 35 years Those towers are going to be there in 35 years. those towers are going to be there in 35 years It's going to be almost impossible to overlap some of those towers in. it's going to be almost impossible to overlap some of those towers in you You look on Long Island, you look at where we're headquartered in Florida, you look at Westchester County. you look on long island you look at where we're headquartered in florida you look at westchester county How do you build a new site given the zoning constraints? how do you build a new site given the zoning constraints So you see some of those sites every year you drive by and you see more equipment on those sites. so you see some of those sites every year you drive by and you see more equipment on those sites So I think short term is disruption. so i think short term is disruption Long term, I think it's good for the health of the industry. long term i think it's good for the health of the industry

Speaker 2: And so maybe just to frame the disruption. So can you remind us your revenue exposure to EchoStar? And where is the risk that that revenue gets decommissioned away? And so maybe just to frame the disruption. and so maybe just to frame the disruption So can you remind us your revenue exposure to EchoStar? so can you remind us your revenue exposure to echostar And where is the risk that that revenue gets decommissioned away? and where is the risk that that revenue gets decommissioned away

Speaker 1: For us, it's about $55 million of revenue every year right now, run rate. And it's about 2% of our global revenues. The lease-up from this year, new leases, we're penciling $2 million. It's already called for. So there's no impact to 2025. If those leases are not renewed, and I don't think they'll be renewed at this stage, they'll probably be terminated. We'll see $25 million of churn in 2027 and $25 million of churn in 2028, a little bit on 2026, a little bit on 2029. So this is assuming the leases are being terminated and not renewed. For us, it's about $55 million of revenue every year right now, run rate. for us it's about $55 million of revenue every year right now run rate And it's about 2% of our global revenues. and it's about 2% of our global revenues The lease-up from this year, new leases, we're penciling $2 million. the lease-up from this year new leases we're penciling $2 million It's already called for. it's already called for So there's no impact to 2025. so there's no impact to 2025 If those leases are not renewed, and I don't think they'll be renewed at this stage, they'll probably be terminated. if those leases are not renewed and i don't think they'll be renewed at this stage they'll probably be terminated We'll see $25 million of churn in 2027 and $25 million of churn in 2028, a little bit on 2026, a little bit on 2029. we'll see $25 million of churn in 2027 and $25 million of churn in 2028 a little bit on 2026 a little bit on 2029 So this is assuming the leases are being terminated and not renewed. so this is assuming the leases are being terminated and not renewed

Speaker 2: And you mentioned the momentum you've had with densification and with activity. Is there a risk that now, at least for AT&T, which could have more spectrum post this transaction and use that as a mechanism for capacity for some period of time, is that going to dilute growth for SBA because now your customer has an alternative for capacity? And you mentioned the momentum you've had with densification and with activity. and you mentioned the momentum you've had with densification and with activity Is there a risk that now, at least for AT&T, which could have more spectrum post this transaction and use that as a mechanism for capacity for some period of time, is that going to dilute growth for SBA because now your customer has an alternative for capacity? is there a risk that now at least for at&t which could have more spectrum post this transaction and use that as a mechanism for capacity for some period of time is that going to dilute growth for sba because now your customer has an alternative for capacity

Speaker 1: They bought two bands of spectrum from DISH, the 3.45 gigahertz band. They could basically roll out 5G through software upgrades. We're not going to see anything there. That being said, on our network, AT&T has only rolled out 5G on 50% of the network. So they're still going to have to put more 5G equipment out there and roll out in a DISH band and their own band. So I think it doesn't really change that much. The 600 megahertz band, AT&T doesn't have any equipment there. It means new equipment. They have some rights and the MLA that we signed with them three years ago. It really depends what type of equipment and the timing of rolling out in that band. So at this stage, we have no idea what it means, to be honest with you. We have, I don't think we have engaged yet. They bought two bands of spectrum from DISH, the 3.45 gigahertz band. they bought two bands of spectrum from dish the 3.45 gigahertz band They could basically roll out 5G through software upgrades. they could basically roll out 5g through software upgrades We're not going to see anything there. we're not going to see anything there That being said, on our network, AT&T has only rolled out 5G on 50% of the network. that being said on our network at&t has only rolled out 5g on 50% of the network So they're still going to have to put more 5G equipment out there and roll out in a DISH band and their own band. so they're still going to have to put more 5g equipment out there and roll out in a dish band and their own band So I think it doesn't really change that much. so i think it doesn't really change that much The 600 megahertz band, AT&T doesn't have any equipment there. the 600 megahertz band at&t doesn't have any equipment there It means new equipment. it means new equipment They have some rights and the MLA that we signed with them three years ago. they have some rights and the mla that we signed with them three years ago It really depends what type of equipment and the timing of rolling out in that band. it really depends what type of equipment and the timing of rolling out in that band So at this stage, we have no idea what it means, to be honest with you. so at this stage we have no idea what it means to be honest with you We have, I don't think we have engaged yet. we have i don't think we have engaged yet

