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Welcome, and thank you for joining the SBA First Quarter 2025 Results. This call is being recorded. All participant audio lines are in listen-only mode. There will be a Q&A session at the end of prepared remarks. [Operator Instructions] With that, I'll turn the call over to Mark DeRussy, Vice President of Finance. Please go ahead.

Thank you. Good evening, and thank you for joining us for SBA's first quarter 2025 earnings conference call. Here with me today are Brendan Cavanagh, our President and Chief Executive Officer; and Marc Montagner, our Chief Financial Officer. Some of the information we will discuss on this call is forward-looking, including, but not limited to, any guidance for 2025 and beyond. In today's press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, April 28, and we have no obligation to update any forward-looking statement we may make. In addition, our comments will include non-GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our supplemental financial data package, which is located on the landing page of our Investor Relations website. With that, I'll now turn it over to Brendan.

Great. Thank you, Mark, and good afternoon. 2025 got off to a good start in the first quarter. Results were broadly in line with our estimates, and activity levels continue to demonstrate a healthy level of growth. In the U.S., our mobile network operator customers continued growing their level of network investment around our macro tower sites. We had our best quarter going back several years in terms of new domestic leasing business signed up during the quarter. Most encouraging, though, is that our leasing backlog also grew from December 31, meaning we are adding new applications at a greater pace than we are signing up new business. This bodes well for the balance of the year. We also continued to see a higher percentage of our new U.S. leasing business coming from new lease colocations versus amendments to existing leases. And our U.S.-based Services business had a great quarter as well, with activity levels and results ahead of our expectations. We also saw our new business backlog grow for Services during the quarter and as a result of the strong start to the year and our growing backlog, we have increased our full year outlook for Services. In our international markets, we also saw a positive start to the year with solid leasing activity. In addition, elevated CPI rates in some of our markets have presented the potential for better existing lease escalations during the year. Across our markets, our customers have many network goals, which will require continued investment. Macro sites remain the most effective and cost-efficient way to advance wireless coverage and deploy new spectrum and technologies. Our portfolio is well-positioned to capture growth from these initiatives over the next several years. In addition to our operational achievements during the quarter, we also made progress in the areas of portfolio management and capital allocation. During the quarter, we completed our exit from the Philippines, and on last quarter's earnings call, we announced our planned exit from Colombia. We were able to finalize the required steps to complete this exit and formally sold our Colombian operations prior to quarter end. These steps have allowed us to improve our focus and allocation of resources. We continue to evaluate all of our operations to identify ways to improve our market positioning or gain further synergies. In addition, during the first quarter, we closed on a small portion of the Central American sites previously put under a purchase agreement with Millicom International. While there are numerous regulatory and diligence steps remaining, we will continue to explore opportunities for additional early closings. Against the backdrop of the current uncertain macroeconomic environment and the resulting market volatility, the stability and consistency of our company and our business stand out. We have not experienced nor do we foresee any direct impacts from the current tariff policies. Our business continues to generate steady cash flow, and the underlying needs of our customers remain robust. As a result, we have significant confidence in our company and our future. Subsequent to quarter end, we have demonstrated that confidence by repurchasing 583,000 shares of our stock at an average price per share of $210.87. We have also announced today that our Board has approved a new $1.5 billion share repurchase plan, supporting our ability to return significant value to our shareholders. The combination of this plan and our industry-leading dividend growth provide a direct line of shareholder returns, while our existing capital structure allows us the flexibility to still pursue meaningful asset investment opportunities. We are very well positioned. For the balance of 2025, SBA will be focused on operational execution, driving efficiencies in our processes, particularly through the incorporation of new technologies and systems, enhancing our relevance to and relationships with our largest customers, and bringing a balance of entrepreneurial spirit and informed financial discipline to capital allocation and expansion. Some of these focus areas may seem straightforward or mundane, but our ability to excel in each of these areas will be what sets SBA apart from our peers. The wireless ecosystem will continually evolve, providing new opportunities for those willing to take them. I believe we have the people, experience, and DNA makeup to maximize these opportunities. Before turning it over to Marc, I'd like to thank our team members who represent that experience in D&A. Our team members represent SBA well every day and continually put the goals and objectives of our customers first. I look forward to sharing our progress with you throughout the balance of the year. With that, I'll turn it over to Marc, who will provide additional details on our results.

