SBA COMMUNICATIONS CORP

SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure, including tower structures, rooftops, and other structures that support antennas used for wireless communications, which the company collectively refers to as towers or sites. The company's principal operations are in the United States and its territories, and it also owns and operates towers in South America, Central America, and Africa. During the year ended December 31, 2025, the company sold all of its towers and ended its operations in both the Philippines and Colombia and sold substantially all of its operations in Canada. The company believes that growing wireless data traffic will require wireless service providers to continue to increase the capacity of their networks, and the company expects that continued capacity increases will require its customers to install equipment at new sites and add new equipment at existing sites. According to a report published by Ericsson in November 2025, global total mobile network traffic was estimated to reach around 197 exabytes per month by the end of 2025 and is projected to grow by a factor of 1.4x to reach 482 exabytes per month in 2031.

In the United States, the company's primary competitors for its site leasing activities are large independent tower companies including American Tower Corporation and Crown Castle International, a number of regional independent tower owners, wireless service providers that own and operate their own towers and lease antenna space to other providers, owners and operators of alternative facilities such as rooftops, outdoor and indoor distributed antenna system networks, billboards, utility poles, and electric transmission towers, and owners and operators of alternative wireless technology systems and architectures. Internationally, the company's competition consists of wireless service providers that own and operate their own tower networks, large multinational, national, and regional independent tower companies, and alternative facilities such as rooftop, outdoor and indoor networks, billboards, utility poles, and electric transmission towers. The company believes that tower location and capacity, quality of service, density within a geographic market, and price historically have been, and will continue to be, the most significant competitive factors affecting the domestic and international site leasing business. The company's primary business line is its site leasing business, which contributed 97.9% of its total segment operating profit for the year ended December 31, 2025.

The company generates revenue primarily through its site leasing business, where it leases space to wireless service providers and other customers on assets that it owns or operates and manages rooftop and tower sites for property owners under various contractual arrangements. The site leasing business generates substantially all of the company's total segment operating profit, representing 97.4% or more of total segment operating profit for the past three fiscal years. The company's other business line is its site development business, through which it assists wireless service providers in developing and maintaining their own wireless service networks. Site development services revenues are earned primarily from providing a full range of end-to-end services to wireless service providers or companies providing development or project management services to wireless service providers. The company's site leasing business is classified into two reportable segments, domestic site leasing and international site leasing.

The company's domestic site leasing segment owned 17,394 sites in the United States and its territories as of December 31, 2025, and generated 72.6% of total site leasing revenue for the year ended December 31, 2025. The company derives domestic site leasing revenues primarily from T-Mobile, AT&T Wireless, and Verizon Wireless. In the United States, tenant leases are generally for an initial term of five years to ten years with multiple renewal periods at the option of the tenant, and these tenant leases typically contain specific annual rent escalators, including renewal option periods. Ground leases and other property interests in the United States are generally for an initial term of five years or more with multiple renewal periods, which are at the company's option, and provide for specific annual rent escalators. As of December 31, 2025, no U.S. state or territory accounted for more than 10% of the company's total tower portfolio by tower count, and no U.S. state or territory accounted for more than 10% of total revenues for the year ended December 31, 2025.

The company's international site leasing segment owned 28,934 sites in its international markets as of December 31, 2025, of which approximately 30% and 10% of total towers are located in Brazil and Guatemala, respectively, and no other international market represented more than 5% of total towers. The company currently owns and operates towers in 12 international markets throughout South America, Central America, and Africa. Tenant leases in international markets are generally for an initial term of five years to fifteen years with multiple renewal periods at the option of the tenant, and these tenant leases typically either contain specific annual rent escalators, escalate annually in accordance with an inflationary index, or escalate using a combination of fixed and inflation adjusted escalators. International site leases may include pass-through charges such as rent related to ground leases and other property interests, utilities, property taxes, and fuel. In Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, and Panama, substantially all of the company's revenue, expenses, and capital expenditures arising from its activities are denominated in U.S. dollars. In Brazil, Chile, and South Africa, substantially all of the company's revenue, expenses, and capital expenditures are denominated in local currency. In Costa Rica, Peru, and Tanzania, the company's revenue, expenses, and capital expenditures are denominated in a mix of local currency and U.S. dollars.

During the year ended December 31, 2025, the company purchased over 7,000 sites from Millicom International Cellular S.A. throughout Central America. As part of the Millicom transaction, the company has agreed to a seven-year exclusivity right for it to build up to 2,500 build-to-suit sites in Central America with each site built having an initial lease term of 15 years. The company sold all of its towers and ended its operations in both the Philippines and Colombia and sold substantially all of its operations in Canada. On April 27, 2025, the company's Board of Directors authorized a stock repurchase plan authorizing the company to repurchase, from time to time, up to $1.5 billion of its outstanding Class A common stock. Subsequent to December 31, 2025, the company repurchased 12 thousand shares of its Class A common stock for $2.2 million, at an average price per share of $188.66. As of the date of the filing, the company had $1.1 billion remaining under the current authorized share repurchase plan. The company also has interest rate swap agreements on its 2024 Term Loan which swap $2.0 billion of notional value accruing interest at one month Term SOFR plus 175 basis points for a blended all-in fixed rate of 5.165% per annum through April 11, 2028.

