American Tower Aktie

All right. It looks like we're there. Live from the New York. It's NAREIT. Welcome, everybody. The tradition continues. We don't have 51 seasons like Saturday Night Live does, but American Tower and Raymond James and myself, we started doing these presentations at NAREIT when American Tower converted in 2012. So we were just doing the math -- we've been doing this basically 6, 14, 15...

14 years. 15th time, I think...

Exactly 15 times but actually the dirty little secret was, before you converted into a REIT, we were still coming to NAREIT. Before tower companies converted to REITs, but we couldn't get a room...

Don't tell me NAREIT, they're going to...

It's okay. But we would meet in the restaurant and say, REIT investors you need to get to know tower companies because they're coming and they're going to be big. And certainly, that's played out. You guys are some of the largest group of real estate companies that are out there in the NAREIT universe.

Today, Steve Vondran is joining us, CFO -- CEO sorry, of American Tower. I'm Rick Prentiss, by the way, sorry about that, head of TMT Research at Raymond James. My definition of TMT, telecom, satellites, media but more importantly, towers and digital infrastructure. So Steve, thanks for coming today.

Thanks for hosting us yet again, Rick.

You bet you. I want to start with -- on the 1Q call, you guys talked about how you're feeling this is the strongest strategic footing and set up, you've seen in a decade. You've been American Tower a long time, just like...

26 years.

Yes. So we've seen a lot.

Yes.

We've lived through this birth, boom, bust and now rebirth of the tower industry. What do you mean by the strongest strategic footing? And how do you square that with the stock performance?

Yes. Thanks, Rick We've been really focused for the past few years on taking risk out of the business. There have been some headwinds in the business in various areas. And so when I think about where we are today, from an operational perspective and with our customer base, we're on the strongest footing because we've taken some measures to pull risk out of the portfolio.

Our exposure to emerging markets is reduced. Part of that is because we divested in India. And part of it is we've changed our capital investment philosophy to direct more of our CapEx to our developed markets where it used to -- the majority of it used to go to the emerging markets. So by doing that, we're reducing our exposure in the emerging markets. We've also been through kind of a period of reset and repair in a lot of those markets where some of the weaker players have churned out. And so now the vast majority of our revenue in those markets is with the top 1 or 2 carriers in each market.

So we think we're largely through the churn events that have kept growth in those markets back over time and remove some of the uncertainty about the revenue stream. So that part of the portfolio is much stronger. Likewise, in the U.S., while, we don't like having churn from DISH, and we didn't like having churn from Sprint, those are 2 weaker players in the market that was a little bit more of a question mark. So now if you look at the U.S. revenues and the U.S. growth rates, it's underpinned by the 3 major carriers.

So from a quality of earnings perspective, we've made a number of moves to dramatically increase the safety, the reliability of those underlying cash flows. On the balance sheet, we've taken a number of steps on the balance sheet to shore that up as well. So where we sit today is we have the lowest leverage and the highest credit rating among all of our peers and less exposure to interest rate fluctuation than we've had in a long time.

So when I look at where we sit today, we have a very strong fundamental base better than we've had in over a decade in terms of not seeing negative shocks happen. And there are so many secular tailwinds that are going to promote growth in our business. And when I think about what's underlying our like kind of long-term growth algorithm that we've laid out, it's really based on mobile data consumption in the U.S. And mobile data consumption in the U.S. grew about 35% year-on-year last year according to CTIA, and it's expected to continue to grow at a pace that requires a doubling of network capacity by the end of the decade.

And so that provides a lot of tailwinds to our business to provide more service to our customers to get more bandwidth out to people. We also have things that could accelerate that because those projections are just current usage, downloading videos. And AI is not really factored into that. So to the extent that AI comes on devices in a way it's bandwidth intensive that can accelerate those demand trends. And 6G is just around the corner. I mean if you think about that, the standards are supposed to come out in 2029.

That means deployments are probably going to be in 2030, 2031. That's not that far away. So as we look toward the future, we see continued investment in the networks at a steady rate in the base case. We see a potential for acceleration for some of these other factors in it. And that's going to give us a lot of growth over the long term that will continue to drive this business on a more solid base. So when we think about that, that's the more solid fundamental footing.

But I also want to remind people we have CoreSite. We have a data center company that's not just a data center. It's a interconnection-rich, network dense environment that gives us another high-growth vehicle. It's growing double digits in the U.S. with phenomenal returns. So again, when I think about where we sit today versus where we've been in the past, it's a lower-risk business, has a lot of opportunities for upside. And that positions us well to create a lot of shareholder value in the future.

So help us square that with the stock performance. Obviously, interest rates are what they are and you can't control that.

Well, we're interest rate sensitive. There's a high inverse correlation on that. That's part of it. But there's been a lot of kind of short-term noise in the system. And I think people have to look past these short-term things, they're not material in the long term. And we -- another way we've kind of derisked the way we think about things is we churned DISH at 100%. So there shouldn't be an overhang from that. It's out of the numbers, it's out of the projections, everything that we're telling you guys would plan to do is ex DISH. Now we're still going to litigate. We're still going to try to collect our money from those guys, but that's just upside from everything that we've said that's out there.

So I think that there's been some short-term noise that's kind of weighed on the sector. It's that satellites and the other stuff, I'm sure you're going to ask about a couple of these, so I'll just tee them up for you. But I think that, that short-term noise has really created some overhangs. And I hope that we're going to move past that and see past that. When you think about the dislocation between public and private multiples where private capital is valuing towers at a much higher multiple, I think they're looking past the short-term stuff.

And they're looking at it and saying, I don't care about this noise in the short term. I see 5G densification. I see AI, I see 6G, and they're looking at that long runway of growth ahead, and that's why their value is higher than the public multiples are. So hopefully, we're turning a corner on some of the short-term stuff.

It feels like we are. I mean, it really feels like the tone this week at NAREIT has been, oh, maybe we are finding the base here or maybe people are getting excited about where things could go. And I guess being a wireless tower company, the signal to noise ratio, signal to noise is the noise has been controlling it, maybe people are getting the signal better now.

I hope so. We're trying to get the message out.

Yes. Let's hit more of those because it definitely was a hot topic came up several times, but it feels like a shift is happening. Let's hit the satellite question.

Okay. My favorite topic, right?

I know.

So first, when it comes to satellites, we have a good perspective on what's going on there. We made an investment in AST SpaceMobile in the early days to get a board seat, which we still retain. So when we talk about what's happening in the satellite space, we're coming from a place of some knowledge here. There's absolutely nothing we see in that space that poses a risk to our business model or our carrier customers. It is a complementary technology.

It will supplement the networks, and there are some real positives for both our customers and towers that I'll touch on. When people express concern about towers being disintermediated by satellite, they're not seeing the physics of it. There's not enough bandwidth produced by the satellite networks to be able to replace towers to even lightly populated areas. The place it's going to be the most effective or where we don't even have towers. And if we do have a tower in the place it's that remote, it's certainly not going to be our top-performing tower.

So when we kind of looked at it and said, in all these possible scenarios, what's the risk? It's just de minimis. You won't even notice it if we did have an effect there. That doesn't mean we don't have to build towers in rural Montana and the Grand Canyon. Yes, I don't want to build those anyway. So from a risk perspective, I don't see it at all.

From an opportunity perspective, though, I think it could be huge. The first area of opportunity I think the satellites provide is for my customers. They're going to provide ubiquitous coverage in a way that they haven't been able to do it before. And that's going to enable new use cases. So if you think about some of the what-ifs that are out there, people talked about using the 5G networks to control drone telemetry or robotics and things like that.

You have to have a ubiquitous signal to do that. They haven't had that in the past. Satellite will give them that. So I think there are new use cases that can create new revenue streams from our customers that will spur investment, that will be good for us. The other thing that I think is going to happen in the satellite world is it's going to actually highlight the places where towers need to be built or where coverage needs to improve.

If you think back to 4G when carriers first built those networks, they had some holes in their networks, so they roamed on each other, and that was getting expensive paying each other for roaming. So we had -- we used to talk about roaming overbuilds in 4G. That was a driver of business for us. I think with satellites, you're going to see a similar phenomenon. There are places at my house, you cannot get a text message out. There's no signal. And no one's building it today. But once that satellite coverage is enabled, people are going to use it.

There'll be roaming being paid to the satellite guys, and I'm -- hopefully, I can convince all 3 carriers to build that neighborhood then...

I might have a site they could use?

They can use my rooftop. I'll make it work somehow. Zoning is going to be tough. But -- so when I look at it, I just look at this being a complementary technology, it's going to help my customers. It could enable some new tower builds. So for me, it's all opportunity. I don't see risk in it at all. And I'm glad to see some of it starting to shift a little bit here this week.

That's definitely been my sense as we came in beginning of this week, there was still the fear factor. And it feels like people are like, wait, this could actually -- instead of being bad satellites, it could be neutral. It might even be positive. So it feels like we've made some education this week.

I hope so. We're trying.

Great. On some of those opportunities, you mentioned drones and robotics and 6G and AI, inference, upload, download, I don't think you hit yet, but we'll hit that as well. Some of this stuff was maybe going to be 5G. 5G let's face it, has maybe underwhelmed.

We've got fixed wireless, which has been a great use case. But there's been a lot of stuff that didn't come in. Why will 6G be -- what's different?

I'm still hopeful the end of 5G, you're going to see some of this. If you go back to 4G, at about this point in 4G 2016, we hadn't seen the social media take off the way it did later in the cycle. So I think there's still time for 5G. With 6G, when I read some of the new white papers coming out, Ericsson has got a great website that lists some of the benefits of it. I think it's creating new capabilities. It's not just more bandwidth, but it's new capabilities. It's spatial tracking, it's things like that. And so I think there are going to be new use cases, new revenue streams that support that.

With 5G -- what it really has done for the carriers is reduce the cost per gigabyte. And so I think we lose sight sometimes of the fact that they need to keep producing more and more data to meet that burgeoning demand that we have. And without 5G, that would have been impossible to do it in an economic way. So I think 5G has been a success from that standpoint, and fixed wireless has given the new revenue streams. So I wouldn't call 5G a bust. I would just call it 5G, maybe not as much as we were hoping as customers would get -- but as I look at 6G, it's just a different set of capabilities is what they're hoping to create with that.

Okay. One of the topics this week at NAREIT has also been the edge. We talked about it years ago, and it kind of quieted down. It's back. What's exciting and what's different about the edge and what does it mean for American Tower?

I got very excited about Edge at the beginning of 5G because mobile edge compute was something that was enabled by 5G, and I was wrong on the timing. It didn't happen as quickly as I thought it was going to be, but it's going to happen. And I'm more convinced than ever, it's going to happen, and I'm more convinced than ever that we have the right to win in that space.

You're now starting to hear other people talk about it. The wireless carriers are talking about it. You're starting to hear some of the chip manufacturers talking about it. Now what is Edge? That's a question a lot of people are trying to answer. And yes, I suspect that everyone's going to have their own definition for a while until we all agree on what it is. But the way we think about Edge is it's where the wireless networks and the compute come together to enable low latency and to take some of the strain off the networks, both the wireless networks and the wireline networks where you're backhauling petabytes of data it's just not efficient to do that.

And the reason that we bought CoreSite originally is when you deploy something at the edge, it still needs to be connected back to a data center that has cloud on-ramps and kind of a wider compute capability. And we think that controlling both ends of that gives us the right to win in that space. I'm not going to predict timelines again because I was wrong the first time. But it is constructive to hear wireless carriers, chip makers, cloud providers, all trying to figure it out. And so we have been experimenting.

We've deployed in Raleigh, North Carolina. We deployed a data center on one of our tower sites as kind of a playground for folks. And we've got some interesting learnings from that. There's a little bit more demand than I thought for some compute there. It may not be the edge use cases yet that are going to promote the wider ecosystem, but people are working on it and people are thinking about it. So I think we're going to see more developments in that, but I think it's undefined at this point exactly what use cases are going to be there, what that facility looks like and when they're going to be deployed.

Yes, makes sense. It feels like AI and inferencing is also going to play into what you need. And let's talk a little bit about downlink versus uplink?

So one of the things that we think could be an accelerant in the back half of 5G is the adoption of AI. When you look at all of the mobile data projection -- growth projections that are out there, they all have an asterisk on them that says, does not assume significant uptake in AI. That's the Ericsson report.

It's kind of some of the other projections that folks make. And -- that's because today when you're using AI on your device, it's typically text, you're chatting with ChatGPT, maybe you have photo, but it's not really bandwidth intensive. And we're not seeing a lot of machine-to-machine today in the AI. Now you're seeing it on the desktop. And I always believe that whatever is on the desktop today migrates to the wireless device tomorrow.

And so I think that you will see these migrate. And when you start seeing more bandwidth intensive uses of AI it may change the architecture of the networks. Some of the early indications that we've heard from some technologists in the field that kind of monitor AI applications has said that they're seeing AI apps use 25% uplink versus traditional networks, which are architected to 10% to 15% uplink. And so when you think about what the customers are going to have to do to provide more robust uplink, that's going to be beneficial for towers.

Now I think everyone is still trying to figure out what does that look like. It's not just adding more spectrum. There's actually a re-architecture. Some of the customers have talked about that. And they're trying to figure out how are they going to do that and we're there to support them. But when I think about what's going to drive higher bandwidth adoption, what's going to drive more activity on our sites than we're anticipating in the base case, AI is certainly one of those.

One of the things that was headlined out there is the carriers, your tenants, your customers are focusing on -- several of them are focusing on convergence, putting mobile and fixed or broadband at least together. Some of them have said they want to cut CapEx to lower levels. How does that impact what you're saying here and the excitement you're feeling about where this industry is headed?

Sure. Well, they've all put kind of broadband and mobility at the center of their strategies. So I don't think anybody is retreating from being a wireless carrier. And when you look at their CapEx spend, that funds a lot of different things. It's not just equipment on towers. It's that, it's fiber, it's investments in the core, it's R&D. There's a number of things we're investing in.

So even if they do take a modest reduction in CapEx, that doesn't mean they're not going to invest in their wireless networks and add equipment to towers. The best predictor of activity on our sites is mobile data growth because it's the stress on the networks that requires the carriers to upgrade those networks to meet their consumer demand.

And so while we do look at CapEx as a little bit of a leading indicator on it, there's not a perfect correlation there because they do have optionality in where they do it. But they're not going to let their networks get bad enough to see subscriber churn and hurt their business for the sake of saving a few bucks.

And you mentioned spectral efficiency can help this mobile demand satisfy it, leasing, but also spectrum. Let's hit spectrum for a second because I always view that as a really nice indicator of what your business might look like in the future.

Sure. Well, let me just kind of reiterate. We're expecting the networks to need to double their capacity by the end of the decade. If you look at all the projections of baseline mobile data growth, not AI, baseline growth double by the end of the decade. And we believe about half of that demand will be satisfied by new spectrum being deployed and technology upgrades in 5G. Every time there's a software release, you get more spectrally efficient. But the other half is going to have to be solved through densification, adding more sites and more equipment to existing sites.

And so when we think about spectrum, more spectrum is good for towers. It always is.

GFT.

Yes. GFT, good for towers. And so we do have some spectrum that's going to come up for auction next year. It will take a little time to clear it and get deployed. Some of that spectrum may get deployed initially with a software upgrade, but radios are not infinite. So even if they initially use a software upgrade for it, there's a limit to how many megahertz, gigahertz, you can put their antenna. There's a limit to how much traffic is going to be there. So it's still a net positive for us because that will promote more traffic, the more traffic that comes through there, the more equipment they need.

So spectrum is good. What I'm more excited about in the spectrum bill and kind of the pipeline is the identification of 6G spectrum because the U.S. has been a little bit behind the rest of the world in identifying and clearing that spectrum. And if you look at The Big Beautiful Bill, it's direct to them to identify spectrum in that kind of 6, 7, 8 gigahertz range, which is predicted to be the ranges for 6G spectrum. That's going to go on towers at that high of a frequency, it's not going to propagate as well. You're going to need more towers. You're going to need more sites. And so when I think about 6G, it's the opportunity to get more colocations on existing sites and maybe to build again. So spectrum is good. The more we get the better, and there's some that's identified, and I'm anxious for that to get sold, cleared and come to market.

It's good to see the FCC get the authority to have auctions again. We've got an auction currently underway, a fairly small auction, get that gear going again and get that machine running.

Absolutely. We need the spectrum pipeline to keep turning.

You touched on data centers, I want to come back to that for a second. Some people kind of forget you guys have got Core. Right now, data centers are trading at a higher multiple than towers. Personally, I believe probably should be -- towers should be probably trading higher. Walk us through what you see with the data center business, why you own a data center business? And how do you get full value for that?

Sure. Well, I agree with you on tower multiples by the way. It probably comes as no surprise to anybody. Let me first distinguish what CoreSite is and what it's not. It's not -- I don't even like calling the data center business. It is an interconnection network-rich hub that lets people communicate to each other. It happens to also be a data center...

Probably get an acronym out of that, I don't know...

Yes, I can get a better name for it. If anybody has any suggestion that would be great. But -- the reason I differentiate that is it's a different business. There's a lot of noise around a lot of money flowing into hyperscale, which are kind of powered shells for single-use facilities. That's not what we do. What we do is we bring networks, enterprises and cloud providers together in an ecosystem where they can trade data directly without having to go out over the Internet and backhaul petabytes of data around. And so we're not a low-cost provider. We're a system that brings customers to clouds and clouds to customers essentially.

And now also AI inferencing is going in those facilities. And that's important because that gives us a more competitive moat around it, a more resilient business. It's a lot safer business, in my opinion, and some of the other stuff that's out there. But the reason we bought CoreSite was for the interconnection environment. Because as we started thinking about the edge and what that looks like, we realized that anybody can drop a shelter somewhere and run a fiber cable to it.

But that fiber has got to land back somewhere it's connected to this rich ecosystem. And we tried to partner with CoreSite before we bought them. We try to partner with some of the other guys as well. And they wanted all the value to go to them instead of to the infrastructure provider. So we think that by owning both ends of that, that gives us a right to win in that space when it evolves at the edge that we see coming eventually.

In the meantime, it's a phenomenally performing asset. Because that interconnection hub is the backbone of how people connect to each other, the AI inferencing is just as dependent on that distribution as the cloud on-ramps were. And so we're seeing tremendous amounts of new business in that. We're dedicating more capital to it. We're building it as quickly as we can. It's a great use of capital. We're continuing to underwrite mid-teens or better stabilized returns, and those get better over time. Those actually get up into the 20s on most of our facilities as they age over time. And it's a very low-risk business for us. So it's not a huge part of our business. It's about 6% of our attributable AFFO.

We hope to grow it bigger than that. But in the meantime, it's a double-digit growth engine and it helps underwrite better growth for us for the long term.

Does it feel like the market is not recognizing the value there, too? Like the market seems to be not -- public markets, are not recognizing what the value of the tower portfolio might be.

We are certainly trying to get the message out on that, Rick, and we do talk about it. We get asked that question. I don't know what all goes to the valuations. I don't always understand where the stock price trades with the current news on it. But we are certainly trying to get the message out, and we're trying to provide more information on it, talk about a little bit more. And again, I think if we can grow it to a larger percentage of the business, maybe people appreciate a little bit more.

Great. Let's go back to where we started almost was your stock performance, there's a large correlation -- inverse correlation to interest rates. What is an interest rate environment really mean to your bottom line AFFO, your fundamentals and how you invest? And some other real estate sectors, the interest rates can really swing.

When you think about our core business. Our interest rate sensitivity in terms of our AFFO is really just our debt stack. And I'll kind of refer back to the conversation I started with, which is we've taken a lot of that risk out.

We've reduced short-term debt. We've been refinancing things that had a lower interest rate on them previously, but we're kind of getting to the tail end of the really cheap debt refinancing. So you're starting to refinance stuff that had a higher handle on it.

So from a cash flow perspective, we've had some headwinds from interest rates. Those are moderating a bit, and those we believe if interest rates stay kind of where they are, will moderate over time. That's the biggest impact on our cash flow on it. When we think about underwriting our investments, it does affect our cost of capital and kind of how we're sourcing opportunities there.

But when we're looking at how to invest to create shareholder value over time, we're looking at what we think the right return criteria is on that. And while it may affect our hurdle rates a little bit, that's not what's preventing us from doing things like M&A today. The reason we're not able to participate in that market is we're not finding the right opportunities that give us the right growth for the long term in the right markets with the right characteristics.

So I would say it's not really the interest rates that are keeping us out of that market. It's more just not having the right deals on the table.

And fundamentally, the leasing activity is driven by mobile demand, not driven by the economy...

Absolutely.

Not driven by cyclicality. It's driven by the addictive nature of a wireless device.

They're not addictive. They're just useful. They're great. Don't limit screen time. There's no reason to do that. The -- if you look at the wireless business in general, we've been through numerous business cycles over our careers and it's proved to be resilient. And it's been recession-proof, investment, investment goes with the technology cycle, you're exactly right. We don't worry about interest rates affecting demand.

And if you look at the demand from our customers, our current projections that we're putting out for everybody in terms of our growth rates represent a new business rate with the 3 carriers that's roughly in line with the average new business we've had kind of even when we had 6 carriers and 5 carriers and 4 carriers. So we see a healthy demand environment for new business, and we don't see that changing based on interest rates or really anything else other than mobile data growth.

So when we think about the growth prospects, so let's bring it all back up to the 30,000-foot view level. What should investors think that American Tower can deliver at a revenue and an attributable AFFO per share growth rate and for dividends as you look out over whatever period you're comfortable with?

Sure. So what we've done is we've given you guys a long-term growth algorithm and let me just kind of walk through the elements of that quickly. So when we think about what our business is going to deliver, we think we can deliver reliably over time, mid- to high single-digit AFFO per share growth. And the components of that are this.

In our developed markets, we expect our organic tenant billings growth rates to be mid-single digits. So that's the U.S. and Europe. In our emerging markets, it should be slightly higher than that. Africa is performing higher today. We've had a little bit of repair in Latin America, but we expect to get through that and get back to that higher growth rate for emerging markets.

Of course, I would expect to have double-digit growth rates over time. We're also going to be investing CapEx in new assets. So that will provide some additional growth for us. We're also going to expand margins. I committed on our last earnings call that we're on the tower side, we will expand margins 200 to 300 basis points over the next several years. We may have a little bit of financing headwinds coming up and FX is a little bit of a volatility piece there. But when you add all those things together, that revenue growth should deliver reliably mid- to high single-digit AFFO per share growth.

And that equates to dividend growth -- that's a board decision but...

So on the dividend side, the guide that we have there is that our policy is to dividend out 100% of our taxable income, roughly over time, that should equal our AFFO per share growth subject to board approval. But that is how you should think about the dividends. It should grow roughly in line with our AFFO per share.

And is AI, edge or any of that stuff in that? Or is that one of those asterisk items?

Those are asterisk items. That's upside. Our projections for that kind of mid-single-digit growth is based on kind of the baseline case is business as usual. And if there are events that change that for the positive, that could be upside from there.

Great. 2, 1, 0. We're done. Thank you, sir.

My name is Richard Choe. I cover Communications Infrastructure for JPMorgan. I'd like to thank Rod Smith, EVP and CFO of American Tower, for being with us here today.

I'd like to just start off. It was nice to hear John Stankey earlier talk about there's not any easy way to build and invest in your -- in networks. And in the end, I think long term, you need to have the best network to eventually win. And I think people forget kind of the critical part American Tower and other tower companies play in this kind of evolving modern world. So, in just, kind of, resetting expectations and, kind of, reminding people where you sit in the infrastructure, how do you feel your assets are in this ecosystem of, kind of, our increasing digital economy?

Yes. Good morning, Richard. It's great to be with you. And thanks, everyone, for joining. I think there's a couple of keys there that I heard you mention. One is the network quality. It's really network coverage, quality and capacity. That is critical for the networks, not only in the U.S. but around the globe, to keep up with and perform well in an environment where mobile data consumption continues to grow rapidly. That really is the key to everything.

The other word that you used, which I think is a key word is the critical infrastructure. Our infrastructure is amongst the most critical infrastructure within the wireless networks. Again, not just in the U.S., but also around the globe, the tower assets we have, coupled with the data center assets that we have in the U.S.

And as we look at our portfolio today, we are perfectly positioned and probably strategically stronger now than we've ever been in terms of executing on and benefiting from that growth in mobile data consumption we see in the U.S., which is -- has been driven by technology advances. That will continue as 5G networks continue to kind of roll out. They're at the tail end of rolling out 5G networks. 5G applications are still on the move. They'll be coming in the future. That will put another wave of growth in mobile data consumption. 6G will be right around the corner, and AI workloads haven't even really hit the wireless networks yet, but they are coming as well.

So there's a lot of evidence that there'll just be a continuation of applications and services that require increases in mobile data consumption, and our assets are perfectly positioned to help the networks perform the way they're intended to perform, but also help the networks to evolve to where they really need to get to, which is having those critical tower assets, having interconnection-rich, cloud on-ramp centric with heavy network density within the data centers that we have geographically spread around the world and then potentially connecting those assets together, the data centers and the towers, to drive the edge to put more compute capacity closer to the base radios to put more -- to provide access to the cloud on-ramps closer to the base radios. There is going to be likely changes to the network that our assets are perfectly positioned to not only benefit our shareholders, but also benefit the wireless carriers themselves and the subscribers to help the networks work well.

So the U.S. backdrop is fantastic. We've got really what I would consider the best assets in the U.S. in terms of that infrastructure. Our tower assets are #1 in our position. No one has better assets in the U.S. than we have in terms of the portfolio.

And again, our data center assets are very high quality, very unique and perfectly situated to drive the networks of the future. And then that is complemented by fantastic assets around the globe. The European assets we have are outperforming our business case. We expect them to continue to perform in line with the U.S. or faster in terms of the economic growth. Africa is growing a few hundred basis points faster than the U.S. now. That could continue for a number of years given where their network deployments are and the amount of infrastructure that the markets that we're in, in Africa need. Latin America is going through consolidation. It's been a fragmented market. This year will mark the peak of churn in Latin America. Once that subsides, the markets will be in a more constructive position, particularly Brazil, moving to a place where there are 3 wireless carriers today.

And starting next year, we see churn decreasing rapidly and new business probably accelerating and that being very constructive to us and our Latin America portfolio returning to normalized growth when you get into moving towards that in '27 and '28 and beyond. So the backdrop looks really good. It's all centered with us with the critical assets, the highest quality assets in the U.S. within towers and data centers, complemented by the portfolios we have around the globe to take advantage of the different timing and cycle of network rollouts around the world.

Yes. I think it's great that you have this whole, I guess, infrastructure that -- and we'll go back to data centers later, but you can kind of see what's coming down the pipeline. And right now, it seems like we have a lot of data creation, a lot of data analysis and generation at data centers. But eventually, people are going to use that on their devices. And the last mile is literally the tower. So I think people kind of get caught up a little bit in the kind of quarter-to-quarter, day-to-day lease rates, churn. But over time, do you see any change coming in terms of your long-term domestic growth rate? Or do you see kind of the same outlook that we've seen for some time?

We've been focused on driving a higher level of quality in our earnings across the globe, including in the U.S. Certainly, in the last few years in the U.S. specifically, we've had a couple of event-driven noteworthy churn events being Sprint and DISH.

With the absence of those, the other parts of our U.S. cash flow and revenue streams have been very consistent. And we think we return to that consistency next year when our cash flow and our revenue no longer has Sprint, which it doesn't today, and it will no longer have DISH in it. And what is remaining is revenues from the 3 big wireless carriers, and we all know where they are in their network development and their focus on wireless networks. So I guess, I would say their renewed focus and prioritization of their wireless networks.

So we're heading into an environment really beginning in '27 where consistency is the word, particularly in the U.S. stable mid-single-digit organic tenant billings growth, a steadfast focus on efficiency, cost control and margin expansion and then really smart, disciplined capital allocation, all supported by a really strong balance sheet, highest credit rating in our environment or in our segment and the lowest amount of debt. We've reduced our reliance on floating rate debt. So we've got much more certainty in our interest charge line within AFFO. So we're in a really good place.

And when the U.S. has that type of stability, which we are getting to and we'll be there for next year. The rest of the globe complements that. The Europe, Africa and LatAm markets complement that. And all of those markets are heading to a place where they are likely to perform maybe consistently, 200 to 300 basis points faster growth. You could have disruptions in FX here and there. This year, FX is a tailwind. FX is not always going to be wildly negative. It could be mildly negative on a normal basis, and sometimes it will be positive.

We're coming through a period where emerging market currencies have devalued relative to the U.S. over the last several years. It's probably going to be a little bit more stable in the next few years. So you have that stability in the currencies combined with the amount of development that those markets need and the high growth rates that we're seeing, as an example, in Africa, that's going to be really constructive and complement that mid-single-digit AFFO growth that we see in the U.S.