Thank you, Brendan. Given the solid start to the year, we are increasing our full year outlook for all key metrics, including Site leasing Revenue, Tower cash Flow, Adjusted EBITDA, AFFO, and AFFO Per Share as compared to our initial 2025 guidance. The primary drivers of these increases include in line first quarter result, the closing of a small portion of the acquisition of Towers from Millicom earlier than expected, an improved outlook for Services, slightly higher straight line revenue due to the extension of some leases and a reduction in the share count from recently completed buybacks. First quarter domestic organic leasing revenue growth over the first quarter of last year was 5.2% on a gross basis, 1% on a net basis, including 4.2% of churn. $20 million of our first quarter churn was related to the Sprint consolidation, which we anticipate to be approximately $50 million to $52 million for the full year 2025. Our previously provided estimate of aggregate Sprint-related churn over the next seven years remain unchanged. Beyond 2025, we anticipate approximately $50 million in 2026 and $20 million thereafter. Non-Sprint related domestic annual churn continues to be between 1% and 1.5% of our Domestic Site Leasing Revenue. During the first quarter, 80% of consolidated Cash Site Leasing Revenue was denominated in U.S. dollars. International organizing leasing revenue growth for the first quarter, which is calculated on a constant-currency basis, was 1.6% net, including 5.6% of churn or 7.2% on a gross basis. Total international churn remained elevated in the first quarter due mostly to carrier consolidation. We believe that post carrier consolidation in some of our international markets, the remaining wireless operators will be stronger in a better position to invest for the long term. This will support a steady growth rate for our operation in those countries. During the first quarter of 2025, we acquired 344 sites for a total cash consideration of $58 million, mostly related to the acquisition of sites from Millicom in Nicaragua. The contribution to the 2025 outlook from closing earlier than previously assumed is $4 million of site leasing revenue and $3 million of tower cash flow. The remaining 6,700 sites related to the Millicom transaction remain under contract, and the guidance continues to assume the September 1 closing date. The closing date is dependent upon regulatory approval and other requirements and may differ from this date. We also built 67 new sites in the quarter, mostly outside of the U.S. Our balance sheet remains strong, and we have ample liquidity from both cash on the balance sheet and a fully undrawn $2 billion revolver. The recent share buybacks were funded fully with excess cash and did not require any borrowing. Our current leverage of 6.4 turns, net debt to adjusted EBITDA remains near historical low. As of the end of the first quarter, our weighted-average interest rate was 3.7% across our total outstanding debt, and our weighted-average maturity was approximately four years. Including the impact of our current interest rate hedge, the interest rate on 98% of our current outstanding debt is fixed. And finally, our net debt maturity is a $750 million ABS security due in January of 2026. Now, let me turn the call over to Mark.

Thank you, Marc. We ended the quarter with $12.5 billion of total debt and $11.8 billion of net debt. As Marc mentioned, our net debt to annualized adjusted EBITDA leverage ratio was 6.4 times below the low end of our target range. Our first quarter net cash interest coverage ratio of adjusted EBITDA to net cash interest expense remained strong at 4.9 times. During the second quarter, we repurchased 583,000 shares of our common stock for $123 million at an average price per share of $210.87. On April 27, 2025, the Company's Board of Directors authorized a new $1.5 billion share repurchase plan, replacing the prior plan that was authorized in October of 2021, which had a remaining authorization of $82 million. This new plan authorizes the company to purchase from time-to-time up to $1.5 billion of our outstanding Class A common stock. The new plan has no time deadline and will continue until otherwise modified or terminated by the Board of Directors. In addition, during the first quarter, we declared and paid a cash dividend of $122.3 million, or $1.11 per share. And today, we announced that our Board of Directors declared a quarterly dividend of $1.1 -- I'm sorry, $1.11 per share payable on June 17, 2025, to shareholders of record as of the close of business on May 22, 2025. This dividend represents an increase of approximately 13% over the dividend paid in the second quarter of 2024 and approximately 35% at the midpoint of our full year AFFO outlook. Operator, we are now ready for questions.

[Operator Instructions] And our first question comes from Jim Schneider, Goldman Sachs.

Hi, good afternoon. Thanks for taking my question. Maybe first on the overall carrier environment. It sounds like fairly constructive commentary on the direction of travel here. Maybe just was wondering if you could comment on any updates in terms of carriers' plans in the U.S. and their willingness to devote any capacity to fixed wireless access, as far as you can see at this point? And then secondly, on the capital allocation front, the buyback of $1.5 billion was encouraging to see. How are you thinking about just the overall environment for capital allocation at this point? Rates are obviously probably a little bit higher than you might have thought six, nine, 12 months ago. How are you thinking about the refinancing needs potentially for 2026 and the level of buybacks you'd want to do right now and assuming nothing changes in the rates environment today? Thank you.

Sure, Jim. So on the carrier environment overall, as you heard in our prepared comments and in our press release, things are generally pretty positive here in the U.S. There's a lot of work to be done. We're seeing a greater amount of leasing activity than we've seen over the last two years. So broadly, we feel very positive about that. And the fact that the backlogs continue to grow is an indication that there's still a lot of work to be done. And so that's part, as I said in my comments, that's perhaps the most encouraging thing. In terms of the specifics of what they're focused on in fixed wireless access. Our belief is that fixed wireless access is certainly a contributing factor when you look at our customers' recent reports on their own results, you saw that that's where a significant portion of their subscriber growth is coming from. We know that is a very heavy broadband-consuming product, and therefore, it drives a lot of usage of the capacity of the network, and therefore, would be a driver of the need for incremental investment in their networks and infrastructure. So, I can't tell you specifically because it's using the same frequencies and spectrum, generally speaking, as their mobile network, but we do think it's a driver, and there are many drivers. So we just feel good about the pickup in activity. On the second question around capital allocation, I -- the rates are certainly staying higher here for longer. It's hard to say for sure, obviously, in the current environment, as to when we'll see rates moving lower, if we'll see rates moving lower. But our positioning is very good. As you heard, our leverage position today is well below where we've historically carried our leverage balance. And as a result, that gives us a lot of flexibility. We did buyback shares because we saw the opportunity to do it here in April, as there were some dislocation around some of the announcements that were affecting the market more broadly. We took advantage of that. And I think if we see additional opportunities, we'll continue to take advantage of it. The new plan that was put in place by our Board is evidence that we expect to be allocating capital towards share repurchases. But as we said in the past, you should expect that our approach to capital allocation should be really a mix of buybacks, new asset investments where we see good opportunities, and debt repayments in addition, of course, to our dividend. So it hasn't really changed, and we're pretty comfortable with our positioning to be able to be flexible and adjust as opportunities present themselves.