Speaker 2: So because that's been a question like whether you could get amendments. And I think there's some question of whether that 600, depending on the equipment, could fit in that. So is it fair to kind of think about this being a possibility of getting amendments, the possibility of being included, or does it really lean one way or the other? So because that's been a question like whether you could get amendments. so because that's been a question like whether you could get amendments And I think there's some question of whether that 600, depending on the equipment, could fit in that. and i think there's some question of whether that 600 depending on the equipment could fit in that So is it fair to kind of think about this being a possibility of getting amendments, the possibility of being included, or does it really lean one way or the other? so is it fair to kind of think about this being a possibility of getting amendments the possibility of being included or does it really lean one way or the other

Speaker 1: To be honest, I really don't know the answer today. It depends on what type of equipment and what timing. So we don't have, I don't have a crystal ball yet. To be honest, I really don't know the answer today. to be honest i really don't know the answer today It depends on what type of equipment and what timing. it depends on what type of equipment and what timing So we don't have, I don't have a crystal ball yet. so we don't have i don't have a crystal ball yet

Speaker 2: Sure. And when the tower businesses go through these episodic events of like a carrier changes their capacity plan, so now maybe they have more spectrum with the transaction, how long does that take to trickle down to the towers where you'll have better visibility of what it might mean for growth or densification or the things that could impact 2026, 2027 organic growth? Sure. sure And when the tower businesses go through these episodic events of like a carrier changes their capacity plan, so now maybe they have more spectrum with the transaction, how long does that take to trickle down to the towers where you'll have better visibility of what it might mean for growth or densification or the things that could impact 2026, 2027 organic growth? and when the tower businesses go through these episodic events of like a carrier changes their capacity plan so now maybe they have more spectrum with the transaction how long does that take to trickle down to the towers where you'll have better visibility of what it might mean for growth or densification or the things that could impact 2026 2027 organic growth

Speaker 1: I don't know, to be honest with you. That would be pure speculation on my side. I don't know, to be honest with you. i don't know to be honest with you That would be pure speculation on my side. that would be pure speculation on my side

Speaker 2: Maybe just zooming out, right, where you think about the long-term comments that you made. We talked, I think, a little bit about this on the last earnings call, but how are you conceptualizing the annual long-term domestic growth? Where should that be? I think, is it almost 4% ex the merger churn this year? Maybe just zooming out, right, where you think about the long-term comments that you made. maybe just zooming out right where you think about the long-term comments that you made We talked, I think, a little bit about this on the last earnings call, but how are you conceptualizing the annual long-term domestic growth? we talked i think a little bit about this on the last earnings call but how are you conceptualizing the annual long-term domestic growth Where should that be? where should that be I think, is it almost 4% ex the merger churn this year? i think is it almost 4% ex the merger churn this year

Speaker 1: Yeah, so I think the way we look at it in the US through escalator, I think it's about a 3% top-line growth rate. Then lease-up around 3%. And remember, the lease-up is a step function. It's not like one year, it's going to be three years forever. It could be 1% or 2% one year, six, seven, eight% another year. I'll give you an example. If you look at the upper C-block spectrum, that's probably NPRM and all these proposed rulemakings should be issued by the FCC this fall, probably in 12 months by the end of 2026. Auction rules will be drafted for the auction of the C-block, and then it's probably 12 to 18 months of clearing. So you could see the C-block coming to market late 2028, 2029. It's a brand new band of spectrum. Yeah, so I think the way we look at it in the US through escalator, I think it's about a 3% top-line growth rate. yeah so i think the way we look at it in the us through escalator i think it's about a 3% top-line growth rate Then lease-up around 3%. then lease-up around 3% And remember, the lease-up is a step function. and remember the lease-up is a step function It's not like one year, it's going to be three years forever. it's not like one year it's going to be three years forever It could be 1% or 2% one year, six, seven, eight% another year. it could be 1% or 2% one year six seven eight% another year I'll give you an example. i'll give you an example If you look at the upper C-block spectrum, that's probably NPRM and all these proposed rulemakings should be issued by the FCC this fall, probably in 12 months by the end of 2026. if you look at the upper c-block spectrum that's probably nprm and all these proposed rulemakings should be issued by the fcc this fall probably in 12 months by the end of 2026 Auction rules will be drafted for the auction of the C-block, and then it's probably 12 to 18 months of clearing. auction rules will be drafted for the auction of the c-block and then it's probably 12 to 18 months of clearing So you could see the C-block coming to market late 2028, 2029. so you could see the c-block coming to market late 2028 2029 It's a brand new band of spectrum. it's a brand new band of spectrum That is going to drive lease-up because it's 100 megahertz, maybe 120. It's going to need new equipment. Everything is going to be new right there. And that's the opportunity for the tower company. So the way we look at it is 3% escalator growth, 3% lease-up, and ex churn about the ex-Sprint churn about 1%. So top-line growth rate at the moment, mid-single digits. That is going to drive lease-up because it's 100 megahertz, maybe 120. that is going to drive lease-up because it's 100 megahertz maybe 120 It's going to need new equipment. it's going to need new equipment Everything is going to be new right there. everything is going to be new right there And that's the opportunity for the tower company. and that's the opportunity for the tower company So the way we look at it is 3% escalator growth, 3% lease-up, and ex churn about the ex-Sprint churn about 1%. so the way we look at it is 3% escalator growth 3% lease-up and ex churn about the ex-sprint churn about 1% So top-line growth rate at the moment, mid-single digits. so top-line growth rate at the moment mid-single digits

