SBA COMMUNICATIONS CORP — Call Transcript 2026

All right. Good morning, everybody. I'm Ric Prentiss, head of TMT Research at Raymond James. My definition of TMT is towers. We've got Marc Montagner from SBAC here with us today. Media, we just literally jumped off the Warner Bros. Paramount call. Brent was able to ask the question for me 'cause I had to run up here. Then telecom and satellite services, 47 years of Raymond James Institutional Investor Conference, my 30th conference. Glad to see everybody here. As I've always said, it's never dull. I'm still standing. Boy, is it never dull. Marc, thanks for joining us. Ric, thanks for having me, and congratulations on an amazing run. Yeah. Yeah. It's been. Hope you keep going for another 20 years. Yeah. As we think about the tower industry, I think on the earnings call last week, gosh, it was just Thursday, I guess, you mentioned that we're close to the carrier consolidation churn probably being done in the United States. I know it's an awkward topic, why don't you just update people in the room and on the webcast, where are we at with SBAC and DISH, just so we know, kind of to set the stage? Right. DISH Who reported this morning on top of everything else. Okay. Yeah. I didn't, I didn't follow that. DISH basically for us is about $55 million of revenue every year. Last year was only $2 million of lease-up. Ongoing commitment, we have short-term contract with DISH. Ongoing commitment, you total all their commitment, it's slightly over $100 million. It's a very limited exposure. They stopped paying late last year, so we basically have a lawsuit ongoing, so I won't comment on the lawsuit. It's public. People could just read it. Basically for us, the exposure is minimum, about $100 million through the end of 2028. Yeah. It was removed from the guidance. We removed the about $56 million of revenue from our guidance for 2026 since they stopped paying basically. Any settlement, negotiation, litigation would be upside to that from a standpoint of somewhere on the income statement and balance sheet. It would just be cash coming in. That's correct. We also look at the remaining big three. We've got a stable operation in the U.S., three carriers, well-capitalized carriers that can spend money. There's been some debate trying to understand Verizon, who you have an MLA with now, what they've publicly said about their CapEx. How do you kind of take a look at what activity you're expecting from Verizon versus CapEx? I know it's not a perfect indicator. CapEx is not a perfect indicator to tower leasing. For us, we signed a MLA agreement with Verizon last year. It's a 10-year agreement. We're very pleased with the agreement. I think we make it easier and faster for Verizon to deploy. Basically, they have minimum commitment with us. Verizon is going to be our biggest, I think contributor to new revenue in 2026, and we're very pleased with the relationship. I think for the next 10 years, I think we have very good visibility with Verizon. It feels like increasing activity from Verizon this year versus what you've seen over the last one or two years. I think that's correct. One of the other carriers that was more rural-focused, maybe reducing efforts a little bit in the short term. If we think of the big three and broaden out the scope beyond just 2026 guidance, philosophically, how should we think about escalators, new lease activity, and churn over the long term in the U.S.? Yeah, sure. Let me just go back through 2026, right? 2027, new colocations and amendment were about $37 million of new revenues. DISH was about $2 million of this. The midpoint of our guidance for 2026 is $35 million. It's flat YoY, so it's steady. I think the mix changing, T-Mobile basically at the coverage requirement as part of their agreement to buy Sprint, so they are getting to the end of the rural coverage there, and densification is getting close to the end as well. Verizon is picking up the slack, so overall it's steady. It's just the mix is changing, more exposure to Verizon, less to T-Mobile on the new leases. Long term, if you just go back, I've been in that industry for over 30 years, just like you. We've seen the cycle repeat itself. Carriers buy new spectrum, they roll out a new technology, they get a 10x increase in terms of capacity. They then harvest that capacity, and eventually, they need to do more co-lo densification, and eventually they get a new band of spectrum and roll out a new technology and the cycle repeats itself. In the peak of the CapEx cycle, CapEx as a percentage of revenue runs anywhere from 22%-25% of revenue. In the harvest mode, it's about 15%. Last year was slightly less than 15. If you go back 20 years, it's one of the lowest ever. It's gonna be around the 15% mark this year. 6G is coming. The upper C-band auction is probably gonna take place sometime in 2027. 18 months clearing period, we could see a 6G rollout by 2028, 2029, and that means new equipment. I think in a normalized environment, I think escalator on the lease agreement is about 3%. New lease activity in a normalized environment is 2%-3% top line growth rate. Non-Sprint, non-DISH trade is about 1%. You solve for about 4%-5% top line growth rate in a normalized environment. Yeah. When you think about transferring that conversion rate from revenue to gross margins to EBITDA and free cash flow, more importantly for a re-adjusted funds from operations, how do we think about the bottom line kind of growth rates that 4%-5% long-term normalized revenue growth rate might equate to? Right. Remember, this is a high fixed cost, low variable industry with very high margin, 85% gross margin, 7% EBITDA margin. That 4%-5%, top line growth rate should, if you exclude refinancing headwinds, should be a single-digit growth rate. Per share might be even better then, 'cause you look at what you do with the excess cash. Walk us through one of the beauties of the tower business is you make a lot of money. And then I'd always tell people a top thing for executives is capital allocation of what do I do with that money? Right. I think you're right, Ric. The way to create value for the long term is really capital allocation. We need to be disciplined there. If you look at our business, and those are public numbers, it's about $1.9 billion of EBITDA, $250 million of growth CapEx and maintenance CapEx, about guided about $500 million, $490 million of cash interest expenses, $525 million of dividend, $70 million of cash taxes, you're left with about $600 million or $700 million of extra cash every year. What did we do with that extra cash? In 2024, we bought back shares $200 million. We did about $200 million M&A, we paid down debt. Last year, we I think, given the way, our stock has traded, we thought that there's real value at that level. We spent half a billion dollar, buying, our shares at, an average of about $200. In 2024, we signed a deal to buy Millicom, towers in Central America, 7,000 towers for about $1 billion. We increased that a little bit, but I think we like our leverage at about 6.5 times now. Going forward, I think, into, looking at 2026, I think, share buyback has to be an important component of use of excess cash, basically. The remaining program, if I remember right, was it $1.6 billion is left on the program? I think there's $1.1 billion. $ 1.1 billion. That's right. $ 1.1 billion, 'cause you did spend some of this, right? That's right. As we think about potential acquisitions, it sure seems like private multiples are staying well above public multiples. How's your ability to compete for or even want to win at those kind of prices? I think the issue in the U.S. domestic market is a scarcity of large tower portfolio available for sale. Then we compete with private capital. There's a lot of private capital chasing that industry because of the economics of it. It's a very attractive business. They have the ability to put 12 turns of leverage in the ABS market. The way they run their model, probably assume an exit at 25, 30 times in seven years. For us, as a publicly traded company, levered 6.5 times, it's very difficult to compete. We have developers that we have been working with for years. We buy a smaller portfolio, three towers, half a thousand tower, 2,000 towers. The large portfolio or I think or the math just doesn't work for us. Yeah. You mentioned 5G going to 6G. When we think about 5G, fixed wireless has certainly been a good application. It seems like, I know I think you guys on the call talked about mobile data usage. I like to call it just wireless network usage 'cause we have both fixed and mobile. As you think about what's happening at the networks, where are we at in the 5G cycle? We'll come back to 6G. Right. I mean, we can only look at the deployment of the big three on our portfolio, and I think T-Mobile is pretty much done on their 5G rollout, or about 85% rollout in a 2.5 GHz band. They haven't rolled out in a C-band at all. Verizon is probably at around 80% mark, and AT&T, 50%-55%. There's still room for Verizon and AT&T to deploy. 6G, I think, as we said, the Upper C-block is probably going to be auctioned in 2027 and be deployed before the end of the decade. Yeah. Of course, T-Mobile done with the Sprint stuff, but the C-band, haven't seen a lot yet, but maybe it's coming. Well, I can only speculate. They haven't, as far as we know, they haven't rolled out in the C-band. Maybe they are just waiting for the auction of the upper C-band and just worldwide equipment to cover the existing C-band and the new one they may get in the auction. I don't know. I'm just speculating, but we haven't seen any C-block rollout by T-Mobile yet. Yeah. I mean, a lot of carriers like to do the one climb, one touch type thing, more efficient. We were talking with John Saw, CTO of T-Mobile the other day before their investor day, John said he's already working on 6G, you know, from his side as the CTO. When we asked what he was thinking of, he said, we got drones, we have robotics, we have wearables, we have AI, we have edge. You guys obviously meet with consultants and try and think of where we're headed. What are you seeing from 6G that would get you excited from activity at the tower level? Right. I really think that the if you just go back to all this generation, I label 1G, 2G, 3G, 4G, 5G. To me, remember, ARPU in the wireless industry has always been around $55-$60. You used to pay $0.25 a minute for a voice call, and then $0.10 for SMS text, and then $40 for 1 gig of data. Now it's basically all you could eat. During that time, EBITDA margins for the wireless operator has still been at around 45%. Why is this? It's because each time they roll out a new technology, they get an exponential reduction in the cost per bit that they deliver. I think to me, 6G is just gonna give them a 10x-20x basically reduction in the cost per bit that they're gonna be able to deliver to their users. Just give them more data, more speed, less latencies, and be able to keep increasing mobile traffic at double-digit rates and still maintain a 45% EBITDA margin. To me, it's all about the cost per bit. If you look at the application, AI eventually is gonna be at the handset. We assume there would be live application to make real time decision and latency, low latency is gonna be a critical factor there. That means that you need to have probably data center or servers at the edge on the network. I don't know if they're gonna be in metro area close to the users, if they have to be at the base of the base station. It's too early to say, but, you could just see the trends going forward with the cost per bit being taken down another 10 or 20x, more capacity coming, less latency, more power in the handset or the iPad. I really think that you're gonna see an uptick in mobile wireless data usage again. Yeah. At the, at the Park City Summer Summit, the fiber data center tower carriers, everybody there felt that kind of this AI impact on wireless, mobile, and towers probably by 2030 was kind of the consensus saying, "Okay, it's not 2026, 2027, but it's coming. I think that's right. I could see it and people always think in terms of capacity. You have to think in terms of latency too. Latency is very, very important. You don't wanna basically need to make a real-life decision and wait one second for an answer. You need to get it right away. That means like more capacity closer to the base station. It's been the debate of when will AI come to towers, and people have kind of forgot about it, whereas data centers, AI is front and center. It's for the people in the audience and on the webcasting, it's coming. It definitely feels more real, whereas a couple years ago we weren't sure when it was coming. Now it feels like it's kind of gelling around that concept. I think that's right. We also hear a lot, and Brent did a video one the other day using Sora for us. It feels also like there might be more upload coming rather than just download, and that might affect the networks. Are you seeing the same thing or hearing? That's what we're hearing. I think today, if you look at the download-upload ratio, it's probably 80% download, 20% upload. I think what we're seeing now is that traffic going forward is gonna be more mixed 50/50. That means probably I think you need more antennas on the to, on the receiving end. I think different type of equipment, more equipment. 