For the year ended December 31, 2025, total revenues were $2,815,139 thousand, compared to $2,679,634 thousand for the year ended December 31, 2024. Net income was $1,054,456 thousand for the year ended December 31, 2025, compared to $748,677 thousand for the year ended December 31, 2024. The company's primary business line is its site leasing business, which contributed 97.9% of total segment operating profit for the year ended December 31, 2025. Domestic site leasing revenues increased $4.2 million for the year ended December 31, 2025, as compared to the prior year, primarily due to organic site leasing growth from new leases, amendments, and contractual rent escalators and revenues from 66 towers acquired and 54 towers built since January 1, 2024, partially offset by Sprint and other lease non-renewals and a decrease in non-cash straight line revenue. International site leasing revenues increased $39.7 million for the year ended December 31, 2025, as compared to the prior year, and on a constant currency basis, international site leasing revenues increased $51.2 million. Site development revenues increased $91.6 million for the year ended December 31, 2025, as compared to the prior year, as a result of increased carrier activity.

The company expects core leasing revenue to increase over 2025 levels, on a currency neutral basis, during 2026, due in part to wireless carriers deploying unused spectrum, the full year impact of towers acquired and built during 2025, and the revenues from towers expected to be acquired and built during 2026, partially offset by increased churn primarily driven by Sprint and EchoStar. In the company's domestic markets, it currently expects churn to represent an aggregate of between $132.0 million and $136.0 million of cash site leasing revenue due in part to Sprint and EchoStar churn. In the company's international markets, it currently expects churn to represent an aggregate of between $36.0 million and $40.0 million of cash site leasing revenue due in part to Oi wireline churn. The company expects churn to be elevated through 2026 due to churn in some of its markets.

The company intends to continue to grow its tower portfolio, domestically and internationally, through tower acquisitions and the construction of new tower structures. The company believes that one of the best uses of its liquidity, including cash from operating activities and borrowings, is to acquire and/or build new towers at prices that it believes will be accretive to its shareholders both in the short and long term and which allow it to maintain its long-term target leverage ratios. The company is focused on maximizing its site leasing services and profitability in international markets, such as Central America, that meet its investment criteria and where it believes it has, or has the ability to achieve, scale. The company's investment criteria focuses on the quality and quantity of wireless service providers in a given country as well as the country's political and regulatory environments. The majority of the company's international markets typically have less mature wireless networks with limited wireline infrastructure and lower wireless data penetration rates than those in the United States. As part of the Millicom transaction, the company has agreed to a seven-year exclusivity right for it to build up to 2,500 build-to-suit sites in Central America with each site built having an initial lease term of 15 years.

The company believes that its tower operations are highly scalable, and consequently, it believes that it is able to materially increase its domestic and international tower portfolio without proportionately increasing selling, general, and administrative expenses. The company believes that the site leasing business continues to be attractive due to its long-term contracts, built-in rent escalators, high operating margins, and low customer churn other than in connection with customer consolidation or cessations of specific technology. The company expects future expenditures required to maintain its towers to be minimal. The company expects to grow its cash flows by adding tenants to its towers at minimal incremental costs by using existing tower capacity or requiring wireless service providers to bear all or a portion of the cost of tower modifications and by executing monetary amendments as wireless service providers add or upgrade their equipment.

The company has a broad field organization across the U.S. and in its international markets that allows it to develop and capitalize on its experience, expertise, and relationships in each of its local markets. The company believes that it is well positioned to proactively grow and defend its site leasing business and to capture new tower build opportunities in its markets and identify and participate in site development projects across its markets. The company continues to explore ancillary services and evolving technologies that it believes will allow it to create additional value by leveraging its current assets, capabilities, and relationships with wireless and other telecommunications and internet service providers and others by expanding SBA's business within the growing communications ecosystem. This includes supporting efforts for edge data centers, fiber aggregation and regeneration huts, satellite ground stations, and private networks utilizing cellular and Wi-Fi technologies. SBA currently owns two regional data centers in the U.S. and one regional data center in Brazil, as well as tower-based data centers, which were acquired as part of its broader efforts to learn and evaluate developing technologies.

