SBA Communications’ 2026 Q2 Call: Leverage Priorities Clash With Buyback Optimism, MEC Timelines Stay Unclear

Date of Call: Aug 3, 2026

Guidance:

• Full-year outlook for site leasing revenue, FFO, and FFO per share modestly increased from prior 2026 guidance.
• U.S. new tower build expectations increased slightly to around 600 sites in 2026.
• International churn remains elevated, but focus is on stabilizing cash flow through long-term agreements.
• Expect to resume share buybacks in second half of 2026.

Business Commentary:

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Financial Performance and Outlook:

• SBA Communications reported FFO per share of $3.05 for the second quarter and paid a cash dividend of $1.25 per share.
• The company is increasing its full-year outlook for site leasing revenue, FFO, and FFO per share due to higher straight-line revenues and improved net cash interest expenses.

Debt Management and Capital Structure:

• SBA Communications issued $3.5 billion in unsecured investment-grade bonds, used to pay down debt, resulting in a leverage ratio of 6.4x net debt to Adjusted EBITDA.
• The refinancing was aimed at optimizing their capital structure and reducing interest expenses.

International Growth and Churn:

• The company added approximately $4 million in new lease and amendment billings internationally, despite elevated churn due to carrier consolidations and bankruptcies.
• Efforts are underway to stabilize international cash flow through long-term contracts with key customers.

Spectrum Auctions and Future Growth:

• The FCC's plan to auction additional spectrum bands, such as Upper C-band, is expected to drive organic growth by necessitating new equipment at tower sites.
• SBA Communications anticipates that these auctions will lead to increased demand for their infrastructure over the next several years.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed confidence in operational performance, stating 'We had another good quarter' and 'The second quarter represented another solid period of both financial and operating results.' They highlighted positive developments like the investment-grade debt offering, FCC spectrum auction progress, and expectation of incremental organic growth from new spectrum and edge compute opportunities.

Q&A:

• Question from Batya Levi (UBS): Could you provide a little bit more color on the application volume that you’re seeing in the second half? If any early indications of the activity... could show up as an acceleration in the growth rate into next year.
  Response: Application volumes are consistent with the first half; U.S. customer activity is steady. New spectrum-related growth is longer-term (5+ years) and not expected to significantly impact next year.

• Question from Ric Prentiss (Raymond James): I’m a little confused by why change guidance at all when it’s like rounding points... What’s kind of the philosophical thought on guidance?
  Response: Guidance changes are minor, driven by FX adjustments (especially Brazilian real) and interest expense from new financing; core outlook ranges remain unchanged.

• Question from Ric Prentiss (Raymond James): On the competition from satellite... what % of your base is really rural?... How do you think about that?
  Response: Potential satellite-served sites are estimated at no more than 2%-3% of the portfolio; impact remains uncertain but could lead to new tower opportunities.

• Question from Michael Rollins (Citi): In terms of just overall asset strategy, where are you in terms of the process of continuing to optimize your assets...?
  Response: Asset optimization is ongoing, with efforts to expand in certain markets and exit others; specific actions will be taken as opportunities arise.

• Question from Jonathan Atkin (RBC Capital Markets): One, in LatAm, one of the Brazilian carriers talked about expense controls... what you’re doing and how your contracts are structured... Secondly, ground lease buybacks... Thirdly, the returns that you’re seeing on new tower builds.
  Response: In LATAM, competition is managed by delivering high-value service. Ground lease buyouts remain a focus, with financially accretive deals available. New tower build returns are challenged in the U.S. due to competition but are better internationally, with builds expected to increase.

• Question from Brendan Lynch (Barclays): ...just to scope the order of magnitude of what this [satellite D2D] opportunity might be... just to help us understand what might be the outcome over the next couple of years.
  Response: Opportunity magnitude is premature to quantify; satellite providers will need a terrestrial component to compete, positioning SBA to benefit in the long term.

• Question from Richard Choe (J.P. Morgan): ...just wanted to follow up on the edge opportunity. Just what kind of conversations are you having, and what kind of timing should we expect?
  Response: Conversations are active with multiple parties; developments expected over the next 12 months, with SBA well positioned to benefit.

• Question from Cameron McVey (Morgan Stanley): With the increase in the discretionary CapEx guide, just curious how many total builds might now be expected in this year in 2026... Secondly, could you characterize just the stage of the 4G to 5G investment cycle across your international markets?
  Response: Expect around 600 new tower builds in 2026, mostly in Central America. International 4G/5G transition is at least 5 years behind the U.S., presenting incremental spending opportunities.

• Question from Ryan Smyth (New Street Research): Going back to the Dish lawsuit... Where do you guys land on that? Separately... is there anything that’s come across with that that changes your view on fighting it out in court versus settling?
  Response: Vehemently disagree with EchoStar's claims; aligned with industry. FCC action shut down Dish's escrow fund games. Expect to be successful in litigation and sufficient funds will be available.

• Question from Matt Niknam (Truist): ...on M&A. You only acquired about six sites in the quarter... Just wondering whether the enhanced balance sheet flexibility accommodates more opportunity for M&A. Just secondly, how should we think about the cadence of new leasing, in the U.S. in the second half of the year...?
  Response: M&A activity is limited due to high asset valuations; share buybacks are a better capital use. U.S. new leasing contribution is expected to be lower in second half 2026, consistent with first half strength.

• Question from Eric Luebchow (Wells Fargo): When do you think we’ll start to see an uptick in amendment volumes? Is it next year with 600 MHz for AT&T or Lower C-band for T-Mobile?... Are we largely waiting for some of the larger upcoming auctions like Upper C-band next year to drive the next amendment cycle?
  Response: Near-term amendment drivers are 600 MHz and Lower C-band deployments. New spectrum auctions will also drive amendments, with a cycle of upgrades followed by densification.

• Question from Michael Ng (Goldman Sachs): First, just with the IG senior notes... I was just wondering if you could give us a sense of what the net interest savings are going to be... Second, just in the U.S., I was just wondering if you could talk about some of the factors that would push you more towards a holistic agreement or an a la carte agreement...
  Response: Interest savings are relative to alternative, higher-cost debt; specifics can be calculated from provided rates. Agreement structure (MLA vs. a la carte) depends on terms; wholesale MLAs offer operational certainty but a la carte remains viable.