6G basically means new equipment at the tower. That's positive for the tower industry. One of the things, and Brent and I, we were in Paris back September 15th when EchoStar had the big event that led to the headwinds. A lot of people in September and October particularly were talking to us about, "Gosh, Ric, aren't satellites gonna replace wireless? Aren't satellites gonna replace tower?" I don't wanna prejudice you, but how do y'all look at that question from a generalist side? To us, or to me at least, and there's still a lot of unknown, but satellite is probably going to be a complement for the tower industry because I think in the rural area, some people are probably gonna use it for broadband, just replace the fixed broadband that they have, also for coverage. Latency is always important, and if you wanna minimize latency, I think Starlink today's latency is probably 45 ms. If you wanna take it down to 20, 25, you probably need to need more downlink in order to get that traffic connected to IP internet backbone, and that means equipment on the site to receive that traffic. I probably see it as a complement at this stage. I don't really see, there's no way you could replicate the capacity and the latency that you have on the terrestrial network. I think satellite is probably gonna be a complement and a positive to the tower industry. It also feels to us like it's more going after the white space, that in the U.S. we think, "Oh, our phones work," but maybe a third of the U.S. landmass, continental U.S. landmass, is not covered, and it's economically not right to cover it with terrestrial. That seems like a natural spot for satellite. I think that's right. The day you could have a dual-mode handset with the right form factor, the right battery life, the right cost, entry level, I think you're gonna see more dual-mode handset. I just think it's a complement. In an urban environment, suburban environment, you're always gonna have a tree, an overpass, a tall building blocking access. The terrestrial network is always gonna be your primary, I think, access network. I remember the day when satellite radio was a big incremental tenant on the towers 'cause satellite radio wouldn't work in your car if you were in an urban environment 'cause they look like canyons. That's right. When you think about it, SiriusXM has thousands of repeater on the ground. Sites basically where they rebroadcast their satellite signal into your car, into your garage, into your under the overpass. I think I don't know what Starlink's plans are, but if you spend the type of money they have buying spectrum, if you wanna utilize that spectrum eventually, probably makes sense to get more capacity and coverage in urban and suburban environment by deploying in that spectrum. One other thing is a lot of people use their mobile devices inside. Inside buildings, inside homes, and satellite doesn't penetrate very well into structures either. Yeah, that's right. It won't penetrate and if you have another 20 floors on top of you, there's no way you're gonna get the satellite signal there. Let's go international for a second. You guys have expanded dramatically with the Millicom transaction, but it's U.S. dollar, right? You know, help us understand risk adjustment, how you look at investing globally, and let's look at Millicom. Yeah, that's a good question because if you really look, I think we have about 14, 15 market internationally. When Brendan became CEO in January 2024, in the first earnings call, he announced a portfolio review. I think we look at an international portfolio and look at return on invested capital and look at market where we've done very well and market that really needed some improvement. We realized that in order to be successful, first of all, you need to be in an economy that's doing well. If the economy is doing well, businesses are doing well, people have jobs, they spend money on the wireless network, businesses need a mobile application, the economy is growing. I think that's number one. Two, it's important not step in front of wireless consolidation. We've seen in the U.S. with Sprint, we've seen it in Brazil with Oi. Once you have consolidation, it just means churn. You go from four to three, and it's not like it's a one-year event. It takes four, five, six years for the churn to work its way through because when you buy an operator, you have ongoing tower basically leases, and you cancel them, you don't renew them. It's like a three, four, five, six year basically paying for the tower company. Not stepping in front of a wireless consolidation is important. Every scale is important because if you have scale, when an operator needs to roll out a new technology, you're on the dialogue. They need to talk to you because they need to roll out fast and wanna sign basically MLA with a tower operator with a good presence. Going through this, we realized that some market with subscale. We sold the Philippines, we sold Argentina, we sold Colombia, and we sold Canada. Canada is a fantastic market, but we only had a few hundred sites. We didn't have any scales. We're not in the flow, and we sold for a very attractive multiple to a PE firm. Central America, we had a 15-year agreement in U.S. dollars with Millicom. Those markets are very stable. You have two dominant operator now, Claro and Millicom. Very well-capitalized company. We have a 15-year agreement in U.S. dollars with Millicom. They gave us a commitment, and we're building 2,500 BTS new sites for them in the region. We locked in a high single-digit return in U.S. dollars, so we're very pleased. The team down there are very busy integrating the asset, getting basically the zoning rights to build, securing the land, and we're very pleased. I'm very pleased with how well the team has delivered so far, and they're very busy. Other regions or other markets that might be interesting? Well, I'm very bullish on Brazil. Everybody in the office knows me as the bull on Brazil. I've been involved in Brazil for over 30 years, from Nextel back in the nineties, 2000 to my prior job. We had a huge operation in Brazil. Brazil is a very large economy, high GDP per capita for an emerging market. I think it's five times GDP per capita of India. It's a large exporter of food, minerals, energy. I think the exports were above imports in January by over $4 billion. The country is doing very well, mostly exporting to China. The Central Bank has done a phenomenal job getting inflation under control. The currency has done very well. The only issue for us is Oi consolidation. We indexed towards Oi, but that's I think we have another $14 million of Oi wireline churn this year, but I think we've reached peak churn in Brazil. Going forward, 5G is less than 50% deployed, and we have three operators, TIM, Claro, and Vivo. It's a stable environment. We have scale. We have 12,000 towers. I feel pretty good about Brazil going forward. You mentioned, a while back about interest refinancing, and you also mentioned, I think, one of the large private tower companies recently did an ABS with, I think, 12.5x net debt to EBITDA, slightly below 5%. Help us look at your balance sheet. What are you thinking as far as refinancing costs, and when do you get to where that headwind from refinancing kind of tapers down? I mean, we had an ABS mature in January, $750 million. Another $1.25 billion mature in November. Those are ABS with one handle on them. We are going, and we said publicly that we have been upgraded to investment grade with 6.5 terms of leverage. I think we made a commitment to stay below seven. The rating agencies, S&P, last summer changed their methodology on tower companies, given the fact that our customers are investment grade. We have MLA long-term contract, given the stability of the free cash flow of that business. I think S&P at below 7.25 terms of leverage, you could be investment grade. Fitch is below seven. We're at 6.5 and making the commitment to becoming investment grade issuer. In order to do that, we need to take our ratio of secured debt to unsecured to below 50%. We will look sometime this year to refinance our Term Loan B and also the ABS maturing in November in basically in investment grade market. We should be able to refinance in investment grade market slightly inside what we'll get in the ABS market. The advantage of the investment grade market, you could issue longer term securities. That market is always open. Even if there's a financial crisis, there's always a price point at which you could finance in that market. The leverage finance market I think is a very attractive market. It's a little bit tougher sometimes. Yeah. Duration of long-term debt as an investment grade, are we thinking seven, 10? What type of duration? It's gonna be a mix. It's gonna depend on market conditions. All of this will be decided later on this year. As far as rough price, I mean, interest rates, anybody that knows interest rates perfectly already owns their Caribbean island. You know, what are you thinking as far as interest rate kind of goalpost that you're thinking of? You mean for SBA? Rates, yeah. I think in the investment grade market, depending on basically the maturity will go out, it's gonna be between 5% and 5.25%, in that range. Yeah. you touched on stock buybacks. Let's talk dividends too. We didn't touch on that earlier. you raised your dividend almost 13%. Payout ratio I think is like 41%. Walk us through kind of what that shareholder return aspect of dividends look like for you guys over the long term. Yeah. Given the growth going forward in the FFO per share and a payout ratio at 41%, we see a dividend increase in the double digit for the next few years. Where would payout ratio kinda stabilize? Where would you wanna take it up to? In the seventies, eighties? I don't know yet. I think by raising dividend in a double-digit for the next few years, you probably get to 50, mid-50s payout ratio. We have a lot of room. Plenty of room. Plenty of room to grow the dividend, yeah. We got about a minute left. You guys bought back a lot of stock in fourth quarter, which then meant big buyback in calendar 2025. What do you think investors are missing, in one minute, in your story? Listen, it's a fantastic industry, and we are in a trough in the industry in terms of CapEx as a percentage of revenue. It's a cyclical business, I mean, probably trending more towards a 4% top line growth rate. Once 6G comes, AI application come to market, maybe more, I think data center closer to the base station or the base of the base station. I think you're gonna see a pickup in the top line growth rate, and at 85% gross margin, that flows straight to the bottom line, and I think I feel comfortable about upper single digit FFO per share growth going forward. If you take a long-term view, that industry is gonna do very well. It's impossible to replicate that industry, that infrastructure. Look how difficult it is to build in an urban, suburban environment given zoning law. Carriers have generator, batteries, fiber going to the base of the base station. It's always easier for them to put more equipment on an existing base station than search for a new site. It's a great thought there. I was reminded talking to Tom Bartlett the other day, retired CFO, then CEO of American Tower. One year at NAREIT, the real estate conference, somebody asked the question, "What would cause your revenues to go down?" In a true cyclical nature, some industries can go up 10% or down 10% in revenues. What you're saying is your cyclicality is how much revenue you grow. I think that's right. I think that's right. It's hard to see, especially in a consortium industry with three carriers, it's really hard to see negative growth. It's with an escalator at 3% and demand, you're always gonna be in, Growth ... probably around mid-single digit growth. Great. We'll wrap it there. Thanks, everybody. Have a good day. Thank you, Ric.