The company's capital allocation strategy is aimed at increasing shareholder value through investment in quality assets that meet its return criteria, stock repurchases, and by returning cash generated by its operations in the form of cash dividends. In addition, in a high interest rate environment and when the company believes interest rates may stay higher for longer, it believes that debt repayments, especially of its variable rate debt, may be an accretive use of its excess capital. The company intends to continue to grow its asset portfolio, domestically and internationally, primarily through tower acquisitions to the extent that opportunities meet its internal return on invested capital criteria and through the construction of new towers. The company currently utilizes stock repurchases as part of its capital allocation policy. On April 27, 2025, the company's Board of Directors authorized a stock repurchase plan authorizing the company to repurchase, from time to time, up to $1.5 billion of its outstanding Class A common stock. As of the date of the filing, the company had $1.1 billion remaining under the current authorized share repurchase plan. Cash dividends are an additional component of the company's strategy of returning value to shareholders, and the company believes that its future cash flow generation will permit it to grow its cash dividend in the future.

The company expects that the impact of competitive pressures in its international markets will continue in the near term as the industry begins to rebalance, and as a result, the company expects approximately $36.0 million to $40.0 million of churn for the 2026 fiscal year. In the company's domestic markets, it currently expects churn to represent an aggregate of between $132.0 million and $136.0 million of cash site leasing revenue due in part to Sprint and EchoStar churn. In late 2025, EchoStar notified the company that it would be discontinuing its network business, and in December 2025, EchoStar defaulted on its payment obligations to the company and such default has continued into 2026. As a result, the company currently expects that this churn will represent approximately $56.0 million of cash site leasing revenue during 2026. The company also expects that the Sprint churn will represent approximately $75.0 million of cash site leasing revenue over the next several years.

The wireless industry in the company's international markets has come under competitive pressures arising from an increase in the number of industry participants, increased cost of capital and capital expenditure requirements, declining discretionary income and changing technology requirements. These pressures have resulted, and may continue to result, in increases in consolidation of wireless service providers, financial instability of wireless service providers, increased pricing pressures on tower operators and the termination or non-renewal of site leasing agreements. Increasing interest rates have impacted, and are expected to continue to impact, the ability and willingness of wireless service providers to incur capital expenditures at historic levels to expand their networks, which would adversely affect the company's future revenue growth rates. Higher interest rates increase the economic cost of available capital and may make it less favorable for wireless service providers to obtain capital for investment.

The company depends on a relatively small number of customers for most of its revenue, with T-Mobile representing 31.1% ¹, AT&T Wireless representing 20.3% ², and Verizon Wireless representing 15.1% ³ of total revenues for the year ended December 31, 2025. The loss or financial instability of any of these significant customers could materially decrease revenue. The company has a substantial level of indebtedness, with total principal amount of debt of $12,959,750 thousand ⁴ as of December 31, 2025, and shareholders' deficit of $4,853,519 thousand ⁵. As of December 31, 2025, variable rate indebtedness under the Revolving Credit Facility and the Term Loan represented approximately $2.7 billion ⁶, or 21.1% ⁷ of total indebtedness, exposing the company to interest rate risk. The company expects approximately $36.0 million to $44.0 million of churn for the 2026 fiscal year in its international markets, and between $132.0 million and $136.0 million of cash site leasing revenue churn in its domestic markets due in part to Sprint and EchoStar. In late 2025, EchoStar defaulted on its payment obligations, and the company currently expects that this churn will represent approximately $56.0 million ⁸ of cash site leasing revenue during 2026. The company also faces risks from currency fluctuations, as approximately 27.4% ⁹ of total site leasing revenue was generated by international operations, of which 21.9% ¹⁰ was generated in non-U.S. dollar currencies, including 13.6% ¹¹ denominated in Brazilian Reais, and the Brazilian Real weakened 4.0% ¹² when comparing the average rate for the years ended December 31, 2025 and 2024.

Management's message emphasizes the company's focus on expanding its site leasing business through organic growth and expansion of its tower portfolio to create shareholder value. The company believes that the long-term and repetitive nature of its site leasing business will permit it to maintain a stable, recurring cash flow stream and reduce its exposure to cyclical changes in customer spending which arises in its site development business. Management believes that the company's tower operations are highly scalable, and consequently, it believes that it is able to materially increase its domestic and international tower portfolio without proportionately increasing selling, general, and administrative expenses. Key strategic priorities include maximizing tower capacity, capitalizing on scale and management experience, systematic tower portfolio growth through disciplined domestic and international tower acquisitions and strategic new builds, international market maximization, using local presence to build strong relationships with major wireless service providers, controlling underlying land positions, and exploring opportunities in evolving technologies and ancillary services. Management expects core leasing revenue to increase over 2025 levels, on a currency neutral basis, during 2026, due in part to wireless carriers deploying unused spectrum, the full year impact of towers acquired and built during 2025, and the revenues from towers expected to be acquired and built during 2026, partially offset by increased churn primarily driven by Sprint and EchoStar. In the company's domestic markets, management currently expects churn to represent an aggregate of between $132.0 million and $136.0 million of cash site leasing revenue due in part to Sprint and EchoStar churn. In the company's international markets, management currently expects churn to represent an aggregate of between $36.0 million and $40.0 million of cash site leasing revenue due in part to Oi wireline churn.