Speaker 2: Okay. Very helpful, and is there anything else just in terms of domestic growth that investors should be mindful of in terms of this current cycle that we're in and trying to think about the acceleration going into the end of the year and what it means for next year? Okay. okay Very helpful, and is there anything else just in terms of domestic growth that investors should be mindful of in terms of this current cycle that we're in and trying to think about the acceleration going into the end of the year and what it means for next year? very helpful and is there anything else just in terms of domestic growth that investors should be mindful of in terms of this current cycle that we're in and trying to think about the acceleration going into the end of the year and what it means for next year

Speaker 1: You know, I mean, as management, we really focus on creating value for shareholders over the long term. So it really means allocated capital in order to create growth and value over the long term. So we don't really think of those like quarter-over-quarter variation because we have a footprint. It's almost impossible to really overlap with some of our, most of our footprint given the zoning in urban, suburban area. And we know that the carriers like the service we provide, the quality, we're very responsive, really help them on the service side. So we have a very good dialogue with the carriers who are trying to support them. And I think it's a good relationship. So I feel that we are really working for the long term to create value for investors and our company. You know, I mean, as management, we really focus on creating value for shareholders over the long term. you know i mean as management we really focus on creating value for shareholders over the long term So it really means allocated capital in order to create growth and value over the long term. so it really means allocated capital in order to create growth and value over the long term So we don't really think of those like quarter-over-quarter variation because we have a footprint. so we don't really think of those like quarter-over-quarter variation because we have a footprint It's almost impossible to really overlap with some of our, most of our footprint given the zoning in urban, suburban area. it's almost impossible to really overlap with some of our most of our footprint given the zoning in urban suburban area And we know that the carriers like the service we provide, the quality, we're very responsive, really help them on the service side. and we know that the carriers like the service we provide the quality we're very responsive really help them on the service side So we have a very good dialogue with the carriers who are trying to support them. so we have a very good dialogue with the carriers who are trying to support them And I think it's a good relationship. and i think it's a good relationship So I feel that we are really working for the long term to create value for investors and our company. so i feel that we are really working for the long term to create value for investors and our company

Speaker 2: You mean, oh please. You mean, oh please. you mean oh please

Speaker 1: So those quarter-over-quarter variations, it's almost false precision because you got the application, but the equipment didn't get on the site, so you don't book it in this quarter. That's okay. It's going to show in the number next quarter. So those quarter-over-quarter variations, it's almost false precision because you got the application, but the equipment didn't get on the site, so you don't book it in this quarter. so those quarter-over-quarter variations it's almost false precision because you got the application but the equipment didn't get on the site so you don't book it in this quarter That's okay. that's okay It's going to show in the number next quarter. it's going to show in the number next quarter

Speaker 2: You mentioned the services business, and the services business has been ramping this year. Investors tend to look at that, at least from the feedback that we get, as one of the leading indicators for leasing because you get the services sometimes before the leasing, but you also have a different angle this year, right, where you're also getting some revenue from third-party sites, which is boosting that figure. How should investors think about the strength of the organic services business, what that means for leasing versus the benefit you're getting from monetizing your business across a larger portfolio? You mentioned the services business, and the services business has been ramping this year. you mentioned the services business and the services business has been ramping this year Investors tend to look at that, at least from the feedback that we get, as one of the leading indicators for leasing because you get the services sometimes before the leasing, but you also have a different angle this year, right, where you're also getting some revenue from third-party sites, which is boosting that figure. investors tend to look at that at least from the feedback that we get as one of the leading indicators for leasing because you get the services sometimes before the leasing but you also have a different angle this year right where you're also getting some revenue from third-party sites which is boosting that figure How should investors think about the strength of the organic services business, what that means for leasing versus the benefit you're getting from monetizing your business across a larger portfolio? how should investors think about the strength of the organic services business what that means for leasing versus the benefit you're getting from monetizing your business across a larger portfolio