Speaker 2: All right. Good morning, everybody. I'm Ric Prentiss, head of TMT Research at Raymond James. My definition of TMT is towers. We've got Marc Montagner from SBAC here with us today. Media, we just literally jumped off the Warner Bros. Paramount call. Brent was able to ask the question for me 'cause I had to run up here. Then telecom and satellite services, 47 years of Raymond James Institutional Investor Conference, my 30th conference. Glad to see everybody here. As I've always said, it's never dull. I'm still standing. Boy, is it never dull. Marc, thanks for joining us. All right. all right Good morning, everybody. good morning everybody I'm Ric Prentiss, head of TMT Research at Raymond James. i'm ric prentiss head of tmt research at raymond james My definition of TMT is towers. my definition of tmt is towers We've got Marc Montagner from SBAC here with us today. we've got marc montagner from sbac here with us today Media, we just literally jumped off the Warner Bros. media we just literally jumped off the warner bros Paramount call. paramount call Brent was able to ask the question for me 'cause I had to run up here. brent was able to ask the question for me 'cause i had to run up here Then telecom and satellite services, 47 years of Raymond James Institutional Investor Conference, my 30th conference. then telecom and satellite services 47 years of raymond james institutional investor conference my 30th conference Glad to see everybody here. glad to see everybody here As I've always said, it's never dull. as i've always said it's never dull I'm still standing. i'm still standing Boy, is it never dull. boy is it never dull Marc, thanks for joining us. marc thanks for joining us

Speaker 1: Ric, thanks for having me, and congratulations on an amazing run. Ric, thanks for having me, and congratulations on an amazing run. ric thanks for having me and congratulations on an amazing run

Speaker 2: Yeah. Yeah. It's been. Yeah. yeah Yeah. yeah It's been. it's been

Speaker 1: Hope you keep going for another 20 years. Hope you keep going for another 20 years. hope you keep going for another 20 years

Speaker 2: Yeah. As we think about the tower industry, I think on the earnings call last week, gosh, it was just Thursday, I guess, you mentioned that we're close to the carrier consolidation churn probably being done in the United States. I know it's an awkward topic, why don't you just update people in the room and on the webcast, where are we at with SBAC and DISH, just so we know, kind of to set the stage? Yeah. yeah As we think about the tower industry, I think on the earnings call last week, gosh, it was just Thursday, I guess, you mentioned that we're close to the carrier consolidation churn probably being done in the United States. as we think about the tower industry i think on the earnings call last week gosh it was just thursday i guess you mentioned that we're close to the carrier consolidation churn probably being done in the united states I know it's an awkward topic, why don't you just update people in the room and on the webcast, where are we at with SBAC and DISH, just so we know, kind of to set the stage? i know it's an awkward topic why don't you just update people in the room and on the webcast where are we at with sbac and dish just so we know kind of to set the stage

Speaker 1: Right. DISH Right. right DISH dish

Speaker 2: Who reported this morning on top of everything else. Who reported this morning on top of everything else. who reported this morning on top of everything else

Speaker 1: Okay. Yeah. I didn't, I didn't follow that. DISH basically for us is about $55 million of revenue every year. Last year was only $2 million of lease-up. Ongoing commitment, we have short-term contract with DISH. Ongoing commitment, you total all their commitment, it's slightly over $100 million. It's a very limited exposure. They stopped paying late last year, so we basically have a lawsuit ongoing, so I won't comment on the lawsuit. It's public. People could just read it. Basically for us, the exposure is minimum, about $100 million through the end of 2028. Okay. okay Yeah. yeah I didn't, I didn't follow that. i didn't i didn't follow that DISH basically for us is about $55 million of revenue every year. dish basically for us is about $55 million of revenue every year Last year was only $2 million of lease-up. last year was only $2 million of lease-up Ongoing commitment, we have short-term contract with DISH. ongoing commitment we have short-term contract with dish Ongoing commitment, you total all their commitment, it's slightly over $100 million. ongoing commitment you total all their commitment it's slightly over $100 million It's a very limited exposure. it's a very limited exposure They stopped paying late last year, so we basically have a lawsuit ongoing, so I won't comment on the lawsuit. they stopped paying late last year so we basically have a lawsuit ongoing so i won't comment on the lawsuit It's public. it's public People could just read it. people could just read it Basically for us, the exposure is minimum, about $100 million through the end of 2028. basically for us the exposure is minimum about $100 million through the end of 2028

Speaker 2: Yeah. It was removed from the guidance. Yeah. yeah It was removed from the guidance. it was removed from the guidance

Speaker 1: We removed the about $56 million of revenue from our guidance for 2026 since they stopped paying basically. We removed the about $56 million of revenue from our guidance for 2026 since they stopped paying basically. we removed the about $56 million of revenue from our guidance for 2026 since they stopped paying basically

Speaker 2: Any settlement, negotiation, litigation would be upside to that from a standpoint of somewhere on the income statement and balance sheet. Any settlement, negotiation, litigation would be upside to that from a standpoint of somewhere on the income statement and balance sheet. any settlement negotiation litigation would be upside to that from a standpoint of somewhere on the income statement and balance sheet

Speaker 1: It would just be cash coming in. That's correct. It would just be cash coming in. it would just be cash coming in That's correct. that's correct

Speaker 2: We also look at the remaining big three. We've got a stable operation in the U.S., three carriers, well-capitalized carriers that can spend money. There's been some debate trying to understand Verizon, who you have an MLA with now, what they've publicly said about their CapEx. How do you kind of take a look at what activity you're expecting from Verizon versus CapEx? I know it's not a perfect indicator. CapEx is not a perfect indicator to tower leasing. We also look at the remaining big three. we also look at the remaining big three We've got a stable operation in the U.S. , three carriers, well-capitalized carriers that can spend money. we've got a stable operation in the u.s three carriers well-capitalized carriers that can spend money There's been some debate trying to understand Verizon, who you have an MLA with now, what they've publicly said about their CapEx. there's been some debate trying to understand verizon who you have an mla with now what they've publicly said about their capex How do you kind of take a look at what activity you're expecting from Verizon versus CapEx? how do you kind of take a look at what activity you're expecting from verizon versus capex I know it's not a perfect indicator. i know it's not a perfect indicator CapEx is not a perfect indicator to tower leasing. capex is not a perfect indicator to tower leasing

Speaker 1: For us, we signed a MLA agreement with Verizon last year. It's a 10-year agreement. We're very pleased with the agreement. I think we make it easier and faster for Verizon to deploy. Basically, they have minimum commitment with us. Verizon is going to be our biggest, I think contributor to new revenue in 2026, and we're very pleased with the relationship. I think for the next 10 years, I think we have very good visibility with Verizon. For us, we signed a MLA agreement with Verizon last year. for us we signed a mla agreement with verizon last year It's a 10-year agreement. it's a 10-year agreement We're very pleased with the agreement. we're very pleased with the agreement I think we make it easier and faster for Verizon to deploy. i think we make it easier and faster for verizon to deploy Basically, they have minimum commitment with us. basically they have minimum commitment with us Verizon is going to be our biggest, I think contributor to new revenue in 2026, and we're very pleased with the relationship. verizon is going to be our biggest i think contributor to new revenue in 2026 and we're very pleased with the relationship I think for the next 10 years, I think we have very good visibility with Verizon. i think for the next 10 years i think we have very good visibility with verizon

Speaker 2: It feels like increasing activity from Verizon this year versus what you've seen over the last one or two years. It feels like increasing activity from Verizon this year versus what you've seen over the last one or two years. it feels like increasing activity from verizon this year versus what you've seen over the last one or two years

Speaker 1: I think that's correct. I think that's correct. i think that's correct

Speaker 2: One of the other carriers that was more rural-focused, maybe reducing efforts a little bit in the short term. If we think of the big three and broaden out the scope beyond just 2026 guidance, philosophically, how should we think about escalators, new lease activity, and churn over the long term in the U.S.? One of the other carriers that was more rural-focused, maybe reducing efforts a little bit in the short term. one of the other carriers that was more rural-focused maybe reducing efforts a little bit in the short term If we think of the big three and broaden out the scope beyond just 2026 guidance, philosophically, how should we think about escalators, new lease activity, and churn over the long term in the U.S. ? if we think of the big three and broaden out the scope beyond just 2026 guidance philosophically how should we think about escalators new lease activity and churn over the long term in the u.s