Yes. And you were talking about having your offering last night in Europe. I think it gives you a lot of flexibility in how you finance the business. But I guess for people that don't know as much about international markets, can you talk a little bit on how the organic growth is? Because you talk about FX being up and down and then there's also CPI escalators that could move around. But it seems like there's real significant organic growth coming from these markets, maybe at different levels and different speeds. But in the end, I think the ability to communicate the need for good networks is kind of universal. And maybe separating out the discussion a little bit between your European assets versus your more emerging market assets. How do you view those opportunities as you sit here today?

Yes, I'll start by making a couple of comments on AFFO and AFFO per share. Our view is we will have industry-leading AFFO per share growth. That's going to be underpinned by mid-single-digit revenue growth in the U.S., complemented by faster revenue growth in emerging markets and double-digit revenue growth in our data center platform, a position that's perfectly positioned to deliver mid- to upper single-digit AFFO per share growth reliably.

What that means from the non-U.S. markets is Europe is a set of very high-quality economies, growing the revenue stream there at mid-single digit or better, the same or a little faster than the U.S. is very constructive, and that's what we expect. And there's consistency there.

We're insulated from significant churn events in Europe because much of our revenue is tied to Telefonica on long-term contracts. So there really isn't the opportunity for these onetime non-recurring event-driven material churn like we saw with Sprint and DISH. So Europe is very stable and will be additive to the U.S. growth.

Africa, we're seeing upper single-digit organic tenant billings growth, and that includes offsetting it with a few hundred basis points of churn, which is what we're seeing. That's probably a pretty normal environment for Africa. We think upper single-digit AFFO or organic tenant billings growth is what that market should deliver not every single year. Sometimes it will be double digits. And sometimes it may be lower upper single digits, but it's going to be strong growth. That's what we expect there.

The offset to that is FX and escalators. The escalators really are a natural hedge to offset the FX risk. So what drives the FX risk or the devaluation of currency is when their inflation rate is higher than the host country. So in our example, when inflation is higher in Nigeria than it is in the U.S., you can expect the Nigeria currency to devalue over time at a rate that equals the differential in interest -- in the inflation rates. So there's a natural hedge built in there.

You may have some ups and downs over time. But long term, we should be able to cover off the FX risk. And then we are left with the real growth. The activity-based growth offset by any churn. And in Africa, we see that being upper single digits. So I think it's going to be really constructive over the long term and additive to growth. It helps us bring up that mid-single-digit revenue growth in the U.S. By the time you get down to AFFO per share, you're at upper single digits. It's because you've got these emerging markets that can grow faster. It's -- we add the expense focus in addition to that and the margin expansion.

And with all that said, there are other elements here that could drive upside, most notably, not the only one, but most notably, AI workloads tipping out of the large language model facilities and the hyperscale facilities into facilities like CoreSite at an increasing pace. And eventually, I agree with you that, those workloads will be getting out onto mobile devices. And that means that it needs equipment and towers in order for the networks to function properly.

So this -- my expectation is, there's a never-ending cycle of capital into wireless networks to keep up with the insatiable demand of mobile data consumption. And that's just going to continue. And there will be applications and services available to all of us as mobile devices that we can't even imagine today.

It's funny. I want to hit Latin America and Brazil at some point. But since you went to data centers, I want to have to talk about CoreSite. I mean, there are very few assets, I feel like, that have the interconnection density and footprint that CoreSite has and Equinix and Digital Realty are there also, but CoreSite was a great acquisition. Kind of how are you looking at your investment in CoreSite? How much can you invest and grow that business? And what kind of perspective does it give you in terms of your tower assets as you see AI inference kind of grow?

Yes. We've owned CoreSite for a number of years now, and it's performing exceptionally well, better than we originally underwrote. We've had a number of record-setting new business years in a row, and the demand in the pipeline continues to be strong. So some say our timing was lucky. We like to think that this was a really important asset that we identified and bought.

The reason we bought it was strategic. It wasn't just financial. It wasn't just opportunistic. It was the idea of advancing the networks within the U.S. and around the globe to the point where they can handle the higher levels of service that come with 5G applications, 6G will be coming. And now with AI, it just accelerates all of that where to have the services work properly and for the user to get the full extent of those types of services, the networks have to be reengineered.

The ability for the wireless networks to have symmetry with uplink and downlink is going to be really important. That doesn't exist today, and that's got to be built in. When that happens, the latency within the networks also has to improve for 5G, 6G and AI applications to function properly. That means you want to have more compute power paired at the tower site where the base radios are with a network that has as much uplink capacity as it does downlink capacity. That means more antennas and lines in the towers and more compute-type equipment, maybe cloud on-ramps and interconnection ability at the tower site.

So with our CoreSite facilities connecting those into tower assets, we are in a perfect position to continue to benefit from the development of the mobile data, the mobile networks and the mobile data consumption growth that we see. One of the interesting things between the data centers and towers, for us, they're not just 2 asset classes. They really are strategic and they represent a critical infrastructure in these networks of the future. And the demand drivers are very similar, if not outright the same. It's compute power. It's what the end user is going to be doing on their devices, whether they're mobile or stationary.

We spend lots of time and we have for decades understanding how people use devices and what that means to traffic on networks and what traffic on networks means to carrier investment and our ability to support that and monetize it. It's the same on both sides. The activity and the growth that we see in data centers gets out and drives growth on the towers. So we've got the same revenue drivers, the same demand drivers that we understand really well, and we can invest in that and not just in towers, but also in data centers very successful. And I think we've proven that.

So we're going to continue to invest in data centers. We've got those investments up now from 200, it's gone to 400, then 600, 800. And that's because there is record-setting pipeline. We're getting double-digit growth as a result of that. We're getting to stabilized yields faster, which means we then have to replace new available capacity. And eventually, we hope to and look to tie those assets into the tower sites.

Yes. I think, people should realize that it's not just your availability of data centers and power, but it's the connectivity. And I think a lot of the wireless networks right now is kind of download focused, but with AI applications, we're kind of seeing more 2-way traffic, call it, and uploads. I guess, as CoreSite has developed, like what should people know about the kind of connectivity aspect that is selling the product, not just having data center space and power. As you've seen things evolve, how has CoreSite kind of differentiated itself in a kind of overall data center market that seems to be going really well.

Yes. It's a great point. That word differentiation is important. Not all data centers are the same. They don't all function the same. They're not at the same level of development. What we saw in CoreSite originally has proven out to be true, which is -- it is a high-quality platform with exceptional management.

The high-quality platform really can be measured or identified in a number of ways. We've got cloud on-ramps and multiple cloud on-ramps represented in many, if not most of our facilities across the U.S. That in and of itself makes the centers much different than a data center without a cloud on-ramp. So customers, the big-name enterprises want to be in there so they can tap right into the cloud on-ramps efficiently.

The quality of the network, the number of networks that are represented in there are important too. We've got over 400 in our 9 campuses, lots of networks in there. And then interconnection represents the ability of enterprise customers to cross connect to one another and communicate directly with other enterprise customers. We are driving a level of interconnection. It's really only second behind Equinix. So for a relatively small portfolio on CoreSite, it is interconnection rich, and it's a fantastic attribute of that network, certainly.

The other pieces that people don't think about a lot is just the quality of the infrastructure within our data centers and how well they position us to be critical in the networks of the future. It's the power availability. It's the backup power availability. It's the cooling systems that allow the GPU density to increase in the amount of compute power. In order for that to work, the facilities have to have the right setup in the right environment and CoreSite facilities have that across the board.

So we have been increasing the GPU density. We use liquid cooling in a lot of our facilities that's central to the assets we have. That's what is driving the customers that are in there to increase their interconnection, which is really them increasing their commitment to be within that facility over the long term.

And then they want more space and more power, which is why we're building so much is to keep up with the demand not only from our existing customers, but new customers that want to come in and be part of that ecosystem, tapping into networks, tapping into cloud on-ramps, interconnecting with one another, being able to increase their GPU density within our buildings in a cost-effective way where we already have the liquid cooling or we're able to have -- provide that density for them. So we have a very -- we call it differentiated, but it is of a quality that is really unmatched across the industry. And again, the interconnection and the cloud on-ramps is only second to Equinix.

Yes. And it seems like your business is growing not just with hyperscalers, but also enterprises and I guess, some of the leading-edge new tech or AI companies, I guess, you call it. What are you seeing from more traditional kind of enterprise businesses? And what are your conversations like in terms of the capacity or the level of connectivity that they're looking to buy from CoreSite?

Yes. I mean we have a whole host of enterprise customers that provide some of their workload requirements in our CoreSite facilities. Over the last few decades, we saw a shift from enterprise customers building out their own computer rooms within their facilities, managing all their IT on their own, keeping all their data and everything on-premise. That, over time, shifted towards cloud and everything was moving out of the enterprise location and moving remote off into the cloud.

And now we see a hybrid where part of the enterprise, compute and data, they want access to it closer or in their facility and much of it can still be up in the cloud. CoreSite is the piece there that stays closer to the enterprise. So we're seeing a lot of enterprise users pull things out of the cloud and put it in CoreSite and then they want that cloud on-ramp, so they can connect back into the cloud on-ramp. But they have closer proximity of their compute to their enterprise location, which is key. We see that the demand of compute power just -- the demand just continues to go up.

The other piece that we're seeing, and this is maybe specific to AI, but it's also kind of a technology evolution where the amount of data processing is just going up and up and up on the networks. We are seeing now enterprise customers continue to do all the normal things that they would do and maybe even at an increasing pace. But now we're also seeing them look for space, power and cooling and GPUs and the density to build their own smaller language models so they can figure out how AI is going to be applied to their enterprise and applied specifically to their data, where they'll use the large language models, but they also build their own to process their own data. That is something that we are seeing taking shape within our CoreSite facilities.

I think we're at the very beginning of that. It's not cannibalizing the existing activity. It's additive to that. And when I say all companies, even American Tower, we're all doing it. We're all looking at ways to use AI within our businesses, and it's going to require more compute power and more facility space and dedicated modules and smaller language models. We're seeing that hit the data centers early on here. But I do think we're at early stage of that. And that's why we see compared with the traditional business continuing to grow, double-digit growth within CoreSite and AI just coming into the facilities, we just see a very constructive pathway for very solid growth and the ability to continue to deploy capital into CoreSite.

It's interesting because you have so much to go over on your earnings call. I don't think we always get to that level of specificity. I think the private AI deployments that you're talking about, we weren't expecting until 2028 and the fact that you're seeing some of that now is impressive. But I think more so, I guess, your ability to handle that level of density is something that you haven't talked a whole lot about. Can you talk a little bit more about your ability to service these higher levels of density that people might not realize that CoreSite is able to?

Yes. I think we're in very good shape for a couple of reasons. One is many of our facilities are anchored with liquid cooling chillers that allow us to cool very deep GPU dense cabinets and areas. So we've got that in place without a huge capital upgrade. And we've been doing that very successfully, having much more density with the GPUs and it works perfectly fine, and we can continue to do that.

The other thing I would say is, years ago when we first bought CoreSite, we expected a ramp-up in activity with a larger parent, more financial support, being able to invest into the tailwinds that, that sector had, unlike CoreSite on its own as a public company, struggled investing a little bit. That was a pain point for them.

And so we knew that, that was going to be coming. And so we were ahead of the curve in terms of procuring power in our facilities across the U.S. We've been at a pretty good clip, expanding and buying land adjacent to or within the campuses we have to build brand-new shells. And we've been building brand-new shells in a number of facilities, and we have the power available and the land available to continue to do that to handle the pipeline and the backlog that we have today.

So if we were waking up now and saying AI is coming, we would be a few years behind in terms of trying to catch up. But luckily, early on, we began to ramp up capital investments, procure the land, procure the power, and that has proven to be really wise. And we're continuing to accelerate that. That's why you see the CapEx that we're investing in CoreSite has gone up noticeably.

But the key that I would also say there is it's within a very disciplined capital allocation approach. So we've sharply increased investments in CoreSite. We haven't sharply increased our capital investments overall. We've reallocated investment capital appetite away from emerging markets and towards the U.S. and in CoreSite, and we're doing build-to-suits in Europe.

Yes. It's funny that you can spend hundreds of millions of dollars and people don't blink anymore though you're spending that level of capital. You mentioned earlier, like you have this kind of AFFO per share growth algorithm, and you have this great CoreSite business, but sometimes it might get lost in the larger portfolio of assets. But it seems like you are committed to, kind of, keeping these assets together to help invest and leverage each of the assets off of each other and kind of under this financial portfolio that you can kind of allocate across the different types of businesses.

What are investors missing because right now, there's kind of this disconnect of the valuation that the public markets are seeing versus what we're hearing how the businesses will do or are doing. How do you look at these different parts? And what do you think people are missing in these assets kind of being together?

I think the first thing I would say is that, these are long-term assets and creating value for shareholders over the long term is really the lens to look at this infrastructure in this real estate, both towers and data centers. That goes for our U.S. assets as well as our assets around the globe. They're long term in nature.

And the value creation is over the long term. And when you look at it through that lens, consistent earnings growth and even small improvements over the way, compounded over decades creates a lot of value. So if you have long-term investors that really look at these assets and they worry less about, oh, there's 1 year of DISH churn or we had this happen, selling to India had a little dilution, like those things come and go, and we would rather have them not come at all, which is why we've been focused on quality of earnings, which I think we've made great improvements there.

But now we are sitting at a place where we have really the essential infrastructure for networks around the globe to work properly. And we have our very best assets in the U.S., the most constructive, highest quality economy where we see the demand is just going to continue as we go forward. And there could be synergies between towers and data centers and driving the edge and tying things together. But even if there isn't, there -- these -- both of these assets are really well positioned, and they're both critical to the networks, and we understand the revenue drivers. They're not misplaced by having them together in our view.

What I think investors might be missing is not looking at that longer-term view. Being too worried about what happened this quarter, last quarter, is new business going to be at this level this year, or is it a little bit lower than that? Think about this over the long term, think about the growth in data consumption over the networks, think about the technology upgrades, the new spectrum, the services that will be coming, try to envision the services that you can't even envision today, but you know they'll be here. The world will be different 10 years from now, and our assets will be essential to make the networks work well, and we and the shareholders will benefit from that.

That's one of the things I think the private investors do a little bit differently is they don't have quarterly reporting requirements. They're not overly concerned about onetime events and growth on a quarterly basis. They're internal rate of return driven. And there's a time horizon that they invest in, and that's getting longer with these assets, not shorter, even private equity invest in these assets for 7 years, 10 years or beyond.

And they really look at the revenue drivers, their economic ability and power to drive a certain internal rate of return over that time, and they're very comfortable with what they see and they price the assets accordingly. I think public investors look at the shorter-term volatility a little bit too much. You're not getting full credit for the data centers, so maybe you should separate those. We may not be getting full credit for the data centers. We may not be getting full credit for the towers. Over time, I think it will become much more clear how important these assets are to the networks, how anchored our company is with these fabulous U.S. assets and the nice complement we have with assets around the globe and how they will contribute to growth over the long term.

Yes. And I mean, I guess it feels very short term to think you need to try to realize value for a certain asset at a certain time. But the way you're looking at it is, these are probably critical assets that would be hard to replicate in another way if you're starting from scratch or even a private enterprise. Is that how you're viewing kind of your whole portfolio in view?

Yes, I think that's exactly right. I mean, when you think of the changes that will happen to the networks, the requirement for more compute power and cloud access closer to the base radios, you'd have network -- networking companies needing to talk to tower companies as well as data center companies and maybe others or for a tower company to participate in the edge, there need to be a partnership with a data center company, that gets very complicated.

We have the greatest assets in the U.S. We have some of the greatest -- we have the greatest tower assets in the U.S. We have some of the greatest data center assets. We have the cloud on-ramps, the compute power, the interconnection, high-quality names, all the hyperscale players are in our facilities. They are our customers now.

The folks that will make the edge work are our customers. The folks that need the edge to work are our customers as well. We are perfectly positioned to tie things together. We don't need to do economic sharing to kind of partnership to bring the right assets. We own the right assets, and we're in a really good position. I think that will become more evident over time -- and you'll see just how critical these assets are and how stable the revenue and earnings growth can be, notwithstanding the fact that we've had a couple of years, a few years here where we've had these onetime non-recurring event-driven headwinds, the Sprint churn, the DISH churn and things like that, but that really is behind us.

Great. I think we'll leave it at there, and it will be nice next year to not have to talk about those onetime items. Have a good day.

Yes. Thank you, Richard. Thanks, everyone.

All right. Well, good morning, everyone. Thanks for joining us for the second day of the MoffettNathanson Media, Internet & Communications Conference. I'm Nick Del Deo, and I'm thrilled to be joined by Rod Smith, EVP and CFO of American Tower.

Good morning, everyone. Thanks for joining so early in the morning. Yes.

Thanks for joining us, Rod. Appreciate it.

Welcome. Happy to be here.

Yes. So listen, I want to start with an interesting comment that Steve made on your earnings call a couple of weeks ago. He said, "I believe that American Tower is on its strongest strategic footing in at least a decade." It's a pretty strong statement. So I wanted to know if you could expand on what he means by that.

And more importantly, what it means for the company and for its investors prospectively.

Yes, it's a great question, great way to start this morning. And I would say 2 things on the outset. One is the genesis and the basis for that comment is, number one, American Tower has never been stronger, and I'll explain what that means to us. And that's also combined with just a great set of opportunities. And you take that strength and put it up against the opportunities, and we do think it is amongst, if not the most, compelling strategic framework that we've had at American Tower.

So when I highlight the fact that American Tower is incredibly strong at the moment, it really comes in a few categories. Number one, we spent several years strengthening the company, improving the balance sheet strength, reducing the interest rate risk by reducing our exposure to floating rate debt. And in the last couple of years, we've had 2 notch upgrades on our credit rating. We're up to BBB+. That's a pretty strong investment-grade balance sheet, certainly the strongest amongst all of the tower companies.

We've also paired that strength with improvements in the quality of our earnings and the mix of our cash flow. So you've all heard us talk about the fact that we are focused on increasing exposure within our cash flows from the highest quality economies in the world, the developed markets. And at the same time, reducing our exposure in our cash flows from emerging markets. Some of the places where you see more volatility where we've experienced more volatility, we've made great progress along those lines, and we have our exposure to emerging markets now down below 25%, moving to 20% and we will continue to bring that lower.

So the quality of our earnings is much better, much stable or much more durable, and we think that is important. We've also improved our margins by a few hundred basis points over the last few years. We've streamlined operations around the globe. We've created a global Chief Operating Officer, so we can unify processes and have standards around the globe and take the best part of our company, which is our operational ability in the U.S. that we've been honing for 25, 30 years and really accelerating rolling that operational expertise out across the globe. That's helping us reduce costs and improve margins.

So we have an incredibly strong business. We have an incredibly strong balance sheet. And that is great, but the thing that makes it even greater is it's up against a fabulous set of opportunities. When you look at the kind of the go-forward path here across our portfolio, we've got a great portfolio in the U.S. We've got 5G rolling out. 5G applications are on the way. The U.S. business is more stable than I would say it has been in decades with the Sprint churn behind us, the DISH churn now behind us.

The cash flows in the U.S. are incredibly stable. So we feel really good about that. We have that great tower business. 6G is on the way, and we see a stable mid-single-digit recurring revenue growth in our U.S. business, which is the anchor for the whole business. And then we combine that in the U.S. with CoreSite, a fabulous set of interconnected rich data center assets with cloud on-ramps, hundreds of networks represented within those facilities that we have.

And this is at a time when compute power across enterprise customers and others is just accelerating. And we're seeing that in our pipeline. We're seeing that in our growth rates. We've had a record new business across that platform. We're seeing double-digit economic growth over the last couple of years, year-over-year.

And with the demand that we're seeing, we don't expect that to change. And AI workloads and interesting is just coming. It's just beginning to really get through our pipeline and get into our facilities. So you look at that high-quality assets, you look at the strength of our balance sheet and our operational business. The combination of towers and data centers with the backdrop of demand. It's an incredibly compelling story, it is the way we see it. And we've been working over the last several years to position ourselves for what we see unfolding right now.

Great overview. Touches on a lot of things, and I want to dig into more. I guess to paraphrase almost, it sounds like $1 of earnings is worth more than $1 of earnings in the past, and you've got a better ability to prosecute the opportunities ahead.

Yes, I think that's right. And I would just emphasize again the quality of earnings. That is important to us. We take actionable steps to improve that. We have -- you've seen it. selling India was an effort to improve our quality of earnings. What quality of earnings means to us is the higher quality, the more durable it is, the more predictable it is, the more repetitive it will be that we can count on, not just the recurring some of the cash flow, but the growth as well with fewer and smaller potential disruptions.

Great. Great. Well, let's dig into the growth outlook. Probably the most common question I get from clients, not surprisingly relates to the growth outlook for the U.S. tower business. There are several different facets to it, whether it's spectrum auctions, the industry structure, 6G, AI and so on. So historically, the spectrum auctions have been a stimulant for leasing. There are some auctions on the horizon, think most notably, the upper C-band middle of next year and you've got several hundred megawatts megahertz in the years that follow for 6G.

So I guess with respect to C-band, what's your current understanding as to what's going to have to be deployed on the towers to make that work and the degree to which carriers may or may not be able to reuse C-band equipment that they have today.

Yes. I would start there by maybe taking a step deeper and going to level deeper. The reason the industry needs additional spectrum, which it does. You hear all the wireless carriers talk about the need for additional spectrum. And that need is coming quickly in the short term, in the next few years. There is an allocation of spectrum pushed in The Big Beautiful Bill. So it does look like Spectrum will be coming. But that's not the whole story. The real story is why does the industry need that spectrum. The industry needs additional spectrum because of the growth in mobile data consumption across the network. It continues to grow at a rapid pace, 30% to 35% a year. That means every few years, it doubles. The amount of bandwidth going through wireless networks is doubling. And that means that the amount of capacity built into the wireless networks also need to double over the next several years to keep up with that growth in mobile data consumption.

The way the wireless carriers keep up with that is by expanding capacity within the network. They can do that by bringing in new spectrum and increasing the amount of spectrum so that you have more capacity available or you have to reuse the spectrum you already have more frequently and break it down and separate it and either way, whether you have new spectrum coming in, like will probably be happening or if you don't get the spectrum and you just have to reuse your existing spectrum more frequently, it's going to require additional equipment on the cell site.

It's going to require additional base radios, additional radio heads up on the towers, cables and lines going up and down the towers and additional antennas and maybe new antennas as well.

Some of the spectrum, certainly it can be -- it can reuse some of the existing equipment up there, but much of it is going to require new equipment. But -- it really is -- the story really is beyond the spectrum, it's about the growth in mobile data consumption. And as that data consumption growth continues to increase, there needs to be more equipment on the towers, whether there's new spectrum or not. That is what underpins our growth going forward and what makes us feel very comfortable and confident in the U.S. position in our towers and our ability to grow in that mid-single digits year-over-year reliably.

And I would say we've been doing that over the last several years but we've also added some event-driven headwinds, very specific event-driven headwinds like Sprint churning off their network because they were bought by T-Mobile, DISH selling their spectrum and coming off of that -- those are event-driven onetime items. The underlying run rate business from the 3 big carriers and others has been very consistent in delivering that mid-single-digit revenue growth.

As I think about some of the spectrum bands coming to market in the coming years that the NTIA is looking at, very high -- or I shouldn't say very high, but much higher frequency bands than what's been deployed today. I think all else equal, people would generally say that higher frequency means you need a denser cell grid to support it. On the flip side, somebody might argue that maybe it's so high that it's uneconomic to deploy in some areas. How do you shake out on that front? .

Yes. I mean there's no question that we are already into the higher bands of spectrum. And when you get through 5G and into 6G, it's absolutely likely that we'll be into higher band spectrum, high C-band spectrum.

And the higher the spectrum band, the benefits to the networks are that they're -- It's a wider band and there's more capacity. More advanced applications require more capacity. AI-driven applications are going to require more capacity. So it is that higher spectrum is a benefit to the network in getting these more advanced applications to work properly.

With that said, the higher band spectrum and the more capacity, the shorter the reach, it doesn't propagate as far. So if you look at a 600 megahertz design ring and then you overlay a higher band, high C-band spectrum over that, it's not going to reach nearly the coverage zone that the 600 does. It will be much smaller.

So what that means is if you want that higher band reach capacity benefits and service benefits like lower latency, faster speed, just that higher throughput, you're going to need to densify the network. You're going to have more transmission points where in 600 you have 1, in a higher band spectrum you might need 2 or even 3 over time. That's where carriers will be co-locating on existing towers and are currently on to reuse the spectrum to have more transmission points within their network or they'll build additional sites to densify it.

But I do think that's where the industry is headed is these new applications, these higher, faster, bigger services that require more capacity definitely are coming, and it's going to require more transmission points, which is really good for the tower sector for us, in particular, I'll just remind folks that across our 43 towers, our largest customers are on something roughly equivalent to half of our towers, which means there's roughly half of our towers are available for all of the 3 big carriers to co-locate on a tower they're not already on, and that could be the first wave of densification could be increasing colocation.

Then the next phase may be building new towers, which we -- as we pursue really leaning into the U.S. market, both on the tower side and data center side, deploying more capital in the U.S. is something we're interested in doing and building towers for the carriers is something that we would be interested in doing.

Okay. Great. In your opening remarks, you talked about having Sprint churn and DISH churn sort of in the past kind of speaks to consolidation in the industry and going down to a few financially healthier carriers that are more stable. There's one argument to be made that in that sort of scenario, they can afford to invest more in their networks over time and then it's beneficial to towers. On the other hand, one could argue that more carriers there are, there's more redundant deployments, more inefficiency in the network, less coordination in the past, and that's -- that dampens leasing activity relative to what it might have been. How do you think about those puts and takes as we think about the longer-term trajectory relative to the past?

I think trying to identify in the industry getting to the optimal number of carriers and having them be healthy fully competitive balanced market share, that's the best backdrop for us. In the U.S., that looks like it's 3 carriers. That could be an argument that a 4-carrier backdrop in the U.S. could also make sense and could be stable. And if DISH continue to pursue the build-out and really focused on getting subscribers, that could have been the fourth network. That is certainly possible.

But we've seen in the U.S. and around the globe, when you have 5, 6, even more carriers within the marketplace, it has proven to be unsustainable over time. And in that environment, yes, you can get some lease up, but as things consolidate in, you may have a little bit of churn. But typically, the acquiring company needs the spectrum. They keep the subscribers. They even need the coverage in the cell sites. There could be some churn.

So it could very well be that consolidation doesn't drive significant churn. But on the other side, with something like DISH, it could drive a lot of churn. And with Sprint, there was obviously a lot of churn. We've seen some churn and consolidation down in Brazil. We think now in some of our biggest markets, the backdrop is healthier today than it's been in a long time. The U.S. with 3 financially healthy carriers in the U.S. all putting billions of dollars into the networks on an annual basis. We see at least in our customer base in Europe, anchored by Telefonica, again, high-quality economies, Telefonica is investing in the network. We're a big part of that. It's a very stable backdrop.

Even when you get out into Brazil in a place in Brazil that -- they've moved through consolidation. We now have a large market with 3 carriers, pretty equally distributed market share, healthy competition and we're right in the center of it. And that looks like it could be a constructive market going forward. With that said, we've got an investment there. We have assets there. Our plan is to sit and support the carriers and see how that network does over time, see how that currency does over time, not jumping in and increasing capital. But now letting the capital we've already invested there play out and really -- and watch the investment.

Okay. Great. So 6G. That's something that folks are starting to talk about. Still a number of years away, but I'm sure that you have teams at AMT kind of thinking about how that's going to play out. you're probably having preliminary discussions with the carriers, I'd imagine. So I guess what attributes of 6G do you find most intriguing from a leasing perspective?

Yes. there's no question you can't stop the technology and the progress that has made the networks today operate so much differently than they did a decade ago or more. If you think of the wireless networks pre-iPhone versus today, it's night and day what people do on their mobile devices and just how much traffic goes on the mobile devices. If you rewind even 10, 15, 20 years ago, very few people would have imagined how much and what kind of services can be done on an iPhone and a mobile device.

My sense is that's what the next 10 and 15 years are going to be like, which is whatever these networks evolve to look like over time, it's going to be different than what people expect. It's going to be more exciting. It's going to be more impressive. The services are going to be different, and they will likely require lots of bandwidth, very low latency, really quick reaction time.

And the one thing that I think people are really coalescing around in terms of 6G is that it will run on higher-band spectrum. The networks will need to be dense. The applications will be bandwidth intensive and that's all good for tower companies in terms of needing more equipment up on the networks.

