SBAC · Q3 2025 Earnings

Neutral

SBA Communications

Reported November 3, 2025

30-second summary

SENTIMENT: Constructive SBA signed a long-term master lease agreement with Verizon, formally lowered its target leverage range to 6.0x–7.0x to enable an investment-grade transition, and printed Q3 FY2025 revenue of $732M (+9.7% YoY) on AFFO/share of $3.30. The FY2025 outlook moved modestly higher: total revenue raised at both ends (low +$28M, high +$3M), site development guidance lifted $20M, and AFFO/share midpoint nudged up $0.03 to $12.87 with the range tightened. Site leasing revenue and Tower Cash Flow midpoints were each trimmed ~$4.5M on Millicom/Canada timing. The print and the guide both lean constructive, with the Verizon MLA and IG path as the strategic anchors.

Headline numbers

EPS

Q3 FY2025

$3.30

Revenue

Q3 FY2025

$0.73B

+9.7% YoY

Operating margin

Q3 FY2025

51.1%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$0.73B	+9.7%	$0.70B	+4.7%
EPS	$3.30	—	$3.17	+4.1%
Operating margin	51.1%	—	47.9%	+320bps

Guidance

SBA revises FY2025 guidance with modest full-year revenue beat offset by capex transparency, AFFO per share slight reduction, and range compression signaling execution risk from Verizon master lease timing.

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

New guidance

Metric	Period	Guide	YoY
Non-discretionary cash capital expenditures	FY2025	$56.0 to $60.0 million	—
Discretionary cash capital expenditures	FY2025	$1,290.0 to $1,300.0 million	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Total revenues	FY2025	$2,780.0 to $2,825.0 million	$2,808.0 to $2,828.0 million	midpoint +$14M (low end +$28M, high end +$3M) — range widened but low-end raised	Lowered
Site development revenue	FY2025	$215.0 to $235.0 million	$240.0 to $250.0 million	+$25M at low end, +$15M at high end; midpoint +$20M	Raised
AFFO	FY2025	$1,365.0 to $1,405.0 million	$1,373.0 to $1,397.0 million	+$8M at low end, -$8M at high end; midpoint unchanged at ~$1,385M but range compressed	Lowered
AFFO per share	FY2025	$12.65 to $13.02	$12.76 to $12.98	+$0.11 at low end, -$0.04 at high end; midpoint -$0.04	Lowered

Reaffirmed unchanged this quarter: Site leasing revenue ($2,568.0 to $2,578.0 million), Tower Cash Flow ($2,061.0 to $2,071.0 million), Adjusted EBITDA ($1,909.0 to $1,919.0 million), Net cash interest expense ($434.0 to $440.0 million)

Segment KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
Domestic Site Leasing	$0.47B	+1.1%
International Site Leasing	$0.186B	+15.8%
Site Development	$0.076B	+81.2%

Other KPIs

Q3 FY2025

Segment	Q3 FY2025
AFFO per Share	$3.30
Tower Cash Flow	$526.4M
Tower Cash Flow Margin	80.4%
Adjusted EBITDA	$493.3M
Adjusted EBITDA Margin	67.5%
Net Leverage Ratio	6.2x
Secured Leverage Ratio	4.7x
Total Communication Sites	44,581

Management tone

Q2 FY2025 framed bookings momentum as "sustained and building" with every FY metric raised. Q3 FY2025 retains the operational confidence — "carrier customers continued to invest meaningfully" — and the FY guide reinforces it: total revenue raised at both ends, services revenue lifted $20M, and AFFO/share midpoint nudged up $0.03. The "negatively impacted" framing applies specifically to the site-leasing lines where Canada closed earlier and Millicom later than the August assumptions — a timing effect, not a demand signal.

The leverage target reset to 6.0–7.0x is the most consequential strategic shift. Management framed it as a deliberate transition: "this new target range will allow SBA to transition into an investment-grade Company, unlock access to the deepest debt market available." With Fitch issuing a BBB- corporate rating alongside the existing S&P investment-grade rating, the IG path is now concrete — cheaper debt access partially mitigates the multi-year refinancing drag at higher rates against the existing 3.8% blended coupon stack.