Thank you.

Sure.

All right. Moving on to Jonathan Atkin from RBC Capital Markets.

Hi.

Hi, Jon.

Thanks. So I was curious about just given what you said about the current activity level, the backlog, where do you think you might end the year on a run rate basis for U.S. leasing? Any kind of products, and metrics you could share with us?

Yes. I mean, it's a little hard to say absolutely at this point because I got to see how things continue to build, but it certainly would expect to end at a higher level than we're at in terms of what we produced here in the first quarter, and that was approximately $9 million from new leases and amendments here in the U.S. I definitely expect to be higher than that when we get to the fourth quarter, but I'll refrain from giving an absolute number there until we see how the rest of the year progresses.

And then secondly, I was interested just where you stand in terms of the bilateral contracting relationships you have with major customers in terms of pay by the drink or things like amendments, colocations, and just give us kind of a refresh on MLAs?

Yes. So we have -- I wish we not typically had the kind of holistic MLAs that you're referring to. We've always had master lease agreements in place with our customers, but they've usually been equipment-specific in terms of how they paid us for the use of our sites. The exception to that was the deal we did with AT&T a couple of years ago, which was more of a holistic approach. We're open to a holistic approach with our customers, but it really is just dependent on the specific give-and-take within the negotiations around those agreements. So, yes, we'll just have to see how it goes. But at this point, the only true holistic agreement we have in the U.S. is the one that we signed with AT&T a couple of years ago.

Thanks very much.

Sure.

Our next call comes from Batya Levi, UBS.

Great. Thank you. A couple of quick questions. First, can you talk a little bit about what's driving higher network services business and versus what you had expected earlier in the year? And when we look at domestic churn, it looks like it picked up a little bit excluding Sprint. What were some of the drivers for that? And maybe on the M&A front, a couple of Tower portfolios -- portfolios are available for sale in Canada. You have some exposure to the region there, slower growth market, but can you provide some color on how you would approach M&A in Canada? Thank you.

Sure. So first question was on Services and why it's growing faster than we expected. Really, it's as simple as one of our customers in particular, just operating at a much faster pace than we had even expected here in terms of their network investments. And so we're just seeing them, frankly, just move quicker. It's kind of that simple. And I would expect based on the backlogs growing, that they'll continue to keep a fast pace during the rest of the year, and that's why we raised our outlook for the full year. So we'll continue to try to meet their needs and keep up with them. On the U.S. churn, you said it was growing. It's basically in line with what we put out at the beginning of the year. So I don't think it's beyond what our expectations were. I don't know if you're asking about year-over-year, but --

No, it's - I guess it's - yes, it's within the range you've given, it's just picked up slightly versus the last two quarters, maybe.

Yes.

It used to be around 1%.

I think that's really just a timing thing. If you look at our full year outlook, we didn't change it. And I think the implied percentage for the full year for the U.S. is around 1.2%. So it was 1.4% in the first quarter. So you should take that to imply that it will be a little bit lower at other points during the rest of the year. And then on the Canada side, really, we approach that the way we approach most major M&A opportunities and portfolios that come to market anywhere, really around the globe, particularly obviously in the markets where we already have operations. We will look thoroughly at any of those opportunities. And if we can see value there and see it at a price point that we think makes sense and is competitive and is better than, we certainly will be interested in pursuing that. I think you've heard us talk about our approach to our international markets over the last year or so in terms of what we'd like our positioning to be. Obviously, in Canada, if you have the mobile network operators up there divesting of their towers, whoever ends up buying those will certainly be in a lead position in terms of their size and scale in the market. So that would be something that we would consider in our analysis of any deal. But at this stage, you should expect that we'll look at any opportunities that come to market. And I can't say whether it will work or not, but if it does, it's something we will certainly pursue.

Got it. Thank you.

Next caller, Walter Piecyk, LightShed.

Walt?

Mr. Piecyk, your line is unmuted. Please make sure your phone isn't muted.

What about now?

Hi.

We can hear you now.

Sorry about that. I guess I'll ask about -- I guess I'll ask about our friends at DISH. I think there were some press reports about them wanting to lease or looking to lease their spectrum. I think it might have been some rural areas, and maybe there's no impact there, but in general, just can you just characterize, kind of, what they've told you about some of their longer-term plans, what role you may play? And then alternatively, I suppose, has there been any inbounds from cable companies you might be considering spectrum that's available in the market and want to redeploy their own? I would guess that they want to do a little due diligence ahead of that to see what type of expenses that they want to take on. So I mean, basically, the same question about that DISH.