Speaker 1: Yeah. So I wouldn't read too much into it. I think Nichole Thomas, who runs that business, is doing a fantastic job, absolutely fantastic job. The team is delivering first-rate quality of service to the customers. But it's indexed towards one carrier today, and you don't have long-term visibility. So we feel good about the ramp-up for the second half. It's a good sign for the first half of next year, but there's no long-term visibility in this business, and it's a non-recurring business. Yeah. yeah So I wouldn't read too much into it. so i wouldn't read too much into it I think Nichole Thomas, who runs that business, is doing a fantastic job, absolutely fantastic job. i think nichole thomas who runs that business is doing a fantastic job absolutely fantastic job The team is delivering first-rate quality of service to the customers. the team is delivering first-rate quality of service to the customers But it's indexed towards one carrier today, and you don't have long-term visibility. but it's indexed towards one carrier today and you don't have long-term visibility So we feel good about the ramp-up for the second half. so we feel good about the ramp-up for the second half It's a good sign for the first half of next year, but there's no long-term visibility in this business, and it's a non-recurring business. it's a good sign for the first half of next year but there's no long-term visibility in this business and it's a non-recurring business

Speaker 2: Can you remind our audience in the domestic business what your exposure is to carrier consolidation? We've just talked about EchoStar, but are there other things, the T-Mobile integrations, like what's left that people should be mindful of just to think about that? Can you remind our audience in the domestic business what your exposure is to carrier consolidation? can you remind our audience in the domestic business what your exposure is to carrier consolidation We've just talked about EchoStar, but are there other things, the T-Mobile integrations, like what's left that people should be mindful of just to think about that? we've just talked about echostar but are there other things the t-mobile integrations like what's left that people should be mindful of just to think about that

Speaker 1: I think the only thing I could think of is UScellular being acquired by T-Mobile. We have about $20 million revenues from UScellular. There will be some churn. I'm pretty much sure that not all of it will go away over, and those consolidations usually take three to five years before it's all done, so $20 million, not all of it will go away, so I just don't know how much will survive, but I think between Sprint, DISH, and UScellular, that's pretty much it at this stage. I think the only thing I could think of is UScellular being acquired by T-Mobile. i think the only thing i could think of is uscellular being acquired by t-mobile We have about $20 million revenues from UScellular. we have about $20 million revenues from uscellular There will be some churn. there will be some churn I'm pretty much sure that not all of it will go away over, and those consolidations usually take three to five years before it's all done, so $20 million, not all of it will go away, so I just don't know how much will survive, but I think between Sprint, DISH, and UScellular, that's pretty much it at this stage. i'm pretty much sure that not all of it will go away over and those consolidations usually take three to five years before it's all done so $20 million not all of it will go away so i just don't know how much will survive but i think between sprint dish and uscellular that's pretty much it at this stage

Speaker 2: How much is left on Sprint? How much is left on Sprint? how much is left on sprint

Speaker 1: We have $50 million this year, $50 million in 2026, and $20 million thereafter. So really, the last big year is 2026. We have $50 million this year, $50 million in 2026, and $20 million thereafter. we have $50 million this year $50 million in 2026 and $20 million thereafter So really, the last big year is 2026. so really the last big year is 2026

Speaker 2: On the international side, where are you in terms of getting through some of these Latin American headwinds? How are you feeling about where that business sits? On the international side, where are you in terms of getting through some of these Latin American headwinds? on the international side where are you in terms of getting through some of these latin american headwinds How are you feeling about where that business sits? how are you feeling about where that business sits