Today, the networks are primarily designed for download speeds for people downloading data onto their phone and doing it relatively quickly. And there isn't nearly as much capacity or throughput on the uplink. It just hasn't been a function of the network. 5G and into 6G that uplink is going to be just as important as the downlink. So the networks have to be fundamentally reengineered and redesigned so that there's symmetry on the uplink and the downlink for some of these more interactive 5G and 6G services to work properly. That's capital investment, that takes additional equipment, and I think that's going to be pretty exciting.

I'm not going to guess at what 6G applications are going to look like because I know I'm going to be wrong. But I'm pretty sure they're going to be more exciting than any of us could imagine. And they're going to require lots of bandwidth. And the networks will need to continue to be strengthened, densified, more equipment to handle the amount of capacity that they're going to be asked to put through the networks on a daily basis.

So I was at the Tower Show ConnectX last week and a common theme that I picked up was the idea that 6G plus AI would be, maybe killer apps is the wrong term, but something that would help to stimulate leasing and traffic demand on the networks. Is that something that you guys are anticipating?

Yes, I think so. I mean when you think about 6G and the fact that networks will likely be dense or the uplink needs to be strengthened, it's probably going to also require and be the catalyst that really pushes the edge forward that brings compute power closer to the end users, closer to where the wireless-based radios are, and that's where our towers and our data centers perfectly position us to play a meaningful role in a 6G environment, not just putting additional equipment up on our towers, but also benefiting from the interconnection and the inferencing, the AI entrancing that we now see coming into the CoreSite facilities.

And we're at the very early stages. Our sense is that, that's just going to continue to ramp and we're going to continue to see very healthy pipelines in our CoreSite facility as well as seeing acceleration in the amount of equipment that goes up on our towers over time as we get through 5G and 6G. We see these new applications hitting. And then there's this ecosystem in the middle that is becoming more of a reality. More of the players are talking about it. The carriers are talking about it. The chip companies are talking about it. And that is driving and pushing cloud on ramps closer to the end-user, getting compute power closer to the end user with that inferencing can happen.

So to benefit from the high capacity and the low latency in the 6G wireless networks, you're going to have that capacity, that compute capacity and access to your information that might be up in the cloud, you want that closer to the base radios to again reduce transport cost, but also reduce latency and give you that faster reaction time.

So you don't want the benefits of the higher spectrum on the wireless networks to be lost when you get into the data centers. So pushing that out closer to that power is going to be key. And we're really well positioned to help the industry get there.

Okay. So that actually ties into the next topic I want to talk about, which is mobile Edge compute or Edge data centers. Yes, there's a lot of enthusiasm for that several years ago and it didn't quite play out. It sounds like there's more enthusiasm across the industry today. We heard that on everybody's Q1 earnings calls. I heard that at the tower show last week. And you touched on it a little bit, what gives you the confidence that this time around with 6G and what we're seeing is going to be different than what was anticipated a few years ago where it kind of petered out a bit, it didn't quite play out as expected?

Yes. When we bought CoreSite, which was several years ago, 1 of the things we really like: in addition to just the high-quality differentiated set of assets, we do think it's a premier set of data center assets in the U.S., and we wanted to own it. We also thought that pairing that with our towers in the U.S. that we would be the perfect partner to develop the Edge, and we saw that coming even years ago.

It has been happening just slower than we thought. Maybe you could just say much slower than we thought. But we have seen progress in that pursuit. More of the carriers today, more of the tech companies and the chip manufacturers are all talking about the Edge. They're all formulating their plans. We're in the midst of many of those discussions with people. So I would say, as we sit here today, we are highly confident that the Edge is coming, that it has to come because it's a necessary component of the networks to make everything work well into the future.

Then the real question is, are we really differentiated? What is our value proposition with our towers and our interconnection-rich, cloud on-ramp, kind of dense geographically dispersed set of assets up against all of our tower assets, bringing those together, does that put us in a good position to fill that need for the industry, and that has yet to be seen. We'll continue to work through that. But we're at the table. We're having the discussions with lots of different parties.

I'm highly confident that the Edge is definitely coming. We'll figure out what the business model is and how we best support the industry and our shareholders in what role we potentially play there. And as we do that, we'll continue to be disciplined. And it will develop, we potentially would be right in the middle of it. And to the extent that it doesn't develop as quickly as we thought or if for whatever reason, we don't play as big of a role, we still have a great separate assets that are performing exceptionally well.

And one of the keys there is the 2 assets, even though they look different they benefit and their revenues and their economics are really driven by the same demand. It's data consumption across networks. And we understand that really well. That helps us run both of the assets well. It helps us make capital allocation decisions and figure out where and when to invest because we know that ecosystem and the drivers around data and data consumption across mobile networks and through traditional landline networks as well.

Maybe it's too soon to tell, but do you envision this playing out such that you might have say, a small data center, a single small data center in a metro area, akin to with the trial when rallying with North Carolina? Or do you imagine it getting denser than that where you might have multiple facilities in a given metro area?

I think everything is possible, and I don't believe it's 1 size fits all. I think the way that it is likely to roll out is that there will be a continuous kind of connectivity from mobile devices right through to radios and into cloud on-ramps, you're likely to see as the Edge develops our core site facilities expand into other metros, moving closer to the end users. And in some places where there is high population density and the most acute examples of high bandwidth going through the networks, you could see relatively small data centers pushed out right to the very edge. And in other places, you could see larger centers kind of move back a little bit. And over time, everything probably fills in. So I think it's a little bit of all of the above.

Okay. Okay. Let's pivot to satellite. If there's a single topic I've gotten more questions on this here than any other, it's satellite. So questions from investors that whether it might substitute for capacity in rural areas, whether it's for a terrestrial customer layers, whether it could be something more, whether there might be a play on the part of someone to try to build out and become the new fourth player?

So maybe you could talk a bit about that topic, how you're thinking about risks, opportunities. And to the extent that there was news this morning about the carriers talking about putting together a joint venture to attack this, your initial thoughts on that?

Yes. I think it's a great technology. We have an investment in AST Mobile. We have a board seat on that publicly traded company. So we understand it well. We understand the technology well as a firm. And we track all the details of where that technology has been and where it's going.

And we think it's an exciting technology. It's a complementary technology to the terrestrial networks. It is a great way to extend coverage to hard-to-reach places and to very hard to reach places as well.

So I think it's a service to humanity to be able to have satellite coverage everywhere for people who need it and want it. The advancements around direct to devices is really good, compelling. But it's complementary. And what that means is it is not a competitive threat to terrestrial wireless networks. And therefore, in our opinion, it's not a threat to the towers that support those terrestrial networks. And it really comes down to physics and capacity and speeds. The satellites do a really good job of reaching into hard-to-cover areas. It is not an equivalent service in terms of the capacity or the speeds that you get in the terrestrial network.

So -- and when I say capacity, it's not just on an individual call doesn't have the capacity. The satellite arrays, they do not have the spectrum or the capacity to cover a population like the U.S. or any of the major cities or suburban areas. It's not possible. There are limitations to how many subscribers and what can be going through the satellite arrays, and it is a -- it is just a fraction of what the terrestrial networks do.

So it is a great complement. It gets into hard-to-reach areas and it extends the current terrestrial networks. In no way does it compete with what the terrestrial networks provide and what the terrestrial networks do. And then even when you get into individual phone calls, the amount of capacity and the bandwidth and the speeds, you'll be able to get that a level on terrestrial networks that you don't get on satellite networks. So those 5G, 6G services require the terrestrial networks.

I'm sure you've done a lot of work internally tower-by-tower to determine how many sites you may own that could conceivably face a risk from satellite, if you were to look at a few years with technology improvements and whatnot more spectrum.

Are you willing to put a number on that or dimension how small that is?

Yes. I mean it's -- probably not putting a number on it. What I would say is our towers are primarily in suburban areas where people live, and then they commute into the cities, and we cover the roadways. It extends out a little bit beyond where the traditional suburbs may be.

And -- but I would also highlight the fact that the cost of a megabit running through a network is for the carriers is much less if they're running it through their own network, including on towers that we own, they're parts of their network than it is to be paying on a minute-per-use to satellite providers or even on an MVNO in a lot of cases.

So what we've seen is the carriers would share networks on an MVNO basis in more rural areas. And then as their consumption got to a point where there was a tipping point, then they would turn on their own network and extend their coverage. That's primarily where our towers are when you think about the Edge of the network, they're unlikely to be displaced by satellites because that would just be transferring minutes of use to a higher cost, and you have already got the network in place.

With that said, satellites may prevent some sites from being built in rural areas. And that really will be a nice complement to the wireless carriers, and it will allow them free up kind of mind and resources to really focus on their networks, the core of their network, that's where we provide the service. So we think that's a good thing for us.

Okay. Great. There's some news a few days ago regarding DISH. The FCC and their orders approving the spectrum transfers from EchoStar to SpaceX into AT&T said that EchoStar would have to set up a trust funded with $2.4 billion to help cover claims of nonpayment, whatnot.

I know you're not going to show your hand here, but interested in your general thoughts about the structure that's been proposed and whether that might be beneficial for you guys?

Yes. Just a few brief comments. And of course, there's litigation involved and it's hard to really comment too much on government agency actions.

But I would say 2 things. One is we have a contract with DISH, it goes out over many years. And we have filed litigation to force DISH to honor their commitments within our contract. That pursuit continues regardless of spectrum transfer and any other FCC actions. And I would say the only limiting factor in terms of what we could potentially be awarded there is the rights we have within the contract and the lawsuit plays out and what the court system decides. It won't be limited by the amount of escrow and that sort of thing.

We have a contract. We feel very good about our rights. There is certain amounts owed to us, and we will pursue every aspect of that fully. And with that said, on the other side, separately, the FCC did approve the spectrum transfer. I think approving it is good. Not having that spectrum in limbo for a long time is better for, I think, everyone. So if the spectrum is not going to be built out anymore from DISH perspective and AT&T and others want to get their hands on it. When they get it, they will deploy it. So the sooner they get it, the faster they'll deploy it and the quicker that brings us to a new revenue event potentially as and when they deploy it.

So I think approving that is a good thing from our perspective given where everything sits today. And then on the flip side, that escrow, it basically just gives a limited kind of safety net to any judgments that vendors may get against DISH, that if they have trouble collecting on those judgments, there is some money in third -- in an escrow that you could try to go after. And we don't know exactly how that would be adjudicated, what the rules will be on that, how it will be administered, but it's there.

So that is better than if it's not there. But in no way does it limit what we would expect the court system to do in terms of helping us enforce the rights that we have within the contract.

Okay. Makes sense. Capital allocation has been a big priority for you guys in recent years. Like you said, focusing on higher-quality markets, more predictable returns and so on. In your remarks earlier, you said you were hopeful that you could do more construction of U.S. towers. I know historically, at least last several years, I think the sort of terms and conditions you're being offered on new construction did not meet your threshold. What -- how confident or what's your sense that, that is changing such that you feel like you could participate in more construction?

Yes. I'm not sure that it is changing dramatically, but the willingness on our end to deploy capital in the U.S. is certainly there. And as always, we will be disciplined. We do bring some things to bear that other smaller developers don't, the scale of our reach and our ability to build lots of towers quickly, time to market; the value proposition, I think, could be compelling. In this environment where interest rates are a little bit higher, smaller developers may not have as easy access to capital. So someone that has a large build plan that requires lots of capital, the options are fewer today than they might have been 5 years ago. And that is something that we'll kind of wait and see. We -- in terms of our focus on increasing exposure in the more developed markets, reducing it in emerging markets, we've been able to rotate our capital deployments to the best options for our shareholders long term in our view.

And that means today, we're allocating the vast majority of our discretionary CapEx is going into developed markets, primarily U.S. and Europe. And much of that is going into data centers in the U.S. So we continue to deploy $1.5 billion to $2 billion annually kind of opportunistically. And within that number, keeping that number relatively consistent, we've increased our annual capital investments in CoreSite, our data center platform from $200 million a year up to $800 million a year. And that may continue to be elevated because the demand is just so strong. And when I say demand, it is showing up just in our pipeline. It's giving us pricing power. It's fueling and driving double-digit economic growth within that business. And that doesn't appear to be slowing and maybe even accelerating with AI coming in.

So we've rotated capital -- and we've been able to dramatically increase the investments in CoreSite without dramatically increasing our overall capital programs or stressing the balance sheet. We've also been below 5x now back within our stated range, and we bought back over $500 million of American Tower stock in the last couple of quarters. And again, combined with accelerated investments in CoreSite and keeping our leverage download, everything on the balance sheet is really working where we're targeting where we put the capital.

We're maintaining that high-quality balance sheet and that is helping us with our quality of earnings because we're increasing the amount of cash flows we're getting in the U.S. and in U.S. dollars and now from CoreSite.

And that puts us in a really strong position to durably drive industry-leading AFFO per share growth. And we're targeting that in the mid- to upper mid-single-digit growth rates in the U.S. That's what we've been focused on for a few years and putting together the pieces that would allow us to do that, not just once or once in a while, but repeatedly, that's the quality of earnings.

And now that we're moving through DISH, we've gotten through Sprint, we've got India out of the way, we've grown into a higher interest rate environment with a much stronger balance sheet and longer-term financing, we're in a really good position to begin to deliver beyond this year once we get through the DISH churn that mid-single-digit AFFO per share growth, upper mid-single-digit AFFO per share growth. And we believe that, that will be an industry-leading growth rate.

That ties in perfectly to the last question I wanted to ask, which is kind of the growth algorithm for the stock perspective. So like you said, mid- to high single-digit AFFO per share growth over time. I think the yield on the stock today is around 4%. It's high single, low double-digit returns together, which is pretty interesting, given the risk profile of the business and the quality assets. So I guess one, in your mind, is that a fair way to think about it? And two, if you set aside rates and FX, which are out of your control, what are the swing factors that you think are most likely to influence that outlook one way or another? .

Yes, it's a great question. So I would say, putting aside FX and interest rates. And with those 2 things, yes, I think putting them aside is fine. We talk about it in that way as well. But I would also just highlight we're in a better position today than we were 5 years ago relative to FX and interest rates. They -- we have reduced the ability of FX and interest rates to move our numbers materially from where we were 4 or 5 years ago by reducing floating rate debt, extending our maturities on the interest rate side.

And from an FX perspective, we've increased the amount of the percentage of our AFFO, our EBITDA and AFFO that comes in U.S. dollars. And we've reduced the amount that comes in foreign currency. So we are in a better position, a more stable position, a higher quality position when it comes to FX and interest rates.

If you put those aside, we expect our U.S. tower business to grow on a revenue basis mid-single digits beyond this year when we get through the DISH churn. Excluding the DISH churn this year, would be in the mid-4%, 4.5%. So we have been in that range or better, 5% are around that over the last couple of years. We think that's durable and can continue.

So a 5% revenue growth on the tower side, Europe has been growing higher than that by 100, 200 basis points. We expect that can continue. You look down into -- Africa is growing upper single digits, almost double digits now, and it has been on an FX-neutral basis. So we do think that will continue. Brazil has been lower than the normal rate of growth because of the consolidation churn primarily driven in Brazil and a few other places with Telefonica exiting some markets.

We will be beyond the kind of the trough this year. And next year, that will be returning to more normalized growth. And we expect Latin America to grow 100, a couple of hundred basis points faster than the U.S. And then in the data center business, that's growing double-digit economic growth.

So you put all that together, you've got an upper single-digit revenue growth, you drop that down to AFFO. Managing expenses, we've continued to drive margin expansion and control costs, and that gives you the ability on an AFFO, AFFO per share to grow upper single digits. That's what we expect to deliver on average over time. Doesn't mean every year you won't put on average over time. Yes, the things that can move that. Certainly, the AI inferencing that's beginning to hit data centers, they could be upside there, certainly. In the U.S., the expectation that is underpinning our outlook here is just business as usual.

If there is a fourth player, that could be very interesting if there's any government investments in networks in the U.S., which they're have been in the past, and there could be in the future, that could be upside and interesting as well.

Growth in mobile data consumption, AI applications hitting, maybe densification accelerates, if you see increases in that growth in mobile data consumption, that could be a catalyst for additional investment by the carriers and growth as well.

So I think we're in a really good position to deliver mid-single-digit -- upper mid-single-digit AFFO per share growth. As things sit today, our risks have been reduced dramatically over the last several years. So quality of earnings is higher. We're really well positioned to deliver that growth. And there are a number of catalysts that could accelerate that .

Well, that's great. Unfortunately, we're out of time, Ron, but I appreciate you being here and help us walk through the store.

Thank you for having me.

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower First Quarter 2026 Earnings Conference Call. As a reminder, today's conference call is being recorded. [Operator Instructions]

I would now like to turn the call over to your host, Spencer Kurn, Senior Vice President of Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to our First Quarter 2026 Earnings Call. I'm Spencer Kurn, Head of Investor Relations for American Tower. Joining me on the call today are Steve Vondran, our President and CEO; and Rod Smith, our Executive Vice President, CFO and Treasurer. Following our prepared remarks, we will open the call for your questions.

Before we begin, I need to call your attention to our safe harbor statement. It says that some of our comments today may be forward looking. As such, they are subject to risks and uncertainties described in American Tower SEC filings, and results may differ materially. Additional information is available on our Investor Relations website.

I'll now turn the call over to Steve. Steve?

Thanks, Spencer. Good morning, everybody, and thanks for joining the call. I'm extremely pleased with our start to 2026. Our performance through the early part of the year, combined with favorable FX and straight line dynamics, led us to raise our full year outlook. The growth drivers shaping our industry continue to strengthen. Rising wireless data consumption, accelerating cloud adoption, rapidly expanding AI-driven workloads and future generational technology shifts, all point towards sustained investment and high-quality digital infrastructure. These trends are global, structural and long duration in nature, and they play directly to American Tower's core strengths.

Over the past several years, we've taken decisive steps to ensure that we're optimally positioned for this next phase of growth. We strengthened our balance sheet, refined our portfolio, shifted our capital to our developed markets and aligned our revenue base with the highest quality carriers in each of our markets. As a result, I believe that American Tower is on its strongest strategic footing in at least a decade.

Against that backdrop, I'd like to revisit the 3 strategic priorities for 2026 that I introduced last quarter, which are summarized on Slide 5 of today's presentation. First, driving durable revenue growth, including approximately 4% organic tenant billings growth across our global tower portfolio, but adjusting for onetime disrelated impacts and double-digit growth from our data center business. Our fundamental growth drivers are compounding. Mobile data consumption is growing at a rapid pace, supported by increasing smartphone penetration, continued 5G adoption, fixed wireless access and expanding enterprise use cases.

In the U.S., industry analysts project that mobile data traffic will double over the next 5 years, requiring a commensurate increase in network capacity. Notably, those projections don't fully capture the potential incremental upside from the transition to 6G or AI-enabled applications. While still early, the engineering principles guiding 6G point toward denser networks, more distributed compute and materially higher throughput requirements, each of which should translate into increased activity across our tower portfolio.

At the same time, AI investment is exploding. History suggests that technological revolutions tend to expand well beyond our initial use cases, and we expect that new AI applications are going to place meaningfully greater demands on wireless networks, both in terms of throughput and complexity. All these trends are inherently supportive macro towers. Terrestrial wireless networks are the only scalable solution capable of meeting this demand, and towers remain the most efficient, economical and flexible means of delivering network capacity, advantages that we believe will only become more pronounced over time.

These demand dynamics extend across our international footprint as well. In our European markets, mobile data traffic is expected to more than double by the end of the decade, which is expected to drive significant amendment and colocation activity. There are emerging markets, mobile data traffic is expected to nearly triple by the end of the decade, providing a long runway for growth as these less mature markets develop. Over the long term, we continue to expect our international markets, and our emerging markets in particular, to grow faster than the U.S.

These same sector tailwinds will translate into accelerating momentum at CoreSite. Demand is scaling rapidly on top of an already strong foundation, with sustained growth in hybrid and multi-cloud deployments and even sharper ramp in AI-driven workloads, including inferencing. Importantly, this quarter marked a clear inflection in interconnection activity, enhancing both the profitability of the platform and the long-term durability of customer relationships.

CoreSite continues to stand apart as a uniquely differentiated digital infrastructure platform. Positioning its convergence of network connectivity, cloud on-ramps and enterprise ecosystems, CoreSite drives resilient leasing demand while capturing a high-margin interconnection revenue stream. This powerful combination delivers structurally higher returns and positions the business to outperform traditional single-tenant hyperscale data center models, especially as demand for interconnected AI-enabled infrastructure continues to grow. After more than 4 years leading CoreSite, my conviction on the platform is stronger than ever. The business has meaningfully exceeded our expectations, and we're increasingly enthusiastic about accelerating CoreSite's expansion as a core driver of long-term value within our portfolio.

Our second strategic priority is driving operational efficiency. Operational excellence has long been a core strength of American Tower, and we continue to build on that foundation. In the first quarter, we made progress on reducing direct tower costs, particularly in areas such as land experience, maintenance, sourcing and internal technology platforms, and we remain confident in our ability to deliver 200 to 300 basis points of cash, adjusted EBITDA margin expansion in our tower business by 2030. In parallel, we're evaluating how AI can further accelerate efficiency gains across the organization. We believe this opportunity represents meaningful upside in future years.

Our third strategic priority is disciplined capital allocation. We remain in a strong financial position with significant flexibility. During the quarter, we continue to prioritize growth capital toward our [indiscernible] return opportunities in our developed tower markets and at CoreSite, while also allocating capital towards share repurchases. Our capital allocation framework remains unchanged. After funding the dividend, we'll continue to evaluate a full range of options, including M&A, opportunistic share repurchases and further deleveraging, guided by a consistent mandate to generate durable cash flow growth and attractive long-term returns on invested capital.

In summary, our first quarter results reflect a company that, throughout heightened industry volatility, has emerged stronger, more focused and better positioned for the future. The long-term opportunities ahead are extraordinary, and few companies are as well positioned as American Tower to support and benefit from the next wave of digital infrastructure investment.

I'd like to thank our employees around the world for their execution and commitment, and our customers and shareholders for their continued trust.

With that, I'll turn the call over to Rod to walk through the financial results and outlook in more detail. Rod?

Thanks, Steve, and thank you all for joining the call. As Steve mentioned, we are off to a great start to the year, and our strong performance, coupled with FX and straight-line tailwinds, have led us to raise our full year outlook. I'll start by reviewing our first quarter results, and then I will touch on our revised full year outlook.

Slide 7 shows a snapshot of our first quarter highlights. Consolidated property revenue grew approximately 3% year-over-year when excluding noncash straight line revenue and FX impacts. Normalized for the impact of onetime DISH churn, property revenue grew approximately 5% on a cash FX-neutral basis. Our growth was primarily driven by organic tenant billings growth of approximately 2% or 4% normalized for the impact of onetime DISH churn and complemented by data center cash revenue growth of approximately 17%.

Adjusted EBITDA grew 1% when excluding net straight line and FX impacts. Normalized for the impact of onetime DISH churn, adjusted EBITDA grew approximately 4% on a cash FX-neutral basis. Cash adjusted EBITDA margins declined approximately 110 basis points year-over-year, primarily due to DISH-related churn, SG&A timing and higher fuel prices in Africa. Attributable AFFO per share declined approximately 1% when excluding FX impacts. Normalized for the impact of one-time DISH churn and excluding the impact of refinancing costs, attributable AFFO per share grew approximately 4% on an FX-neutral basis.

Moving to Q1 organic growth and data center growth on Slide 8. We delivered consolidated organic tenant billings growth of approximately 2% or approximately 4% when excluding DISH churn. Across our segments, organic growth was in line with the expectations we laid out earlier this year, driven by solid demand across our global portfolio.

In the U.S. and Canada, organic growth was approximately 1% and approximately 5% when excluding DISH churn. In Africa and APAC, organic growth was approximately 11%. As a reminder, churn is expected to be back half weighted, resulting in approximately 10% organic growth in the first half of the year and approximately 7% in the second half of the year. In Europe, organic growth was approximately 4%. And in Latin America, organic growth declined approximately 2%, primarily driven by elevated churn in Brazil. As discussed last quarter, the higher churn in 2026 is driven by a combination of delayed churn initially expected in 2025 and accelerated churn initially expected in 2027. Overall, we are encouraged by the prospects of an earlier-than-expected market repair in Brazil and the forthcoming acceleration in organic growth in 2027.

Finally, on the right side of the slide, organic growth in towers was complemented by data center property revenue growth of approximately 17% when excluding noncash straight-line revenue. This double-digit growth was driven by robust demand for hybrid and multi-cloud installations, accelerating AI-related use cases and an inflection in interconnection activity. We believe this inflection marks the beginning of a durable long-term trend that reinforces CoreSite's value proposition while compounding its competitive moat over time.

Now let's turn to our revised full year outlook. We are raising guidance across all of our key consolidated financial metrics, primarily due to incremental FX and straight line tailwinds. Starting with property revenue outlook on Slide 9. We are raising our outlook by approximately $145 million at the midpoint, representing a 1% increase to our prior outlook. Our revised outlook now implies approximately 3% year-over-year growth when excluding noncash straight line revenue and FX impacts.

Normalized for the impact of onetime DISH-related churn, our outlook implies approximately 5% growth on a cash FX-neutral basis. The entries to outlook was driven by approximately $110 million of FX tailwinds and approximately $35 million of accelerated noncash straight line revenue in Latin America related to Oi. We are reiterating organic growth assumptions across all regions and continue to expect organic tenant billings growth of approximately 1% or approximately 4% when excluding DISH churn and data center growth of approximately 13% year-over-year.

Moving to adjusted EBITDA on Slide 10. We are raising our adjusted EBITDA outlook by approximately $105 million at the midpoint, representing a 1% increase to our prior outlook. Our revised outlook now implies approximately 2% growth year-over-year, excluding noncash net straight line and FX impacts. Normalized for the onetime impact of DISH-related churn, our outlook for adjusted EBITDA implies approximately 5% growth on a cash FX-neutral basis.

Turning to AFFO on Slide 11. We are raising our attributable AFFO outlook by $0.12 per share, representing a 1% increase to our prior outlook. Our revised outlook now implies growth of approximately 2% year-over-year. Normalized for the impact of onetime DISH-related churn and excluding the impact of refinancing costs, our outlook for attributable AFFO per share growth implies approximately 5% growth on an FX-neutral basis. We expect attributable AFFO per share growth on an FX-neutral basis to be faster in the back half of the year than the front half, primarily due to the timing of maintenance capital and cash taxes compared to the prior year periods.

As a reminder, we continue to expect our services business growth and debt refinancings to each represent an approximately 100 basis point headwind to attributable AFFO per share growth this year. We continue to believe that we are well positioned to deliver our goal of industry-leading attributable AFFO per share growth and compelling total shareholder returns over the long term.

Turning to capital allocation and our balance sheet on Slide 12, we remain disciplined stewards of capital. Our investment-grade balance sheet is well positioned for a variety of macroeconomic scenarios. As Steve mentioned, over the past few years, we have taken deliberate action to reduce risk in our business. As a result, today, we have the lowest leverage and the highest credit rating across our peer group, positioning us with exceptional financial flexibility going forward. Our capital allocation framework remains focused on maintaining financial flexibility, protecting our investment-grade credit profile and investing prudently to enhance long-term shareholder value.

In 2026, our growth capital plan remains consistent with our prior outlook. We continue to expect to spend approximately 85% of our discretionary capital within our developed markets platforms, including over $700 million in success-based investments in our data center portfolio to replenish elevated levels of capacity, purchases of land beneath our tower sites and continued acceleration in European new builds, with over 700 new sites planned.

Additionally, we repurchased approximately $184 million of American Tower stock during the first quarter plus an additional $19 million through April 21, bringing our total share repurchases, since we started buying back stock in Q4, to over $565 million.

Turning to Slide 13 and in closing, we are off to a strong start in 2026, reflecting the fundamental strength and durability of our business model. Continued growth in mobile data consumption, together with strong demand for our interconnection-rich data center platform, supports a long and attractive runway of growth for American Tower. With our best-in-class portfolio of towers and data centers, combined with a strong balance sheet, we are well positioned to capture these opportunities and deliver on our objective of industry-leading attributable AFFO per share growth.

And with that, operator, we can open the line for questions.

[Operator Instructions] and wait for your name to be announced. Our first question comes from the line of Rick Prentiss of Raymond James & Associates.

A couple of questions. First, the Spectrum deal between EchoStar DISH and AT&T seems to be going very slowly. It feels to us like there's some issues in Washington. We're hearing that maybe one of the request is that escrow be set up with all the litigation and negotiation between the tower industry and EchoStar DISH. Can you update us on -- is that maybe one of the paths you're taking? And any other updates on what could be interesting process.