Yes. Well, you're probably not going to love my answer because there's not a lot of detail to offer there. I'll take the cable one first. There really hasn't been much in the way of direct conversation. We talk to them periodically, but there's no -- there's nothing really along the lines of what you just described. So, I think until they have something firmer in hand, they frankly don't really need to spend a lot of time talking to the tower companies just yet, but we'll see how it develops.

Can I just interject on that one before you go back to it?

Sure.

Even on CBRS, because I think Comcast has made -- mention at least in some investor meetings that the initial attempt with CBRS might have been tied to a vendor that didn't really deliver. They moved to, I think it was Samsung or something, and I know a lot of that's kind of in-home, but I thought there was an opportunity, especially with the current SEC, to increase the power ability of CBRS for them to start hitting towers. No, even early indications of them looking to try and offload of the rising expense at Verizon?

Very limited, Walt. I mean, we have conversations with them. We've actually talked with them about CBRS over the years at various times. But when I look at it from a materiality standpoint to us, it's really completely immaterial.

Got it. And then on the flip side, like the DISH, what do you -- have you heard -- have you seen the stuff about them leasing out specimen rural? Does that touch any part of your contract, and otherwise, what are they saying in terms of their intermediate-term plans, let's call it?

Yes. There's -- at this stage, they have -- there hasn't really been any specific conversations in terms of the leasing. If they do lease their spectrum, their contract doesn't allow for that to change it's in somebody else's hands. So there would have to be a conversation, and we've not had that conversation as of yet. In terms of just their broader commentary and feedback with us, we work pretty closely with them. They on the operation side are very clear about their desire to continue to pursue their standalone greenfield network. At this stage, obviously, things are much slower in terms of leasing activity with them. So we're hopeful that changes. But at this stage, it's really just meeting some very basic needs. There's some basic upgrades going on. They are signing a few leases here and there, but it's pretty small at this stage. So, I don't have much feedback for you there either, but I would -- I'll be interested to hear what they have to say on their call.

Got it. Thanks. Sorry for the technical difficulties.

No, no worries. Thanks.

Okay. Moving on to Michael Rollins from Citi.

Thanks, and good afternoon. Two topics, if I could. So first, on the international front, just curious if you could share an update on how the visibility is trending for organic growth as well as the churn dynamics, and specifically in Latin America, both for this year and over the next few years? And then second, I was just looking at the supplemental, and thanks for the refresh, I think you began on this last quarter. The supplemental, looking at the straight-line revenue, and what caught my attention was the straight-line revenue is negative this year for the first time in like five years, and goes more negative next year. And so, as these contracts on average are getting further into their life, does that increase the potential for some renewals? And is that something that could significantly just impact the way GAAP results look over the next few years, that might be different than what the schedule is currently inferring.

Let me try to answer that second one first while I'm thinking about it. I don't think so. I mean, basically, if you think about what straight-line revenue is, it's essentially revenue that, from an accounting standpoint, we're booking, but we haven't actually received the cash. So eventually, it's going to all go negative and reverse out and end up at zero cumulatively. I think what you're seeing is that as we've had less new leases and moved further in terms of the dates and the timing of our portfolio as it gets more mature, you should expect that it would move back towards that sort of breakeven point. Now, having said that, we are signing more new leases today, and perhaps that will have an impact. And as we, in some cases, extend out the length of the terms. We'll see some adjustments up, and actually, that did happen in the first quarter. We extended some leases out. So that pushes the timing. But I don't think that there's anything to be read into it other than just we're a more mature business and we're in a more mature place in terms of our life cycle with our biggest customers. So it's going to move up and down over time, but eventually, if you went to the end of time, it would be zero cumulatively. And so the other question was on international, I think, Mike, right, organic growth and churn, is that what your question was on dynamics?

Exactly. Yes, the visibility into this year as well as into the next few years, as you're managing through some of the Latin American churn dynamics.

Yes. We are -- each market is a little different. And in some of the markets, we have experienced churn over the last few years due to consolidations and we're pretty close to being on the other side of that, and a number of markets, we are on the other side of it. If you look across many of our Central American markets, you had that consolidation take place. You've had most of the rightsizing of those leases happen as a result of that. And so I think we're going to be in a good spot there, and actually, you're going to have carriers that are more interested in their network development and investing further in their networks, and therefore, we're going to actually see some pickup in activity in that area. In other spots, like in Brazil, we're really just kind of in the throes of the consolidation impacts and everything that comes with that. We talked about it a bunch over the last year. So, everybody knows that Oi was replaced by the other three carriers taking a piece of them, each of them, but that leaves a lot of overlap and a lot of rationalization needs to take place, and we're seeing that take place. We're also still seeing the impacts of the Nextel acquisition by Claro, and that was done years ago. So, I would say for the next few years, we probably will see some elevated churn internationally as a result of those dynamics. And that -- I think the hidden cost of that is not just the churn, but it is the fact that rationalization takes a lot of the focus of the existing carriers. And so the organic growth in terms of new lease-up is also impacted, I think a little bit by that. So I would say the next few years will probably be a slower growth period in Brazil, in particular, which is the lion's share of our international business. But as we move beyond that, based on what we've seen in other markets, including the U.S., by the way, I would expect there to be an acceleration of leasing activity as we start to get further down the maturity cycle of that process.

