tapebrief
SBAC · Q4 2025

SBAC · Q1 2026 Earnings

Bullish

SBA Communications

Reported April 29, 2026

30-second summary

SENTIMENT: Constructive SBA opened FY2026 with $703M revenue (+5.9% YoY), AFFO/share of $3.03, and a modest upward revision to every reaffirmed FY metric (revenue, site leasing, Tower Cash Flow, EBITDA, AFFO, AFFO/share all raised 0.5–0.9%). The cleaner signal is qualitative: management explicitly framed 2026 as "the peak year for international churn" with improvement expected thereafter, and moved investment-grade issuance from medium-term goal to imminent 2026 milestone. One caveat on the raise: roughly $6M of the $24M revenue increase is FX-driven (the BRL/USD assumption moved from 5.20 to 5.05), so the organic raise is closer to +$18M / +0.6% at the midpoint rather than the headline +0.8%.

Headline numbers

EPS

Q1 FY2026

$3.03

Revenue

Q1 FY2026

$0.70B

+5.9% YoY

Operating margin

Q1 FY2026

48.7%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$0.70B+5.9%$0.72B-2.3%
EPS$3.03—$3.19-5.0%
Operating margin48.7%—41.5%+720bps

Guidance

Company raised full-year 2026 guidance across all key metrics by modest amounts (0.5–0.9%), reflecting stronger-than-expected Q1 performance and steady international growth, while withdrawing site development revenue as a separate disclosure category.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Total revenues
FY 2026
$2,815.0 to $2,860.0 million$2,839.0 to $2,884.0 million+$24M to +$24M (low end +0.9%, high end +0.8%)Raised
Site leasing revenue
FY 2026
$2,625.0 to $2,650.0 million$2,649.0 to $2,674.0 million+$24M to +$24M (low end +0.9%, high end +0.9%)Raised
Site development revenue
FY 2026
$190.0 to $210.0 millionWithdrawn — no replacement—Withdrawn
Tower Cash Flow
FY 2026
$2,082.0 to $2,102.0 million$2,092.0 to $2,112.0 million+$10M to +$10M (low end +0.5%, high end +0.5%)Raised
Adjusted EBITDA
FY 2026
$1,912.0 to $1,932.0 million$1,921.0 to $1,941.0 million+$9M to +$9M (low end +0.5%, high end +0.5%)Raised
AFFO
FY 2026
$1,260.0 to $1,308.0 million$1,269.0 to $1,317.0 million+$9M to +$9M (low end +0.7%, high end +0.7%)Raised
AFFO per share
FY 2026
$11.84 to $12.29$11.93 to $12.38+$0.09 to +$0.09 (low end +0.8%, high end +0.7%)Raised

Reaffirmed unchanged this quarter: Net cash interest expense ($492.0 to $500.0 million)

Segment KPIs

Q1 FY2026
SegmentQ1 FY2026YoY
Domestic Site Leasing$0.45B-2.3%
International Site Leasing$0.206B+32.6%
Site Development$0.047B-1.6%

Other KPIs

Q1 FY2026
SegmentQ1 FY2026
Tower Cash Flow Margin79.8%
Adjusted EBITDA Margin68.1%
AFFO per Share$3.03
Total Communication Sites Owned/Operated46,358
Net Debt to Annualized Adjusted EBITDA6.6x
Net Secured Debt to Annualized Adjusted EBITDA5.0x
Domestic Site Leasing Operating Profit Margin84.3%
International Site Leasing Operating Profit Margin70.2%

Management tone

Q2 FY2025 sustained-bookings bullishness → Q3 FY2025 Verizon MLA + leverage reset → Q4 FY2025 trough-year framing → Q1 FY2026 quantified peak-churn callout + IG imminence

International churn shifted from open-ended challenge to date-bounded inflection. Three quarters ago international churn was an unbounded headwind tied to OI Brazil; two quarters ago management projected "significant step-down" without a timeline; this quarter management committed to "We believe 2026 will be the peak year for international churn and expect improvement in our turn rate over the next several years." Putting a calendar on the inflection — rather than deflecting the question — signals management now has line-of-sight to the churn schedule (OI bankruptcy resolution, Brazil consolidations) rather than monitoring it reactively.