Speaker 1: Yeah. So basically, Latin America for us is really Brazil. And personally, I'm very bullish on Brazil. It's the largest economy in Latin America. The GDP per capita is four or five times GDP per capita in India. It's a large exporter of corn and soybeans, mineral oil. The central bank has done a phenomenal job getting inflation under control. The real has appreciated by over 20% this year. And we are the number two tower company, 12,000 towers behind American Tower. The industry is going from four to three, which is healthy for the long term. It's painful in the short term. So Oi has been parceled out to Claro, Vivo, and TIM. And Oi wireless went into reorg last year. We had another $20 million of annual revenue to Oi wireless. That eventually, we don't see Oi wireless surviving. Yeah. yeah So basically, Latin America for us is really Brazil. so basically latin america for us is really brazil And personally, I'm very bullish on Brazil. and personally i'm very bullish on brazil It's the largest economy in Latin America. it's the largest economy in latin america The GDP per capita is four or five times GDP per capita in India. the gdp per capita is four or five times gdp per capita in india It's a large exporter of corn and soybeans, mineral oil. it's a large exporter of corn and soybeans mineral oil The central bank has done a phenomenal job getting inflation under control. the central bank has done a phenomenal job getting inflation under control The real has appreciated by over 20% this year. the real has appreciated by over 20% this year And we are the number two tower company, 12,000 towers behind American Tower. and we are the number two tower company 12,000 towers behind american tower The industry is going from four to three, which is healthy for the long term. the industry is going from four to three which is healthy for the long term It's painful in the short term. it's painful in the short term So Oi has been parceled out to Claro, Vivo, and TIM. so oi has been parceled out to claro vivo and tim And Oi wireless went into reorg last year. and oi wireless went into reorg last year We had another $20 million of annual revenue to Oi wireless. we had another $20 million of annual revenue to oi wireless that That eventually, we don't see Oi wireless surviving. that eventually we don't see oi wireless surviving So over the next two or three years, we'll see that $20 million revenue going away. So those consolidations take three to five years. But long-term, 5G in Brazil is only less than 35% deployed. The country is going to need 5G. The fixed line, I think infrastructure is really not what it is in the U.S. So I think fixed wireless access has a huge potential there. And I'm bullish for Brazil long term. Listen, I was at Nextel with a large operation in Brazil, and it's either white-hot or no one wants to touch emerging market. It's totally driven by interest rates in the U.S. The minute interest rates go down in the U.S., everybody's chasing growth and higher return. And Brazil is the number place they go because of the size and the macroeconomics of the country. So it's the country of the future. So over the next two or three years, we'll see that $20 million revenue going away. so over the next two or three years we'll see that $20 million revenue going away So those consolidations take three to five years. so those consolidations take three to five years But long-term, 5G in Brazil is only less than 35% deployed. but long-term 5g in brazil is only less than 35% deployed The country is going to need 5G. the country is going to need 5g The fixed line, I think infrastructure is really not what it is in the U.S. the fixed line i think infrastructure is really not what it is in the u.s So I think fixed wireless access has a huge potential there. so i think fixed wireless access has a huge potential there And I'm bullish for Brazil long term. and i'm bullish for brazil long term Listen, I was at Nextel with a large operation in Brazil, and it's either white-hot or no one wants to touch emerging market. listen i was at nextel with a large operation in brazil and it's either white-hot or no one wants to touch emerging market It's totally driven by interest rates in the U.S. it's totally driven by interest rates in the u.s The minute interest rates go down in the U.S., everybody's chasing growth and higher return. the minute interest rates go down in the u.s everybody's chasing growth and higher return And Brazil is the number place they go because of the size and the macroeconomics of the country. and brazil is the number place they go because of the size and the macroeconomics of the country So it's the country of the future. so it's the country of the future We feel good about Brazil. It's just we are being very patient there. So what we've done in the short term, I mean, cost of capital is very high. You get 15% in the checking account in Brazil now. So obviously, when we look at new site build, we're looking for a rate of return much greater than this. And our competitors, either the smaller companies, have much higher cost of capital than we do, so they can afford to build a lot of sites. And I think our number one competitor is we pull back in the region. So when we build site, we're going to build sites this year. We are teaming up with our carriers and making sure that we get a return commensurate with the cost of capital to operate in that country. But I feel good about Brazil long term. We feel good about Brazil. we feel good about brazil It's just we are being very patient there. it's just we are being very patient there So what we've done in the short term, I mean, cost of capital is very high. so what we've done in the short term i mean cost of capital is very high You get 15% in the checking account in Brazil now. you get 15% in the checking account in brazil now So obviously, when we look at new site build, we're looking for a rate of return much greater than this. so obviously when we look at new site build we're looking for a rate of return much greater than this And our competitors, either the smaller companies, have much higher cost of capital than we do, so they can afford to build a lot of sites. and our competitors either the smaller companies have much higher cost of capital than we do so they can afford to build a lot of sites And I think our number one competitor is we pull back in the region. and i think our number one competitor is we pull back in the region So when we build site, we're going to build sites this year. so when we build site we're going to build sites this year We are teaming up with our carriers and making sure that we get a return commensurate with the cost of capital to operate in that country. we are teaming up with our carriers and making sure that we get a return commensurate with the cost of capital to operate in that country But I feel good about Brazil long term. but i feel good about brazil long term

Speaker 2: And what about Africa? How's the business doing there? Are you happy with the investments that you've been making? And where does that go over time in terms of exposure for SBA? And what about Africa? and what about africa How's the business doing there? how's the business doing there Are you happy with the investments that you've been making? are you happy with the investments that you've been making And where does that go over time in terms of exposure for SBA? and where does that go over time in terms of exposure for sba

Speaker 1: Right, so we have two countries in Africa, Tanzania. Tanzania is a fast-growing market for us. A lot of new sites are being built, mostly for coverage. The government is really pushing the carriers to build more sites, and our operations are growing very well. Very pleased we see operations in Tanzania. South Africa has the highest return on invested capital of all of our international market because we got in early. We saw tremendous growth, and I think we are number four, number five carrier in South Africa. And once again, South Africa has its ups and downs, but in the long term, I think it's a good place to do business. Right, so we have two countries in Africa, Tanzania. right so we have two countries in africa tanzania Tanzania is a fast-growing market for us. tanzania is a fast-growing market for us A lot of new sites are being built, mostly for coverage. a lot of new sites are being built mostly for coverage The government is really pushing the carriers to build more sites, and our operations are growing very well. the government is really pushing the carriers to build more sites and our operations are growing very well Very pleased we see operations in Tanzania. very pleased we see operations in tanzania South Africa has the highest return on invested capital of all of our international market because we got in early. south africa has the highest return on invested capital of all of our international market because we got in early We saw tremendous growth, and I think we are number four, number five carrier in South Africa. we saw tremendous growth and i think we are number four number five carrier in south africa And once again, South Africa has its ups and downs, but in the long term, I think it's a good place to do business. and once again south africa has its ups and downs but in the long term i think it's a good place to do business