Thanks.

Sure.

[Operator Instructions] Next caller is Matt Niknam from Deutsche Bank.

Hi, guys. Thanks so much for taking the questions. Just two, if I could. First, on the macro front. I'm wondering if sales cycles, conversations with carrier customers, particularly in the U.S., are lengthening at all? Or are you seeing carriers even potentially reevaluating spending plans in light of what's developing into a choppier macro backdrop? And then just secondly on the U.S. as well. If you can give us any color on the mix of colo relative to amendment for new leases signed in 1Q and how that compares to prior quarters? Thanks.

Yes. We -- so the answer to your first question, Matt, is we have not seen an impact on any of our sales or leasing discussions with our customers. But I also think that it is pretty fresh and it's not something that I can swear won't take place over the coming months. I do feel very good in the sense that we obviously have no direct impacts from tariffs. Our carrier customers have limited relative to most companies here, international companies, obviously, in particular, the impacts on our carrier customers are very limited. So, I think we're not going to see a lot because there's still such significant network needs, and there's a competitive dynamic that exists among our customers that I think is also favorable to continued investment. But we'll have to see how the microenvironment around this topic evolves and where it ends up going, and obviously, there's a possibility that it has an impact. But as of today, we've not seen any of that. And your second question was colos versus amendments, right?

That's right.

Yes. So we've definitely seen a pickup in the colocations that started last year and has continued into this period now where we're seeing the vast majority actually of new revenue added in the U.S. coming from new lease colocations versus amendments. I don't actually have the percentage handy to give you, but that's something our team can probably provide to you in a follow-up call afterwards, but most of it is coming from new leases. And based on the backlogs and the way they're building, I would expect that to continue for the balance of the year.

Thank you.

Our next caller is Nick Del Deo from MoffettNathanson. Please go ahead

Thanks for taking my questions. First, Brendan, in your prepared remarks, you noted that driving efficiencies through new technologies and systems was a priority for the year. Can you expand on that at all, and maybe frame some of the areas that you're looking at, the sorts of savings that you're expecting? And then second, you decommissioned a lot of towers overseas this quarter. Is that all oil-related, or are there other drivers, anything we should be aware of there? And how should that trend in the coming periods?

Sure. Yes. So on the efficiencies, we are -- I mean, this is stuff that you should expect that we will be doing anyway, Nick, but I call it out because it's an internal focus area that we are definitely spending some time on. We have a number of new systems that we are putting in place in various areas of our business, some on the operational and front-end side around leasing, others around back-office operations, including our ERP systems, getting a total refresh. And as we do that and we incorporate AI and other things into the solutions that we're providing, we will look for efficiencies in the way that we run these processes. And I think through that, we will actually gain not only cost savings, but opportunities to drive additional revenue sources as well. It's too early at this point to probably quantify that for you, but over time, I would hope that I'll be able to give you some idea of places where we've actually realized real savings that make an impact on the financials.

Only thing you mentioned…

Yes.

Sorry to jump in. You mentioned the ERP system. I know sometimes that's been problematic for some companies when they change that out. Do you feel comfortable from a risk profile because that's typically a big change for folks.

I do. It is a big change, and it's actually a multi-year project, but I feel very good about where we are today and the progress we're making on that. But yes, okay.

Okay. Good.

No worries. Yes.

Okay. And then the decommissioning question?

Yes. The decommissioning, so -- and just to be sure that we're clear, because you probably are looking at the total number for international, that includes the divestitures of Colombia and the Philippines, which took place. So, just to be clear, that's the vast majority…

Okay. Yes. Okay.

So if you strip that out, though, we are decommissioning some sites, primarily in Brazil, and that is -- it is an association with the consolidation where we're seeing places where we have taken towers that we don't think have much -- promise, sorry. In those cases, we'll take those towers down to save the cost, but most of that number is the sale of those two countries.

Okay. Okay. Great. Thank you, Brendan.

Sure.

Next question is from Eric Luebchow from Wells Fargo. Please go ahead.

Good. Thanks for taking the question. Brendan, I think you talked a little bit about the increasing colo mix in your backlog. Any sense for you have for how much might be related to regulatory requirements that certain carriers have, that have specific time to be deployed, versus kind of any early signs of densification in your footprint from your early mid-band deployments.

Yes. Well, first, let me -- since you gave me the opportunity here to go back and answer Matt's question on the actual percentages, it was about 75% of the new leasing business signed up in the first quarter in the U.S. came from colos as opposed to amendments. So then, to your question, it's a mix of things. Definitely, the regulatory requirements is a part of it. And I only know that with confidence because when we look at least one of our carrier customers and we look at the locations and sort of the more rural nature of some of those, that gives us a pretty good sense of what they're trying to accomplish there. But it's really hard to say in every case because you have real network needs in all these different spots. And so, whether it's for a commercial reason or a regulatory reason, sometimes we don't have that clarity, but I would expect that we'll continue to see a balance of both of those factors as a driver.

Okay, great. I appreciate that. And on the services guide uplift, I believe you over-indexed to one carrier in particular there. So would you attribute that uptick to that customer, or is it a little bit more broad-based than that? And I guess, do you think there's any correlation here between the services upside and some of the higher leasing activity that you've talked about in your backlog? Thanks.