Yes, Rick, this is Steve. We really can't comment on ongoing litigation or anything that's kind of going on in that space today. So we don't really have any updates for you guys on DISH. I'll just reiterate, we believe our contract is enforceable. We're continuing to defend it and core -- the litigation public. And you guys have access to that docket to see what's happening on that front. And we've completely derisked our earnings and our guidance by taking DISH out of our numbers. So anything that happened in that space is incremental upside to the guidance we've put out there. So at this time, there's really not much more we can say about that.

Okay. We'll keep monitoring and checking our Washington sources as well.

Second question, Rod, you mentioned 700 new builds in Europe, 85% of your CapEx has been developed areas. What's -- because obviously, 9%, I think, inorganic growth in Europe. Walk us through what's happening there in Europe? What kind of -- what's the model there? There's been concern in the U.S. that when we see new builds, some of them have been uneconomic that others have done, not you guys. But walk us through what the opportunity is in Europe, what the contracts kind of look like and what the return profile might be there?

Yes. I think, Rick, you've heard us say in the past that the European market is outperforming the original business case that we underwrote the Telefonica deal with. So we've been very pleased with the results. We've had upper single-digit growth rates across the region for a couple of years. That has moderated down into the mid-single-digit growth rate, but it's still a very compelling growth rate for such a high-quality set of economies.

With the Telefonica deal, you may recall, we also announced at that time that we had a contract to build 3,000 sites of Telefonica over the next 10 years, starting at the beginning of that acquisition, that contract. So we've been executing on that. We've added a few additional build-to-suits with other carriers across the region. So building something in that market, we think, is a pretty compelling thing to do. And of course, the return profile is -- we expect it to be above our weighted average cost of capital in that region by a couple of hundred basis points over time.

But the secular trends in Europe are very similar to the U.S., which is technology evolution, rolling out 5G networks, eventually, they'll push into 6G networks. There are new applications coming just like there will be in the U.S. that will drive mobile data consumption growth across the region. So again, we are in some of the greatest economies, not only in Europe but also in the world there with very compelling assets supporting some of the top-tier customers, including Telefonica, in a big way. So continuing to build sites and reinvesting some of the cash flow that we derive out of the Europe market back into the market as build-to-suits, we think is a really compelling thing to do to drive total shareholder return.

So the market is solid, like any region across the world that we're in. We will continue to watch the outlook and the growth rates and the political trends, the regulatory trends, the market backdrop, we'll continue to watch that and be prudent every step of the way as we go forward. But at the moment, the market is performing very well and above our original expectations. So we're happy with it.

Rick, I would just add that we are also winning some things that are outside the contract on very good terms because of our operational excellence. In Europe, a lot of the sites being built are difficult to build. And when they're difficult to build, the carriers value a good operator who can bring things online quickly and get through that kind of regulatory scenario. So we're winning business at healthy returns for us because of our operational excellence there.

And again, in the U.S., as you noted, we haven't been building actively. A lot of those sites have been built in areas that aren't as hard to build. And we think that if we get back to where we're building things in hard-to-build areas, we've got advantage back in the U.S. as well. So we're excited about the prospect of building more sites everywhere in our developed markets.

And the return hurdles would be a couple of hundred basis points? Or what were you saying about it because obviously, we've seen some others that have stressed the thoughts of what you should build or not build.

I mean I would say, Rick, from a return hurdle perspective, I don't want to get into the details here, but certainly, being above our weighted average cost of capital by a couple of hundred basis points over a reasonable amount of time, and I'm not going to get into the details in terms of the terms, that really is what we would expect based on just the fundamentals of the market and the investment that we're making.

But with that said, longer term, can it be well above that? Absolutely very similar to what we see in the U.S., where we will build an asset -- we don't build a lot at the moment. We have in the past. You may start out at or even slightly below your weighted average cost of capital. In the near term, you get up to that weighted average cost of capital and get above that, which might be in the upper single-digit growth rate. But over time, with compounding results on the escalator and the new business you can get up into the teens in the U.S., we would expect certainly that direction for Europe new builds over the long term.

Yes. Just to be clear, Rick, I didn't build stuff in bad economics previously. We're not going to start doing that. We're going to build things that make sense over time.

Great. Makes sense. We like that third pillar of capital allocation discipline.

Our next question comes from the line of Michael Rollins of Citi.

Steve, you mentioned that M&A is a possible option for capital allocation. I'm curious if you could describe how you're looking at those opportunities today, whether that's similarly or differently than the way you may have looked at this in the past. And if you could specifically comment on the possibilities of AMT participating in either a public to public or a public to private opportunities in the United States.

And then, Rod, if I could just throw in one other question. So on Slide 11, that shows the normalized AFFO per share growth plus some of the specific factors that are weighing on 2026. How should this inform investors after 2026, what the right range of annual AFFO per share expectation should be?

Sure, Mike. So I'll start with your question on M&A. We have a very disciplined capital allocation formula that we followed for a long time here, and we're not changing the way we think about that. We look at everything through the lens of how do we create the best long-term shareholder value at the best risk-adjusted rates of return that we can get. And so we do some pretty detailed financial modelings on everything that we look at in that space.

And as you can imagine, we have an M&A team, they like to buy stuff. So we look at everything. There's not a process out there that we haven't had our toes dip in the water to see what that looks like. And in the past few years, we haven't found compelling opportunities to do that. We're hopeful as we go forward that there are things that would make sense. But for any M&A scenario, you've got to have a willing counterparty, a constructive regulatory environment and the economics have to make sense.

And so we'll continue to evaluate all the opportunities in front of us. And that's whether it's in the U.S., in another developed market, in the data center space. Whatever comes available, we'll look at those M&A opportunities. And if we think that we can create shareholder value over time with those, we'll participate. But we're not going to be reactive to specific market trends that are out there. We're not -- we have enough scale in our business today. There's no sort of strategic imperative to overpay for anything. So we're not going to do anything that doesn't make sense economically. But we are hopeful that we're seeing a more active environment and we're hopeful that we can participate in that in some manner, but it may not work out, and it may. We'll just have to see what fits in with our disciplined capital allocation and what's going to create the best long-term shareholder value for you guys.

Michael, thanks for joining the call. On your AFFO question, on Slide 11, we're showing a revised outlook that's about $10.99. That reflects a 2% reported growth rate year-over-year. Embedded within that is tailwinds of about 200 basis points from FX. It also has about 100 basis points of headwind for net interest, and within that includes 400 basis points of headwind due to the DISH churn. So there's a few pieces in there, a few moving pieces, but I think most of those notes are highlighted right on the slide there. So I would encourage everyone to kind of piece that together.

This outlook for 2026 is in line with our longer-term view for AFFO per share growth, which is up in the mid-single digits to better than mid-single digits before you account for the impacts of FX and interest rates, whether those are tailwinds or headwinds, quite frankly. So we will get through the event-driven churn from DISH. And again, that's 400 basis points of churn. So that 200 basis points would go up to about 6% growth just adjusted for the impacts of churn. You take off the 200 basis points of tailwind from FX, that drops you back down to the 4% range. You remove the 1% headwind that we're picking up from interest rates and you get to 5%. So we're right in the -- maybe the lower end of that longer-term range, which is mid-single digits to upper single digit AFFO and AFFO per share growth rate over time.

And we really do feel as though we've moved through a number of event-driven headwinds not only in the industry for us specifically, and we are moving into a time where we will benefit from the secular technology trends within the sector, that continuation of mobile data capital investment from the carriers, which we still see very stable, strong in that $30 billion to $35 billion range. The carriers continue to roll out their 5G networks kind of at the tail end of that. They'll move into filling in, densifying, increasing capacity across the network. That will all be good for us. New applications will come down the pike. And some will be driven by AI. And those should all fuel that secular trend of growth, which should be very constructive in terms of supporting us and our business to that mid- to upper single-digit AFFO per share growth.

And in addition to all of that, Steve and I and the entire management team continue to stay very focused on cost management, direct costs, SG&A, smart capital allocation, very strong balance sheet management to make sure that all those pieces as well support and contribute to achieving our ambition of mid- to upper single-digit AFFO and AFFO per share growth.

Our next question comes from the line of Eric Luebchow of Wells Fargo.

Great. Appreciate it. I just wanted to touch on the CoreSite business. So one of your peers was talking about doing some early exploration on the mobile edge. And given your ownership of CoreSite and this theme that you've been looking at for several years, curious if there's any update you could provide on whether you think there's a real market that could develop there in the next couple of years?

And then separately on CoreSite, just curious, given it's a relatively small part of the business today, and data center multiples seem to be very high, demand seems to be off the charts. So do you think longer term, CoreSite makes sense within the American Tower family? Or could there be something strategic that you would do with it to potentially maximize value?

Yes, thanks for the question. We're really encouraged to hear other people talking about the Edge. It's something that we believe partially in for a period of time now. And we do continue to have projects ongoing. We launched our data center in Raleigh as a little bit of a playground for people to come in and experiment with Edge. We are looking at incremental opportunities in that space to continue to work with ecosystem partners to develop the Edge. And what I'm most excited about is our wireless carriers are now talking about the Edge. They're engaging in discussions with chip makers and some of the cloud companies.

So Edge is absolutely something that we think is going to continue to grow. We think it's going to be a material opportunity for us in the future. Timing, I'm not going to predict timing again because I was a little bit off my first time predicting it. But we do see a lot of momentum taking shape in that space. So we're very excited about the opportunities. And we think that we're positioned better than anyone else to provide the basic infrastructure that you need to support Edge in various forms that it may evolve, whether it's AI RAN, whether it's smaller regional data centers that are supporting more inferencing, which is what we're hearing is one of the use cases. We're in a great place to do that when you combine that interconnection ecosystem at CoreSite with our distributed land footprint and our abilities to service massively distributed real estate.

So we're excited about the Edge opportunity. We continue to work through it. I don't have a projection for you yet because we're still in the early stages of how this is going to develop. But the momentum is there and all the people that are talking about it really reinforces our original thesis on that. And that's really why CoreSite is a strategically important asset for us. We do think it's a big part of our future, and we think that we're going to realize that synergy between towers and data centers.

And in the meantime, we're going to continue to grow that company. It's performing well beyond our expectations when we underwrote that acquisition. And the tailwinds that are underpinning the growth in CoreSite are durable. And AI is one them, but it's not the only tailwind there. This highly interconnected ecosystem that we have there is different from most of the "data center" companies out there. I don't even like calling it a data center, to be honest, because it's really an interconnection hub.

People come to us to connect to other people. They put their computer in a CoreSite facility because we give them access to other enterprises, the cloud on-ramps, and now to inferencing instances. So that kind of -- that's a nerve center for this rapidly developing kind of digital ecosystem out there, and it's going to continue to grow. So we're very excited about that as a part of our company. I do think it has a long-term place in our portfolio. And we think that the Edge will kind of finalize the synergies between the 2. But in the meantime, we're going to focus on growing our tower business, which has great tailwinds, as Rod mentioned, and we're going to focus on growing CoreSite and being that interconnection provider of choice as this ecosystem continues to develop.

Our next question comes from the line of Jim Schneider of Goldman Sachs.

In light of what you just talked about in terms of the -- some of the attractive growth prospects for emerging markets and overseas developed markets and maybe given some of the recent headwinds you've seen in terms of churn in the U.S., can you maybe kind of give us your latest thoughts about the relative attractiveness of M&A prospects across Europe, U.S. and emerging markets? Just wanted -- an impact, you talked about the U.S. being probably your preference in terms of an any potential skill acquisition. I'm wondering if you still see those pluses and minuses in the same way as you did before?

Yes. Thanks, Jim. The U.S. continues to be our flagship market, and we love the opportunity to add scale here, again, subject to the right terms and conditions and economics and things like that. So yes, the U.S. will probably always be our primary focus, if there are opportunities there. There haven't been that many recently that met all of our criteria.

Europe is a market that we continue to look at. And we've talked in the past about how patient we were to get into that market because of the terms and conditions that were required by us to show long-term growth for our shareholders. We're still not seeing a ton of opportunities there for incremental M&A that meet those criteria. There are things that are happening in Europe, but they're not things that we find long-term attractive at this point. So we'll keep looking at it. Like I said before, we have M&A people, they're looking at everything. And if we found something there, that would be on the table.

In the emerging markets, and I just want to reiterate this. While those markets are a key component of our portfolio and they're going to give us outsized growth over time, the strategic decision that we made 2 years ago has not changed. And that is, we think they should be a smaller piece of our overall portfolio than they've been in the past, and we will continue to allocate capital toward developed markets away from those markets, not because we don't believe the growth. We do believe in the growth. They are doing well. They are incremental to our U.S. growth, and we think that's their function in the portfolio. But if they become too large of a part of the portfolio when there are macroeconomic shocks, it just puts a little bit too much volatility into the earnings.

So we're not going to change our strategic direction just because some of the short-term dynamics have changed. We still think the best opportunity to create long-term shareholder value is to continue to invest in the U.S. and other developed markets. And we'll continue to see the secular tailwinds driving growth in that business for a long period of time. And then the emerging markets are a complement to that.

And I'm so proud of our teams. They've managed through a lot of adversity in there. They're the best operators on both of the continents that we're operating in there. They're getting some great sales results in Africa. The Latin America team has worked through this kind of reset repair, and they're on a great trajectory to get back to growth for us. So I'm very excited about what the teams have been able to do there, but we're not going to change our strategic direction in terms of how we're investing.

Our next question comes from the line of Nick Del Deo of MoffettNathanson.

I guess first, to build on the domestic new build activity commentary you provided in response to Rick's question earlier, it appears there is this comment that the carriers might be more interested in working with our large public tower company partners to undertake more new construction opportunities. I was wondering if you've had any similar discussions and if you think they might amount to anything?

And then second, Steve, you talked about the importance of interconnection a moment ago. Cloud on-ramps have always been a very important part of that, strengthen those ecosystems. Can you talk about any steps you might be taking to proactively land neo cloud on-ramps or other deployments like that, that may be magnetic for AI workloads over the coming years?

Sure. So when it comes to the kind of the build-to-suit market in the U.S., we're always talking to our customers about that. We have been for years even when the competitive environment was tough. It's a core competency that we've always had and we used to be one of the largest builders of towers in the U.S. So we think that there's an opportunity there as people become more rational on the economics. There's nothing to announce at this point. I will tell you that we're -- my sales team has always been there pitching those, and we're hopeful something comes through. And if and when it does, we'll let you guys know. But until there's -- until a deal is done, it's not done. So I wouldn't prematurely talk about that.

When it comes to the interconnection on ramps, one of the things that was a core strength in CoreSite before we bought them, and we think it's gotten even more advanced since we've been working with them, is the ability to curate an ecosystem. And it's not just about the cloud on ramps. It's about making sure that you balance networks, enterprises and those cloud providers. And now you've got this kind of fourth category that you mentioned, which is inferencing hubs, and you've got other ecosystem players like neo cloud that are providing kind of services into that.

And so what the team is very skilled at doing and they continue to do is making sure that we're creating an ecosystem where everybody wants to be there. Our problem is not demand. All of those players want to come into our facilities. And the reason that we attract cloud on ramps, the reason we attract inferencing is because we're bringing their customers to them. And we're providing space for their customers to house their data and interconnect natively to those cloud on ramps and those inferencing hubs.

And so for us, it's really about keeping that balance and not getting too excited about a trend and not just trying to sell out a building a second that goes online to the highest bidder. It's about curating an ecosystem that gives us this long-term competitive moat around our business. And because of that, the vast majority of our revenue is with providers who are interconnected to 5 or more other people.

Now that may have hundreds of interconnections, but 5 or more other people, that makes that whole ecosystem very sticky. It means that if there are downturns and -- in that kind of sector over time, that will be much more inflated than anybody else is for that because of the way we've carried the ecosystem. And so the team is very focused on continuing to build that. The inferencing hubs and the neo clouds are absolutely part of that ecosystem, and they're knocking on our doors. They want to be there. And our team is able to be selective and curate that right customer mix. And I'm confident that we will continue to be a leading interconnection provider and that we will be the provider of choice for all of those use cases over time.

And Nick, I may add just a quick comment on our services business to complement Steve's answer on the U.S. new business. And just to really remind folks that our services business has been very active in the last several years. We had record-setting levels of service revenue last year at the $340 million range. Over the last several years, we've expanded our end-to-end solutions through acquisitions, owning, permitting and even construction management. We've got over 40 -- almost 43,000 sites across the -- across the U.S. with a very distributed services business and hundreds of people that support that business. And this year, we're going to have our third highest revenue year ever, so that business is still very robust. And there's a lot of capability there that directly translate into our ability to effectively and efficiently do large-scale bills for carriers if and when we get that opportunity. So we're really well positioned from an operational standpoint to move quickly on any kind of an opportunity like that.

A good point, Rod. I hope our customers are listening to that.

Yes.

Our next question comes from the line of Madison Rezaei of Bernstein.

I just wanted to build on the prior M&A question here with a slightly different angle. Obviously not going to ask you to comment on any of the specifics, but how do you think about private and/or sort of consolidated portfolios in the U.S. shifting any competitive dynamics, if at all?

I don't think it actually changes the competitive dynamic. There have been a number of privately held scaled tower portfolios in the U.S. for years. And so we haven't seen that affect the competitive dynamic at all in the tower space. It doesn't change the way we operate, hasn't changed our results or our ability to compete. So we don't think that having more private tower companies affects that.

I think what it does reflect is that there's a disconnect, and there has been for years, and the multiples that private players will value towers out versus the public markets. And we really think the reason that they value them at a higher multiple and have for a period of time is they're taking a long-term view. They see past some of the short-term noise that's out there. And they see these long-term demand drivers that encourage us about our business. They see that mobile data growth is going to double over the next 5 years in the U.S., and that's going to require more network investment, which translates into new business for towers. They realize that AI is an incremental use case that's not even factored into those projections that could be a catalyst for even more growth and could be pretty substantial growth, depending on how that evolves over time. They're looking at the fact that 6G is just around the corner and that the 6G frequencies are likely to be in the 6 to 7 gigahertz range, which means much more [ DISH ] networks are going to be required.

So when I look at kind of what's swirling around out there in the ether, about tower companies in our private world, it's encouraging to me to see that people are seeing the true value of towers and the fact that this is a growing long-term business that will be the backbone of digital infrastructure going forward. And so when I hear the rumors and see what's out there, to me, that just shows that the business model is still the best business model out there. It's still a place to create a lot of long-term value for our shareholders. It's the right place for us to be.

Our next question comes from the line of Cameron McVeigh of Morgan Stanley.

I just wanted to actually follow up on CoreSite. And I'm curious how you're thinking about expanding capacity at CoreSite versus reinvesting in retrofitting some of the current sites. And has your approach to expanding CoreSite capacity changed at all given some of the current supply-demand imbalance dynamics we hear about with regard to power and tight supply chains?

Sure. A few years ago, we had to start thinking a lot longer term about both land acquisition, power acquisition and actually even ordering the components that go into it. We had some supply chain disruption as a result of COVID. And because of that, the team started taking a longer-term view. And that's put us in a really good position for where we are today. And we've had more construction over the past couple of years than at any time in CoreSite history.

Because of the record sales we've had in the past few years, we've also really ramped up our capabilities to build more. So yes, we're being more aggressive. We're out buying more land, and we are looking at some new market entries. Nothing that we want to announce yet because it's premature to do that until you have a good idea about when you're going to break ground on it. But we think there are opportunities there.

We've also looked at retrofitting some buildings. We have retrofitted some computer rooms. Sometimes that makes sense and sometimes it doesn't. But with higher density applications coming in, if you have the available power there, it can make sense to retrofit a computer room and take up the density levels in it. So that is something that we've looked at. We have done a little bit of that in the past. And we are designing our new facilities with more flexibility in the future to go higher density with multiple different cooling options in it as well. So we have altered the way that we build new sites and the way that we're looking for it.

We've also looked at some existing buildings that have available power. And so you've seen us buy a couple of small ones in that space, and that's something that could be a strategy for us going forward to accelerate some of the development that we'd like to do. But we feel very good about the pipeline we have just kind of organically to build within our existing footprint, and we think there's some opportunities [indiscernible] the market. So overall, again, that business is performing so well. It's some of the highest returns that we can get on invested capital today, and it's continuing to grow rapidly. So we're excited about it, and we're going to continue to invest in it.

Cameron, I would just add to Steve's comments here as he talks about our investment in land and additional power across our existing campuses, just to put a little bit finer detail on that if the -- last year, we had about 287, 280 megawatts of development held for development, and we've increased that by 200 megawatts. So that's where we're negotiating with power companies, securing that power in certain places, buying land and banking that land for additional development where we can expand campuses. So we are really well positioned to continue to lean into the demand across our footprint.

Our next question comes from the line of Brendan Lynch of Barclays.

Rod, I appreciate all the color on the long-term AFFO per share growth outlook. You also mentioned an earlier return to normal in Brazil. Can you give us some color on what that actually looks like in terms of potential coloc and amendment growth and cancellations?

Yes, absolutely. So I think everyone is familiar with where we are in Latin America. We are experiencing a higher level of churn this year. It's around 8% contribution to our organic tenant billings growth. That -- I'll highlight a couple of things, and I think I said this in my prepared remarks, but probably worth highlighting. That includes delaying some churn from '25 into '26 and also accelerating some churn, particularly on the oil side from '27 into '26. So we do think that the market there is peaking in terms of the churn that we would expect.

We also have in -- a couple of hundred basis points of new business across the region. And that's a function of consolidation needing some of the markets that we're in across Latin America have been fragmented, including Brazil in the past, which we've seen the consolidation that we've worked through there. So with all that kind of put together, you end up with negative organic tenant billings growth for 2026. But because we're accelerating some of the churn from '27 into '26 and we've gotten through some of this market repair and consolidation across the region. And most importantly, in Brazil itself, we do expect to get back to accelerated organic tenant billings growth into '27.

So moving from a negative OTBG into positive territory in the lower single digit to '27 and returning to kind of the expectation of normalized growth by the time we get out to '28 and beyond. But we do think that it is the beginning seeing much better results across Latin America as there are a rational number of carriers, 3 solid well-capitalized carriers in Brazil, and going forward, kind of the absence of this consolidation churn really sets us up well to get back to normal organic tenant billings growth and a normal new business contribution kind of across that region to organic tenant billings growth.

Yes. I would just highlight that the 3 carriers in Brazil have all talked about investing more in their networks. We're absolutely seeing an increase in demand across the ecosystem there. So we're seeing the acceleration in new business applications in Brazil. So we're seeing that market repair take place, and we're excited about the prospect of Latin America being accretive to the U.S. growth rates over time, and we believe that we're on track to see that start happening, as Rod said, '28 and beyond.

Yes. And maybe I would just highlight right there. I mean, Steve talked about the Latin America being accretive to our overall AFFO per share growth rates. I'll just take a step back and remind everyone of our -- the bits and pieces of our longer-term AFFO per share growth rate expectation, which is solid mid-single-digit growth in the U.S. market, probably better than that across the Europe market. That would be driven by a mid-single-digit organic tenant billings growth in the U.S., probably slightly higher in Europe, complemented by good cost controls in managing the expenses down the line.

And then CoreSite double-digit growth, that's accretive to those growth rates. You look at the emerging markets, Africa is growing double digits. That's very accretive to the overall growth rates. Returning Latin America to normalized growth will also be accretive there. And that's how you get down to an AFFO and AFFO per share growth rate that will be in the mid-single digits or upper single digits. And of course, complemented by a strong balance buys, very smart capital allocation, whether it is driving the dividend, which I think you all know, we've got 5% growth for Q1 on the dividend. We expect that growth rate to be in line on average with our AFFO per share growth rate. So again, a mid-single-digit growth rate on the dividend, investing $1.5 billion to $2 billion in CapEx.

And then looking at accretive M&A from time to time, where we see good opportunities and also balancing paying down debt, reducing our overall leverage further than the 4.9x that we ended this last quarter and also buying back shares. And based on my prepared remarks, I think you all know we bought back about $184 million worth of shares in Q1. That is in addition to what we did in Q4, which you put the 2 together, you're up well over $560 million devoted towards share buybacks. And that helps support that mid- to upper mid-single-digit growth rate on AFFO and AFFO per share going forward.

Great. Very helpful. Maybe just one other kind of quick one on the data centers. There are some press reports out there about DC construction being delayed in North Carolina. Seems there's a kind of growing wave of [ nimbyism ] across the country. Can you just talk about how you're kind of handling some of those restrictions?

Yes. I mean unfortunately, we are seeing an increase in that. And for me, it's very reminiscent of my early days in tower. And one of the things that I did as a [ baby ] lawyer was permitting towers. And so it's a very similar phenomenon to that, and we're attacking it the same way. This is one of those synergies that may not be as apparent between the 2 companies, but we're using our government affairs team from American Tower our and our zoning and permitting team from American Tower to help the CoreSite team deal with that and also to help the data center coalition who's also attacking that from an industry perspective.

And so we think we have a long track record of being able to work with communities and finding ways to address those concerns. And we're very confident that our team is able to tackle that as well as anybody in the industry can. But it is certainly something that's taking a little bit of airtime in the news and on social media, and it's something we're very aware of. At this point, it hasn't been an issue for us where we've had the scrap any projects or having significant delays. And so we believe we can navigate through that, but we're going to continue to work with the industry partners and our internal teams to make sure that it doesn't get worse.

Our next question comes from the line of David Barden of New Street Research.

I guess I'll just ask it, right? What does it mean if SBA gets taken private? And how important is the multiple that they get taken private at? And if it's low, does that mean maybe you stop buying back stock; if it's high, do you start buying back more aggressively? Or do you start thinking about maybe taking parts of your portfolio and taking those private or selling them to private entities? I just -- I think it would be great to have you guys as the biggest tower company in the United States kind of just weigh in on what that means for everybody.

And then I guess the second is, last week, SpaceX had a 3-day kind of diligence meeting, I guess the buy-side guys, sell-side guys are there. We're not investment banks, so we don't get involved in that. But some people are walking away from that meeting and the road show that's beginning, and thinking that one of the growth vectors to support a multitrillion dollar valuation is disrupting the terrestrial wireless market. And so give us your perspectives on both of those would be super helpful.

Sure. On the SBA question, we're not going to comment on the rumors that are out there and any of the valuations that may be rumored to be out there. That's going to be what it's going to be. And we don't run our business based on what other people are doing with their business. When we think about our business and how we create the most long-term shareholder value, we're always looking at portfolio optimization. And the dislocation between public and private multiples is not something that's new. It's something that's been out there before. And you've seen us take decisive action when we think that we can create more value by selling something than by holding it. And we're always evaluating all the different opportunities in the portfolio, and we'll continue to do that. And like I said, we're going to figure out what creates the most long-term shareholder value.

We believe that we have a lot of secular tailwinds driving growth in this industry. We believe that our portfolio is going to continue to grow and that we can deliver that mid- to high single-digit AFFO per share growth with our combined portfolio of our -- kind of the whole company here over time, and we believe that, that's going to drive a lot of shareholder value beyond where we are today. And so that's how we look at the industry piece of it.

And in terms of our share buyback, we're doing our own calculations on what we think is going to drive value over time on that. And it's not really going to be influenced that much by what other people are doing in this space. We're going to continue to make our decisions based on our business, our growth prospects and what we think the right thing to do is. So like everybody else, we'll watch the market and see what happens, but we're going to continue to kind of the independent thinkers in terms of how we create value over time.

In terms of the satellite piece of it -- and look, we've answered this question a bunch of times and I'll just repeat, we have a front row seat to this space. We have a Board seat with [ ASP ]. That's why we made the investment that we made in ASP. Satellites are complementary to terrestrial networks. We said it, other tower companies have said it, the carriers have said it, most of the satellite companies themselves have said it. We don't see anything that changes that.

Now in the very ultra rural areas, it may be a better solution. But we don't have towers. We have a tiny, tiny number of towers in those areas. And quite frankly, they're not the top-performing towers in the portfolio. So if it does disintermediate a handful of towers, you're not even going to notice it. So from our business perspective, I don't lose a second fleet worried about satellites. I'm actually encouraged by satellite. It's going to provide ubiquitous coverage. It will enable some of the capabilities that they're talking about for 6G, which is going to continue to give new use cases to our customers, things that you can't do when you have a network that has holes in it. So I think the satellite story is going to play out over time. It's going to be a big positive for our carrier customers. That means it's going to be a big positive for us. And I think the short-term noise that people are hearing about this is just displaced.

This concludes the question-and-answer session. I'd like to thank everyone for your participation in today's conference. This does conclude the program, and you may now disconnect.

Good morning, everyone. My name is Benjamin Goy. I'm an equity analyst here at Deutsche Bank, and I'm very pleased to be joined this morning by Rod Smith, American Tower's CFO. Thanks for being here Rod.