Speaker 2: And then just thinking about the competitive landscape and over time, just like the positioning of towers for your wireless carrier customers, are you seeing any impact or a conversation about how these LEO constellations might affect their interest for rural towers, whether it's in the U.S. or some of your emerging markets? And then just thinking about the competitive landscape and over time, just like the positioning of towers for your wireless carrier customers, are you seeing any impact or a conversation about how these LEO constellations might affect their interest for rural towers, whether it's in the U.S. or some of your emerging markets? and then just thinking about the competitive landscape and over time just like the positioning of towers for your wireless carrier customers are you seeing any impact or a conversation about how these leo constellations might affect their interest for rural towers whether it's in the u.s or some of your emerging markets

Speaker 1: Honestly, it's hard to say for us. LEO is probably complementary to the fixed wireless network, just because, I mean, first of all, the antennas are expensive. So it's never going to be as ubiquitous as it is big. It needs to be plugged to the grid. So it's never going to be as ubiquitous as the handset. I think it's a complement in very rural areas in the US. We don't see that as a disruptor. You don't get the capacity. You don't get the cost basis. The cost per bit to deliver a bit over satellite versus terrestrial wireless is probably 100-500X. It's more a complement than a threat to the wireless networks. Honestly, it's hard to say for us. honestly it's hard to say for us LEO is probably complementary to the fixed wireless network, just because, I mean, first of all, the antennas are expensive. leo is probably complementary to the fixed wireless network just because i mean first of all the antennas are expensive So it's never going to be as ubiquitous as it is big. so it's never going to be as ubiquitous as it is big It needs to be plugged to the grid. it needs to be plugged to the grid So it's never going to be as ubiquitous as the handset. so it's never going to be as ubiquitous as the handset I think it's a complement in very rural areas in the US. i think it's a complement in very rural areas in the us We don't see that as a disruptor. we don't see that as a disruptor You don't get the capacity. you don't get the capacity You don't get the cost basis. you don't get the cost basis The cost per bit to deliver a bit over satellite versus terrestrial wireless is probably 100-500X. the cost per bit to deliver a bit over satellite versus terrestrial wireless is probably 100-500x It's more a complement than a threat to the wireless networks. it's more a complement than a threat to the wireless networks

Speaker 2: Maybe shifting over to capital allocation for a few more minutes. So you mentioned earlier the potential pivot next year into buybacks. Do you look at that as opportunistic, where there might be moments to really leverage the financial flexibility that you have? Or do you see kind of going back to maybe the way I perceived SBA used to manage the balance sheet, which was you had a certain leverage ratio you wanted to be at. And if you weren't there because you had flexibility, whether it was because of growth in the business or there wasn't M&A, you just bought back stock. So by the end of that quarter, you got to kind of in that range that you wanted to stay within. So it was a very prescriptive way of managing the balance sheet and capital returns. Maybe shifting over to capital allocation for a few more minutes. maybe shifting over to capital allocation for a few more minutes So you mentioned earlier the potential pivot next year into buybacks. so you mentioned earlier the potential pivot next year into buybacks Do you look at that as opportunistic, where there might be moments to really leverage the financial flexibility that you have? do you look at that as opportunistic where there might be moments to really leverage the financial flexibility that you have Or do you see kind of going back to maybe the way I perceived SBA used to manage the balance sheet, which was you had a certain leverage ratio you wanted to be at. or do you see kind of going back to maybe the way i perceived sba used to manage the balance sheet which was you had a certain leverage ratio you wanted to be at And if you weren't there because you had flexibility, whether it was because of growth in the business or there wasn't M&A, you just bought back stock. and if you weren't there because you had flexibility whether it was because of growth in the business or there wasn't m&a you just bought back stock So by the end of that quarter, you got to kind of in that range that you wanted to stay within. so by the end of that quarter you got to kind of in that range that you wanted to stay within So it was a very prescriptive way of managing the balance sheet and capital returns. so it was a very prescriptive way of managing the balance sheet and capital returns Where are you in terms of that opportunistic discretionary approach versus more of a programmatic experience? Where are you in terms of that opportunistic discretionary approach versus more of a programmatic experience? where are you in terms of that opportunistic discretionary approach versus more of a programmatic experience