Speaker 1: Yeah, sure. Let me just go back through 2026, right? 2027, new colocations and amendment were about $37 million of new revenues. DISH was about $2 million of this. The midpoint of our guidance for 2026 is $35 million. It's flat YoY, so it's steady. I think the mix changing, T-Mobile basically at the coverage requirement as part of their agreement to buy Sprint, so they are getting to the end of the rural coverage there, and densification is getting close to the end as well. Verizon is picking up the slack, so overall it's steady. It's just the mix is changing, more exposure to Verizon, less to T-Mobile on the new leases. Yeah, sure. yeah sure Let me just go back through 2026, right? 2027, new colocations and amendment were about $37 million of new revenues. let me just go back through 2026 right 2027 new colocations and amendment were about $37 million of new revenues DISH was about $2 million of this. dish was about $2 million of this The midpoint of our guidance for 2026 is $35 million. the midpoint of our guidance for 2026 is $35 million It's flat YoY, so it's steady. it's flat yoy so it's steady I think the mix changing, T-Mobile basically at the coverage requirement as part of their agreement to buy Sprint, so they are getting to the end of the rural coverage there, and densification is getting close to the end as well. i think the mix changing t-mobile basically at the coverage requirement as part of their agreement to buy sprint so they are getting to the end of the rural coverage there and densification is getting close to the end as well Verizon is picking up the slack, so overall it's steady. verizon is picking up the slack so overall it's steady It's just the mix is changing, more exposure to Verizon, less to T-Mobile on the new leases. it's just the mix is changing more exposure to verizon less to t-mobile on the new leases Long term, if you just go back, I've been in that industry for over 30 years, just like you. We've seen the cycle repeat itself. Carriers buy new spectrum, they roll out a new technology, they get a 10x increase in terms of capacity. They then harvest that capacity, and eventually, they need to do more co-lo densification, and eventually they get a new band of spectrum and roll out a new technology and the cycle repeats itself. In the peak of the CapEx cycle, CapEx as a percentage of revenue runs anywhere from 22%-25% of revenue. In the harvest mode, it's about 15%. Last year was slightly less than 15. If you go back 20 years, it's one of the lowest ever. Long term, if you just go back, I've been in that industry for over 30 years, just like you. long term if you just go back i've been in that industry for over 30 years just like you We've seen the cycle repeat itself. we've seen the cycle repeat itself Carriers buy new spectrum, they roll out a new technology, they get a 10x increase in terms of capacity. carriers buy new spectrum they roll out a new technology they get a 10x increase in terms of capacity They then harvest that capacity, and eventually, they need to do more co-lo densification, and eventually they get a new band of spectrum and roll out a new technology and the cycle repeats itself. they then harvest that capacity and eventually they need to do more co-lo densification and eventually they get a new band of spectrum and roll out a new technology and the cycle repeats itself In the peak of the CapEx cycle, CapEx as a percentage of revenue runs anywhere from 22%-25% of revenue. in the peak of the capex cycle capex as a percentage of revenue runs anywhere from 22%-25% of revenue In the harvest mode, it's about 15%. in the harvest mode it's about 15% Last year was slightly less than 15. last year was slightly less than 15 If you go back 20 years, it's one of the lowest ever. if you go back 20 years it's one of the lowest ever It's gonna be around the 15% mark this year. 6G is coming. The upper C-band auction is probably gonna take place sometime in 2027. 18 months clearing period, we could see a 6G rollout by 2028, 2029, and that means new equipment. I think in a normalized environment, I think escalator on the lease agreement is about 3%. New lease activity in a normalized environment is 2%-3% top line growth rate. Non-Sprint, non-DISH trade is about 1%. You solve for about 4%-5% top line growth rate in a normalized environment. It's gonna be around the 15% mark this year. 6G is coming. it's gonna be around the 15% mark this year 6g is coming The upper C-band auction is probably gonna take place sometime in 2027. 18 months clearing period, we could see a 6G rollout by 2028, 2029, and that means new equipment. the upper c-band auction is probably gonna take place sometime in 2027 18 months clearing period we could see a 6g rollout by 2028 2029 and that means new equipment I think in a normalized environment, I think escalator on the lease agreement is about 3%. i think in a normalized environment i think escalator on the lease agreement is about 3% New lease activity in a normalized environment is 2%-3% top line growth rate. new lease activity in a normalized environment is 2%-3% top line growth rate Non-Sprint, non-DISH trade is about 1%. non-sprint non-dish trade is about 1% You solve for about 4%-5% top line growth rate in a normalized environment. you solve for about 4%-5% top line growth rate in a normalized environment

Speaker 2: Yeah. When you think about transferring that conversion rate from revenue to gross margins to EBITDA and free cash flow, more importantly for a re-adjusted funds from operations, how do we think about the bottom line kind of growth rates that 4%-5% long-term normalized revenue growth rate might equate to? Yeah. yeah When you think about transferring that conversion rate from revenue to gross margins to EBITDA and free cash flow, more importantly for a re-adjusted funds from operations, how do we think about the bottom line kind of growth rates that 4%-5% long-term normalized revenue growth rate might equate to? when you think about transferring that conversion rate from revenue to gross margins to ebitda and free cash flow more importantly for a re-adjusted funds from operations how do we think about the bottom line kind of growth rates that 4%-5% long-term normalized revenue growth rate might equate to

Speaker 1: Right. Remember, this is a high fixed cost, low variable industry with very high margin, 85% gross margin, 7% EBITDA margin. That 4%-5%, top line growth rate should, if you exclude refinancing headwinds, should be a single-digit growth rate. Right. right Remember, this is a high fixed cost, low variable industry with very high margin, 85% gross margin, 7% EBITDA margin. remember this is a high fixed cost low variable industry with very high margin 85% gross margin 7% ebitda margin That 4%-5%, top line growth rate should, if you exclude refinancing headwinds, should be a single-digit growth rate. that 4%-5% top line growth rate should if you exclude refinancing headwinds should be a single-digit growth rate

Speaker 2: Per share might be even better then, 'cause you look at what you do with the excess cash. Walk us through one of the beauties of the tower business is you make a lot of money. And then I'd always tell people a top thing for executives is capital allocation of what do I do with that money? Per share might be even better then, 'cause you look at what you do with the excess cash. per share might be even better then 'cause you look at what you do with the excess cash Walk us through one of the beauties of the tower business is you make a lot of money. walk us through one of the beauties of the tower business is you make a lot of money And then I'd always tell people a top thing for executives is capital allocation of what do I do with that money? and then i'd always tell people a top thing for executives is capital allocation of what do i do with that money

Speaker 1: Right. I think you're right, Ric. The way to create value for the long term is really capital allocation. We need to be disciplined there. If you look at our business, and those are public numbers, it's about $1.9 billion of EBITDA, $250 million of growth CapEx and maintenance CapEx, about guided about $500 million, $490 million of cash interest expenses, $525 million of dividend, $70 million of cash taxes, you're left with about $600 million or $700 million of extra cash every year. What did we do with that extra cash? In 2024, we bought back shares $200 million. We did about $200 million M&A, we paid down debt. Right. right I think you're right, Ric. i think you're right ric The way to create value for the long term is really capital allocation. the way to create value for the long term is really capital allocation We need to be disciplined there. we need to be disciplined there If you look at our business, and those are public numbers, it's about $1.9 billion of EBITDA, $250 million of growth CapEx and maintenance CapEx, about guided about $500 million, $490 million of cash interest expenses, $525 million of dividend, $70 million of cash taxes, you're left with about $600 million or $700 million of extra cash every year. if you look at our business and those are public numbers it's about $1.9 billion of ebitda $250 million of growth capex and maintenance capex about guided about $500 million $490 million of cash interest expenses $525 million of dividend $70 million of cash taxes you're left with about $600 million or $700 million of extra cash every year What did we do with that extra cash? what did we do with that extra cash In 2024, we bought back shares $200 million. in 2024 we bought back shares $200 million We did about $200 million M&A, we paid down debt. we did about $200 million m&a we paid down debt Last year, we I think, given the way, our stock has traded, we thought that there's real value at that level. We spent half a billion dollar, buying, our shares at, an average of about $200. In 2024, we signed a deal to buy Millicom, towers in Central America, 7,000 towers for about $1 billion. We increased that a little bit, but I think we like our leverage at about 6.5 times now. Going forward, I think, into, looking at 2026, I think, share buyback has to be an important component of use of excess cash, basically. Last year, we I think, given the way, our stock has traded, we thought that there's real value at that level. last year we i think given the way our stock has traded we thought that there's real value at that level We spent half a billion dollar, buying, our shares at, an average of about $200. we spent half a billion dollar buying our shares at an average of about $200 In 2024, we signed a deal to buy Millicom, towers in Central America, 7,000 towers for about $1 billion. in 2024 we signed a deal to buy millicom towers in central america 7,000 towers for about $1 billion We increased that a little bit, but I think we like our leverage at about 6.5 times now. we increased that a little bit but i think we like our leverage at about 6.5 times now Going forward, I think, into, looking at 2026, I think, share buyback has to be an important component of use of excess cash, basically. going forward i think into looking at 2026 i think share buyback has to be an important component of use of excess cash basically

Speaker 2: The remaining program, if I remember right, was it $1.6 billion is left on the program? The remaining program, if I remember right, was it $1.6 billion is left on the program? the remaining program if i remember right was it $1.6 billion is left on the program

Speaker 1: I think there's $1.1 billion. I think there's $1.1 billion. i think there's $1.1 billion

Speaker 2: $ 1.1 billion. That's right. $ 1.1 billion, 'cause you did spend some of this, right? $ 1.1 b illion . $ 1.1 b illion That's right. $ 1.1 billion, 'cause you did spend some of this, right? that's right $ 1.1 billion 'cause you did spend some of this right

Speaker 1: That's right. That's right. that's right

Speaker 2: As we think about potential acquisitions, it sure seems like private multiples are staying well above public multiples. How's your ability to compete for or even want to win at those kind of prices? As we think about potential acquisitions, it sure seems like private multiples are staying well above public multiples. as we think about potential acquisitions it sure seems like private multiples are staying well above public multiples How's your ability to compete for or even want to win at those kind of prices? how's your ability to compete for or even want to win at those kind of prices

Speaker 1: I think the issue in the U.S. domestic market is a scarcity of large tower portfolio available for sale. Then we compete with private capital. There's a lot of private capital chasing that industry because of the economics of it. It's a very attractive business. They have the ability to put 12 turns of leverage in the ABS market. The way they run their model, probably assume an exit at 25, 30 times in seven years. For us, as a publicly traded company, levered 6.5 times, it's very difficult to compete. We have developers that we have been working with for years. We buy a smaller portfolio, three towers, half a thousand tower, 2,000 towers. I think the issue in the U.S. domestic market is a scarcity of large tower portfolio available for sale. i think the issue in the u.s domestic market is a scarcity of large tower portfolio available for sale Then we compete with private capital. then we compete with private capital There's a lot of private capital chasing that industry because of the economics of it. there's a lot of private capital chasing that industry because of the economics of it It's a very attractive business. it's a very attractive business They have the ability to put 12 turns of leverage in the ABS market. they have the ability to put 12 turns of leverage in the abs market The way they run their model, probably assume an exit at 25, 30 times in seven years. the way they run their model probably assume an exit at 25 30 times in seven years For us, as a publicly traded company, levered 6.5 times, it's very difficult to compete. for us as a publicly traded company levered 6.5 times it's very difficult to compete We have developers that we have been working with for years. we have developers that we have been working with for years We buy a smaller portfolio, three towers, half a thousand tower, 2,000 towers. we buy a smaller portfolio three towers half a thousand tower 2,000 towers The large portfolio or I think or the math just doesn't work for us. The large portfolio or I think or the math just doesn't work for us. the large portfolio or i think or the math just doesn't work for us