Welcome, Ben. Thanks for having me, and welcome. Good morning, everyone.

You reported 4Q earnings a couple of weeks ago. Looking back to 2025, what were some of the highlights? And what are some of the key areas of focus for American Tower in 2026?

Yes. We had a great 2025. I would say at the outset, we are making a lot of progress on our strategic priorities that we've laid out in the past. So I'll highlight a few of the economic accomplishments for the year.

Most notably, on an as adjusted basis, we grew AFFO per share by about 8%. So upper single digits there, very happy with that. We also expanded margins, partly supported by our focus on efficiency and cost controls around the globe, certainly -- we are -- we invested almost a little less than $2 billion up in the $1.8 billion range, and we are putting that capital increasingly into the developed markets. That includes towers in the U.S., towers in Europe and our data center platform in the U.S.

Our data center platform continues to perform exceptionally well, growing in the double-digit range. Our tower business globally as well as in the U.S. and Europe on a organic tenant billings growth basis is in the mid-single digits, has been kind of solidly there. So things are performing very well from that perspective. Yes, so we couldn't be more pleased with the way 2025 rolled out and our focus going forward is continue to maximize the organic growth across the assets we have globally. And we focus on that every day of the week, driving efficiency through the business and continuing to expand margins priority for us, certainly. And then being very smart and disciplined when it comes to allocating capital, allocating capital in a risk-adjusted way that gives our investors the highest returns over time.

And in the environment that we're in today, we certainly look at that and say putting more capital into the U.S. through towers and data centers is mission-critical, maybe priority #1 from our capital perspective and continues to divest and develop the business we have in Europe.

That's a great overview, and we're definitely going to hit on a few of those topics. But starting in the U.S., the big 3 carriers seem to be reaching their 5G coverage targets after several years of robust activity. What are you seeing the carriers invest in today? And how would you characterize the demand environment in the U.S. as we think about 2026?

Yes, the demand environment is healthy. You saw us come off at '25 with a very robust record-setting level of services that really underpins the amount of activity that we've seen across our towers, certainly.

Yes, the carriers have made great progress in deploying mid-band spectrum across their networks and transitioning to 5G. There's a little bit more work to do there. So we're seeing that kind of play out. Growth in mobile data continues to be in the 30%, 35% range. We expect that to continue. That means carriers will be focused on beyond getting their networks 5G equipment deployed they will be focusing on the quality of the coverage and eventually the density of the network.

So we do see a path forward where the carriers will continue to roll out 5G. And then they will come back through and increase the quality of the networks by continuing to invest in it. They'll be investing in it through amendment in order to keep up with growing demand across the networks that they have. And then eventually, they'll shift most likely to densifying the network. We're seeing an uptick in co-locations, the number of new installations on new towers that they're not already on. That's a form of kind of expanding coverage but also increasing the density. We think that, that effort has to continue over the longer term as more and more of their network relies on higher-band spectrum. We do -- certainly, the C-band spectrum is a higher band spectrum than the traditional spectrum for years back. That means it doesn't propagate quite as far. It can handle more capacity, but it doesn't propagate as far. So they need to fill in the network in order to make it denser.

The industry will need more spectrum. And as that spectrum comes, it will be even higher band spectrum over time that the wireless carriers rely on, which means there's more infrastructure needed to make the networks denser in order to operate properly on that higher band spectrum.

So one of the things you mentioned was that really the driver of leasing activity over the long run is mobile data traffic growth. In your view, what are some of the key drivers of data traffic and by extension tower leasing in the U.S?

Yes. It really is just more and more handsets being out in the marketplace, higher level handsets, 5G capable handsets are really getting to a point where lots of people have them. And we've seen that transition over a couple of years, right? When you have a new 5G capable phone, not everyone has it, it takes a while for people to get it. When they get it the adoption of applications that are more data intent that require more capacity, use up more capacity.

Those applications grow on the handsets, and people use them more and more. As more and more people have the handsets, more and more people develop applications that will run on the phones and other wireless devices that will drive traffic across the board. That's the cycle that we are certainly seeing today.

So 5G is out there well and good, handsets are ubiquitous across the market applications are going up. That's driving the growth in mobile data consumption, which kind of is the backdrop for the continued capital investments that our customers make in the networks. Going forward, we expect that you will see AI-type applications eventually hitting the wireless networks, right? These large language models that people are building, everyone's developing applications that will be AI generated. The idea of having AI applications require uplink and downlink speeds and capabilities that are similar is a different type of a structure for the wireless network. So we think investments will be required in order to keep up with that. And then 6 Gs are around the corner, and then that will come. That will be another wave of network components that will be added to the networks. And it all is activity that underpins kind of that growth in mobile data consumption, which we expect to just continue in that 30%, 35% range for a little bit here.

What about fixed wireless, where your customers are increasingly leaning into that as a driver of growth? Obviously, those users consume a lot more data than mobile users. So how are you thinking about that as a driver?

Yes. It's a driver of mobile data consumption. Even though it's fixed wireless today is running on the mobile network, so it's coming, let's say, coming off of landline networks and now being provided through wireless networks. That means it's part of the growth in the data consumption going across mobile networks, it's using up capacity on the wireless networks. From everything I hear, the carriers like where it's headed. They like their success, their positioning on it. They like the economics of it.

So if that continues to grow, it just takes up more capacity on the wireless network, which means more capacity needs to be built into the wireless networks. And we're here to help customers do that. So I think it's a very exciting part of the wireless network. It's one of the few instances where you really see an incremental revenue opportunity, bringing revenue that was satisfied in some other way, a service that was satisfied in a totally different way on a different network now transitioning into the wireless network.

So I think it's an interesting development and I think it's good for the wireless carriers, and it could be good for the infrastructure providers, too.

You mentioned spectrum before. One of the priorities in this administration has been trying to find new bands of spectrum to put into use for wireless. How do you view the spectrum pipeline in the U.S.? And what could that mean for leasing activity in the future?

Yes. I think -- I mean it is a priority for the administration to have new spectrum release, the big beautiful bill or the one big beautiful bill has some requirements in there for the FCC to release more spectrum. So we do expect some more spectrum to come in. It's clear the industry needs more spectrum to satisfy that growth in mobile data consumption. But maybe I'll take a minute and just explain the 2 different paths. If you -- if the carriers bring in more spectrum, they're able to put more spectrum into the network and then they can handle more capacity within the network.

In order for that spectrum to work, they need to pair it with antennas and lines and radio. So that's all equipment that they would put on the tower sites, and we would benefit from that. If the spectrum doesn't come, which we think some will and certainly over the next 3 to 5 years and then 5 to 10 years, there should be more spectrum being allocated, higher-band spectrum, I would remind you. If the spectrum doesn't come and the growth in mobile data kind of gets to the point where the networks run into capacity issues in the carriers, we'll deploy more equipment and reuse the spectrum they have more frequently, which is kind of accelerates that density.

And again, it's then putting more equipment, towers, cables, antennas on the towers in order to reuse that spectrum. So either path, new spectrum reusing existing spectrum requires more equipment on the towers.

Filing earlier this year, you noted that DISH had stopped meeting its obligations under your agreement and you're now pursuing legal action. Can you remind us what you expect the impact from that could be? And how should investors think about the potential next steps in that process?

Yes. What I -- that pretty much summarizes kind of where we're at. I won't say too much more than that, other than highlighting the fact that we took DISH out of our outlook completely for 2026. So our 2026 outlook is completely derisked from a DISH perspective. Any future collections or settlement with DISH could be a tailwind to the P&L outlook and/or the balance sheet if there's some sort of a settlement. But within our outlook, there is zero revenue from DISH, zero economic benefit from any kind of a settlement. So there's only upside. And with that said, I would say it is a litigation.

Some of that will be made public and everyone here that's interested can certainly follow that but we won't be commenting along the way in terms of what stage we're in and what's happening in the litigation.

Okay. Makes sense. When we put all of these factors together, how are you thinking about organic growth in the U.S. tower business this year and longer term?

Yes. So this year, the DISH -- removing DISH and having all the DISH discern the '26 affects the outlook, I would say, when you ignore the DISH or before the DISH churn, we're up in the mid-single digits in the 4.5% range.

One of the key elements of that 4.5% organic tenant billings growth in the U.S. excluding DISH is that we're seeing about 250 basis points of growth there from new leasing activity, new co-locations and amendments. That is very similar to almost the same number we saw in the prior year if you exclude DISH altogether, right? No revenue contribution and no churn. And so we are seeing kind of a consistent 2.5% growth on our key net new business, colocations and amendments, not including any churn, just colocations and amendments in there.

So that's good. And that -- and with all the things that I've said earlier, and that feels like a pretty good range for us to be in, given that 35% mobile data consumption and the growth that's coming -- we haven't yet seen AI applications run through wireless networks. That could happen in the future, and that could be an inflection point one way or another. I wouldn't talk too much long term, but I would say where we sit that 2.5% looking forward, we don't see any reason why that level of activity shouldn't be somewhat consistent.

I wanted to pivot to the international business. You've been seeing strong growth in your European business recently. What are some of the main factors driving that performance?

Yes. We -- I mean, we have a great business in Europe underpinned by our acquisition of the Telefonica assets and there's really just a couple of factors. One is what we're seeing organic tenant billings growth over the last several years that's exceeded the U.S. growth.

Now it's coming more back in line, but I think it's still slightly above the U.S. growth, which is good. The underpinnings there is we're seeing healthy new business activity across the carriers that we have. That's amendments, it's colocation on towers. It's new rooftop development. It's some existing customers just increasing their network components. And it's also somewhat supported by Drillisch 101, which is a new carrier in Germany kind of building out a greenfield network, we're getting contributions from them as well.

So the new business activity is solid. And the way that our contracts work is our escalation is basically local CPI, uncapped with a 0% floor. So that's a good place to be in an international contract. We've seen higher levels of inflation in the last few years. That's moderated down a little below where the U.S. is. That's what's making its way into our organic tenant billings number that is still slightly higher than the U.S. But we have that organic tenant billings growth number, that CPI escalation piece of it tied to local inflation.

Again, it's uncapped and it has a zero pool for the most part. In France, there's a little different since we have a 2% escalator in France. It's a smaller business compared to Germany and Spain. And then we're in a good position with churn in Europe where the vast majority of the revenues come from Telefonica on long-term contracts as part of the leaseback transaction we did when we bought the asset. So churn is very much controllable. It's running in a little higher than 1% now or so. But certainly staying within that 1% to 2% even at the lower end of that, it's clear that we're in a good position in Europe.

So to summarize, it's solid new business activity kind of across the market. An escalator that's tied to CPI that's uncapped, which is very good and kind of a modest lower level of churn expected based on the contracts that we have.

It seems like you're doing more new builds in Europe than in the U.S. What are the factors that make these markets attractive to build in?

Yes. So again, I would just highlight the fact that the organic revenue growth has been higher than the U.S. for a couple of years. The markets certainly are high-quality markets, some of the highest economic quality that you would find we like that. We like the developed markets as we've talked about for many years. We do think that's the best place to drive consistent long-term economic growth and returns.

So that is all good. We have a skill set that transfers to Europe pretty well in developing towers and rooftops. The carriers that are in those markets need new assets. And we -- I would say we performed better than other infrastructure providers. That's been our experience and therefore, they come to us and we're able to drive terms and conditions that we are happy with. And therefore, we put capital to work and we build up more components and very high-quality markets for the right customers.

So we're doing that. We'll continue to do that. Some of that is with Telefonica. Some of those build-to-suits came with the leaseback arrangement we had. I think we signed up 3,000 new tower bills over a 10-year period as part of the acquisition contract. We're building sites for Orange, and we're also building sites for Drillisch 101.

In Africa and in APAC, you're guiding to an acceleration in new leasing activity this year. On the other hand, your Latin America business is experiencing some headwinds related to carrier consolidation. How should investors view the fundamental outlook across these different regions?

Yes. I mean there are different regions. And within the regions, the countries are all different. So there is some uniquenesses there that really should be explored if you want to get into a lot of detail there. I would say the differences between Africa and Latin America.

I'll start with Africa, that the new business growth there has been solid, upper single digits, kind of consistently over time. So we're seeing 6%, 7%, 8%, 9% growth from new co-locations and amendments. We expect that activity to continue. So in local currency, that business performs really well. Because the demand for new infrastructure and the carriers' willingness to pay kind of matches up in it and it works pretty good. There is also an element of escalations that are tied to CPI. The inflation was much higher a few years ago, double digits, even 20%, 30%, that's come way down.

So now that the inflation is generally in the upper single digit or even mid-single-digit kind of range. And then we're seeing 4% or 5% churn across the market there. And then, of course, FX is a concern when you're in Africa and in Nigeria and Ghana and other places, Uganda where we are at. But if you look at on a local currency basis, those businesses perform very well. Our contracts are solid. Our teams perform exceptionally well. The infrastructure is important. And it's really the monetary policy, the FX issues that create challenges in those markets.

And for that reason, we have pulled back our investments. That does not mean that the invested capital we have in the towers, we have can't perform exceptionally well in some years when FX behaves itself. In some years, there may be some FX headwinds. We are looking to minimize the impact that those FX headwinds can have on our overall business. That's why you've heard us talking about shrinking the exposure to Africa relative to our other places we can do that by growing and developed markets or we can shrink Africa from time to time here and there when it makes sense for us and for the investors.

So that is Africa. It could do very well over the long term. The economic risk around FX and some other things have caused us to not want to put more development CapEx there, but we will ride that bet that we have and I think it will be constructive. Many years. In some years, we'll have some FX headwinds, certainly.

Latin America is a little bit different. It's a more mature market, some of the backdrop in terms of the number of carriers and the competition is different. We've seen more carriers kind of in the market there, and now we're working through consolidation. And that's kind of a major event in Brazil and in a few other places. So we're seeing significant consolidation churn. And in some cases, as the market works through the consolidation churn, they've also slowed down on their new business activity, their amendments. They're really focused on absorbing the customers that are being -- the carriers that are being consolidated and integrating things in. And so the new business has slowed. The churn has gone up, and we generally have inflation-based escalators in there as well.

You put all that together, and we've been projecting low single-digit OTBG for a number of years. We've kind of been in that cycle. We delayed some churn from '25 to '26. We've also accelerated some expected churn from '27 into '26. That puts us in a negative position relative to organic tenant billings growth. But that will pull us out of this quicker, too.

So we'll accelerate the recovery and we say accelerating growth. We expect that growth to go from negative to begin to accelerate to a more normal organic tenant billings growth across the region over the next couple of years. And we are really very excited about the backdrop in Brazil. They've worked their way through to 3 primary carriers pretty good distribution of market share, pretty healthy across the board. It's a big market, and it's one that we think we could do very well in over time.

I wanted to ask next about your data center business. CoreSite, as you mentioned earlier, has posted consistent double-digit growth the past few years, and you're now guiding to low teens revenue growth again in 2026. What's driving that performance? And are you starting to see a greater contribution from AI related to that?

Yes. So our data center business, CoreSite has been and continues to perform exceptionally well. That great performance has been accelerating, going up from upper single digits to higher to getting it to double digit to now staying in the double-digit economic growth. That's what we were projecting. And and that's where it is. I would remind people that, that's well above the range we underwrote when we did the acquisition.

Just as a reminder, we were in the 6% to 8% range when we underwrote it. We've been above that almost the whole time, and now we're in the double-digit growth. The -- I mean, what's driving the double-digit growth really is the new business, the demand side of the equation. Not just for our assets, but kind of across the board. It is a time when more and more of the world's greatest companies in networks, they all want to get into cloud on ramps, they all want to interconnect each other. They all want space where they can build out their business, to grow their own business. They require that interconnection and the ecosystem that CoreSite offers to grow their own business.

So we've seen the demand strengthened. We've had 3 or 4 years of record sales repeatedly that not only does that drive in our case, double-digit revenue growth that can translate down into overall economic growth, but it also predicts it out over a couple of years because you're delivering capacity that you've already sold. So we feel really good about the next few years in terms of where that business is going to go and keeping revenue up. We're investing more capital because we need to do that in order to satisfy the growing demand.

In the increment -- the returns on the incremental capital has been really good. We're looking at mid-single, mid teens to better than mid-teens on a stabilized basis for the incremental capital that we're putting in place. A couple of years ago, we would talk about how before we even started building a building, it would be 55%, 60%, 65% preleased. That's come back just a little bit because we're accelerating some builds. And much of the building that we're doing is connected the campuses we already own. It's not out speculative building. It is just expanding the campuses because our existing customers within those campuses want more space. They want more compute power.

So the business is performing exceptionally well. We are seeing AI use cases show up in our pipeline. We're leasing space to folks that will use it for AI inferencing. But in 2025, it was very early, not a meaningful impact at all. In terms of the P&L, we think that will grow a little bit in '26. But over the next couple of years, we do see AI inferencing tipping into these interconnection data centers with cloud on ramps, our centers are -- have the ability to be very dense from a GPU basis.

So you can get a lot of compute power in the small spaces. We think that AI inferencing is going to go up. It could be a wave of demand on top of already very strong demand.

One of the major themes recently in the data center space has been the imbalance between demand and supply of capacity in part because it's so hard to get access to power. Are you seeing that play out? And if so, what does that mean for pricing power across your business?

Yes. I think -- I mean, a lot of it comes back down to the chipsets that are out, faster, more powerful chipsets, companies can do more with that and to help grow their own business. If they're going to do that, they need a place to do that. They need power to do that. They have a place where that power and the heat generated can also be cooled. And that's where you get into these great ecosystems that we have with liquid cooling in most of our facilities across the U.S. We can put the GPU density is going up in our facilities, and we are able to do that for our customers, and they can compute more and do more.

So we -- again, we've had great performance in CoreSite. It is even before AI really kind hits in there. That is causing a lot of demand for our site specifically, and I would highlight the fact that we believe our sites are differentiated from others. The fact that our sites have multiple cloud on-ramps in each of our facilities, each of our campuses, that is key. We've got over 400 networks terminating within our campuses across the U.S.

Our customers rely on interconnection. They interconnect with each other. We're seeing high single-digit, even transitioning to double-digit growth in the interconnection world. So companies that are interconnected with one another. That works so well for them in terms of growing their own business. They want more of it. And the interconnection grows. That is kind of the demand profile. And that's why you've seen us increase our CapEx to increase capacity to stay ahead of that. We are building in order to provide 2 years' worth of absorption. Typically, we've pre-leased a lot of that 2 years, so it's a low-risk capital, and that's why we're able to drive these high mid-teens or better returns on a stabilized basis.

You recently unveiled a new cost-saving initiative with the goal to generate 200 to 300 basis points of margin expansion over the next 5 years. Tell us a bit more about this initiative what areas of the cost structure are you planning to focus on? And why does this make sense to roll out now?

Yes. I would say, first off, the idea of being efficient in managing costs, we've been focused on that for quite a while. Of course, I think anyone that knows us know we grew materially over a number of years through M&A. That M&A activity post CoreSite has slowed down. Our last 3 acquisitions was the CoreSite acquisition in the U.S. We bought Telefonica towers in Europe, and then we bought another good-sized tower company in the U.S. So our last 3 acquisitions were all centered around the U.S. and Europe in high-quality economies and assets.

Since then, the M&A activity has slowed a little bit. We've been focused on integrating everything fully and making our operations very efficient. You've seen us reduce SG&A year-over-year even in light of and working against 7%, 8%, 9% inflation. That's not an easy thing to do. And we did that even though our SG&A as a percent of revenue was already kind of industry-leading and our margins have been industry-leading as well.

Now we're transitioning with the appointment of Bud Knoll as the Chief Operating Officer globally to bring some global standards lessons learned and efficiency that comes out of systems and approaches around the globe to really make sure that we're very efficient. He will be focused on things like managing our land expense and land renewal. So a lot of things there that the U.S. has learned over a long period of time that can be more fully integrated outside of the U.S.

Unifying supply chains around the globe and really driving contracts where we maximize the benefit that we can see in our procurement areas across IT and systems and really trying to use the best practices from a systems perspective and get them in the right places and make the service better for the customers and reduce the cost. So we think we've got a nice outlook there. And the way we describe it is that those efforts over the next 3 years, 4 years will contribute to margin expansion along with our general business and growth in revenue.

So we're projecting that our margins will expand about 300 basis points out to 2030.

It sounds like you're starting to do some efficiency work using AI that's separate from these initiatives. Can you discuss some of the things you're looking at with that?

Yes. AI is rapidly developing. We're on it, looking at it. We've been for a little while for a year or so. We certainly think there will be applications that will make our business more efficient. And as and when we completely analyze the opportunities and build things in, we'll let people know. But I would say that even above the 300 basis point expected margin expansion. AI could have another wave of kind of dramatic results there.

In areas like lease processing, lease abstraction and some financial reporting and some of the accounting areas, predicting where sites may be needed and other things, doing analysis on towers through drone footage, having AI review that to make it much quicker and instantaneous in terms of figuring out what's on the towers. Is it actually the equipment that's listed out in the agreements. Is there any equipment differences.

So it's an exciting time. I think it could be important to the way our business operates, and it could be in addition to the 300 basis point expansion that we expect.

You've been delevering your balance sheet over the past few years, and you're now back within your target range of 3 to 5x. How is American Tower thinking about capital allocation in general? And what does it mean for the company to now be within your leverage target?

Yes. So we are back within our target. We're below 5x, which is a nice place for us to be. We've enjoyed 2 credit rating expansions or upgrades. We're at BBB+ now across 2 of the 3 firms, which, again, is a place that we like to be because we're focused on quality of earnings.

We're focused on quality of balance sheet. The way we allocate capital really has not changed in terms of the way we approach it, maybe our focus areas certainly are different. So that's absolutely the case. But first and foremost, we provide a dividend over $3 billion this year, about $3 billion last year, over $3 billion this year, grew 5% last year, probably in the same similar way this year.

That dividend and dividend growth is paramount to us. It will continue. We will protect it and really be focused on it. After that, we go back and we invest capital. We think that's the highest return possible. We're investing more of it, 80% of the growth capital now is going into the developed markets, which again is the highest quality markets in the world with the highest quality customers in the world, we think that is a really good thing.

So we typically invest anywhere between $1.5 billion and $2 billion a year in capital programs. Then beyond that, we look for M&A opportunities where we can leverage scale, increase assets in places we already are, get an outsized benefit that someone else might be able to value in. And we'll continue to be very selective. I just highlighting again, our last few acquisitions were in tower -- a big tower portfolio in Europe, a medium -- a good-sized tower portfolio in the U.S. and then the CoreSite business in the U.S. all of which are working out very, very well for us.

And so we'll continue on that disciplined, developed markets kind of approach, really trying to figure out the infrastructure that the networks of the future are going to need in the highest quality markets. That's really -- that's where we're focused. And then beyond that, we will and always do put up M&A against share buybacks. We'll do the math and make the right decision there when we can [indiscernible] invest over $365 million at the end of last year in a relatively short time buying back shares.

We announced we continue to do that as we turn the corner into 2026. So we bought back more shares in 2026. Not making any prediction going forward, but that is in our toolbox. We'll be looking at that and putting it up against any M&A. We'll be balancing that with the benefits of just paying down debt and preserving capital for future deployment. So our approach there hasn't changed materially at all.

One of the questions investors have been asking recently is whether satellite broadband could end up competing with terrestrial wireless infrastructure or it will mainly be a complement to towers. I know you have a relationship with AST SpaceMobile, who's building out satellite broadband. So I'm curious to hear your perspective on that.

Yes. We view it as a complementary. An important complementary technology to terrestrial networks. It is built and designed for certain purposes like extending coverage into rural areas, hard-to-reach areas. Those hard-to-reach areas can be in places like the U.S. and also over in Africa, LatAm throughout Asia.

So it really is a very important service, but it's complementary to terrestrial land-based networks. It also provides immediate coverage support and disaster recovery and extreme weather events and those sorts of things. So that's clear. There are fundamental challenges with trying to have a satellite wireless service compete with a terrestrial network. There are capacity issues in terms of the spectrum that is available for satellites and how much capacity you can actually run through that, and it is nowhere near sufficient to compete with terrestrial networks in places where people live and work and travel. And I think that's kind of broadly and widely known. So we do view it as an important complement to the terrestrial networks, not a competitor.

Maybe just to wrap up, it's still fairly early, but the industry is starting to discuss 6G. Do you have any initial thoughts on what spectrum could you use for 6G? And when you'd expect that activity to start picking up more meaningfully?

Yes. People are talking about 6G. We're just getting 5G deployed in the discussion already leapfrog to the next technology. New technology is always good for tower companies and infrastructure players.

Those new technologies allow new applications, which often are higher bandwidth. And in an AI setting, again, it's going to be an uplink and downlink. It's going to fundamentally change the way the networks need to operate in it's going to require new infrastructure. I would expect that there will be additional spectrum coming along for 6G and won't be for a few years yet. So it's too early to talk too much about that. But it will be higher band spectrum, maybe significantly higher band spectrum, which means the capacity will be there, but the propagation won't be there. And that, again, is another kind of fundamental driver for network densification.

Well, that seems like a pretty good place to wrap it up. Thanks, Rod.

Excellent. Thanks, Ben. Thanks, everyone, for joining.

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower Fourth Quarter and Full Year 2025 Earnings Conference Call. As a reminder, today's conference call is being recorded. Following the prepared remarks, we will open the call for questions. [Operator Instructions]

I would now like to turn the call over to your host, Spencer Kurn, SVP of Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to our fourth quarter 2025 earnings call. I'm Spencer Kurn, Head of Investor Relations for American Tower. Joining me on the call today are Steven Vondran, our President and CEO; and Rod Smith, our Executive Vice President, CFO and Treasurer. Following our prepared remarks, we will open the call for your questions.

Before we begin, I need to call your attention to our safe harbor statement. It says that some of our comments today may be forward-looking. As such, they are subject to risks and uncertainties described in American Tower SEC filings and results may differ materially. Additional information is available on our Investor Relations website.

With that, I'll turn the call over to Steve.

Thanks, Spencer. Good morning, everyone. Thanks for joining today's call. As you can see from our published results, we had a great year and an excellent fourth quarter. For the full year, we delivered attributable AFFO per share as adjusted growth of 8%, including over 13% growth in the fourth quarter. These results were underpinned by robust leasing demand across our tower and data center businesses and strong execution against our strategy.

Over the past year, we've taken meaningful steps to improve our earnings quality and durability. We've steered capital toward developed markets, globalized and simplified our operations and brought leverage back down to our target range. These actions put us on strong footing to capitalize on future growth opportunities and deliver on our goal of industry-leading AFFO per share growth.

Before turning the call over to Rod to review our detailed financial results and 2026 outlook, I'd like to spend a few minutes discussing our key priorities for 2026, as outlined on Slide 5 of our earnings presentation.

First, driving durable revenue growth. The backbone of our revenue growth is mobile data consumption, which continues to grow rapidly alongside growth in mobile customers, 5G adoption and fixed wireless access. This secular demand growth is expected to require a doubling in wireless network capacity between now and 2030. On top of this, with trillions of dollars being deployed into AI, it's likely that new AI applications will propel mobile data consumption even higher and require greater bandwidth, lower latency and more uplink capacity than today's typical usage.

In our largest tower market, the U.S., carriers are in the middle stages of the 5G cycle, where they broadly completed their initial 5G coverage-oriented activity and are shifting toward capacity-oriented activity. We anticipate carriers will densify their networks not only to meet the capacity demand of 5G, but also to plan ahead for the 6G cycle. We're excited about the 800 megahertz of higher frequency spectrum that's been earmarked for 6G and believe its deployment will drive significant activity on towers. As carriers invest in this capacity, we expect our U.S. portfolio to deliver durable long-term mid-single-digit organic growth.

As you saw in our 8-K form from January, DISH has defaulted on its payment obligations. We continue to pursue legal action to recover the value of its remaining lease obligations. And while DISH's default negatively impacts our 2026 outlook, in the long run, we expect our business to benefit from a healthier, well-capitalized customer base that can invest more heavily in their mobile networks.

Internationally, we see parallel trends of rising data consumption driving durable network investment. In our European market, 5G progress lagged slightly behind the U.S. and strong demand for new sites is prompting exciting levels of newbuild activity with top-tier carriers. In our emerging markets, 4G-related activity continues to dominate, but we see increasing levels of 5G rollouts in key metros with significant runway for growth. We continue to expect our international tower portfolio to deliver faster organic growth in the U.S. as our less mature portfolio is leased up over time.