Investment-grade issuance moved from "subject to market conditions" to imminent 2026 milestone. Q3 FY2025 disclosed the leverage target reset and second IG rating from Fitch. Q4 FY2025 noted intent for "inaugural bond issuance in 2026 … subject to market conditions" — preserving optionality but slipping execution. Q1 FY2026: "we are well positioned to be an investment-grade issuer during this year … will reduce our relative overall cost of debt over time, while providing access to the deepest and most liquid market in the world." The hedging language thinned and the framing shifted from "if conditions allow" to a stated 2026 deliverable with explicit cost-of-capital benefits.

Tower-centric positioning expanded to platform-for-edge-compute. A new theme this quarter: "macro tower compounds offer a cost-effective solution for edge compute needs, benefiting from strategically located sites with existing power, backhaul infrastructure, and zoning protections." This is the first quarter SBA has framed edge compute as a serious adjacency rather than a tangential 6G mention. Q&A tempered the timeline — management acknowledged only a "small number of sites" deployed with no specific P&L impact timing — so the framing is strategic posture rather than near-term revenue. Worth noting against AMT/CCI peer narratives where edge compute has been more cautiously framed.

Central America moved from stabilizing market to active capital deployment. Q4 FY2025 described international as churn-defensive with Brazil densification as the offensive story. Q1 FY2026 added Central America: "Between building towers and buying the land underneath, we intend to put capital to work in Central America at risk-adjusted returns that are expected to be well above our cost of capital," with the Guatemala land purchase at ~7x multiple cited as the template. International is now framed as the dual-engine growth story (Brazil organic + Central America capex), not just Brazil.

Recurring themes management leaned on this quarter:

Organic growth drivers from spectrum auctions and 6G infrastructureInternational portfolio optimization through Central America expansionMobile edge computing as new revenue streamInvestment-grade transition with cost-of-capital benefitsDividend growth and shareholder returns prioritizationBalance sheet strengthening via debt paydown

Risks management surfaced:

Equistar-related churn ongoing litigation and contractual disputeInternational churn from carrier consolidations and bankruptciesForeign currency exposure and FX headwindsMarket conditions affecting timing of inaugural investment-grade bond issuanceExecution risk on edge computing opportunity development

Q&A highlights

Mike Rollins · Citi

Asked about the significance of increased domestic leasing backlog versus historical first quarters and expected leasing growth; also asked how SBA is responding to valuation concerns versus private markets and what investors should understand about the business.

Management characterized backlog increase as moderate, not extreme, and expects relatively steady U.S. leasing activity in 2026. Emphasized focus on communicating business attributes, asset quality, growth prospects, and consistent cash flow to public investors; declined to comment on how private market investors specifically value the company.

U.S. backlog increased from December 31 to March 31Backlog growth characterized as moderateExpected steady leasing activity levels for 2026Focus on demonstrating execution and quality of cash flow generation

Nick DelDale · Moffett Nathanson

Asked whether strong Milicom power demand is an initial burst or sustainable; also asked about carrier interest in working with larger public tower companies on new construction.

Management believes initial surge is due to sites becoming more available for co-location, but sustainable growth expected due to pent-up demand and early-stage conversations. Confirmed carriers are increasingly constructive on new build opportunities due to higher cost of capital and need for stable long-term partners.

Initial demand surge driven by sites becoming available for co-location after carrier controlPent-up demand supports extended lease-up periodCarriers prefer larger stable tower companies for new buildsCost of capital and partner stability driving carrier preference

Bhatia Levy · UBS

Asked whether domestic backlog increase is even across all major customers or concentrated; asked about investment required and timing for edge compute revenue contribution.

Management acknowledged backlog increase was uneven across customers, with one recently-signed agreement driving activity; noted edge compute is still early stage with only a small number of sites deployed, incurring dollars but timeline for material P&L impact cannot be precisely determined.

Backlog increase not evenly distributed among major customersRecent customer agreement driving incremental activityEdge compute still in early trial stages with small deployment numbersSome edge compute sites expected to come online shortly

Brendan Lynch · Barclays

Asked for concrete examples of AI deployment at tower sites versus traditional data centers; asked for details on Guatemala land purchase cap rate.