Speaker 2: Yeah. You mentioned 5G going to 6G. When we think about 5G, fixed wireless has certainly been a good application. It seems like, I know I think you guys on the call talked about mobile data usage. I like to call it just wireless network usage 'cause we have both fixed and mobile. As you think about what's happening at the networks, where are we at in the 5G cycle? We'll come back to 6G. Yeah. yeah You mentioned 5G going to 6G. you mentioned 5g going to 6g When we think about 5G, fixed wireless has certainly been a good application. when we think about 5g fixed wireless has certainly been a good application It seems like, I know I think you guys on the call talked about mobile data usage. it seems like i know i think you guys on the call talked about mobile data usage I like to call it just wireless network usage 'cause we have both fixed and mobile. i like to call it just wireless network usage 'cause we have both fixed and mobile As you think about what's happening at the networks, where are we at in the 5G cycle? as you think about what's happening at the networks where are we at in the 5g cycle We'll come back to 6G. we'll come back to 6g

Speaker 1: Right. I mean, we can only look at the deployment of the big three on our portfolio, and I think T-Mobile is pretty much done on their 5G rollout, or about 85% rollout in a 2.5 GHz band. They haven't rolled out in a C-band at all. Verizon is probably at around 80% mark, and AT&T, 50%-55%. There's still room for Verizon and AT&T to deploy. 6G, I think, as we said, the Upper C-block is probably going to be auctioned in 2027 and be deployed before the end of the decade. Right. right I mean, we can only look at the deployment of the big three on our portfolio, and I think T-Mobile is pretty much done on their 5G rollout, or about 85% rollout in a 2.5 GHz band. i mean we can only look at the deployment of the big three on our portfolio and i think t-mobile is pretty much done on their 5g rollout or about 85% rollout in a 2.5 ghz band They haven't rolled out in a C-band at all. they haven't rolled out in a c-band at all Verizon is probably at around 80% mark, and AT&T, 50%- 55%. verizon is probably at around 80% mark and at&t 50%- 55% There's still room for Verizon and AT&T to deploy. 6G, I think, as we said, the Upper C-block is probably going to be auctioned in 2027 and be deployed before the end of the decade. there's still room for verizon and at&t to deploy 6g i think as we said the upper c-block is probably going to be auctioned in 2027 and be deployed before the end of the decade

Speaker 2: Yeah. Of course, T-Mobile done with the Sprint stuff, but the C-band, haven't seen a lot yet, but maybe it's coming. Yeah. yeah Of course, T-Mobile done with the Sprint stuff, but the C-band, haven't seen a lot yet, but maybe it's coming. of course t-mobile done with the sprint stuff but the c-band haven't seen a lot yet but maybe it's coming

Speaker 1: Well, I can only speculate. They haven't, as far as we know, they haven't rolled out in the C-band. Maybe they are just waiting for the auction of the upper C-band and just worldwide equipment to cover the existing C-band and the new one they may get in the auction. I don't know. I'm just speculating, but we haven't seen any C-block rollout by T-Mobile yet. Well, I can only speculate. well i can only speculate They haven't, as far as we know, they haven't rolled out in the C-band. they haven't as far as we know they haven't rolled out in the c-band Maybe they are just waiting for the auction of the upper C-band and just worldwide equipment to cover the existing C-band and the new one they may get in the auction. maybe they are just waiting for the auction of the upper c-band and just worldwide equipment to cover the existing c-band and the new one they may get in the auction I don't know. i don't know I'm just speculating, but we haven't seen any C-block rollout by T-Mobile yet. i'm just speculating but we haven't seen any c-block rollout by t-mobile yet

Speaker 2: Yeah. I mean, a lot of carriers like to do the one climb, one touch type thing, more efficient. We were talking with John Saw, CTO of T-Mobile the other day before their investor day, John said he's already working on 6G, you know, from his side as the CTO. When we asked what he was thinking of, he said, we got drones, we have robotics, we have wearables, we have AI, we have edge. You guys obviously meet with consultants and try and think of where we're headed. What are you seeing from 6G that would get you excited from activity at the tower level? Yeah. yeah I mean, a lot of carriers like to do the one climb, one touch type thing, more efficient. i mean a lot of carriers like to do the one climb one touch type thing more efficient We were talking with John Saw, CTO of T-Mobile the other day before their investor day, John said he's already working on 6G, you know, from his side as the CTO. we were talking with john saw cto of t-mobile the other day before their investor day john said he's already working on 6g you know from his side as the cto When we asked what he was thinking of, he said, we got drones, we have robotics, we have wearables, we have AI, we have edge. when we asked what he was thinking of he said we got drones we have robotics we have wearables we have ai we have edge You guys obviously meet with consultants and try and think of where we're headed. you guys obviously meet with consultants and try and think of where we're headed What are you seeing from 6G that would get you excited from activity at the tower level? what are you seeing from 6g that would get you excited from activity at the tower level

Speaker 1: Right. I really think that the if you just go back to all this generation, I label 1G, 2G, 3G, 4G, 5G. To me, remember, ARPU in the wireless industry has always been around $55-$60. You used to pay $0.25 a minute for a voice call, and then $0.10 for SMS text, and then $40 for 1 gig of data. Now it's basically all you could eat. During that time, EBITDA margins for the wireless operator has still been at around 45%. Why is this? It's because each time they roll out a new technology, they get an exponential reduction in the cost per bit that they deliver. Right. right I really think that the if you just go back to all this generation, I label 1G, 2G, 3G, 4G, 5G. i really think that the if you just go back to all this generation i label 1g 2g 3g 4g 5g To me, remember, ARPU in the wireless industry has always been around $55-$60. to me remember arpu in the wireless industry has always been around $55-$60 You used to pay $0.25 a minute for a voice call, and then $0.10 for SMS text, and then $40 for 1 gig of data. you used to pay $0.25 a minute for a voice call and then $0.10 for sms text and then $40 for 1 gig of data Now it's basically all you could eat. now it's basically all you could eat During that time, EBITDA margins for the wireless operator has still been at around 45%. during that time ebitda margins for the wireless operator has still been at around 45% Why is this? why is this It's because each time they roll out a new technology, they get an exponential reduction in the cost per bit that they deliver. it's because each time they roll out a new technology they get an exponential reduction in the cost per bit that they deliver I think to me, 6G is just gonna give them a 10x-20x basically reduction in the cost per bit that they're gonna be able to deliver to their users. Just give them more data, more speed, less latencies, and be able to keep increasing mobile traffic at double-digit rates and still maintain a 45% EBITDA margin. To me, it's all about the cost per bit. If you look at the application, AI eventually is gonna be at the handset. We assume there would be live application to make real time decision and latency, low latency is gonna be a critical factor there. That means that you need to have probably data center or servers at the edge on the network. I think to me, 6G is just gonna give them a 10x-20x basically reduction in the cost per bit that they're gonna be able to deliver to their users. i think to me 6g is just gonna give them a 10x-20x basically reduction in the cost per bit that they're gonna be able to deliver to their users Just give them more data, more speed, less latencies, and be able to keep increasing mobile traffic at double-digit rates and still maintain a 45% EBITDA margin. just give them more data more speed less latencies and be able to keep increasing mobile traffic at double-digit rates and still maintain a 45% ebitda margin To me, it's all about the cost per bit. to me it's all about the cost per bit If you look at the application, AI eventually is gonna be at the handset. if you look at the application ai eventually is gonna be at the handset We assume there would be live application to make real time decision and latency, low latency is gonna be a critical factor there. we assume there would be live application to make real time decision and latency low latency is gonna be a critical factor there That means that you need to have probably data center or servers at the edge on the network. that means that you need to have probably data center or servers at the edge on the network I don't know if they're gonna be in metro area close to the users, if they have to be at the base of the base station. It's too early to say, but, you could just see the trends going forward with the cost per bit being taken down another 10 or 20x, more capacity coming, less latency, more power in the handset or the iPad. I really think that you're gonna see an uptick in mobile wireless data usage again. I don't know if they're gonna be in metro area close to the users, if they have to be at the base of the base station. i don't know if they're gonna be in metro area close to the users if they have to be at the base of the base station It's too early to say, but, you could just see the trends going forward with the cost per bit being taken down another 10 or 20x, more capacity coming, less latency, more power in the handset or the iPad. it's too early to say but you could just see the trends going forward with the cost per bit being taken down another 10 or 20x more capacity coming less latency more power in the handset or the ipad I really think that you're gonna see an uptick in mobile wireless data usage again. i really think that you're gonna see an uptick in mobile wireless data usage again

Speaker 2: Yeah. At the, at the Park City Summer Summit, the fiber data center tower carriers, everybody there felt that kind of this AI impact on wireless, mobile, and towers probably by 2030 was kind of the consensus saying, "Okay, it's not 2026, 2027, but it's coming. Yeah. yeah at At the, at the Park City Summer Summit, the fiber data center tower carriers, everybody there felt that kind of this AI impact on wireless, mobile, and towers probably by 2030 was kind of the consensus saying, "Okay, it's not 2026, 2027, but it's coming. at the at the park city summer summit the fiber data center tower carriers everybody there felt that kind of this ai impact on wireless mobile and towers probably by 2030 was kind of the consensus saying "okay it's not 2026 2027 but it's coming

Speaker 1: I think that's right. I could see it and people always think in terms of capacity. You have to think in terms of latency too. Latency is very, very important. You don't wanna basically need to make a real-life decision and wait one second for an answer. You need to get it right away. That means like more capacity closer to the base station. I think that's right. i think that's right I could see it and people always think in terms of capacity. i could see it and people always think in terms of capacity You have to think in terms of latency too. you have to think in terms of latency too Latency is very, very important. latency is very very important You don't wanna basically need to make a real-life decision and wait one second for an answer. you don't wanna basically need to make a real-life decision and wait one second for an answer You need to get it right away. you need to get it right away That means like more capacity closer to the base station. that means like more capacity closer to the base station