In our data center business, strong demand for hybrid and multi-cloud deployments and positive pricing actions continue to yield impressive double-digit growth. Demand for AI-related use cases like inferencing and machine learning is driving an increasing portion of new leasing, and CoreSite's AI-ready platform is equipped to accommodate these higher-density, interconnection-heavy workloads within its existing cost structure. CoreSite is also benefiting from sustained migration of enterprise IT infrastructure from on-premises to interconnection-rich colocation facility. These powerful demand trends, combined with our unique interconnection-oriented infrastructure, continue to support CoreSite's achievement of mid-teens or higher stabilized yields on new data center deployments.

Our second priority is operational efficiency. This has long been a key operating principle at American Tower. Over the past 3 years, we worked diligently to improve our cost structure by centrally aligning our regional groups, divesting noncore business units and automating leasing transactions. These initiatives have helped deliver over 300 basis points of cash EBITDA margin expansion across our global tower portfolio since 2022. And today, we have the highest like-for-like tower cash EBITDA margins amongst our peer group.

The bulk of our recent cost efficiency efforts are focused on reducing SG&A, which for our tower business is best-in-class at approximately 4.5% of revenue. With the creation of our global COO position last year, we've undergone an extensive review of the direct costs within our tower business in an effort to bend our cost curve and grow direct expenses at a slower rate than revenue.

We identified four key areas of expense savings across our global tower portfolio: first, managing land expense, which is our most significant direct cost, by expanding our highly successful U.S.-based land optimization program to other markets; second, implementing a global unified sourcing and supply chain to enable economies of scale, gain pricing advantages and improved inventory management; third, accelerating the adoption of our well-developed standard of care for U.S. assets across our global portfolio to improve repair and maintenance costs; and fourth, simplifying and standardizing internal technology platforms to optimize customer service and accelerate automation.

We expect these new initiatives in conjunction with continued strong conversion rates to drive 200 to 300 basis points of tower cash EBITDA margin expansion over the next 5 years. On top of this, we're investing in AI to accelerate efficiency gains even further. While we're still in the early stages of AI adoption, we expect AI use cases to target process automation, predictive maintenance, power and utility management and workflow optimization. We look forward to updating you on our AI endeavors and accelerated efficiency targets in the future.

Moving to our last priority for the year, capital allocation. We remain disciplined stewards of capital, striving to generate durable cash flow growth with high returns on invested capital. Now that we're back within our target leverage range, we have significant flexibility. After funding our dividend, we will opportunistically assess the best uses of our capital among internal CapEx, M&A, share repurchases and further delevering. This year, we plan to deploy the vast majority of growth CapEx to our developed tower markets and CoreSite, and we'll continue to manage our global portfolio in ways that accelerate growth and reduce volatility.

Before turning the call over to Rod to discuss our 2025 results and 2026 outlook, I'd like to thank our incredible employees for delivering another excellent year. We've established a best-in-class platform for capitalizing on strong industry demand drivers, and I'm confident that we're well positioned to execute our 2026 priorities and drive accelerating durable growth in 2027 and beyond.

Rod, over to you.

Thanks, Steve, and thank you all for joining the call. I'll start by walking you through our 2025 highlights and then share our 2026 outlook.

Slide 7 shows a snapshot of our full year highlights. Consolidated property revenue grew approximately 4% year-over-year and approximately 5% when excluding noncash straight line and FX impacts. Our growth was primarily driven by organic tenant billings growth of approximately 5% and complemented by data center revenue growth of approximately 14%.

Adjusted EBITDA grew approximately 5% year-over-year and approximately 7% excluding noncash net straight line and FX impacts, Property revenue growth was magnified by record services contribution and disciplined cost management, resulting in 20 basis points of consolidated margin expansion.

Attributable AFFO per share as adjusted grew approximately 8% year-over-year, firmly within our long-term range of mid- to high single digits. This growth was supported by strong conversion of adjusted EBITDA growth and management of below-the-line costs. Excluding refinancing headwinds of approximately 1% and normalized for FX impacts, AFFO per share as adjusted grew approximately 9% year-over-year, demonstrating the underlying strength of our business model.

Finally, on the capital allocation front, we brought leverage back down into our target range of 3 to 5x, and we ended the year at 4.9x. Also in the fourth quarter, we repurchased approximately $365 million of American Tower common stock, our largest quarterly and annual buyback since 2017. We've continued to repurchase stock in 2026, buying back approximately $53 million year-to-date.

Now let's turn to our full year 2026 outlook, starting with organic tenant billings growth on Slide 8. As Steve mentioned, DISH failed to meet its payment obligation and is in default. This did not impact our 2025 financials, and for the full year 2025, DISH represented approximately 2% of consolidated property revenue and approximately 4% of U.S. and Canada property revenue. In order to reset true run rate expectations for the U.S. and Canada, 100% of DISH's revenue was removed from organic growth beginning on January 1 and reflected in churn. Any payments collected from DISH subsequent to year-end 2025 will be reflected in other non-run rate revenue.

For 2026, we expect consolidated organic tenant billings growth of approximately 1% or approximately 4% excluding DISH churn. In the U.S. and Canada, organic tenant billings growth is expected to be approximately 0.5% or approximately 4.5% when excluding DISH churn. This is comprised of colocation and amendment growth of approximately 2.5%, escalations of approximately 3%, DISH-related churn of approximately 4% and normal churn of approximately 1%. We remain constructive on growth for towers in the U.S., supported by a healthier well-capitalized customer base.

In Africa and APAC, organic tenant billings growth is expected to be approximately 8.5%. This is comprised of colocation and amendment growth of approximately 7%, representing a modest acceleration off of 2025 levels, CPI-linked escalations of approximately 4% and churn of approximately 2.5%. Churn is expected to be back half weighted, resulting in approximately 10% organic growth in the first half of the year and approximately 7% in the second half of the year.

In Europe, organic tenant billings growth is expected to be approximately 4%. This is comprised of colocation and amendment growth of approximately 3%, consistent with 2025 levels, CPI-linked escalations of approximately 2% and churn of approximately 1%.

In LatAm, organic tenant billings is expected to decline by approximately 3%. This includes steady colocation and amendment contributions of approximately 2%, CPI-linked escalations of approximately 4%, churn of approximately 8% and other run rate revenue headwinds of approximately 1%. As communicated over the last couple of years, we have expected low single-digit organic growth in LatAm through the end of 2027 due to elevated consolidation-related churn in Brazil and for organic growth to accelerate in 2028 once the churn passed.

On average, our multiyear expectations remain consistent, though we now expect more acute churn in 2026 and the acceleration in organic growth to commence in 2027, 1 year earlier than previously expected. The higher churn in 2026 is driven by a combination of delayed churn initially expected in 2025 and accelerated churn initially expected in 2027. Overall, we are encouraged by the prospects of an earlier-than-expected market repair in Brazil and from the forthcoming acceleration of organic growth in 2027.

As a reminder, we still have an ongoing arbitration with AT&T Mexico. We remain confident in our legal position and note that the outcome of the arbitration may impact organic growth.

Turning to property revenue on Slide 9. We expect our outlook for approximately 1% organic tenant billings growth to be complemented by the selective construction of approximately 2,000 new tower sites at the midpoint of our outlook and approximately 13% growth in our U.S. data center business. Excluding noncash straight line revenue and FX impacts, property revenue is expected to grow approximately 3%.

Normalized for the impact of onetime DISH-related churn, our outlook for property revenue implies approximately 5% growth on a cash FX-neutral basis. The FX assumptions contemplated in our 2026 outlook, which reflect our standard methodology and are conservative relative to current spot rates, contribute approximately 1% of incremental growth. And noncash straight-line revenue represents an approximately 2% headwind to our GAAP outlook for property revenue.

Moving to Slide 10. Adjusted EBITDA is expected to grow approximately 2% when excluding net straight line and FX impacts as growth in towers and data centers is partially offset by a decline in services. Normalized for the onetime impact of DISH-related churn, our outlook for cash adjusted EBITDA implies approximately 5% growth. Cash adjusted EBITDA margins are expected to be 66.8%, down a modest 20 basis points versus last year as steady margins in towers are offset by contributions from lower-margin data centers and services.

In towers, due to a continuation of high conversion rates and cost savings initiatives, we expect cash margins to be flat year-over-year even while absorbing approximately 60 basis points of onetime pressure from DISH-related churn. In data centers, we expect cash margins to decline approximately 270 basis points year-over-year as onetime benefits from property tax adjustments and legal settlements in 2025 are not expected to reoccur in 2026. Normalized for these onetime items, we expect cash margins to hold steady as strong lease-up of existing facilities is offset by putting new capacity into service.

In services, we expect healthy levels of carrier activity to drive our third highest services contribution in the history of the company. While this level of services contribution is robust relative to historical standards, following our record 2025 and taking into account an increasing contribution of lower-margin construction services, it weighs on consolidated growth and margins in 2026.

Turning to AFFO on Slide 11. Our 2026 outlook assumes attributable AFFO per share growth of approximately 1% year-over-year. Normalized for the impact of onetime DISH-related churn and excluding the impact of FX and refinancing costs, our outlook for attributable AFFO per share growth implies approximately 5% growth.

Bridging from our 2026 outlook for cash adjusted EBITDA, tailwinds from lower maintenance capital and share repurchases executed in the fourth quarter of 2025 and year-to-date in 2026 are partially offset by higher interest expenses as debt is refinanced at higher rates, higher cash taxes and higher minority interest and distributions, consistent with our expectations.

While our outlook for 2026 growth is negatively impacted by churn events in the U.S. and Latin America, we believe that we are well positioned to deliver our goal of industry-leading attributable AFFO per share growth and compelling total shareholder returns in subsequent years.

On Slide 12, I'll review our capital allocation plans for 2026. We expect to grow our dividend approximately 5%, resulting in approximately $3.3 billion in distributions to our shareholders, subject to Board approval. Next, we're planning for $1.9 billion in capital deployment, of which $1.8 billion is discretionary in nature and includes the construction of 2,000 sites at the midpoint.

Approximately 85% of our discretionary spend is directed towards our developed market platforms, including over $700 million in success-based investments in our data center portfolio to replenish elevated levels of capacity sold over the past several years, increased spend in the U.S. primarily toward land buyouts under our tower sites and continued acceleration in European newbuilds with over 700 new sites planned.

Our plan also includes approximately $180 million in maintenance capital, a reduction of roughly $15 million due to an acceleration of maintenance capital projects into 2025, reducing 2026 anticipated spending.

Moving to the right side of the slide, we remain disciplined as we utilize our balance sheet, which is well positioned for a variety of macroeconomic scenarios. And we are focused on allocating capital to optimize long-term shareholder value creation. As I mentioned, we repurchased approximately $365 million of American Tower stock in 2025, plus another approximately $53 million so far in 2026. We will continue to be opportunistic in utilizing the remaining approximately $1.6 billion that the Board has authorized for share repurchases.

Turning to Slide 13 and, in summary, we are pleased with our 2025 results, which demonstrate the fundamental durability of our business model. Robust mobile data consumption growth and demand for our interconnection-rich data centers underpin a long runway of growth opportunities for American Tower. With our best-in-class portfolio of towers and data centers and strong balance sheet, we are well positioned to capture these growth opportunities and deliver on our goal of industry-leading attributable AFFO per share growth.

And with that, operator, we can open the line for questions.

[Operator Instructions] Our first question comes from the line of Batya Levi of UBS.

Great. On the domestic side, can you provide a bit more color on the pacing of activity that you're seeing from the carriers as we enter a lower contracted revenue cycle that you had under the holistic deals in the prior terms? And are you seeing a change in the amendment versus densification activity today? And maybe just to compare that 2.5% leasing growth guidance for '26, how does that compare to '25 if we exclude DISH?

I'll start with leasing trends, and then I'll let Rod talk about the numbers on it. So what we're seeing, Batya, is we're seeing the customers providing a steady level of activity, kind of broad-based across the entire ecosystem there. And we are seeing a higher incidence of new colocations coming in, but we still have a pretty healthy amendment pipeline as well. And this is what we would expect to see at this point in the cycle.

Some of the carriers are broadly done with their initial 5G overlays. So there'll be some fill-in fights that happen there, but they're broadly done with their initial targets. One is still a little bit further behind on that. And we are still seeing some amendment growth there. And when it comes to the densification, we're seeing some amendments because they're adding more equipment to existing sites that they've already overlaid, but they're also adding new sites.

So we are seeing a little bit of a shift in that. But we still would expect the majority of our new leasing to come from amendments this year, as we have historically.

Batya, this is Rod. I'll take the other piece of your question relative to the colo and amendment contribution to organic tenant billings and how it relates to prior year. So if you look at our 2026 guide for organic tenant billings growth, it's about 0.5%. Within that, there is about 2.4% contribution coming from colocation and amendment revenue. Now that doesn't have any contribution from DISH at all in it.

If you go back to the prior year, the 2025 numbers, we were at about 3.1%, 3.2%, which included some activity from DISH in terms of the contribution from colocation and amendment revenue. When you remove that contribution in the prior year number from DISH, you'd come right in at that 2.5% level. So we are seeing, as Steve outlined, very consistent activity levels in the U.S. marketplace ex DISH. And we're seeing about 2.5% contribution from colocation and amendment revenue in each of those years from the carriers in the U.S. ex DISH.

The only other thing I would add to the pacing of the new business, as Steve said, it's pretty consistent. You will see a little bit higher number in the first half of the year and it drops down just slightly in the second half of the year.

Yes. Thanks, Rod. I think you meant to say 2.5% contribution from new leases and amendments this year.

Our next question comes from the line of Rick Prentiss of Raymond James & Associates.

Can you hear me okay

Yes. We can, Rick.

I want to start on the DISH. Appreciate it's out of the guidance. We had taken it out of our numbers as well. Can you provide us the amount owed? Like Crown Castle mentioned that they owed $3.5 billion when they terminated the agreement with DISH. Are you able to tell us how much is owned and that you're looking at trying to work out of payment from them?

Yes. Thanks, Rick. Yes, I think the key takeaway that we want everybody to have about DISH from today's call is that we have derisked our business going forward by taking it out of the numbers. And we fully plan to in the litigation. We think our contract is enforceable. We're going to do everything we can to collect that. But that would all be incremental upside to the current guidance that we're giving out there.

When it comes to the exposure on DISH, we've given you guys the numbers. We can kind of back into it, where it represents about 4% of our U.S. revenue. So that's approximately $200 million a year and we've disclosed that it goes through 2035 into 2036. So that gives you guys kind of the ballpark on that. We haven't put a specific number out there and don't plan to put a precise number on it, but that gives you guys kind of the ZIP code of where that exposure is or what the opportunity is actually now that it's out of the numbers.

And so in terms of -- and I'll go and proactively address this for some of the other questions I know are coming. We don't plan to speculate on the litigation. It's public, and you guys can follow along as you go. This is going to take time to work out. And so we don't necessarily expect this to get resolved this year. We hope it does, but we don't necessarily expect it to. And so as we kind of go forward in the year, we'll keep you updated if anything material that happens. But otherwise, we're just going to continue to fight this out in the courts and see where it goes.

Excellent. Along those lines, obviously, settlement or payments would be upside to the capital allocation. You mentioned opportunistic stock buybacks, also pursue M&A. How should we think about M&A out there, what you're seeing across the global landscape? And maybe address also kind of the disparity between public and private multiples.

Yes. Thanks, Rick. We continue to evaluate everything that's out there. As you probably know, there's a lot of portfolios that are talked about right now. There's not a lot of active deals that we're seeing. But we are still seeing a disconnect between private and public multiples. And we think that, that reflects the attractiveness and the durability of revenue in the tower business. And so that's kept us on the sidelines for the past few years because there has been that delta there that's made it hard for us to participate.

But just to reiterate to everyone, our capital allocation strategy is to focus on developed markets. And so you should not expect to see us participating in M&A in emerging markets. We'll continue to invest a small amount of capital there, opportunistically doing redevelopment to support our organic tenant billings growth there. And then we do have some build-to-suits that we're doing as part of multiyear commitments we entered into previously.

But as we think about capital allocation going forward, it's really focused on developed markets, predominantly the U.S. And then if there's an opportunity in Europe or elsewhere that's developed, we'll certainly evaluate that. But we're not seeing a lot of deal flow out there that we find attractive today. And we hope that changes. We hope that there is an opportunity for us to scale in some of those markets. And if there is, we'll keep you guys apprised when it happens.

Rick, I would just add a couple of quick things here. You had mentioned any possible future settlement from DISH could be a balance sheet item. I'll just highlight the fact that DISH is in default at the moment. They're not paying us. There is the potential for future collections that may come in. And if they do, it could be accounted for in other non-run rate revenue. So there could be some P&L impacts to the extent that there are future collections from DISH as we go forward.

And the only other thing I'd highlight on capital allocation is we are now down below our 5%, within our 3 to 5x leverage target. As you've heard Steve and I talk about over the last several quarters, that brings us into financial flexibility. Just to remind you the bits and pieces here, Steve talked about this. We're a REIT. We provide the dividend. We think that's essential to our long-term TSR, total shareholder return. Then we have been consistently investing between $1.5 billion and $2 billion in CapEx. And we've been able to rotate that, as Steve said, into the areas where we see the best returns.

Today, that's going into developed markets and it's increasing capital investments in CoreSite. And then we look at M&A and buyback, and we will make the decisions between those two pieces in terms of which one provides the best outlook for long-term total shareholder return. And of course, if paying down debt and building capacity for future deployments make sense, then we'll do that. So we have a lot of options available to us. We're willing to use them all. And we are now in a place where the balance sheet is very strong and we've regained full financial flexibility.

Our next question comes from the line of Michael Rollins of Citi.

So the margin guidance for cash margins to go up by 200 to 300 basis points by 2030, how much of that is just organic from the natural operating leverage in the business? And then how much is represented by the acceleration of the activities that you outlined earlier?

Michael, this is Rod. Let me take that one. So as you highlight in our 2026 guide for cash EBITDA margins, we're guiding to about 66.8%. That is slightly down from the prior year, down about 20 basis points. Of course, within there, there is organic revenue growth as the benefits of cost management that I would remind you and other listeners that we, as a company, have been focused on cost management and efficiencies over the long term historically and certainly over the last several years, that you've seen us talk about absolute reductions in SG&A year-over-year over the last few years. So this is not new to us in terms of focusing on cost.

A couple of things that are offsetting those expansionary pieces that are driving the margin is it's offset by higher contributions from our data center business which is lower margin as well as contributions from our services business that also has lower margin. And I would highlight that it's absorbing about 50 basis points of contraction because of the DISH churn. And within there, it has a step back in the CoreSite margins by about 270 basis points. A lot of that is a onetime nonrecurring benefit we got in property tax. As we reversed a prior property tax accrual in 2025, that's not expected to be recurring again, of course, in 2026.

With all of that said, I'm not going to go through and try to break out the bits and pieces of that margin expansion that we are expecting. We have increased margins about 300 basis points over the last several years. We expect to do that again going forward in the next several years going out to about 2030. And I'm not going to break it out in terms of which pieces are the organic growth pieces and which ones are the cost savings. And it really is a continuation of what we've been doing. We've been focused a lot on reducing and managing SG&A. We'll now pivot towards global operations and look to reduce and manage our direct expenses down. That will help contribute to that continued expansion.

And just to confirm. Over the last several months, I think you and Steve have been talking about the incremental effort to drive efficiency, and we were going to get an update at some point. So does today's target for 2030 fully encapsulate the activities that you've been describing over the last several months just to continue to push those efficiencies forward?

It encapsulates the things that I talked about in my script, where we talked about the four initiatives that we're taking on today. We do think that AI could offer some incremental upside to that, but it's too early to predict exactly what that's going to be. So when you think about what we're doing here, the direct costs typically rise with inflation. And so we thought the best way to explain a target to you guys was to do it in terms of margin. We could put out a number that's sort of a voided cost number that wouldn't mean anything to anybody.

But we didn't think that was the right way to explain it. We thought it was really to focus on what's going to be in the bottom line and what's something you could actually model out in terms of our expectation. And so when we looked at it, and we looked at what the growth would have been in terms of margins just from the operating leverage and where we were in terms of direct, we set a stretch target for ourselves. And we do think that, that 200 to 300 points of margin expansion represents some nice improvement over what it would otherwise be if we weren't able to recognize these cost savings.

So that's the guidance you're going to get from us, is that margin expansion piece. If theres's a chance to do something else with AI, and we think there is, once we've been able to sort of figure exactly what those numbers look like, we'll share it. But until then, focused on margin expansion. As Rod said, look at it on the tower side. not on a data center and services side. And we give you guys enough information on supplemental to do that. And we'll continue to expand those margins and update you on that quarter, like we always have.

And Michael, I would just add that, that margin expansion is off of a base that is already industry-leading.

Our next question comes from the line of Nick Del Deo of MoffettNathanson.

First, I was hoping you could expand a bit on two of the tower revenue growth drivers you highlighted, fixed wireless and AI. So with fixed wireless, are you seeing the carriers invest behind it as the primary motivating factor for work on a site versus piggybacking mobile-led deployments both in the U.S. and overseas? And what AI use cases do you see as most promising for driving wireless traffic growth?

Sure. I'll take that one. When it comes to fixed wireless, the carriers are still using their existing installations to support that. So you wouldn't necessarily see a stand-alone, to put it, for fixed wireless. The way we think about it is overall mobile network traffic and mobile data demand. And when you look at the percentage of mobile data usage that's coming from fixed wireless, it's accelerating.

We also look at our carrier customers and what they're saying publicly, and they're all raising their targets for fixed wireless subscribers. So what that tells us is that's driving demand on the network. And that's underpinning growth in our sales. Even though we can't necessarily pinpoint this amendment or this colocation to fixed wireless, we know it's kind of an overall driver.

When it comes to AI, we're in the early days of this. And most of the AI that we're all doing on our telephones is text or maybe a still photograph. That doesn't put a ton of stress on the networks. It's really video that puts the stress on the networks, and it's both video upstreaming and downstreaming. And that's what we think is going to drive a lot more activity over time.

Some of the projections we've seen are showing that the upstreaming effects of AI to require a change in network architecture, where most networks today have about 10% dedicated to upload and 90% to download, varies by customers, so some of them could be different. We think that in the future, AI could change that trajectory a bit so that you're seeing north of 20% in terms of uploading capacity. So again, it's early days. Too hard to predict exactly when it's going to happen or exactly what app is going to drive it.

But it's really that video upstreaming, video manipulation as well as things like the Meta glasses that are live streaming kind of everything around you, those types of applications that we think are really result in some network traffic over time.

Okay, Steve. And can I ask one on CoreSite as well? I thought there were some local news reports that indicated that you recently bought land in the Bay Area and might be pursuing a new campus in the Dallas-Fort Worth area. Assuming those reports are accurate, kind of what's the time frame for the Bay Area land? And how many megawatts do you think you'll be able to support? And maybe talk a little bit about the vision and rationale for de novo market entry in Dallas.

Sure. So we're not ready to announce any new markets yet. We are selectively looking at opportunities in other key metros that would be complementary to our existing portfolio, and we have purchased the land in various areas as sort of an exploratory foray into those. And when we make a decision to break ground there, we'll tell you guys that we're doing it.

The rationale is we're seeing incredible demand on our campuses. And this is our fourth consecutive year of record sales growth and this is the first year we've seen AI really manifest itself as a huge use case. So when you look at what's driving the success of CoreSite right now, we still have our kind of bread-and-butter customer, and that's the enterprises that need to be in interconnection-rich data center that's directly connected to multiple cloud on ramps. That's our core customer. There's still a long runway of demand from that customer.

But we're also seeing AI workloads like inferencing and machine learning, things like that, and that's our fastest-growing new use case. So from our perspective, to maximize the value of CoreSite, which is what we should be doing, it's both investing in our current campuses and expanding those. And it's looking at what other markets our customers would like for us to be in to drive even more accelerant sales over time.

From a timeline perspective, from the time we break ground until the time we open the facility, it depends on a couple of factors. Power availability is one of them, but also just the size of the facility zoning, et cetera. But you can expect it to be approximately 2 to 3 years from the time we break ground until the time that we can bring that capacity online and start realizing revenue from it.

Our next question comes from the line of Jim Schneider of Goldman Sachs.

I was wondering if you could maybe just elaborate on the cost savings program. Maybe you specifically talk about what -- it sounds like many of the actions you mentioned, Rod, would be things you would have done in normal course already. So I'm trying to understand, are you basically saying or is the message that you'll be able to sort of achieve this 50 basis points on average per year in spite of some of the cost headwinds and margin headwinds that you mentioned earlier? Or is there something sort of above and beyond that? And would you expect any nonlinearity in achievement of those?

Yes. Thanks for the question, Jim. And I would highlight the fact that in the last several years, you've seen us really manage our SG&A and manage that down. Of course, we don't announce when we're reducing staff and those sorts of things, but some of that activity certainly happened over the last 3 years as we rationalized SG&A across the board. When I mentioned a continuation, it really is a continuation of the mindset around cost management and cost controls.

The thing that is different going forward is that we have a different global structure. We have the addition of a Chief Operating Officer that is going to be bringing best practices around the globe in terms of the way we manage land expenses, the way we execute on supply chain and sourcing. We're going to be looking to expand the standard of care in the way we manage tower operations in the U.S. globally, which we expect really will drive efficiency and bend that curve down. And that will be a contributing factor to the margin expansion that we expect going out to 2030.

And then as a follow-up, can you maybe comment on the Europe property growth expectations? 9% new site seems like a lot. I'm just kind of curious where that's coming from. And maybe talk about any kind of the flavor or underlying color on a country-by-country basis.

Sure. I'll take that one. So we're seeing a lot of good opportunities in Europe right now, and we have a strong portfolio anchored by Telefonica that's largely insulated from some of the potential consolidation that's out there. So as we look at Europe, we're continuing to see a long runway of mid-single-digit organic growth that we expect to realize there.

And as part of our acquisition but also as part of some of our other agreements out there, we have the opportunity to build these sites. So we're expecting to bring onboard a record number of new builds in Europe next year. And so that's underpinning a lot of that growth.

And it's largely in the countries you'd expect it to be. Our two main markets are Germany and Spain there. So you're going to see a lot of towers there. We will bring some new towers online in France as well. And we'd like to bring more online in Italy. We like that country, and we just don't have as much presence there as we'd like to have. But what you're seeing there is a reflection of some really solid performance by our teams and earning the trust of our customers and then giving us more opportunities to build sites for them. And that's what's underpinning the growth there, along with good leasing expectations over time.

I would note that Europe in general is behind in deploying 5G compared to what the U.S. is. And so I think that from that perspective, there's a lot more runway to continue to deploy 5G there as well. So we feel good about the market. We feel good about the investments there. And what you're seeing in that 9% is really us continuing to build new sites as well as realizing organic growth there as well.

Our next question comes from the line of David Barden of New Street Research.

I guess regarding capital allocation, we talked a lot about returning capital and making new investments. But something we had talked about for a while, Steve, was kind of the pivot away from emerging markets. And I think the term of art is called capital recycling.

And if you go to Slide 11 and you kind of look at that left-hand side, it looks like there's a lot of markets that are small enough to be distractions and that money could be put to a higher and better use. So if you could kind of talk to us a little bit about what the strategy there is at this stage, whether currencies and market valuations have stopped you from doing things or if things are on the burner.

And then I guess my next question is a little offbeat. But for the last 5 years, if anyone asked, hey, how's satellite going to affect the terrestrial wireless business? You'd roll your eyes and you'd say, it's never going to have an impact. But now that you're starting to talk about 2030 margin expansion, 2030 6G is a driver and the reality that these LEO constellations are going to evolve over the next 5 years of material ways, how do you kind of get comfort right now looking into 2030 that this kind of evolution of connectivity, towers in the sky, so to speak, isn't an equivalently disruptive -- an equivalent to, say, the AI evolution, which you also expect to happen in the next 5 years?

Yes. Well, let me take the emerging market question on that. And our goal is always to establish a real estate portfolio that's giving us industry-leading AFFO per share. And we made a pivot a couple of years ago to focus more of our development CapEx and the developed markets because we thought that was going to give us the best durable growth over time and because we had gotten a little ahead of ourselves in terms of emerging market exposure given some of the challenges that we saw there with India and other things. So we've already made a number of changes to our portfolio mix there.

You referenced some of the smaller countries. And we'll always evaluate those countries to see what the best use of capital is on that, and you could see us do something there, but only if we think we're realizing the value of those that's accretive to our shareholders. So we're not going to do any fire sales. We're not going to eliminate something because of the distraction. What we've done to fix that is we've changed our operating model so that they're operating from regional hubs or through these kind of global organizations.

So it's really not a distraction for us. So it's all about what value can we realize and does that make sense? And if it does, you might see us take action. Otherwise, we're going to harvest that cash flow and redeploy it into our capital priorities that we outlined there. So again, just when there's news there, we'll let you know. But until then, we're going to continue those.