In Q&A, management's most evasive topic was Starlink satellite-terrestrial deployment, repeatedly deferring as "too early to speculate." Given Starlink is the most-cited long-term competitive threat to tower economics, the refusal to quantify — while expected — is worth noting as a posture, not a disclosure.

Q&A highlights

Bhatia Levy · UBS

Verizon MLA impact on new leasing revenue, structure (co-locations and amendments), and how incremental spectrum acquisition would be captured. Also asked about DISH payment status and potential early exit.

Verizon deal includes co-location and amendment components with a 10-year minimum commitment locking in growth. Deal is more linear than AT&T structure and tied to activity. DISH is current on rents and company expects them to honor agreements, though keeping specific correspondence private.

Verizon deal has 10-year minimum commitment for co-locationsLinear structure tied directly to activity (unlike AT&T wholesale bonus model)DISH currently paying rentsDISH expected churn of $25 million in each of 2027 and 2028

Answers to last quarter's watch list

Seventh quarter of bookings growth and domestic leasing revenue conversion — Domestic site leasing growth decelerated to +1.1% YoY (from +1.4% in Q2 FY2025), so the bookings-to-revenue conversion remains lagged. Management's Verizon MLA — a 10-year minimum commitment with activity-driven upside — is the structural answer to forward conversion visibility, but the Q3 FY2025 print did not show acceleration in the reported line.

Continue monitoring

Millicom full close and Canada sale timing — International site leasing +15.8% YoY confirms Millicom is now embedded in the run-rate; the final ~2,020 Millicom sites closed in October, and the Canada sale closed October 15 ahead of schedule. Status: Resolved.

OI Brazil churn — temporary or spreading — Management characterized Brazil consolidation and OI as ongoing challenges with "significant step-down" expected once consolidation clears, but provided no updated $-quantification.

Continue monitoring

2026 Sprint churn step-down framing — Management deferred 2026 outlook to next quarter's call. The Verizon MLA was offered as the forward-confidence anchor but no offset math was provided. Separately, T-Mobile USM exposure was quantified at $20M annual revenue with 2.5–3 years remaining.

Not resolved

Refinancing pacing for one-handle-coupon maturities — No specific refi pacing was disclosed, but the formal leverage target reset to 6.0–7.0x with explicit IG ambition — now backed by a second IG rating from Fitch — is the strategic answer: cheaper debt market access is the planned mitigant. Net cash interest expense guide was trimmed $1M at both ends, which is noise.

Continue monitoring

800 MHz spectrum auction and carrier deployment commentary — Management cited upper C-band auction by July 2027 and noted 3.45 GHz upgrades are "mostly software." No fresh commentary on 800 MHz timing was provided.

Continue monitoring

What to watch into next quarter

2026 outlook: management explicitly deferred 2026 commentary to the Q4 FY2025 call. Watch for the framing of Verizon MLA contribution versus the Sprint churn step-down, $20M T-Mobile USM exposure, and $25M annual DISH churn building from 2027.

AFFO/share midpoint trajectory: midpoint was nudged up $0.03 this quarter with range tightening. Watch whether Q4 FY2025 extends the upward bias or whether timing drag from international closings resurfaces.

Domestic site leasing revenue conversion: with reported growth decelerating to +1.1% YoY despite seven quarters of bookings strength, watch whether Q4 FY2025 finally shows acceleration. If not, the bookings narrative weakens regardless of Verizon MLA.

Investment-grade transition execution: with Fitch's BBB- now alongside S&P's IG rating, watch for the inaugural unsecured IG issuance and the spread implication versus the existing 3.8% blended coupon stack.

International churn quantification: management deferred specifics on Brazil/OI step-down timing. A dollar-quantified update would resolve a key 2026 modeling input.

Discretionary capex utilization: the $1,290–1,300M line is large enough that any pull-forward or push-out into 2026 materially shapes the FCF bridge.

Sources

SBA Communications Q3 FY2025 Press Release (8-K Ex. 99.1), filed November 3, 2025 — https://www.sec.gov/Archives/edgar/data/1034054/000119312525262644/d94208dex991.htm

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