Yes. I do think that there is a correlation to the leasing at least a little bit because most of the work that we're doing, virtually all the services work we're doing now is on our own power sites. So it's definitely tied into leasing activity. And yes, I mean, we do have a significant percentage of our Services business with one particular carrier, but the increase at least proportionally among them is more broad-based. But obviously, that one customer makes up a bigger percentage, and therefore, as they get busier, that makes more of an impact to our outlook.

Thanks, Brendan.

Sure.

Our next caller is Brandon Nispel from KeyBanc.

Thanks for taking the question. Brendan, I want to go back to your comments around new bookings and backlog. From a historical standpoint, what period is most comparable to the new bookings you saw this quarter? And then I was hoping you could help us contextualize what the book-to-bill ratio looks like today. Thanks.

Sure. Yes, I don't know if I could say absolutely, but it's been a couple of years. It's been over two years, I'd say, since we saw this level of applications that drive our backlog. So it's pretty good in terms of recent history. We were pretty busy back in the '22-'23 window. So, it's probably as good as it was any time since then. I'm sorry, Brandon, your second question.

I was just curious book-to-bill backlog and sort of where that -- what that looks like today?

Yes. It's still because of this shift in the mix to new leases, it's obviously more elongated than it's been historically. It's typically a six to nine-month for a new colo. We've seen a little bit of improvement in that. It's probably been a little bit shorter than that on average at least thus far into the year, which is not that much history, but they're turning them around a little bit quicker and getting them deployed quicker. So let's say, three to nine months, just to kind of hedge it. It's -- every lease is a little bit different, but that's the typical range.

Great. Thanks for taking the questions.

Sure.

Moving on to Mike Funk from Bank of America.

Thank you all for the questions today. So, first one, just what do you attribute the increase in new leasing activity from the carriers based on your conversations with them? And then maybe split between the carriers would be helpful as well. And then second one kind of more bookkeeping. You mentioned during the prepared remarks that CPI rates have a potential for better escalators throughout the year internationally. If you can quantify, that would be helpful.

Yes, So the increase -- I don't want to get too specific by customer in terms of what they're each doing. I think you can look at their own reports and get a sense of the things that they're focused on that would be the logical drivers of activity in terms of leasing on macro tower sites. But it's broadly increased subscriber activity, certainly certain product offerings that are more network bandwidth-intensive, such as fixed wireless access. There are some regulatory requirements, which we referred to a moment ago, for at least one of our customers, that's T-Mobile, who has some need to meet obligations in terms of downlink speeds and coverage that they committed to as part of the Sprint acquisition. So that's ongoing as a driver as well. So there's a variety of things. I think we'll continue to see a mix of those things. But overall, it's going to be a strain on the network and competitive pressures between the carriers. And on the CPI question, yes, I mean, particularly in Brazil, we've seen an increase in the CPI rates down there. I -- we will have to see whether that holds up. We obviously didn't raise our outlook around international escalator contributions for this year. But if we continue to see elevated CPI rates down there, there's a potential that we would actually be able to raise our leasing outlook. And we're really talking about on our total for the full year, you're talking about a million or $2 million of impact. So it's not a massive number, but as a percentage, it's a reasonable contribution increase.

Great. Thank you for the question.

Sure.

All right. Moving on to Ric Prentiss from Raymond James.

Hi, Good afternoon, everybody. I think I messed up my pound too here. I appreciate the questions.

Sure.

First question, I want to follow along the lines. A lot of people touched on the colocation amendment. Appreciate the 75, 25 for 1Q number. Was that revenue-based, I assume instead of application-based, because I would expect new colocations come in at a significantly higher amount of revenue than an amendment?

Yes. Yes, that's revenue-based dollars.

Okay. Which also then leads to activity. Also, associated with that kind of looking at new colocations versus amendments, what's your outlook as far as when spectrum -- new spectrum, not just secondary like Walt was asking about, but what new spectrum could be found auctioned and put into the system that would drive more spectrum deployments instead of having to split sites? Any update from Washington that you're seeing on the spectrum front? And when we might see some blocks come out, and when they might show up on your towers?

Yes. I don't obviously have any insight that is specific to when you're going to see it. But the general commentary that we get back in the conversations that we have and that our industry association WIA has is that there's definitely much more of an interest in this administration and the FCC to get new spectrum out there and auctioned off. And so we're encouraged by that. I think even if they get that done in relatively short order by the time it gets cleared and is available and then is actually deployed, I mean, you're talking four or five years from now, probably before we would see an opportunity for increased leasing activity as a result of that, Ric. So it's a ways off. But the faster that we get it done and out there and get this process started, the quicker we can get to that point. So, we're definitely pushing for that from our industry.

All right. Industry could definitely use more spectrum, but it's going to take time, which means we should probably count on colocations, more so than amendments being a trend it feels like.

Yes, which obviously isn't bad. I mean, we're fortunate in terms of where we're placed in the ecosystem, and that if you don't have the spectrum, the only solutions you've got are to densify your network, and that typically means more locations for us and more equipment, which is a good thing.