When it comes to satellites, the reason that we made an investment in AST SpaceMobile was to get a Board seat so that we would have a front row seat to this technology as it unfolds. And we certainly continue to monitor that. We talk to the engineers in the space. We talked to the dreamers in the space and what they're trying to do. And that gives us a lot of confidence that satellites will be complementary to the terrestrial networks.

6G is likely to be designed with satellites being an integral part of an integrated network. But the simple physics of spectrum, the simple economics of having a constellation that has to consistently be replenished over time means that towers will always be the cheapest and best way of deploying the level of content, the volume of mobile data that consumers demand. So while we think the satellite business is a great business, it's going to be a good complement to the network. And we certainly are excited about the developments we're seeing in that area.

We see no risk at all to the tower business over the long term because, again, towers will always be a cheaper form of delivering a mass amount of data to the consumer. And the satellites and just can't compete with that.

And David, I want to add a couple of just data points for you to think about to support Steve's discussion around us being an active portfolio manager. The evidence here is that we sold India and we took the proceeds from that sale. And we delevered and helped us get down below our 5x. You also saw us exit in different markets around the world. And again, we used those proceeds from those sales to delever the balance sheet and to help us regain that financial flexibility.

And most recently, and we announced it in the prepared remarks and in the press release, we sold half of our stake in AST Mobile. Remember, that was just a modest investment. We really invested in to stay close to the satellite business and to learn about that business going forward. There's no secret. The stock has done well. The company has done well. And we looked at it as a good opportunity to recycle some of that capital. So we sold half the stake. We used that to actually buy back shares in the last quarter. And we maintained a Board seat on AST. So we still have the ability to continue to learn.

Our next question comes from the line of Brandon Nispel of KeyBanc Capital Markets.

Can you guys hear me?

Yes, we can hear you.

Great. So two questions. Obviously, the U.S. ex DISH is pretty steady. I guess if we can remove DISH from like the last 3 years, it still seems like colo and amendment activity is down. Is that right?

And just to nitpick a little bit, why is the second half of the year lower than the first half? And how should we be thinking about that in terms of the exit rate? How should that inform our view in terms of 2027?

And then separately, in Africa, one of your largest customers just announced their intent to acquire some towers for their own. Sort of how you're thinking about that in terms of your view when one of your largest customers now wants to own a captive tower portfolio? How does that impact your growth expectations for that market?

Thanks. I'll take the Africa question first. We don't expect it to have any effect on our business there at all. We think that transaction is unrelated to the business we have there. If you look at the sales success that we had in 2025, we're doing very well in Africa in terms of our new business there. And our projections for 2026 are to have another good year of that. We don't think that the acquisition of the other tower company really has any bearing on that at all.

As we've said previously, our goal is to reduce the incremental capital that we're putting into Africa over time. And that means that we're not going to be building as many new sites for the carrier customers there. And so I think that what you're seeing play out in the various changes that are happening in Africa are reflective of our customers that are looking for other alternatives versus American Tower in terms of how they're going to build some of those sites in their network. So we feel good about that business. We think that we're going to continue to have a nice long runway of organic growth there.

Brandon, I guess keeping with the theme here and working backwards, I'll answer your second question, which is the timing and the pacing of new business. So I referred to the fact that there will be a slightly higher number or contribution in the first half of the year and it ticks down really ever so slightly. It's simply just a function of the way that our holistic agreements work as well as the timing of activity that we expect to see. And there's nothing more to it than that.

Your first question again is related to kind of going back over several years and the contribution and activity level that we've seen in the U.S. and how it relates to our organic growth. I'll point out a couple of things. A few years ago, you did see us achieve record levels of new business. And there were a couple of drivers to that.

One is there was an initial phase, initial wave of 5G networks, carriers deploying and upgrading the network with C-band spectrum. That came with an initial spike in CapEx, where we saw the carrier CapEx in the U.S. come up over $40 billion. So there was a significant push to begin that 5G launch. And that's typically what we see in the industry when a new technology is deployed. After that initial wave, we do see a moderation of the CapEx and a more steadying, albeit a step-up in terms of CapEx.

So we may not be seeing a repeat of the all-time high that we saw in the initial wave of 5G. But the steady state now, more in the mid-$30 billion range, is higher than the steady state that we saw in CapEx under the 4G cycle. So it moderates but there is a step-up that's consistent over time.

And the other thing I would highlight is over the last several years, you saw contributions from DISH to new business and organic growth for the tower companies over the last several years. Going forward, that's no longer in the numbers. So that said, when you think about the state of the industry today and the 3 wireless carriers, they're well capitalized, healthy. And they are contributing a consistent level of activity in '26 that we saw in prior years, and we expect that to continue going forward.

Our next question comes from the line of Brendan Lynch of Barclays.

Rod, maybe just to follow up on that commentary there. That was very helpful in kind of framing out the longer-term outlook. You previously guided to 5% organic growth through 2027. Obviously, with DISH not in the picture now, that is coming down a little bit. How should we think about that long-term growth going forward, back into about 4.5%, and that's what you're suggesting for this year. Should we anticipate that, that continues out into the future as well?

I'll actually take that one. Back in early 2021 when we set out that expectation for U.S. and Canada organic growth of 5% or better between '23 and '27, that was based on the growth drivers that we saw at the time. And what we didn't have in our view shed then was DISH trying to sell its spectrum and exit the market effectively and also T-Mobile completing the transaction of U.S. cellular. So those are things that have taken us off of that guide, as you know, this year in particular.

However, everything else is kind of playing out the way that we expected it to. And if you look at the past several years, we achieved 5% up until last year when those transactions were announced. And so as we think about going forward, and we're not going to give '27 guidance here. But as we think about going forward, our long-term growth algorithm that we've laid out for you guys, we believe still holds true.

And that is organic growth in our developed markets in the mid-single digits, a little bit higher in our emerging markets, higher contributions from CoreSite because we see double-digit growth in revenue in CoreSite. And we're going to have expanding margins because of our cost control. So as we think about that long-term growth algorithm that we laid out, we're still confident in our ability to deliver that even in the 3-carrier market.

Great. That's helpful. And maybe just one on the data center front. Can you describe to what extent you're seeing actual inferencing demand and specifically low latency inferencing demand at CoreSite?

I can speak to inferencing demand. It's hard to say if it's low latency because the whole campus is low latency based on the way we've organized it. But what we've seen is an uptick in inferencing. It is one of our leading new use cases that's coming in. And quite frankly, we have more demand for it than we can meet with our supply. So we're able to curate our mix of inferencing partners there, and that's helping us keep the risk, the business model risk down because we're only choosing the best names in the space in terms of who can go in our facilities.

We could do more if we had more space, quite frankly. There's a lot of demand out there for it. But because we're still curating our customer mix, we're still trying to make sure that we have that right balance of cloud, networks and enterprises, and I would throw inferencing in, is kind of the new fourth characteristics of it, but because we're still curating that mix, we're just not taking everything that comes in the door.

Our final question comes from the line of Richard Choe of JPMorgan.

I wanted to ask a follow-up on the data centers. What kind of renewal pricing are you seeing an overall pricing for new business? And then back to the tower business, if you can give us a sense of what kind of pipeline of applications you are seeing. And has that shifted at all? And at some point, do you see it kind of inflecting higher?

Sure. So I'll start with the data center question -- I'm sorry, pricing. So we're seeing generally higher pricing. Our mark-to-market continues to exceed what it's been over kind of historical norms on that. So that's a really good indication of that. And then the market level pricing does continue to rise because there is this imbalance between supply and demand. And so I don't have any specifics for you in terms of percentages there. We're not putting that kind of level of information out there.

But overall, it's going up. And that's enabling us to continue to underwrite mid-teens or better returns on the new incremental capital that we're putting in. Because as we're creating that new space, even though you do have a little bit of cost pressure from inflation, tariffs, things like that, we're able to pass that through in the form of higher pricing to keep those stabilized returns kind of in that mid-teens range. So we feel very good about that over time.

In terms of the application pipeline on towers, we are expecting slightly fewer number of total applications this year. But that's not reflective of anything other than a couple of the carriers are largely through their initial 5G overlays. And so a lot of that was kind of amendment business that was likely covered in a lot of our holistic agreements anyway. So there's no real readthrough on that in terms of customer demand or property revenue.

And in terms of an inflection, what we're seeing as an inflection is a higher number of new colocations coming in which is very positive because those come in at higher revenue per transaction than the amendments do. But I would say, again, it's an overall consistent level of activity year-over-year, and it's consistent with what we expected to see at this point. And we expect it to be at that level or better in the future as they switch to densifying their networks.

This concludes the question-and-answer session. I'd like to thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

Okay. Great. We're going to get started now. Thanks, everyone, for joining our conference. I'm Batya Levi with the communications team at UBS. And our next speaker is Steve Vondran, President and CEO of American Tower. Thank you so much for joining us.

Thanks for the invite Batya.

Thanks. So I thought that we would just start with maybe looking into the next year. And if you could just give us an overview of what your top priorities will be.

Absolutely. We have a great business model that has long-term durable growth, and that's underpinned by strong secular trends and long-term contracts. And then we combine that with high operating leverage. So that revenue converts at a very high margin. And we supplement that with some select investments and an investment-grade balance sheet that really gives us an advantage in the market. And so our overall goal is to drive industry-leading AFFO per share growth. And so we've organized our key priorities around those pillars. And so 2026 is no different.

The first priority is to maximize organic growth on the portfolio. When you look at, in particular, the U.S. market, mobile data growth has grown at about 35% a year for the last 3 years, and it's projected to continue to grow at a rapid pace for the next several years. In fact, some experts are predicting that the mobile carriers will need to double network capacity over the next 5 years. And that gives us a long runway of growth for new colocations from densification and amendments. Those are those secular tailwinds. And so we'll continue to monetize the rest of 5G, the deployment of 5G and focus on getting ready for 6G. And so that's on the revenue side. On the expense side, we have a disciplined cost management structure in place where we're always trying to maximize the growth in that -- in the margin on that.

And we've been very successful over the last several years at reducing SG&A as a percentage of sales and actually net reductions in SG&A. And we've got programs in place to look at the rest of our direct costs over the next several years to try to make sure that those costs are growing slower than the revenue, which will give us margin expansion over time. We've also generated enough cash that we have the ability to invest in our business, and we have a disciplined investment strategy on that. We've pivoted over the last couple of years where we're focusing most of that discretionary CapEx in our developed markets, so the U.S., Europe and CoreSite. And we're investing less in our emerging markets.

Not 0, there's still a little bit of investment there as we work through some contracts, preexisting contracts in those markets, but we are investing more in the developed markets. And then we also have the options to buy back stock or further delever some of the other uses of cash there as well. And then kind of the fourth pillar is really maintaining and enhancing our investment-grade balance sheet as we focus on the quality of earnings and making sure that we have quality on the revenue side, but also being disciplined about refinancing our debt and keeping that investment-grade balance sheet that gives us the lowest cost of capital in the industry and gives us just that much more leverage in terms of our operating results. And when we put all those together, we believe that, that will give us industry-leading AFFO per share growth over time.

That's great. I'd like to dig in on all of them. But before we do that, maybe just get this topic out of the way. Can you just maybe talk about maybe framing the potential risk as you go through the litigation with DISH? And how should we think about the process?

Sure. So DISH comprises about 2% of our global revenues, and that's roughly $200 million a year. And so I've seen some analyst reports out where they net present value that and kind of size it. So I'll just refer to how they size it, which is $1.5 billion to $2 billion. So that's kind of the way to size the risk with DISH on that. There's really nothing new to report in terms of the litigation.

It's still pretty new. We just filed it a couple -- I guess, a few weeks ago on that, and it takes time for these things to play out in the courts. And just to refresh everyone's memory on what happened with DISH. So we signed an MLA in 2021, and it goes through 2036. After the Spectrum sale was announced, we received a letter from DISH saying that they believe they were excused from performance under the agreement. We strongly disagree with that.

And so we filed suit to enforce our rights under that agreement. For those of you who don't know, I'm a recovering lawyer. So I am not anti-litigation when it's required. And so we'll continue to play that out. And we'll continue to talk with DISH. We're open to the idea of trying to resolve this business person to business person. But if not, we'll just continue through the process. The courts aren't fast. So it's not going to get resolved tomorrow, but we'll update you guys on our progress along the way as developments happen there.

Okay. Maybe just generally in the U.S., you mentioned healthy levels of carrier activity. Can we dig in a little bit more based on where we are in terms of the first phase of 5G deployment completed? What does that mean in terms of carrier activity going forward? Is there a pause in the market? Are you already starting to see some densification? What are they spending on?

Yes. So we think of every G is about a decade-long deployment. And so we're roughly 5 years into it. And that first phase is a coverage phase where everyone is racing to get a certain number of POPs covered. And we're largely through that phase of it. And we're getting into the phase now where our customers are focused on kind of what we call quality and then capacity. And so when you do that initial build-out, every technology and every spectrum band propagates a little bit differently. So when you do the first overlay, you have some quality of service issues. I'm sure no matter who your carrier is, you may have areas where you're still in 4G, things like that. So they'll attack that and improve the consistency and quality of coverage. And we're definitely seeing that activity today.

And that comes in the form of 2 things. It can be additional amendments as they enhance sites that are already getting capacity issues, but also as they fill in gaps in the coverage. So we're definitely in the phase where we're seeing that activity. And we're also seeing the early phases of densification to meet capacity needs. Now a lot of times, they do both. When you're doing a quality of service, it also release capacity. So you can't tag a specific site all the time and just say it's definitely for capacity. But as we look at the regions where we're seeing new colocations coming in, they mirror areas where we saw capacity adds in 4G and 3G and 2G.

So it's a pretty good bet. So we are encouraged by what we're seeing there. We're seeing that beginning of densification -- and again, we expect another 5-year run on 5G as they prepare for 6G. And one of the things that we look at in terms of densification for 5G is we think that's actually getting the networks ready for 6G as well. So we think it's a smart network planning to densify now. If you look at the spectrum bands that are being identified globally for 6G, they're in that 7 to 8 gigahertz band, which is definitely going to propagate much differently than the 3 or sub-3 bands. So we think that more dense networks are going to be required out of the gate for 6G. So the densification we're going to see in 5G is also getting ready for that first phase of 6G as well, we believe.

For the 5G deployment, which is still ongoing, the carriers now have access to more spectrum. It's sort of deep and breadth of spectrum is available for them. Does that delay more activity for towers?

We don't think so. We think it's both end. When you think about how rapidly mobile data requirements are growing, they need every solution at their fingertips. They need to be able to deploy more equipment, more spectrum and more sites to meet that demand over time. So I know there's speculation out there about does it delay things a quarter, a month. We think in terms of long term, medium and long term, we don't see any delays in medium and long term. We think that they need all those different solutions to meet that skyrocketing demand.

Okay. We had AT&T CEO, John Stankey, in the prior session, and he said that the wireless CapEx has peaked. What does that imply for you?

There's not always a direct correlation there because when they talk about spending on their network, there's a lot of different elements in that. There's the backhaul element. There's the core network element. The radio access network on the towers is only one part of that overall spend. So I don't read a direct read-through in terms of him saying that, that means less activity on towers. For me, the way I think about activity on towers is really mobile data growth over time. And what equipment is available, what's the throughput available on that, how much capacity can the radios handle, what spectrum is available and then what do demand trends look like? That's a much better proxy than what they're spending year-to-year on that whole chunk.

Okay. I remember a time that we used to say every time the carriers touch the tower, the tower companies benefit from that. But maybe with the holistic MLAs, the carriers also got some flexibility and we're able to light up more spectrum with just a software upgrade. So thinking about the upcoming spectrum that's becoming available. We saw it with 3, 4, 5 for AT&T, it's just spectrum upgrade. Maybe they will build out 600 megahertz later on. Can you just help us understand when is it good for towers and when is it not?

It's always good for towers, okay? It may not be that every single touch results in an amendment revenue piece of it because as they refarm spectrum, as they refarm equipment, there's a little bit of a substitution effect on that. But as mobile data growth increases, there's a limit to what the new equipment can handle in terms of throughput. So even if you can do a software push to a radio, there's still a limit to how much that radio can. So as mobile data growth climbs, they'll need to add more radios over time. So as they're deploying the spectrum, it's good for us. Anytime carriers get spectrum, they deploy it, it's good for us because that requires them to continue to invest in the network and that telegraphs are going to continue -- that they will invest in the network to do that.

And mobile data usage still up 35%. Can you talk a little bit about what use cases do you think that the carriers will continue to support with incremental mobile equipment?

Yes. Well, certainly, fixed wireless is a component of that growth. But we are also seeing that 5G smartphone users are using a lot more data than 4G smartphone users. And so when you start thinking about the use cases that are in place today, a lot of it is still video streaming on social media and the upstreaming has more of an effect on the network than the downstreaming does. So don't discourage your kids from doing their TikTok videos. That's good for our business. Fixed wireless continues to be a growth driver for the carriers. And so if you look at the net subscriber adds for the past couple of years, fixed wireless makes up the biggest part of that.

And we see them continuing to drive good margins in that business and setting new targets for subscribers. So we think that's a good driver of activity on the networks overall and a good source of revenue for our customers. When you get a little bit further out, all these use cases that are related to AI are not baked into the estimates that we're seeing out there. There's always an asterisk in every report that comes out about mobile data usage that assumes light levels of AI. And I'm starting to get really excited about some of the more bandwidth-intensive use cases on AI. Working with a group of folks when we were using one of the new video editing software Canva the other day. And it is such a bandwidth with hog.

I mean it was causing problems on the WiFi that we were on. So when you start thinking about those types of applications in the mobile network, those are going to be huge data drivers. The other use cases that we're starting to get excited about are some of the AR glasses. And even ones that aren't AR yet, the meta glasses with the camera in it, Ed Knapp, retire but still doing some work for us. He's obsessed with those things, and he's streaming video up all the time on those. So those types of use cases are going to continue to drive more and more bandwidth increases on the network. And when I look out over that kind of medium to long term, I just don't see a limit to mobile data growth. I think it's going to accelerate, not decelerate.

And I think you've mentioned before that the current network planning has been more to support the downlink capacity and not so much the uplink. Are you seeing a change in the carrier activity to sort of support the future use cases that could be coming?

We're not seeing it yet, but we wouldn't necessarily see it. A lot of that's behind the scenes for them. So when we talk to industry experts, we're still -- what we hear is they're still architecting 90% downlink, 10% uplink. And again, I defer to my customers to talk about their specific use cases on that. But I do think over time, they're going to need more downlink. And so whether that's rearchitecting the networks or just adding more raw capacity, I think that that's going to be required to meet the demand that's coming down the pipe from all these use cases.

Got it. And maybe other potential tenants. Cable is a small portion of your portfolio. They are talking a lot about continuing to build the CBRS. Is that an opportunity?

They're a very small customer of ours today. So we see a little bit of activity around the edges on that. And when you look at -- they've been very successful in this space as MVNOs, but their scope relative to the MNOs is still pretty modest. So we're not anticipating anything in our current guidance for that. But we hope so. We hope that they continue to find a business case to do that. And when you think about other tenants on sites, we've had a -- we call it our vertical market segment, and we've had that in place for 2 decades.

And so that's things like government, wireless Internet service providers, all the way down to HAM radio operators. There's a big ecosystem out there that we support on the towers. And so we'll continue to work on that. We're now talking with some of the satellite providers about teleports on the sites. We've even got a little proof of concept for drone testing on sites. So we're actively chasing all those additional tenants, but nothing I can brag about today in terms of materiality, but every dollar helps. So we're out there chasing every dollar.

Any thoughts about Starlink and their potential for building a maybe hybrid MNO with satellite and terrestrial networks?

That would be great. I don't see anything in the announcements today that make me think that that's imminent. But if they did, we'd certainly be there to support them and help them build out that network. We've got a great portfolio.

Okay. Maybe wrapping all of that up in terms of how to think about domestic organic growth. You had given a 5-year outlook of about 5% growth through '27. We had some discrete events that could change it. Maybe help us understand what could be the outlook into '26, '27, given those items? And then how do we think about future growth from there?

Sure. So we gave that guidance, I think it was in 2021 when we gave that multiyear guidance, and we said that the way we saw the industry shaping up that we would expect to see 5% growth from 2023 to 2027. And if you look at where we are a few years into that, we're pretty right on where we were. What we didn't have in our view shed at that time was DISH selling spectrum or U.S. Cellular being acquired. So those are some things that may have a short-term impact in terms of what our leasing looks like on that. And we'll wait to give guidance for 2026 when we give our Q4 results in February. But when you think about kind of the long-term growth algorithm that we've laid out for everyone, we believe our developed markets, including the U.S., will provide mid-single-digit organic growth over time.

And it almost doesn't matter who's building it as long as mobile data growth grows, the customers need to build to meet that demand. And so we actually view some of these changes as long-term positive for the industry because even though you'll have fewer customers, they're better capitalized and they can better utilize the spectrum. And we've seen that play out over time. I've been with the company 25 years, and we used to have a couple of dozen customers because you had all these regional customers.

As they've consolidated, we saw investment climb up because it was more profitable. Even when you think about Sprint and what happened when T-Mobile bought them, T-Mobile then kind of doubled down on their investments in their network, and we saw a lot of healthy growth from that combination, even though it was painful to lose a customer over the long term, we're going to benefit from that. So we think these structural changes in the market are probably healthy for the market long term, even though it may be a short-term headwind over the next couple of years given we didn't have that.

And how do you think about churn going forward with the industry consolidation churn almost over? What -- you used to say that it's 1% to 2%. But is that the right level when you think about the incumbent tenants on your network now?

Look, it's hard to predict right now. 1% to 2% is the historical churn number. And what we've said is we believe it will trend down to the lower end of that. And we'll wait to see how that plays out quarter-by-quarter. But it's certainly a lot of the catalysts in that churn were regional players merging out of business, et cetera. And we'll just have to wait and see how it plays out. over time.

Okay. The network services business has been tremendous. And we always think of that as potentially a proxy for future growth to come. Can you maybe help us understand, is that wrong? Is that like a onetime benefit that you had that's not going to continue? And how do we think about that business going forward?

So the service business is a great business, and we do it -- the cash flow is nice, but it's also complementary to our leasing environment. By being the easy button for our customers, we think we get more long-term revenue out of it because we get a higher share of new business. Having said that, that services business is cyclical. And a couple of years ago, we did take guidance down pretty materially. And last year, we did take it up pretty materially. So it's a little bit harder to predict. It's a good proxy for activity levels on the sites, but our comprehensive agreements smooth out some of that from a leasing perspective sometimes. So it's not a one-for-one proxy necessarily.

What you can read from it is that the ecosystem is healthy. The customers are investing. They're building their networks, and they're building them on our sites. The other nuance on services is we've grown our construction management piece, and that's not broad-based. So we do most of our services everywhere, and that's like acquisition zoning and permitting, engineering, those type of services. We do that for everyone across the board all over the country. Construction management is more of a niche business for us where we do it for certain customers in certain areas. And so when that's a larger piece of it, it's not as predictive because it's more of a niche business.

And maybe talking about competition in the U.S., we're hearing more and more private tower companies trying to get some business from the incumbents and Verizon has a deal with Vertical Bridge. They talk about wanting to diversify their tower portfolio. How do you think about their presence? And your -- and as the carriers move on to the densification phase, could that opportunity be shared with some of the private ones?

Well, this is nothing new. The customers wanting to diversify their vendor base has been going on for at least 15 years that I can think of, maybe even longer. And you have to remember, it's real estate. And so there are barriers to entry around a lot of these sites. So I don't worry too much about those types of things. We're not building a lot of new sites in the U.S. today because there is competition from some of these private companies that are willing to underwrite returns different than I'm willing to underwrite than that.

And so it has limited our ability to develop new sites kind of on a build-to-suit basis in the U.S., but it hasn't at all impacted our ability to drive organic growth on our existing portfolios. And so the way I think about that is there's so much demand. There's so much growth in the networks that they can support multiple vendors on that. And who knows, some of those vendors may become acquisition targets in the future like they have in the past. And so I think it's just a sign of a healthy ecosystem.

Okay. Maybe let's move on to Europe, another developed region that has been growing around mid-single digits. What -- how do you think about your positioning there, both in terms of potential consolidation that could happen among the carriers, your exposure to that. But also it looks like there are some portfolios that are being available. What would be your approach?

So when we entered Europe, we were very patient to get the right portfolio, right terms and conditions because we anticipated that there could be some counterparty risk with some of the smaller carriers there. And while I'm not sure we expected as much consolidation as we're seeing, we knew that was a risk out there. And so when we bought the Telxius portfolio, it had very little exposure to the weaker tenants on it. So that has given us a lot of insulation from the impacts of the carrier consolidations that we are seeing. In Spain, you have MasMovil and Orange coming together.

There are some rumors about things that may or may not happen in France. We have small exposure compared to the peer group in that. And so we actually look at it very much the way we look at the U.S. that it may be an opportunity for us because fewer customers with healthier balance sheets may spur a little bit more investment and a little bit more competition in Europe. And so we feel very comfortable that we'll continue to drive those kind of mid-single-digit growth opportunities in Europe.

And when you think about scaling in the region, we have really good scale in Spain and Germany. France, we're a little bit subscale in, and we'll continue to evaluate opportunities there. But we're not going to be -- we don't feel compelled to do anything. There's no strategic reason to stretch for that. So if we do buy something there, it's going to be because it's a good deal, right terms and conditions and the right price.

And how would you balance in terms of growth versus yield? And I guess you've mentioned that you want to put incremental capital into developed markets. So that would hit it. But in terms of growth opportunity.

The good news is we have a lot of opportunity to invest right now. And so whether it's -- we're doing a lot of build-to-suits with good day 1 yields that we also think have good growth characteristics in Europe, and we're putting more capital toward that. And we have CoreSite as an option in the U.S. to put more capital in. So we haven't had to make a growth versus yield decision because we can do both. And that's where we want to continue to source the opportunity to do both.

Okay. LatAm, and that one has seen some industry consolidation. Can you just remind us how long that will take us? And then anything else that you're seeing in terms of new activity picking up?

Yes. That market is in the middle of a reset, and it's resetting kind of all across the market from the larger countries like Brazil to the smaller ones in Latin America. And it's been a low growth market for us for the past couple of years, and it will be for the next couple of years. So probably '26 and '27, I continue to expect low growth in Latin America as we continue to see the remaining churn in Brazil from Oi, so the gift that keeps on giving. And then also, there's some carrier consolidation in some of the smaller countries. And also, there have been a couple of carrier bankruptcies that we're working through.

And so I'd expect to continue to see low growth in that market. The good news is, though, we are seeing a little bit of signs that the market resets is happening. If you look at Brazil in particular, the 3 major carriers in Brazil are starting to tick up their investments in their networks. And it's not dramatic yet, but we think it will continue to rise over time. And so we are seeing some positive leasing trends happening in Brazil, not enough to offset the churn that we're seeing. So I don't want to change the expectation on that. But it is the sign that, that market is changing, which we think will give us a return to accretive growth rates in Latin America, 2028 and beyond.

Anything -- any updates on Mexico? How should we think about trends there?

Look, Mexico, I guess we have the 2 issues. We have the dispute with AT&T Mexico that we disclosed before that we're kind of in stasis on pending that arbitration. But from a market perspective, in general, that market is still behind in terms of 5G deployment. The spectrum is not in the hands of the carriers yet. And so we're not seeing robust investment in the networks there by anyone because they haven't figured out from a policy perspective, how to get spectrum in the hands of the carriers. So I think that's something that's got to get worked out over time.

And they're going to need the investment just like everybody else needs the investment. So I'm hoping to see the government and the carriers work something out there to get that 5G spectrum in their hands to see some investment happening there, but it just hasn't happened to date. So that's a future opportunity in a current kind of stasis model.

And maybe Africa, it remains one of the sort of half of your emerging footprint roughly. How -- and it's been growing very nicely, double digits. Do you expect that to grow? And also maybe provide some guidance for us in terms of your appetite to remain in the region.

Sure. So Africa has got an amazing growth story in terms of new business. Our new colocations and amendment business there continues to grow. They keep having quarter after quarter of really good results on that front. And so when you think about the challenges we've had in Africa, it's largely been carrier consolidation, which is pretty much done now. The vast majority of our revenues there are with the top 2 players in each market, which we think are stable and durable. And then we also had FX issues that have been weighing on it. They've had a great year this year, and they've had really good growth this year because FX has been relatively stable, better than what we expected when we put guidance out, and we're seeing those new leasing trends continue to accelerate.