Speaker 2: It's been the debate of when will AI come to towers, and people have kind of forgot about it, whereas data centers, AI is front and center. It's for the people in the audience and on the webcasting, it's coming. It definitely feels more real, whereas a couple years ago we weren't sure when it was coming. Now it feels like it's kind of gelling around that concept. It's been the debate of when will AI come to towers, and people have kind of forgot about it, whereas data centers, AI is front and center. it's been the debate of when will ai come to towers and people have kind of forgot about it whereas data centers ai is front and center It's for the people in the audience and on the webcasting, it's coming. it's for the people in the audience and on the webcasting it's coming It definitely feels more real, whereas a couple years ago we weren't sure when it was coming. it definitely feels more real whereas a couple years ago we weren't sure when it was coming Now it feels like it's kind of gelling around that concept. now it feels like it's kind of gelling around that concept

Speaker 1: I think that's right. I think that's right. i think that's right

Speaker 2: We also hear a lot, and Brent did a video one the other day using Sora for us. It feels also like there might be more upload coming rather than just download, and that might affect the networks. Are you seeing the same thing or hearing? We also hear a lot, and Brent did a video one the other day using Sora for us. we also hear a lot and brent did a video one the other day using sora for us It feels also like there might be more upload coming rather than just download, and that might affect the networks. it feels also like there might be more upload coming rather than just download and that might affect the networks Are you seeing the same thing or hearing? are you seeing the same thing or hearing

Speaker 1: That's what we're hearing. I think today, if you look at the download-upload ratio, it's probably 80% download, 20% upload. I think what we're seeing now is that traffic going forward is gonna be more mixed 50/50. That means probably I think you need more antennas on the to, on the receiving end. I think different type of equipment, more equipment. 6G basically means new equipment at the tower. That's positive for the tower industry. That's what we're hearing. that's what we're hearing I think today, if you look at the download-upload ratio, it's probably 80% download, 20% upload. i think today if you look at the download-upload ratio it's probably 80% download 20% upload I think what we're seeing now is that traffic going forward is gonna be more mixed 50/50. i think what we're seeing now is that traffic going forward is gonna be more mixed 50/50 That means probably I think you need more antennas on the to, on the receiving end. that means probably i think you need more antennas on the to on the receiving end I think different type of equipment, more equipment. 6G basically means new equipment at the tower. i think different type of equipment more equipment 6g basically means new equipment at the tower That's positive for the tower industry. that's positive for the tower industry

Speaker 2: One of the things, and Brent and I, we were in Paris back September 15th when EchoStar had the big event that led to the headwinds. A lot of people in September and October particularly were talking to us about, "Gosh, Ric, aren't satellites gonna replace wireless? Aren't satellites gonna replace tower?" I don't wanna prejudice you, but how do y'all look at that question from a generalist side? One of the things, and Brent and I, we were in Paris back September 15th when EchoStar had the big event that led to the headwinds. one of the things and brent and i we were in paris back september 15th when echostar had the big event that led to the headwinds A lot of people in September and October particularly were talking to us about, "Gosh, Ric, aren't satellites gonna replace wireless? a lot of people in september and october particularly were talking to us about "gosh ric aren't satellites gonna replace wireless Aren't satellites gonna replace tower?" I don't wanna prejudice you, but how do y'all look at that question from a generalist side? aren't satellites gonna replace tower?" i don't wanna prejudice you but how do y'all look at that question from a generalist side

Speaker 1: To us, or to me at least, and there's still a lot of unknown, but satellite is probably going to be a complement for the tower industry because I think in the rural area, some people are probably gonna use it for broadband, just replace the fixed broadband that they have, also for coverage. Latency is always important, and if you wanna minimize latency, I think Starlink today's latency is probably 45 ms. If you wanna take it down to 20, 25, you probably need to need more downlink in order to get that traffic connected to IP internet backbone, and that means equipment on the site to receive that traffic. I probably see it as a complement at this stage. To us, or to me at least, and there's still a lot of unknown, but satellite is probably going to be a complement for the tower industry because I think in the rural area, some people are probably gonna use it for broadband, just replace the fixed broadband that they have, also for coverage. to us or to me at least and there's still a lot of unknown but satellite is probably going to be a complement for the tower industry because i think in the rural area some people are probably gonna use it for broadband just replace the fixed broadband that they have also for coverage Latency is always important, and if you wanna minimize latency, I think Starlink today's latency is probably 45 ms. latency is always important and if you wanna minimize latency i think starlink today's latency is probably 45 ms If you wanna take it down to 20, 25, you probably need to need more downlink in order to get that traffic connected to IP internet backbone, and that means equipment on the site to receive that traffic. if you wanna take it down to 20 25 you probably need to need more downlink in order to get that traffic connected to ip internet backbone and that means equipment on the site to receive that traffic I probably see it as a complement at this stage. i probably see it as a complement at this stage I don't really see, there's no way you could replicate the capacity and the latency that you have on the terrestrial network. I think satellite is probably gonna be a complement and a positive to the tower industry. I don't really see, there's no way you could replicate the capacity and the latency that you have on the terrestrial network. i don't really see there's no way you could replicate the capacity and the latency that you have on the terrestrial network I think satellite is probably gonna be a complement and a positive to the tower industry. i think satellite is probably gonna be a complement and a positive to the tower industry

Speaker 2: It also feels to us like it's more going after the white space, that in the U.S. we think, "Oh, our phones work," but maybe a third of the U.S. landmass, continental U.S. landmass, is not covered, and it's economically not right to cover it with terrestrial. That seems like a natural spot for satellite. It also feels to us like it's more going after the white space, that in the U.S. we think, "Oh, our phones work," but maybe a third of the U.S. landmass, continental U.S. landmass, is not covered, and it's economically not right to cover it with terrestrial. it also feels to us like it's more going after the white space that in the u.s we think "oh our phones work," but maybe a third of the u.s landmass continental u.s landmass is not covered and it's economically not right to cover it with terrestrial That seems like a natural spot for satellite. that seems like a natural spot for satellite

Speaker 1: I think that's right. The day you could have a dual-mode handset with the right form factor, the right battery life, the right cost, entry level, I think you're gonna see more dual-mode handset. I just think it's a complement. In an urban environment, suburban environment, you're always gonna have a tree, an overpass, a tall building blocking access. The terrestrial network is always gonna be your primary, I think, access network. I think that's right. i think that's right The day you could have a dual-mode handset with the right form factor, the right battery life, the right cost, entry level, I think you're gonna see more dual-mode handset. the day you could have a dual-mode handset with the right form factor the right battery life the right cost entry level i think you're gonna see more dual-mode handset I just think it's a complement. i just think it's a complement In an urban environment, suburban environment, you're always gonna have a tree, an overpass, a tall building blocking access. in an urban environment suburban environment you're always gonna have a tree an overpass a tall building blocking access The terrestrial network is always gonna be your primary, I think, access network. the terrestrial network is always gonna be your primary i think access network

Speaker 2: I remember the day when satellite radio was a big incremental tenant on the towers 'cause satellite radio wouldn't work in your car if you were in an urban environment 'cause they look like canyons. I remember the day when satellite radio was a big incremental tenant on the towers 'cause satellite radio wouldn't work in your car if you were in an urban environment 'cause they look like canyons. i remember the day when satellite radio was a big incremental tenant on the towers 'cause satellite radio wouldn't work in your car if you were in an urban environment 'cause they look like canyons

Speaker 1: That's right. When you think about it, SiriusXM has thousands of repeater on the ground. Sites basically where they rebroadcast their satellite signal into your car, into your garage, into your under the overpass. I think I don't know what Starlink's plans are, but if you spend the type of money they have buying spectrum, if you wanna utilize that spectrum eventually, probably makes sense to get more capacity and coverage in urban and suburban environment by deploying in that spectrum. That's right. that's right When you think about it, SiriusXM has thousands of repeater on the ground. when you think about it siriusxm has thousands of repeater on the ground Sites basically where they rebroadcast their satellite signal into your car, into your garage, into your under the overpass. sites basically where they rebroadcast their satellite signal into your car into your garage into your under the overpass I think I don't know what Starlink's plans are, but if you spend the type of money they have buying spectrum, if you wanna utilize that spectrum eventually, probably makes sense to get more capacity and coverage in urban and suburban environment by deploying in that spectrum. i think i don't know what starlink's plans are but if you spend the type of money they have buying spectrum if you wanna utilize that spectrum eventually probably makes sense to get more capacity and coverage in urban and suburban environment by deploying in that spectrum

Speaker 2: One other thing is a lot of people use their mobile devices inside. Inside buildings, inside homes, and satellite doesn't penetrate very well into structures either. One other thing is a lot of people use their mobile devices inside. one other thing is a lot of people use their mobile devices inside Inside buildings, inside homes, and satellite doesn't penetrate very well into structures either. inside buildings inside homes and satellite doesn't penetrate very well into structures either

Speaker 1: Yeah, that's right. It won't penetrate and if you have another 20 floors on top of you, there's no way you're gonna get the satellite signal there. Yeah, that's right. yeah that's right It won't penetrate and if you have another 20 floors on top of you, there's no way you're gonna get the satellite signal there. it won't penetrate and if you have another 20 floors on top of you there's no way you're gonna get the satellite signal there

Speaker 2: Let's go international for a second. You guys have expanded dramatically with the Millicom transaction, but it's U.S. dollar, right? You know, help us understand risk adjustment, how you look at investing globally, and let's look at Millicom. Let's go international for a second. let's go international for a second You guys have expanded dramatically with the Millicom transaction, but it's U.S. dollar, right? you guys have expanded dramatically with the millicom transaction but it's u.s dollar right You know, help us understand risk adjustment, how you look at investing globally, and let's look at Millicom. you know help us understand risk adjustment how you look at investing globally and let's look at millicom