Great. Last one for me. Obviously, good capital allocation, jumping on the dislocation in the stock price. But when you think about M&A that might be out there, Batya asked about the Canada towers, but are you still seeing private multiples being well above, or just above what the public multiples are going forward? And kind of how is that still impacting the ability to compete and win for external towers?

Yes. We are still seeing that. If you're talking about the U.S., because there is a limited supply of potential assets, and there are a lot of people very interested in acquiring U.S. towers. When those opportunities come about, the private valuations are much, much higher than the public valuations, and that makes it a challenge for us. Internationally, in some of our emerging markets, we're -- we've seen that rationalize a little bit more, but what you're actually seeing is very few assets trading hands at all. So I think what's happening is sellers are not getting interest at the levels that they'd like to or that perhaps they were getting in the past, and buyers aren't willing to come up to those levels. So you end up having deals, just not trade. So I'm feeling better about there being a little bit of rationalization in most of the international markets, although I'm not seeing that so much in the U.S. and hopefully, we will see that kind of balance out because I think it will be good in terms of that the health of the overall industry if we have more rationality brought to some of these analyses. You can't have cost-of-capital raising the way that it has and have no change in the approach that people take to valuing these assets. So, hopefully, we'll start to see that.

It makes sense. In the U.S., much, much higher. Are we thinking mid-20s, high-20s, even into the 30s? Is that kind of what we're seeing out there?

Yes. I mean, it just depends on the portfolio to some degree because of the maturity of it makes a difference. But we're definitely seeing assets that are trading in the mid-30s, in some cases even higher.

Well, great. Yes. Well, appreciate it. Thanks, guys.

Sure.

All right. Moving on to Ben Swinburne from Morgan Stanley.

Thanks. Good afternoon. Two questions. Brendan, we touched on it in a few of your answers. Just trying -- can you give us a sense of your visibility into sort of the full year domestic site leasing growth? Should we look at the activity to service revenue growth, and the mix-shift to colocations is adding to that visibility? I just wanted to get a sense, sitting here at late April, sort of the line of sight into the improving revenue trends domestic -- in the domestic business as we look through the rest of the year? And then I just thought a little bit of a housekeeping. Can you just update us on if there's any change to how we should think about the Millicom contribution to revenue and gross profit when the rest of the bulk of the acquisition closes on -- assuming it closes September 1? Thank you.

Yes. So, we do break out in our press release, our outlook for the contribution to leasing that we expect during the full year, and the range that we set for that for the U.S., we did not change after this quarter. It's only been two months since we gave that outlook originally. And I think at this stage, while my commentary is accurate in terms of the accelerating pace, and that we're feeling very good about it as the backlogs have been bigger and the lease up was a little bit ahead of pace. I think that it's a little early to think that we're going to be outside of the range that we gave. But we'll see where we are next quarter, we'll certainly have a much better sense by then as to whether there's an opportunity to beat the range. But, perhaps we'll be more towards the higher end of the range if things continue on this track. So stay tuned on that. At least we're talking about it being towards the higher end and not towards the lower end.

Okay.

That's a good sign. And then on the Millicom question, yes, I mean, at this stage, the outlook that we put together originally hasn't really changed outside of the sites that we closed on early. Obviously, we adjusted for that. There's -- I don't know, Ben, if you're looking for something in particular, but basically what we laid out in terms of the total expectation when it's all said and done, that's still the same as what we put in our original press release when we announced that deal. No real changes there, but we'll be excited to get it done as soon as we can.

Okay. The only change, I guess, is just part of that acquisition is closed already, right?

Yes, just a timing difference.

Yes.

So it's a fairly small piece of it. There were 320 sites that we were. And if we can close other pieces early, we will do that too. I think there's not as great an opportunity to break off other pieces each -- this particular market, there was an opportunity to buy the asset separately as opposed to an entity. And so that allowed us to close a few early. But we'll see how it goes. If we can close them early, we'll do that.

Great. Thank you so much.

Thanks.

Okay. Moving on to Richard Choe from JPMorgan.

I had a follow-up on the Services side. Was the increase more in near-term activity, or is it just feeling more confident about the level through the year? And then also, how much more services revenue could you fulfill, or how much capacity you have in that Services business kind of from this 180 to 200 level?

Well, the Services -- the increase in guidance for Services is a mix of the contribution from the first quarter where we did a little bit better than we had anticipated when we set the original outlook as well as the increased backlogs, which gave us some confidence that we will do better during the balance of the year versus our original projections as well. So it's really a mix of both of those. And on your question on capacity, I'm not sure what you're getting at. I mean, obviously, we've given an outlook for this year of now updated of $180 million to $200 million. In the past, we have had even bigger years, a couple of years ago, we did almost $300 million in Services revenue, high $200 million. So we have the capacity in terms of our capabilities and scalability to handle increased volume if we can find the right work. And so if we see that opportunity, hopefully, we'll continue to see it grow. But we're not restrained in terms of our capabilities or capacity.

Great. Thank you.

Sure.

Moving on to Jonathan Chaplin from New Street.

Thanks, guys. Just one clarifying question from me. So, I think in the past, Brendan, you said that the 2.5 gigahertz and 3.5 gigahertz spectrum that the carriers have deployed on their sites is sort of 55% to 65% of sites. Is that of your sites, or their sites? The way I've understood it initially was there at sort of 55% to 65% of their sites, and they still got a lot of growth to go. And I would have thought that would have traded into -- translated into a lot more amendment -- amendments, full to come as opposed to what you're seeing, which is the bulk of growth coming from new leasing.