Management explained edge compute advantage derives from lower latency requirements for applications with high uplink/downlink ratios; distributed micro data centers may be more efficient than centralized facilities. Guatemala land purchase completed at approximately 7x multiple, providing valuation accretion and improved risk positioning.

Edge compute addresses low-latency requirements for AI applicationsApplications require high uplink versus downlink architectureDistributed micro data centers more efficient in some casesGuatemala land purchase multiple: approximately 7x

Answers to last quarter's watch list

Q1 FY2026 domestic site leasing print — Domestic site leasing came in at -2.3% YoY, a deepening of the negative trajectory from Q4 FY2025's -1.6%. Management still frames 2026 as the bottom and the Q&A revealed the backlog increased from Dec 31 to Mar 31 — but the headline print moved against the trough thesis. Backlog concentration with a single customer (per the UBS exchange) further weakens broad-based recovery confidence. Status: Resolved negatively.
EchoStar recovery progress — The press release confirms the full removal of EchoStar revenue from FY2026 outlook (EchoStar Churn line in the revenue bridge). The Q1 prepared remarks characterized EchoStar-related churn as ongoing federal court litigation with SBA continuing to "deal strongly in our contractual rights." No recovery quantification provided. Status: Continue monitoring.
Inaugural IG unsecured issuance pricing — Management upgraded the framing from "subject to market conditions" to "we are well positioned to be an investment-grade issuer during this year" but the inaugural issuance has not priced. FY2026 net cash interest expense guide reaffirmed at $492–$500M unchanged, meaning no refi benefit is yet embedded. Status: Continue monitoring.
Services revenue trajectory — Site development revenue was $47M in Q1 (-1.6% YoY) and the FY2026 site development guide was reaffirmed at $190–$210M. Q1 annualizes to ~$189M, tracking just at the low end of the reaffirmed range. Status: Tracking to low end of reaffirmed guide.
Verizon MLA dollar contribution disclosure — No dollar quantification of Verizon MLA contribution was provided in the press release. Q&A referenced "moderate" backlog growth and concentration with one customer (likely Verizon by inference from the MLA timing) but management did not break out dollar contribution. Status: Not resolved.
Brazil organic lease-up cadence — International site leasing grew +32.6% YoY (+24.8% ex-FX) in Q1, well above Q4 FY2025's +15.6%. The acceleration likely reflects continued Millicom contribution before the lap, but management's Central America capex framing adds a second growth vector. International churn was explicitly framed as peaking in 2026 with improvement after. Status: Resolved positively.

What to watch into next quarter

Q2 FY2026 domestic site leasing trajectory — Q1 deepened to -2.3% YoY against management's trough thesis. If Q2 does not show inflection toward zero or positive, the 2026-as-bottom narrative is broken and FY guide credibility is at risk regardless of the modest raises this quarter.

Site development conversion against reaffirmed $190–$210M guide — Q1 annualizes to ~$189M, just at the low end. Watch Q2 for whether backlog conversion lifts the run-rate into the middle of the range or whether the line continues tracking the floor.

Domestic backlog concentration — Q&A revealed backlog increase is concentrated in one customer. Watch whether breadth improves in Q2 disclosures or whether the conversion remains tied to a single MLA ramp.

Inaugural IG bond pricing and spread to existing 3.8% blended coupon stack — management's "during this year" framing implies a 1H/2H FY2026 issuance window. Pricing and any FY net cash interest expense guide refresh will define normalized AFFO/share recovery trajectory.

Edge compute deployment metrics — management cited only a "small number of sites" with no P&L timing. Any disclosure of site count, revenue per site, or carrier counterparty would convert the strategic narrative into a measurable forward driver.

International growth sustainability ex-Millicom-lap and ex-FX — Q1's +32.6% YoY (+24.8% ex-FX) reflects Millicom still in the run-rate before the full lap. Watch whether international stays above +15% YoY ex-FX as the Millicom comp normalizes through 2H FY2026.

Sources

  1. SBA Communications Q1 FY2026 Press Release (8-K Ex. 99.1), filed April 29, 2026 — https://www.sec.gov/Archives/edgar/data/1034054/000119312526191545/d49075dex991.htm

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.