Speaker 1: Yeah, that's a good question because if you really look, I think we have about 14, 15 market internationally. When Brendan became CEO in January 2024, in the first earnings call, he announced a portfolio review. I think we look at an international portfolio and look at return on invested capital and look at market where we've done very well and market that really needed some improvement. We realized that in order to be successful, first of all, you need to be in an economy that's doing well. If the economy is doing well, businesses are doing well, people have jobs, they spend money on the wireless network, businesses need a mobile application, the economy is growing. I think that's number one. Yeah, that's a good question because if you really look, I think we have about 14, 15 market internationally. yeah that's a good question because if you really look i think we have about 14 15 market internationally When Brendan became CEO in January 2024, in the first earnings call, he announced a portfolio review. when brendan became ceo in january 2024 in the first earnings call he announced a portfolio review I think we look at an international portfolio and look at return on invested capital and look at market where we've done very well and market that really needed some improvement. i think we look at an international portfolio and look at return on invested capital and look at market where we've done very well and market that really needed some improvement We realized that in order to be successful, first of all, you need to be in an economy that's doing well. we realized that in order to be successful first of all you need to be in an economy that's doing well If the economy is doing well, businesses are doing well, people have jobs, they spend money on the wireless network, businesses need a mobile application, the economy is growing. if the economy is doing well businesses are doing well people have jobs they spend money on the wireless network businesses need a mobile application the economy is growing I think that's number one. i think that's number one Two, it's important not step in front of wireless consolidation. We've seen in the U.S. with Sprint, we've seen it in Brazil with Oi. Once you have consolidation, it just means churn. You go from four to three, and it's not like it's a one-year event. It takes four, five, six years for the churn to work its way through because when you buy an operator, you have ongoing tower basically leases, and you cancel them, you don't renew them. It's like a three, four, five, six year basically paying for the tower company. Not stepping in front of a wireless consolidation is important. Every scale is important because if you have scale, when an operator needs to roll out a new technology, you're on the dialogue. Two, it's important not step in front of wireless consolidation. two it's important not step in front of wireless consolidation We've seen in the U.S. with Sprint, we've seen it in Brazil with Oi. we've seen in the u.s with sprint we've seen it in brazil with oi Once you have consolidation, it just means churn. once you have consolidation it just means churn You go from four to three, and it's not like it's a one-year event. you go from four to three and it's not like it's a one-year event It takes four, five, six years for the churn to work its way through because when you buy an operator, you have ongoing tower basically leases, and you cancel them, you don't renew them. it takes four five six years for the churn to work its way through because when you buy an operator you have ongoing tower basically leases and you cancel them you don't renew them It's like a three, four, five, six year basically paying for the tower company. it's like a three four five six year basically paying for the tower company Not stepping in front of a wireless consolidation is important. not stepping in front of a wireless consolidation is important Every scale is important because if you have scale, when an operator needs to roll out a new technology, you're on the dialogue. every scale is important because if you have scale when an operator needs to roll out a new technology you're on the dialogue They need to talk to you because they need to roll out fast and wanna sign basically MLA with a tower operator with a good presence. Going through this, we realized that some market with subscale. We sold the Philippines, we sold Argentina, we sold Colombia, and we sold Canada. Canada is a fantastic market, but we only had a few hundred sites. We didn't have any scales. We're not in the flow, and we sold for a very attractive multiple to a PE firm. Central America, we had a 15-year agreement in U.S. dollars with Millicom. Those markets are very stable. You have two dominant operator now, Claro and Millicom. Very well-capitalized company. We have a 15-year agreement in U.S. dollars with Millicom. They need to talk to you because they need to roll out fast and wanna sign basically MLA with a tower operator with a good presence. they need to talk to you because they need to roll out fast and wanna sign basically mla with a tower operator with a good presence Going through this, we realized that some market with subscale. going through this we realized that some market with subscale We sold the Philippines, we sold Argentina, we sold Colombia, and we sold Canada. we sold the philippines we sold argentina we sold colombia and we sold canada Canada is a fantastic market, but we only had a few hundred sites. canada is a fantastic market but we only had a few hundred sites We didn't have any scales. we didn't have any scales We're not in the flow, and we sold for a very attractive multiple to a PE firm. we're not in the flow and we sold for a very attractive multiple to a pe firm Central America, we had a 15-year agreement in U.S. dollars with Millicom. central america we had a 15-year agreement in u.s dollars with millicom Those markets are very stable. those markets are very stable You have two dominant operator now, Claro and Millicom. you have two dominant operator now claro and millicom Very well-capitalized company. very well-capitalized company We have a 15-year agreement in U.S. dollars with Millicom. we have a 15-year agreement in u.s dollars with millicom They gave us a commitment, and we're building 2,500 BTS new sites for them in the region. We locked in a high single-digit return in U.S. dollars, so we're very pleased. The team down there are very busy integrating the asset, getting basically the zoning rights to build, securing the land, and we're very pleased. I'm very pleased with how well the team has delivered so far, and they're very busy. They gave us a commitment, and we're building 2,500 BTS new sites for them in the region. they gave us a commitment and we're building 2,500 bts new sites for them in the region We locked in a high single-digit return in U.S. dollars, so we're very pleased. we locked in a high single-digit return in u.s dollars so we're very pleased The team down there are very busy integrating the asset, getting basically the zoning rights to build, securing the land, and we're very pleased. the team down there are very busy integrating the asset getting basically the zoning rights to build securing the land and we're very pleased I'm very pleased with how well the team has delivered so far, and they're very busy. i'm very pleased with how well the team has delivered so far and they're very busy

Speaker 2: Other regions or other markets that might be interesting? Other regions or other markets that might be interesting? other regions or other markets that might be interesting

Speaker 1: Well, I'm very bullish on Brazil. Everybody in the office knows me as the bull on Brazil. I've been involved in Brazil for over 30 years, from Nextel back in the nineties, 2000 to my prior job. We had a huge operation in Brazil. Brazil is a very large economy, high GDP per capita for an emerging market. I think it's five times GDP per capita of India. It's a large exporter of food, minerals, energy. I think the exports were above imports in January by over $4 billion. The country is doing very well, mostly exporting to China. The Central Bank has done a phenomenal job getting inflation under control. The currency has done very well. The only issue for us is Oi consolidation. Well, I'm very bullish on Brazil. well i'm very bullish on brazil Everybody in the office knows me as the bull on Brazil. everybody in the office knows me as the bull on brazil I've been involved in Brazil for over 30 years, from Nextel back in the nineties, 2000 to my prior job. i've been involved in brazil for over 30 years from nextel back in the nineties 2000 to my prior job We had a huge operation in Brazil. we had a huge operation in brazil Brazil is a very large economy, high GDP per capita for an emerging market. brazil is a very large economy high gdp per capita for an emerging market I think it's five times GDP per capita of India. i think it's five times gdp per capita of india It's a large exporter of food, minerals, energy. it's a large exporter of food minerals energy I think the exports were above imports in January by over $4 billion. i think the exports were above imports in january by over $4 billion The country is doing very well, mostly exporting to China. the country is doing very well mostly exporting to china 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 currency has done very well. the currency has done very well The only issue for us is Oi consolidation. the only issue for us is oi consolidation We indexed towards Oi, but that's I think we have another $14 million of Oi wireline churn this year, but I think we've reached peak churn in Brazil. Going forward, 5G is less than 50% deployed, and we have three operators, TIM, Claro, and Vivo. It's a stable environment. We have scale. We have 12,000 towers. I feel pretty good about Brazil going forward. We indexed towards Oi, but that's I think we have another $14 million of Oi wireline churn this year, but I think we've reached peak churn in Brazil. we indexed towards oi but that's i think we have another $14 million of oi wireline churn this year but i think we've reached peak churn in brazil Going forward, 5G is less than 50% deployed, and we have three operators, TIM, Claro, and Vivo. going forward 5g is less than 50% deployed and we have three operators tim claro and vivo It's a stable environment. it's a stable environment We have scale. we have scale We have 12,000 towers. we have 12,000 towers I feel pretty good about Brazil going forward. i feel pretty good about brazil going forward

Speaker 2: You mentioned, a while back about interest refinancing, and you also mentioned, I think, one of the large private tower companies recently did an ABS with, I think, 12.5x net debt to EBITDA, slightly below 5%. Help us look at your balance sheet. What are you thinking as far as refinancing costs, and when do you get to where that headwind from refinancing kind of tapers down? You mentioned, a while back about interest refinancing, and you also mentioned, I think, one of the large private tower companies recently did an ABS with, I think, 12.5x net debt to EBITDA, slightly below 5%. you mentioned a while back about interest refinancing and you also mentioned i think one of the large private tower companies recently did an abs with i think 12.5x net debt to ebitda slightly below 5% Help us look at your balance sheet. help us look at your balance sheet What are you thinking as far as refinancing costs, and when do you get to where that headwind from refinancing kind of tapers down? what are you thinking as far as refinancing costs and when do you get to where that headwind from refinancing kind of tapers down