Speaker 1: First of all, I just want to correct. So I don't think I say we'll pivot towards share buyback. I just say it's going to be a mix of share buyback, dividend, debt paydown, and M&A. It's going to depend on opportunity, the level of our stock. So it's a totally flexible approach on this $700 million of extra capital. And then to me or to us, the leverage is an output. It's not an input. The input is, what are your cash interest expenses every year? And what are the opportunities on the M&A side? If there's another Millicom deal at 11 times EBITDA, 15-year contract, USD, single-digit growth for 0.2 turns of leverage, I think you'll spend the money and increase the leverage. I think I like the kind of where we are at 6.5 times. First of all, I just want to correct. first of all i just want to correct So I don't think I say we'll pivot towards share buyback. so i don't think i say we'll pivot towards share buyback I just say it's going to be a mix of share buyback, dividend, debt paydown, and M&A. i just say it's going to be a mix of share buyback dividend debt paydown and m&a It's going to depend on opportunity, the level of our stock. it's going to depend on opportunity the level of our stock So it's a totally flexible approach on this $700 million of extra capital. so it's a totally flexible approach on this $700 million of extra capital And then to me or to us, the leverage is an output. and then to me or to us the leverage is an output It's not an input. it's not an input The input is, what are your cash interest expenses every year? the input is what are your cash interest expenses every year And what are the opportunities on the M&A side? and what are the opportunities on the m&a side If there's another Millicom deal at 11 times EBITDA, 15-year contract, USD, single-digit growth for 0.2 turns of leverage, I think you'll spend the money and increase the leverage. if there's another millicom deal at 11 times ebitda 15-year contract usd single-digit growth for 0.2 turns of leverage i think you'll spend the money and increase the leverage I think I like the kind of where we are at 6.5 times. i think i like the kind of where we are at 6.5 times I mean, if interest rates were to go up and we don't see any opportunity, I think we probably pay down debt, right? I want to highlight it's like a flexible capital allocation approach, and we want to be flexible and be able to react quickly. I mean, if interest rates were to go up and we don't see any opportunity, I think we probably pay down debt, right? i mean if interest rates were to go up and we don't see any opportunity i think we probably pay down debt right I want to highlight it's like a flexible capital allocation approach, and we want to be flexible and be able to react quickly. i want to highlight it's like a flexible capital allocation approach and we want to be flexible and be able to react quickly

Speaker 2: When you spoke earlier about your outlook for domestic leasing growth, when you combine that with international, what's the right expectation for organic AFFO per share growth on an annual basis? When you spoke earlier about your outlook for domestic leasing growth, when you combine that with international, what's the right expectation for organic AFFO per share growth on an annual basis? when you spoke earlier about your outlook for domestic leasing growth when you combine that with international what's the right expectation for organic affo per share growth on an annual basis

Speaker 1: Yeah, that's the billion-dollar question. I think if you relook at it, you say, okay, the top-line growth rate about mid-single digit, probably mid to high single digit at the EBITDA line. And then if you really exclude, I mean, rate impact, I think it's probably high single digit. But then the billion-dollar issue is where interest rates are going to go in the future. That's why we need to be nimble and flexible. If interest rates stay higher for longer, we need to index towards delivering. If interest rates were to go down, I mean, there's no reason not to relever the balance sheet and do M&A or buyback. Yeah, that's the billion-dollar question. yeah that's the billion-dollar question I think if you relook at it, you say, okay, the top-line growth rate about mid-single digit, probably mid to high single digit at the EBITDA line. i think if you relook at it you say okay the top-line growth rate about mid-single digit probably mid to high single digit at the ebitda line And then if you really exclude, I mean, rate impact, I think it's probably high single digit. and then if you really exclude i mean rate impact i think it's probably high single digit But then the billion-dollar issue is where interest rates are going to go in the future. but then the billion-dollar issue is where interest rates are going to go in the future That's why we need to be nimble and flexible. that's why we need to be nimble and flexible If interest rates stay higher for longer, we need to index towards delivering. if interest rates stay higher for longer we need to index towards delivering If interest rates were to go down, I mean, there's no reason not to relever the balance sheet and do M&A or buyback. if interest rates were to go down i mean there's no reason not to relever the balance sheet and do m&a or buyback

Speaker 2: When you think of the opportunities in front of SBA, what do you think is the most underappreciated part of your future financial opportunities when you look at how the market values you? When you think of the opportunities in front of SBA, what do you think is the most underappreciated part of your future financial opportunities when you look at how the market values you? when you think of the opportunities in front of sba what do you think is the most underappreciated part of your future financial opportunities when you look at how the market values you

