American Tower's Q4 2024: Unpacking Contradictions in Leasing Growth, AI Impact, and Data Center Strategies

These are the key contradictions discussed in American Tower Corporation's latest 2024 Q4 earnings call, specifically including: Leasing Environment and Growth Expectations, Data Center Connectivity and AI Impact, and Carrier CapEx Impact on Leasing Activity:



Carrier Investments and Network Demand:
- American Tower reported that four quarters of sequential application activity for 5G deployments were observed in the U.S. market in 2024.
- This trend is attributed to carriers deploying mid-band spectrum assets and the growth of mobile data demand, prompting network upgrades and densification efforts.

Data Center Performance and AI Demand:
- The CoreSite data center business achieved record results, with 40%-50% of revenue growth driven by new leasing.
- Growth is supported by strong demand for interconnect-centric retail colocation and AI-related demand, leading to mid-teens or higher expected stabilized yields.

Regional Asset Portfolio Optimization:
- American Tower exited its India business and sold modest land interests in Australia and New Zealand, and plans to divest its South African fiber business.
- These moves are part of a strategy to enhance the quality of the earnings profile by focusing on developed markets, such as the U.S., Canada, and Europe, which are projected to contribute 75% of unlevered AFFO.

Cost Management and Efficiency Initiatives:
- American Tower achieved a $35 million reduction in cash SG&A costs in 2024 compared to 2023, contributing to a cash margin expansion of 140 basis points.
- This was driven by initiatives such as globalizing company-wide functions like finance, IT, and HR, and the appointment of a new Chief Operating Officer to leverage global operating expertise.