Speaker 1: I mean, we had an ABS mature in January, $750 million. Another $1.25 billion mature in November. Those are ABS with one handle on them. We are going, and we said publicly that we have been upgraded to investment grade with 6.5 terms of leverage. I think we made a commitment to stay below seven. The rating agencies, S&P, last summer changed their methodology on tower companies, given the fact that our customers are investment grade. We have MLA long-term contract, given the stability of the free cash flow of that business. I think S&P at below 7.25 terms of leverage, you could be investment grade. Fitch is below seven. We're at 6.5 and making the commitment to becoming investment grade issuer. I mean, we had an ABS mature in January, $750 million. i mean we had an abs mature in january $750 million Another $1.25 billion mature in November. another $1.25 billion mature in november Those are ABS with one handle on them. those are abs with one handle on them We are going, and we said publicly that we have been upgraded to investment grade with 6.5 terms of leverage. we are going and we said publicly that we have been upgraded to investment grade with 6.5 terms of leverage I think we made a commitment to stay below seven. i think we made a commitment to stay below seven The rating agencies, S&P, last summer changed their methodology on tower companies, given the fact that our customers are investment grade. the rating agencies s&p last summer changed their methodology on tower companies given the fact that our customers are investment grade We have MLA long-term contract, given the stability of the free cash flow of that business. we have mla long-term contract given the stability of the free cash flow of that business I think S&P at below 7.25 terms of leverage, you could be investment grade. i think s&p at below 7.25 terms of leverage you could be investment grade Fitch is below seven. fitch is below seven We're at 6.5 and making the commitment to becoming investment grade issuer. we're at 6.5 and making the commitment to becoming investment grade issuer In order to do that, we need to take our ratio of secured debt to unsecured to below 50%. We will look sometime this year to refinance our Term Loan B and also the ABS maturing in November in basically in investment grade market. We should be able to refinance in investment grade market slightly inside what we'll get in the ABS market. In order to do that, we need to take our ratio of secured debt to unsecured to below 50%. in order to do that we need to take our ratio of secured debt to unsecured to below 50% We will look sometime this year to refinance our Term Loan B and also the ABS maturing in November in basically in investment grade market. we will look sometime this year to refinance our term loan b and also the abs maturing in november in basically in investment grade market We should be able to refinance in investment grade market slightly inside what we'll get in the ABS market. we should be able to refinance in investment grade market slightly inside what we'll get in the abs market The advantage of the investment grade market, you could issue longer term securities. That market is always open. Even if there's a financial crisis, there's always a price point at which you could finance in that market. The leverage finance market I think is a very attractive market. It's a little bit tougher sometimes. The advantage of the investment grade market, you could issue longer term securities. the advantage of the investment grade market you could issue longer term securities That market is always open. that market is always open Even if there's a financial crisis, there's always a price point at which you could finance in that market. even if there's a financial crisis there's always a price point at which you could finance in that market The leverage finance market I think is a very attractive market. the leverage finance market i think is a very attractive market It's a little bit tougher sometimes. it's a little bit tougher sometimes

Speaker 2: Yeah. Duration of long-term debt as an investment grade, are we thinking seven, 10? What type of duration? Yeah. yeah Duration of long-term debt as an investment grade, are we thinking seven, 10? duration of long-term debt as an investment grade are we thinking seven 10 What type of duration? what type of duration

Speaker 1: It's gonna be a mix. It's gonna depend on market conditions. All of this will be decided later on this year. It's gonna be a mix. it's gonna be a mix It's gonna depend on market conditions. it's gonna depend on market conditions All of this will be decided later on this year. all of this will be decided later on this year

Speaker 2: As far as rough price, I mean, interest rates, anybody that knows interest rates perfectly already owns their Caribbean island. You know, what are you thinking as far as interest rate kind of goalpost that you're thinking of? As far as rough price, I mean, interest rates, anybody that knows interest rates perfectly already owns their Caribbean island. as far as rough price i mean interest rates anybody that knows interest rates perfectly already owns their caribbean island You know, what are you thinking as far as interest rate kind of goalpost that you're thinking of? you know what are you thinking as far as interest rate kind of goalpost that you're thinking of

Speaker 1: You mean for SBA? You mean for SBA? you mean for sba

Speaker 2: Rates, yeah. Rates, yeah. rates yeah

Speaker 1: I think in the investment grade market, depending on basically the maturity will go out, it's gonna be between 5% and 5.25%, in that range. I think in the investment grade market, depending on basically the maturity will go out, it's gonna be between 5% and 5.25%, in that range. i think in the investment grade market depending on basically the maturity will go out it's gonna be between 5% and 5.25% in that range

Speaker 2: Yeah. you touched on stock buybacks. Let's talk dividends too. We didn't touch on that earlier. you raised your dividend almost 13%. Payout ratio I think is like 41%. Walk us through kind of what that shareholder return aspect of dividends look like for you guys over the long term. Yeah. you touched on stock buybacks. yeah you touched on stock buybacks Let's talk dividends too. let's talk dividends too We didn't touch on that earlier. you raised your dividend almost 13%. we didn't touch on that earlier you raised your dividend almost 13% Payout ratio I think is like 41%. payout ratio i think is like 41% Walk us through kind of what that shareholder return aspect of dividends look like for you guys over the long term. walk us through kind of what that shareholder return aspect of dividends look like for you guys over the long term

Speaker 1: Yeah. Given the growth going forward in the FFO per share and a payout ratio at 41%, we see a dividend increase in the double digit for the next few years. Yeah. yeah Given the growth going forward in the FFO per share and a payout ratio at 41%, we see a dividend increase in the double digit for the next few years. given the growth going forward in the ffo per share and a payout ratio at 41% we see a dividend increase in the double digit for the next few years

Speaker 2: Where would payout ratio kinda stabilize? Where would you wanna take it up to? In the seventies, eighties? Where would payout ratio kinda stabilize? where would payout ratio kinda stabilize Where would you wanna take it up to? where would you wanna take it up to In the seventies, eighties? in the seventies eighties

Speaker 1: I don't know yet. I think by raising dividend in a double-digit for the next few years, you probably get to 50, mid-50s payout ratio. We have a lot of room. I don't know yet. i don't know yet I think by raising dividend in a double-digit for the next few years, you probably get to 50, mid-50s payout ratio. i think by raising dividend in a double-digit for the next few years you probably get to 50 mid-50s payout ratio We have a lot of room. we have a lot of room

Speaker 2: Plenty of room. Plenty of room. plenty of room

Speaker 1: Plenty of room to grow the dividend, yeah. Plenty of room to grow the dividend, yeah. plenty of room to grow the dividend yeah

Speaker 2: We got about a minute left. You guys bought back a lot of stock in fourth quarter, which then meant big buyback in calendar 2025. What do you think investors are missing, in one minute, in your story? We got about a minute left. we got about a minute left You guys bought back a lot of stock in fourth quarter, which then meant big buyback in calendar 2025. you guys bought back a lot of stock in fourth quarter which then meant big buyback in calendar 2025 What do you think investors are missing, in one minute, in your story? what do you think investors are missing in one minute in your story

Speaker 1: Listen, it's a fantastic industry, and we are in a trough in the industry in terms of CapEx as a percentage of revenue. It's a cyclical business, I mean, probably trending more towards a 4% top line growth rate. Once 6G comes, AI application come to market, maybe more, I think data center closer to the base station or the base of the base station. I think you're gonna see a pickup in the top line growth rate, and at 85% gross margin, that flows straight to the bottom line, and I think I feel comfortable about upper single digit FFO per share growth going forward. If you take a long-term view, that industry is gonna do very well. Listen, it's a fantastic industry, and we are in a trough in the industry in terms of CapEx as a percentage of revenue. listen it's a fantastic industry and we are in a trough in the industry in terms of capex as a percentage of revenue It's a cyclical business, I mean, probably trending more towards a 4% top line growth rate. it's a cyclical business i mean probably trending more towards a 4% top line growth rate Once 6G comes, AI application come to market, maybe more, I think data center closer to the base station or the base of the base station. once 6g comes ai application come to market maybe more i think data center closer to the base station or the base of the base station I think you're gonna see a pickup in the top line growth rate, and at 85% gross margin, that flows straight to the bottom line, and I think I feel comfortable about upper single digit FFO per share growth going forward. i think you're gonna see a pickup in the top line growth rate and at 85% gross margin that flows straight to the bottom line and i think i feel comfortable about upper single digit ffo per share growth going forward If you take a long-term view, that industry is gonna do very well. if you take a long-term view that industry is gonna do very well It's impossible to replicate that industry, that infrastructure. Look how difficult it is to build in an urban, suburban environment given zoning law. Carriers have generator, batteries, fiber going to the base of the base station. It's always easier for them to put more equipment on an existing base station than search for a new site. It's impossible to replicate that industry, that infrastructure. it's impossible to replicate that industry that infrastructure Look how difficult it is to build in an urban, suburban environment given zoning law. look how difficult it is to build in an urban suburban environment given zoning law Carriers have generator, batteries, fiber going to the base of the base station. carriers have generator batteries fiber going to the base of the base station It's always easier for them to put more equipment on an existing base station than search for a new site. it's always easier for them to put more equipment on an existing base station than search for a new site

Speaker 2: It's a great thought there. I was reminded talking to Tom Bartlett the other day, retired CFO, then CEO of American Tower. One year at NAREIT, the real estate conference, somebody asked the question, "What would cause your revenues to go down?" In a true cyclical nature, some industries can go up 10% or down 10% in revenues. What you're saying is your cyclicality is how much revenue you grow. It's a great thought there. it's a great thought there I was reminded talking to Tom Bartlett the other day, retired CFO, then CEO of American Tower. i was reminded talking to tom bartlett the other day retired cfo then ceo of american tower One year at NAREIT, the real estate conference, somebody asked the question, "What would cause your revenues to go down?" In a true cyclical nature, some industries can go up 10% or down 10% in revenues. one year at nareit the real estate conference somebody asked the question "what would cause your revenues to go down?" in a true cyclical nature some industries can go up 10% or down 10% in revenues What you're saying is your cyclicality is how much revenue you grow. what you're saying is your cyclicality is how much revenue you grow

Speaker 1: I think that's right. I think that's right. It's hard to see, especially in a consortium industry with three carriers, it's really hard to see negative growth. It's with an escalator at 3% and demand, you're always gonna be in, I think that's right. i think that's right I think that's right. i think that's right It's hard to see, especially in a consortium industry with three carriers, it's really hard to see negative growth. it's hard to see especially in a consortium industry with three carriers it's really hard to see negative growth It's with an escalator at 3% and demand, you're always gonna be in, it's with an escalator at 3% and demand you're always gonna be in

Speaker 2: Growth Growth growth

Speaker 1: ... probably around mid-single digit growth. ... probably around mid-single digit growth. probably around mid-single digit growth

Speaker 2: Great. We'll wrap it there. Thanks, everybody. Have a good day. Great. great We'll wrap it there. we'll wrap it there Thanks, everybody. thanks everybody Have a good day. have a good day

Speaker 1: Thank you, Ric. Thank you, Ric. thank you ric