Speaker 1: I think, obviously, we are highly dependent on interest rates. You could see the volatility in our stock when interest rates fluctuate. I think you need to realize that, and I've been in this wireless industry for 35 years. People have underestimated the growth in that industry for the last 30 or 40 years, 35 years, and you started doing voice at $1 a minute. Then voice is basically free today. Then you do text, then you do data, then you do video, now you're going to do AI, you do fixed wireless access. We saw that the wireless network would basically cannibalize the fixed network eventually. No one uses a landline anymore. I think no one expected that when that industry started 25-30 years ago. I think, obviously, we are highly dependent on interest rates. i think obviously we are highly dependent on interest rates You could see the volatility in our stock when interest rates fluctuate. you could see the volatility in our stock when interest rates fluctuate I think you need to realize that, and I've been in this wireless industry for 35 years. i think you need to realize that and i've been in this wireless industry for 35 years People have underestimated the growth in that industry for the last 30 or 40 years, 35 years, and you started doing voice at $1 a minute. people have underestimated the growth in that industry for the last 30 or 40 years 35 years and you started doing voice at $1 a minute Then voice is basically free today. then voice is basically free today Then you do text, then you do data, then you do video, now you're going to do AI, you do fixed wireless access. then you do text then you do data then you do video now you're going to do ai you do fixed wireless access We saw that the wireless network would basically cannibalize the fixed network eventually. we saw that the wireless network would basically cannibalize the fixed network eventually No one uses a landline anymore. no one uses a landline anymore I think no one expected that when that industry started 25-30 years ago. i think no one expected that when that industry started 25-30 years ago So if you take a long-term view and even 10, 15 years with AI, you don't even know where this is going because, I mean, look how much video traffic goes through wireless network with Mark Zuckerberg and his AI glasses. You're going to have even more video flying over those networks. You have no idea what it means on the capacity on these networks. I mean, 20 years ago, the carriers had 35-40 megahertz of spectrum. And now they have 300 or more. And you see like another 100 and 120 coming from the C-block. You're going to see government spectrum. You're going to see blocks of 100 megahertz of spectrum coming to market over the next 10 years. And that's just going to drive more traffic. The cost per bit on those wireless networks has dropped. So if you take a long-term view and even 10, 15 years with AI, you don't even know where this is going because, I mean, look how much video traffic goes through wireless network with Mark Zuckerberg and his AI glasses. so if you take a long-term view and even 10 15 years with ai you don't even know where this is going because i mean look how much video traffic goes through wireless network with mark zuckerberg and his ai glasses You're going to have even more video flying over those networks. you're going to have even more video flying over those networks You have no idea what it means on the capacity on these networks. you have no idea what it means on the capacity on these networks I mean, 20 years ago, the carriers had 35-40 megahertz of spectrum. i mean 20 years ago the carriers had 35-40 megahertz of spectrum And now they have 300 or more. and now they have 300 or more And you see like another 100 and 120 coming from the C-block. and you see like another 100 and 120 coming from the c-block You're going to see government spectrum. you're going to see government spectrum You're going to see blocks of 100 megahertz of spectrum coming to market over the next 10 years. you're going to see blocks of 100 megahertz of spectrum coming to market over the next 10 years And that's just going to drive more traffic. and that's just going to drive more traffic The cost per bit on those wireless networks has dropped. the cost per bit on those wireless networks has dropped It's almost like Intel and their production of how many semiconductors you could put on a chip. Same thing has happened in the cost per bit in the wireless industry. It's probably gone by over 1,000X over the last 20 years. And it's going to keep doing the same as more spectrum comes to market. And the problem for the operators is that it's very difficult to build new towers in those neighborhoods. No one wants to see a new tower coming up. We have that infrastructure. It's there. There's capacity on it. And we are there to support them. So I think it's a symbiotic relationship. And if you take a long-term view, I think I feel really good about our business. I mean, I always say after the Google search business, just show me a better business. It's 85% gross margin, 70% EBITDA margins. It's almost like Intel and their production of how many semiconductors you could put on a chip. it's almost like intel and their production of how many semiconductors you could put on a chip Same thing has happened in the cost per bit in the wireless industry. same thing has happened in the cost per bit in the wireless industry It's probably gone by over 1,000X over the last 20 years. it's probably gone by over 1,000x over the last 20 years And it's going to keep doing the same as more spectrum comes to market. and it's going to keep doing the same as more spectrum comes to market And the problem for the operators is that it's very difficult to build new towers in those neighborhoods. and the problem for the operators is that it's very difficult to build new towers in those neighborhoods No one wants to see a new tower coming up. no one wants to see a new tower coming up We have that infrastructure. we have that infrastructure It's there. it's there There's capacity on it. there's capacity on it And we are there to support them. and we are there to support them So I think it's a symbiotic relationship. so i think it's a symbiotic relationship And if you take a long-term view, I think I feel really good about our business. and if you take a long-term view i think i feel really good about our business I mean, I always say after the Google search business, just show me a better business. i mean i always say after the google search business just show me a better business It's 85% gross margin, 70% EBITDA margins. it's 85% gross margin 70% ebitda margins The fixed costs to get into that business are so high, it's going to be very, very difficult to come and compete with us. The fixed costs to get into that business are so high, it's going to be very, very difficult to come and compete with us. the fixed costs to get into that business are so high it's going to be very very difficult to come and compete with us

Speaker 2: Marc, thanks so much for your time. Marc, thanks so much for your time. marc thanks so much for your time

Speaker 1: Thank you. Thank you. thank you