Yes. No, it's -- when we give those statistics, we're giving it on our -- their presence on our sites, the leases that we have with them on our sites. Yes, it's not to their overall position that's up to them to comment on. So -- and the carriers are not balanced in terms of that. Obviously, T-Mobile is further ahead because they had 2.5 spectrum well ahead of the other incumbents having their mid-band C-band spectrum. So it's a mix between them, and that perhaps is what's contributing to the shift of who's moving towards new leasing versus amendments faster. But either way, they're through -- on a consolidated combined basis, cumulatively, they're through about close to 60% of our leases with the three incumbents have been upgraded for mid-band spectrum.

Got it. So wait, that's 60% of their sites. So they -- they've done amendments on 60% of their sites for mid-band spectrum already. And so there's another 40% they could -- they could still do amendments on.

As a -- yes, as a group. When -- we're talking about their leases on our sites.

Yes. And so they're not doing incremental. So, but that's not where the activity is coming from at the moment. It's mostly coming from them putting equipment on new sites.

Well, yes, I mean, we're still signing a bunch of amendments, and the amendment activity is largely around that. It was largely 5G-related upgrades. Yes.

Perfect. Thanks for that clarification.

Sure.

Next caller, David Guarino from Green Street.

Yes. Thanks. Hi, Brendan, going back to your comment on the transaction front. You said the bid-ask spread might be too wide for some deals to cross the finish line. Was that comment in reference to the past few weeks and the volatility we've seen, or is that something you've observed over the course of the year?

Yes. No, it's something we've observed really for the last year or so internationally, where you're seeing we've seen a number of potential transactions come to market, processes run, some we participated in, others we have not, and there are a number of them that did not actually get completed. So it's been a dynamic. That's been happening for the last few years. So really, if you look at the timing of when cost-of-capital started to increase sometime following on that time period, you started to see this dynamic.

It makes sense. And then you had a comment in your press release talking about the business having very reliable cash flow amidst economic uncertainty. And that's definitely been true in the past. But since the tenant landscape has evolved since that, we've really had any sort of economic stress-test. How should we think about SBA's portfolio performing if the U.S. economy were to hit a soft patch?

Well, I think, David, if you look at it from a big-picture standpoint, we produced a tremendous amount of cash flow. Our AFFO is about $1.4 billion a year. And even if there's softness in the U.S. or anywhere else, you're talking about a variation of leasing activity and incremental dollars being added that is relatively small in the -- in the big picture of the cash flow that we're able to produce, the amount that we're able to return back to our shareholders. There's no risk to our ability to continue to operate, or in quote some saying, sell our product. Well, it's already been sold. It's already happening. So we're talking about impact happening on incremental additions. And right now, that's a positive environment, and that's great. But even if things were to slow down, you're talking about fairly small amounts. So my commentary is that compared to most businesses out there, the cash flow that we're able to produce can be relied upon. It is very steady and consistent, and that's a good place to be in a -- in an unstable environment.

Good point. Thank you.

Sure.

Here, moving on to our next and last caller, Ari Klein from BMO Capital Markets.

Thanks for squeezing me in here. The commentary on domestic leasing activity and signing continues to get better. Based on the conversations with carriers, is that something you expect to continue to accelerate and maybe build here for the next couple of years, or does it level-off kind of in the range where you're at now?

I think that's a hard question to answer to look out multiple years. We -- we've seen this play out over decades of being in this and there are some periods where the carriers are busier than others, but it tends to move in cycles as different events happen. And I think if you look out over the coming years, this year, we're obviously feeling very confident and excited about the level of activity as it's continued to increase based on the specific drivers that are in place today. That -- there are a number of factors that could come along that cause that to slow, and there are factors that could come along to cause that to increase. As we look out longer term, we know that there will be new spectrum that's eventually made available and that will be a driver of increased activity. There's eventually a 6G cycle that will take place down the road. And so over time, I feel very good that there will continue to be cycles of investment in networks by our customers, and we will see -- we will be a beneficiary of that. But to say from one year to the next, whether this year is going to be a higher or lower year, it's hard to say without -- with too much precision if we look out multiple years. So, I'll just leave it at that. We'll see how it goes, but you should feel comfortable that there's always another cycle of something needed.

Got it. And maybe if I can just kind of move it -- moving that leasing activity to backlog, up from backlog to leasing or to leasing revenue. I think one of the things is the guide this year is the midpoint is down a little bit from last year, despite the improvement in activity. Is that something when we look out to '26, we should expect that a decent ramp given how active you've been?

Yes. If we continue to see it move the way that it's moved thus far this year and it stays with the same trajectory as we move through the balance of the year, that should be favorable to next year because that's -- the reason this year is down compared to last year, even though the activity is better this year than last year is because there's a drag. There's a lag time between when you sign up these agreements and when they start to hit your financials. And so we will see this benefit into the balance of this year, but particularly into next year as it carries over.

Thanks for the color.

No problem. Well, thank you all for joining the call today, and we look forward to reporting our second quarter results at the end of July.