Looking forward, the leasing environment is going to continue to be good there. FX is -- you guys are probably have a better handle than I do on what that's going to be, and it's going to be unpredictable, which is why we said we're going to kind of pivot investment. When we think about our emerging market portfolios, when you go back to why we went there to begin with, it was to give us higher growth for longer because we thought they would grow faster. And from a new business perspective, they are. You've got some discrete issues with carrier consolidation. But when you get through that, they are growing faster. For us, it's just the volatility that puts in the portfolio.

So we think having some exposure there can make sense for us long term. It just needs to be smaller, so it's not having as much of an effect on the overall results. So we'll continue to work through investing more money in developed markets and then continue to ratchet down the investments in those markets, so it becomes a smaller piece of the pie. In terms of divestitures, we get asked that we might dip around the edges. And look, everything is for sale in the whole portfolio. If you want to buy something, make me an offer, but we want to get the right value for something. So we're not going to do fire sales.

We're not going to kind of run for the exits on that. We're going to harvest cash flows, repatriate them, invest them in the good markets. And that's what we see kind of the near-term best option for those. But we're always evaluating. And so if we ever decide that we can create more value by doing something different, we will. But as we sit here today, we think that continuing to operate those markets as efficiently as we can, growing them, harvesting that cash flow and reinvesting it is the best long-term growth driver for those markets today.

And then maybe CoreSite, the other part of the business, which has been doing tremendously well, maybe not for the reasons that you bought the asset for. First, maybe operationally, it was a double-digit grower? Can '26 be a repeat of that? And then same question, strategically, do you see yourself as the owner of that asset for longer term?

We see the ability to drive upper single-digit or double-digit growth in CoreSite for a good period of time. The demand drivers that are in that space are durable, and it's not just the AI boom that's fueling it. Now that's helping with market pricing has gotten better. It's helping with not having excess supply out there. But CoreSite is benefiting from its core business, which are enterprises that need to be interconnected to major cloud providers and more and more inferencing platforms in that environment. And there's a very long tail of business on that.

So for us, the key to driving growth in CoreSite is replenishing capacity. We've got more megawatts under construction today than we ever have in our history, and we'll continue to invest in doing that, and that will continue to fuel the growth there. So that's a great story for us. It's a great growth driver. We're able to continue to write mid-teens or better development yields as we build the assets, and we have a lot of opportunity to keep growing that portfolio. So that's a great business, and we continue to focus on that. I believe more and more of the edge is coming. We were wrong on the timing.

We thought it was going to happen sooner, but we're really starting to see the ecosystem starting to develop there. And so I am convinced that you will see the synergies between tower and data centers -- and so I think, yes, we're the right owner for that asset. Number one, it's a great growth driver. We're maximizing the value of it today. But number two, it is going to give us a leg up and a right to win as the edge evolves over time. So I'm feeling very good about the investment. I'm feeling very good about the business, and I'm feeling very good about how the edge is going to play out over the next several years.

And so far, it's contained domestically. Would you consider also owning data center assets outside of the U.S.?

Our customers would like for us to. And so I think with that, we haven't found the right opportunity to do that yet. If we did, it would likely be developed markets and it would likely be in conjunction with customer commitments with that. So there's no current plans. There's nothing to announce, and there's nothing in the works on that, but I wouldn't shut the door on it. Again, the dynamics that we're seeing in the U.S., the rest of the world is behind. So there is an opportunity to get some of that growth in those developed markets, we consider that in the right opportunity.

Okay. Maybe tying it all together in terms of how to think about capital allocation and especially considering where your stock valuation is right now. And as you think about opportunities to invest in developed markets, both on the tower side, maybe CoreSite development CapEx seems to be going up. How should we think about that discretionary CapEx versus buyback and your leverage?

Yes. It's really a math exercise that Rod and I engage with -- engage in kind of a real-time basis. And every opportunity that we look at to invest capital has to compete with the stock buyback. So we just run the math and say, what do we think is going to create the best long-term opportunity based on where current interest rates are, where the stock price is and what that investment opportunity will yield. So it's really a dynamic way to allocate capital.

Our first priority is funding the dividend. And then beyond that, we do have some optionality in terms of whether we're going to fund that internal CapEx, M&A, stock buybacks or further delevering. And you saw us announce our last quarterly earnings that we had started doing some buybacks because at the time, that was going to create more value than what we saw in the other alternatives for that cash. So we'll continue to make those dynamic allocation decisions based on what the math shows us.

And can we expect that to continue in the near term?

We'll make the decisions the same way for the medium and long term. We'll wait to tell you what we're doing this quarter when we do earnings, but nice try.

That's fair. I think we'll end it there. Thank you so much.

Yes, I appreciate it.

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower Third Quarter 2025 Earnings Conference Call. As a reminder, today's conference call is being recorded. [Operator Instructions]

I would now like to turn the call over to your host, Spencer Kurn, Senior Vice President of Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to our third quarter earnings call. I'm Spencer Kurn, Head of Investor Relations for American Tower. Joining me on the call today are Steve Vondran, our President and Chief Executive Officer; and Rod Smith, our Executive Vice President, Chief Financial Officer and Treasurer. Following our prepared remarks, we will open the call for your questions.

Before we begin, I need to call your attention to our safe harbor statement. It says that some of our comments today may be forward-looking. As such, they are subject to risks and uncertainties described in American Tower SEC filings, and results may differ materially. Additional information as well as our earnings materials are available on our Investor Relations website.

With that, I'll turn the call over to Steve. Steve?

Thanks, Spencer. Good morning, everyone, and thanks for joining the call.

As you can see from our published results, we completed a great quarter that delivered double-digit growth in attributable AFFO per share as adjusted. Leasing activity remained robust across our tower and data center businesses that was complemented by near record services revenue. These top line trends, combined with focused execution of our strategic initiatives, have enabled us to increase our guidance for the year across all of our key consolidated metrics.

At the midpoint of our revised guidance, we now expect to deliver attributable AFFO per share as adjusted growth of approximately 7%. Net of FX headwinds and financing costs, our outlook implies attributable AFFO per share as adjusted growth of approximately 9%, which reflects the fundamental strength of our core operating model.

Before turning the call over to Rod to review our detailed financial results and updated outlook, I'd like to spend a few minutes discussing the industry backdrop and what it means for American Tower. The past few months have been interesting and active time in our industry, with [ spectrum ] moving between key players and signals of a more consolidated U.S. carrier market. During my 25 years at American Tower, I've navigated many instances of carrier consolidation of spectrum deals, and our experienced team has a strong track record of delivering market-leading solutions that meet the needs of our customers while enhancing our strategic positioning.

Although each transaction has been unique, there's been one consistent trend: the tower industry benefits when its customers become healthier. Financially strong customers tend to invest more heavily in their networks to keep pace with demand for mobile data consumption, which in turn requires greater demand for our best-in-class tower portfolio.

Demand for mobile data, the backbone of our business model, continues to rise at a torrid pace. In the U.S., the most recent CTI survey showed that mobile data consumption in 2024 increased approximately 35% year-over-year for the third straight year, driven by growth in mobile customers, 5G-enabled devices, usage per device and fixed wireless access. To put this into perspective, at this pace, mobile data consumption would continue to double every 2 to 3 years.

Experts believe that the rapid growth in mobile data consumption will require a doubling in overall network capacity over the next 5 years, which in turn will require a significant increase in cell sites that benefit our tower business. We, therefore, remain quite optimistic about the opportunities that this industry landscape presents, even before considering likely tailwinds from AI-driven mobile data demand.

We're also paying close attention to developments within satellite-based networks. We have a firsthand view through our Board representation at AST SpaceMobile and regularly evaluate satellite capabilities with engineers and technology consultants. Our assessments are deeply rooted in data and firmly endorse the view that satellite-based networks will remain complementary to terrestrial towers due to the capacity and economic constraints inherent to the satellite model. And these challenges are only magnified when considering the evolving nature of wireless communication technology as growth in mobile data consumption compounds.

In the U.S., this demand continues to drive robust levels of leasing activity. Application volumes in the third quarter remained elevated and heavily weighted towards [ amendments ] but with a growing share of co-locations. On average, approximately 75% of our towers have been upgraded with 5G equipment. So there's still considerable runway for growth as carriers complete their 5G coverage rollouts and shift their attention to network quality with densification activity.

We also see positive trends across our other tower portfolios where data consumption has grown at a CAGR of roughly 20% to 25% since 2020. 5G mid-band coverage is still progressing and stands at an average of roughly 50% in Europe, 20% in Latin America and 10% in Africa, with emerging markets lagging developed markets in cell sites per capita. Our international customers, especially in our emerging markets, continue to invest in 4G and newer 5G networks, and we're well positioned to capture future upside as our less mature markets lease up over time.

Strong industry tailwinds also continue to propel our data center business. This quarter, CoreSite signed record retail new leasing revenue and experienced healthy growth in our larger deployments as well, driven by strong demand for hybrid cloud and multi-cloud deployments and positive pricing actions amidst tight supply dynamics. We're also seeing significant new demand from early-stage AI-related workloads like inferencing, machine learning models and GPU as a service for Neo clouds. It's becoming increasingly important for AI workloads to be co-located with hybrid installations. Our CoreSite facilities are perfectly suited to this as they have a rich ecosystem of network and cloud interconnection coupled with purpose-built capacity designed to support AI and other high-density deployments with features like liquid cooling.

All of these positive trends in demand and pricing reinforce our expectation for CoreSite to achieve mid-teens or higher stabilized yields and to achieve these targets faster and with better visibility as pre-leasing and sales pipelines accumulate. I'm confident that American Tower is well positioned to benefit from these demand drivers across our tower and data center businesses. Our portfolio of assets is unmatched in quality, scale and operational excellence. And we focused our company around 4 strategic priorities to optimize long-term value creation: maximize organic growth, expand margins, allocate capital with discipline, and position our balance sheet as an asset.

We maximize organic growth as the best operator of towers and distributed real estate in the world. Our contractual and asset management expertise continues to deliver industry-leading organic growth while passing along superior service, operational benefits and efficiencies to our customers.

We expand margins by leveraging our global scale and world-class teams to drive cost efficiency. We've generated approximately 300 basis points of adjusted EBITDA margin expansion since 2020, and we see room for continued expansion as we streamline operations. We look forward to communicating more details on future efficiency initiatives as a part of our 2026 outlook presentation during our fourth quarter call.

Our capital allocation philosophy optimizes long-term strander value creation. After funding our dividend, we evaluate internal uses of CapEx, inorganic opportunities, debt repayments and share buybacks against each other to drive the highest possible risk-adjusted returns for our business. This approach has recently prioritized developed tower markets and CoreSite to improve the quality of our earnings and durability of growth. And as you saw in our results this morning, it informed our decision to repurchase $28 million of shares since quarter-end.

And our balance sheet, with an investment-grade credit rating and leverage now below 5x, which is the lowest among our tower peers, provides the cost of capital advantage and superior financial flexibility to pursue our growth objectives. Taken together, our strategic priorities are designed to deliver our goal of industry-leading AFFO per share growth.

Since assuming the CEO role last year, I'm increasingly impressed by my team's ability to execute these priorities and deliver value for all of our stakeholders. And I'd like to thank our incredible employees for delivering yet another impressive quarter. I'm confident that our team will continue to expertly manage our best-in-class assets and provide unmatched service for our customers in the future.

With that, I'll hand the call over to Rod to discuss our detailed third quarter financial results and updated 2025 outlook. Rod?

Thanks, Steve, and thank you all for joining the call. As you saw in this morning's press release, we delivered another strong quarter and raised our full year outlook. Before diving into our third quarter results and our revised full year outlook, I'll share a few highlights.

First, total revenue grew nearly 8% year-over-year, driven by steady consolidated organic growth in the mid-single digits, another strong quarter of U.S. services contribution and double-digit growth from CoreSite. Second, adjusted EBITDA also grew nearly 8% year-over-year as strong revenue growth was complemented by 20 basis points of cash margin expansion. Third, attributable AFFO per share as adjusted grew approximately 10% year-over-year as strong adjusted EBITDA growth was enhanced by disciplined management of below-the-line costs.

Finally, we are raising our full year outlook across property revenue, adjusted EBITDA, attributable AFFO and AFFO per share. The outlook raise is supported primarily by FX tailwinds, U.S. services outperformance and net interest benefits as compared to prior outlook. Our expectations for organic growth and CoreSite revenue growth remain in line with our prior outlook.

Now let's dive into our results. Turning to third quarter property revenue and organic tenant billings growth on Slide 5. Consolidated property revenue grew nearly 6% year-over-year. U.S. and Canada property revenue was flat year-over-year and grew approximately 5% when excluding noncash straight line revenue and Sprint churn. International property revenue grew approximately 12% year-over-year and nearly 8% when excluding noncash straight-line revenue and FX impacts. Finally, data center property revenue grew over 14%, driven by a record quarter of retail new leasing and consistent pricing growth.

Moving to the right side of the slide. We delivered consolidated organic tenant billings growth of 5%, in line with expectations driven by solid demand across our global portfolio. Our U.S. and Canada segment grew approximately 4% organically and greater than 5% when excluding Sprint churn. As a reminder, this was our final quarter of Sprint churn. Organic growth in our international segment was nearly 7%, reflecting double-digit growth in Africa and APAC, steady mid-single-digit growth in Europe in low single-digit growth in Latin America as expected.

Turning to Slide 6. Adjusted EBITDA grew nearly 8% year-over-year as strong revenue growth was enhanced by disciplined cost management. Moving to the right side of the slide, attributable AFFO per share as adjusted grew approximately 10% year-over-year, supported by robust EBITDA growth and prudent management of below-the-line costs.

Now let's turn to our revised full year outlook. As I mentioned, we are raising guidance across all of our key consolidated financial metrics. Starting with property revenue outlook on Slide 7, we are raising our outlook by $40 million at the midpoint, which implies approximately 3% year-over-year growth or approximately 5% when excluding noncash straight-line revenue and FX impacts. We are reiterating organic growth assumptions across all regions and continue to expect organic tenant billings growth of approximately 5% and data center growth of approximately 13% year-over-year.

The increase in outlook was driven by $50 million of FX tailwinds, a $5 million increase to pass-through revenue and $5 million of incremental non-run rate revenue in the U.S. This was partially offset by $20 million of revenue reserves in Latin America, primarily related to our previously disclosed legal dispute with AT&T Mexico over the calculation of tower rent.

As we disclosed in September, we reached a positive interim agreement with AT&T Mexico whereby AT&T Mexico has paid American Tower the majority of withheld payments and will resume monthly payments of the majority of tower rents owed going forward. The remainder of the rents not paid to American Tower are to be deposited into an irrevocable escrow account administered by an independent trustee. The funds in escrow will be released in accordance with the final ruling of the arbitration or by mutual consent of the company and AT&T Mexico. We remain confident in the terms of our master lease agreement with AT&T Mexico and expect to prevail in the arbitration.

Per our conservative reserve policies, our 2025 outlook assumes approximately $30 million of revenue reserves for the full year, of which $19 million are already reflected in our results through the third quarter. We expect future reserves of approximately $8 million to $10 million per quarter until the arbitration is settled. The arbitration is scheduled for hearing in August of 2026 and the final ruling may come at a later date.

Moving to adjusted EBITDA on Slide 8. We are raising our adjusted EBITDA outlook by $45 million at the midpoint, which implies approximately 4% growth year-over-year or approximately 7% growth year-over-year excluding noncash net straight-line and FX impacts. The increase to outlook was driven by $30 million of FX tailwinds and $15 million of upside from consolidated operating profit primarily driven by U.S. services outperformance.

And finally, moving to our outlook for AFFO on Slide 9. We are raising our attributable AFFO outlook by $50 million, which now implies growth at the midpoint of approximately 7% year-over-year on an as adjusted basis or approximately 9% excluding financing costs and FX impacts. The increase to outlook was driven by $20 million of FX tailwinds, $15 million of cash adjusted EBITDA and $15 million of upside from other items, consisting of $15 million of upside from net interest expense and $5 million of upside from cash taxes and minority interest, partly offset by $5 million of higher capital improvement CapEx.

Turning to Slide 10. Our 2025 capital plan remains consistent with our prior outlook. We continue to expect to distribute approximately $3.2 billion to our shareholders as a common dividend in 2025, subject to Board approval, and expect $1.7 billion in capital expenditures. $1.5 billion of our capital expenditures are related to discretionary projects of building approximately 2,150 new towers at the midpoint and $600 million of data center spend. Importantly, we expect 80% of our discretionary projects this year to be in developed markets, consistent with our capital allocation philosophy that Steve reiterated earlier.

Moving to the right side of the slide, our balance sheet remains strong. With our net leverage now at 4.9x, $10.7 billion in liquidity and low floating rate debt exposure, we have significant financial flexibility. We'll remain disciplined in how we utilize our balance sheet and allocate capital to optimize long-term shareholder value creation.

Subsequent to quarter-end, we have executed $28 million of share repurchases, and we will continue to be opportunistic in utilizing the remaining $2 billion that the Board has authorized for share repurchases.

Turning to Slide 11, and in summary, we are pleased with our results year-to-date, which demonstrate the fundamental durability of our business model. Robust mobile data consumption growth and demand for our interconnection-rich data centers underpin a long runway of growth opportunities for American Tower. With our best-in-class portfolio of towers and data centers and strong balance sheet, we are well positioned to capture these growth opportunities and deliver on our goal of industry-leading AFFO per share growth.

And with that, operator, we can open the line for questions.

[Operator Instructions] Your first question comes from the line of Michael Funk from Bank of America.

So Steve, a quick one for you. So services revenue continues to come in above expectations, ours and the Street. Typically, that was a leading indicator for domestic deployments. So would love to hear your thoughts on how to potentially factors in deployments in 2026.

And then maybe to feather in another one, any thoughts you can also offer on how the AT&T EchoStar spectrum acquisition might impact deployments from AT&T and your expectations for that company?

So I'll start with the services piece. We've got a healthy pipeline of activity this year in services, and it has -- it's a near record year. You have to go back to when we actually owned construction management firms back in the early 2000s to find a better services a year for us. So we're very excited about the activity levels that we've seen.

We also have a larger construction management component this year than we've had in prior years. So that's a little bit of what's kind of feathering into that. But that's indicative of the the carrier activity that we're seeing. And as we said from the beginning of the year, we're seeing robust activity across the board, and that's continued build-out of the 5G mid-band spectrum throughout the networks and also some early phase densification that we're seeing as well. So we're excited about the activity levels that we're seeing there.

We'll refrain from guiding to 2026 until February on that. But we do see a healthy pipeline building and we do think that our services business will be a good robust contributor in 2026 as well. So we're feeling very good about what we're seeing and hearing in terms of how that pipeline is building next year.

In terms of the spectrum sale, again, we'll learn more about that and share more about that in February in terms of 2026. What we've typically seen with the carriers is that when they buy spectrum, they want to deploy it. And there is certainly a lot of opportunity to continue to deploy mid-band 5G on our sites. And so we're looking forward to working with AT&T and helping them in what they decide to do next year. But until they have announced their build plans, it's probably not appropriate for me to comment in terms of what we think they are going to do on that.

And your next question comes from the line of Nick Del Deo from MoffetNathanson.

First, on the spectrum front, the FCC now has marching orders to auction a lot of spectrum over the coming years, some of it at potentially much higher frequencies than the mainstream spectrum that we've seen deployed to date, I think potentially as high up as 10 gigahertz. Obviously, it's going to depend on what bands are ultimately selected. But broadly speaking, how are you thinking about the relevance of your tower portfolio for potentially supporting some of these much higher frequency bands given their propagation attributes?

Look, I'm excited hear that those bands are coming to market because towers are going to be the primary way those bands are deployed, even up into that 7, 8, 9, 10 gigahertz. And that really underpins the beauty of the tower model and the long-term growth that we're going to see on the portfolio. And so when I see what's kind of been identified by the government, some of that, there's a little bit more mid-band to support 5G, but a lot of those spectrum bands that you just referenced are the 6G brands that need to be freed up and allocated for the U.S. to be competitive in the 6G market.

So we're excited to see that that's been identified, that they're working on making that available, and we're looking forward to seeing how that plays out. As we've seen in the past, the higher the frequency, the lower the wavelength, which means you will need some densification of sites. So as we look out across the landscape of the remaining tranche of 5G and also 6G, we think that that bodes very well for long-term growth for us because carriers are going to densify their networks, it will give them more bandwidth, you'll see new use cases coming out. And there are some really exciting things coming out in kind of the early discussions about 6G and what it supports.

So we're very supportive of those bands coming to market and being auctioned. And we're looking forward to working with our customers to get those deployed as soon as they can.

Okay. Great. Can I ask one on CoreSite as well? I thought your pre-lease shares was down to 6% this quarter. I think historically, that's been driven by sort of larger customers taking big flows of space. I guess, should we think about the 6% as, again, just the product of the ebb and flow of larger deals? Or are you kind of purposefully saving the space that you're developing for more of a retail [ SKU ]?

There's no slowdown in the deal flow. We are still seeing incredibly robust demand. What you're seeing in that dip on pre-leasing is us putting some stuff in construction to service. So you're really just seeing that move from pre-leasing to actual leasing. And that pre-leasing -- new projects to build new sites. So that's just a function of the flow of the construction, not a deal flow at all.

Okay. Okay. So no underlying changes there. Good to hear.

We're still seeing huge demand drivers in CoreSite.

Yes. Yes. Demand across the space is -- I was wondering more if it was more of a purposeful shift on your part to hold space for retail where you don't see as much pre-leasing, but it doesn't sound like that. So that's the case.

No. Still sticking to our knitting in terms of how we do business.

The next question comes from the line of Jim Schneider from Goldman Sachs.

I was wondering if we could maybe -- understanding that the cost optimization program, you can give us more details when you report Q4 results? But can you maybe give us a sense of how you would frame the opportunity in terms of rough order of magnitude, directionally, how that, when you do announce it, should flow through the model? Would that be sort of a onetime thing or something that would layer in over the course of several quarters?

And then maybe directionally, what are the considerations you're thinking about in terms of sizing that opportunity? Are you trying to sort of get a sense about what is happening with the churn activity on your potential customers? Or is there any other considerations that are kind of top of mind as you scope that out?

So I'll start off by highlighting the fact that cost efficiencies is one of our strategic priorities. You've heard Steve and I talk about that over the quarters and the years as well. So it's something we've been focused on for a while here.

I would point to a couple of things that have resulted from the work that we've done over the years. If you go back to 2020, since that time period, we've been able to expand our EBITDA margins by about 300 basis points. That comes from solid steady organic growth. It includes absorbing the Sprint churn, but it's complemented in a material way by the cost efficiencies that we've driven into the business over that time period. You've seen a couple of years where SG&A actually stepped down multiple years in a row. This year, it's about flat. So we're holding things very steady after reducing SG&A quite a bit over time.

So we've got a very efficient business globally as it stands today, with strong margins, and as I pointed out, expanding margins. So we do see the future opportunities as incremental improvements to an already efficient business, not necessarily a step-function change. With that said, Steve has talked about and we did hire or create a new role of Chief Operating Officer. That is a global role, but [indiscernible] fills that role, and it's focused on simplifying our operations across all areas, in areas like supply chain, technology, service delivery, network operations. And the goal there really is to improve service quality across the board by making things simpler and bending the cost curve down over time, particularly in the direct cost area. That should help us continue to maintain strong margins out into the future in a way to complement steady organic tenant billings growth.

With that said, we do look forward to our next earnings call when we finish up 2025 to talk about the fourth quarter results and get into the '26 outlook. At that point, we will have a little bit more detail around cost efficiencies and improvements that may come from the COO position.

That's helpful. And then maybe as a follow-up, your data center business, I think you're guiding effectively to the midpoint of your prior guidance. A lot of your peers have sort of taken up their guidance and, obviously, the data points, as you pointed out, in terms of new business, are very, very positive across the whole ecosystem. So can you maybe give us a sense about whether there's anything happening under the hood that would sort of mute the upside that you're seeing at least in the current business for the next couple of months into the end of the year?

I'll take that one. No, there's nothing that would mute our expectations for the business. We continue to believe that sustained double-digit growth is possible as long as we can keep building the capacity to absorb the demand that we're seeing out there. And we continue to see increased demand for the space in CoreSite from our core customer, which is the enterprises that need to be colocated in that facility for hybrid cloud deployments.

And what's exciting about the way that customer is evolving is they're actually also expanding their installations to put inferencing there. So a lot of those key enterprise customers are expanding their installations to have their inference colocated with their hybrid cloud deployments. And so there's a very long tail of that activity.

So I think all the trends that we're seeing in this space reinforce the fact that there's a huge growth path there for us. So there's nothing muting that. I think we were just pretty close on our expectations for the year. And we pride ourselves on being pretty accurate on that. So nothing to be concerned about there. In fact, we're excited about the future of CoreSite.

Jim, I would also just complement Steve's answer here with a couple of pieces. We are seeing strong double-digit growth. You see that in our numbers. And of course, Steve outlined that that was in line with our expectations, certainly.

I'll highlight the fact that, that is well above the underwriting assumptions that we made when we originally purchased CoreSite. So the business is performing exceptionally well, driving upper teens in terms of stabilized yields on assets. That's why you're seeing a little bit more CapEx going into that business. We're up to a little over $600 million of CapEx.

And we -- not only are we seeing a robust pipeline and we're able to be selective in terms of who we bring into these facilities, we're also seeing strong pricing ability on our end, which is driving a cash mark-to-market well up at the end -- the top end of the range that we had outlined.

A couple of other things that I'll highlight here. The business is well positioned going forward. We have about 296 megawatts of power available and held for future development. That's a nice runway as we look out into the future to be able to provide condition space to meet the demand that we see coming. We also have about 42 megawatts under construction currently. That's the highest we've seen in CoreSite in quite a while here. So we're building a lot of facilities to meet the demand that we've already taken in. Those couple of record year of sales in new business we've seen over the years, we're now delivering on that. That's another reason why you're seeing a little bit of a touch-down in terms of pre-leasing, because we're just building so much into this curve.

So these CoreSite assets, interconnection-rich, network-dense, they're really well positioned for the future, not just from a demand perspective, but from a pricing perspective as well as making sure we're in a good position to meet the demand going forward.

Your next question comes from the line of Rick Prentiss from Raymond James & Associates.

Steve, I appreciate your comments in the beginning. Obviously, 25 years, you've seen a lot of spectrum deals and M&A. I wanted to just touch on one. U.S. Cellular T-Mobile deal is closed. Can you remind us again your exposure to U.S. Cellular? And then also, interestingly, T-Mobile on their earnings call talked about [ a charge ], they were going to be reducing some cell sites that were not U.S. Cellular. That's the first time I've seen kind of carriers without a deal kind of saying they're reducing things. Do you have any extra color on what T-Mobile was talking about there? .

On the second question, I don't have any color on that, Rick.

In terms of the U.S. Cellular portfolio, it's pretty modest. They represent a little bit less than 1% of our U.S. revenue, a little bit less than 0.5% of our global revenue. And there is a chunk of that that we -- that's up for renewal next year, which we've talked about previously. We haven't given a specific percentage, but there's a good chunk of that up for renewal next year. And so we'll give more guidance on what we expect on that in February in terms of churn coming from that. But just given the overall exposure, we'll still be in that 1% to 2% historical range for churn, we believe.

Right. Okay. And then on the DISH EchoStar AT&T deal, are you guys open to like doing a negotiation with DISH to kind of get an NPV value? Because we're watching that just trying to see how long Charlie Ergen wants to keep making tower payments, but you have good contracts it seems. So just trying to get a sense of openness to trying to say, can we resolve this sooner rather than over 11 years?

Yes. Well, Rick, we've got a long track record of maximizing the value to our shareholders, through our contract structures, any negotiations that we do. And so you can assume that we're going to retain the discipline we've always had on that. I think it'd be premature to speculate on what something might look like on that.

Now what you will see in our 10-Q when we file it is you'll see that we did receive a letter from DISH saying that they believe they're excused from making payments under the MLA based on the spectrum sale. We disagree with that. And in fact, we filed suit. We filed a declaratory judgment action to ask the court to confirm that we're owed the remainder of the rent under that agreement. And just to remind folks, that agreement goes through 2036, and this represents about 2% of our total property revenue, about 4% of our U.S. and Canada property revenue.

And so we're focused on defending our contract and making sure that everyone acknowledges that it's a valid and enforceable contract through 2036. And then we will have whatever discussions make sense that are going to maximize long-term growth. But again, we feel good about our contract. We feel good about the collectibility on it. And we will continue to do the right thing for our shareholders for the long term on that.

Makes sense. One last one for me. Obviously, nice to see stock buybacks come in, kind of endorses where you feel your stock price is at. Also finally, your leverage is below 5.0000. How should we think about the M&A environment out there for external growth, stock buyback? And where are we at as far as private versus public multiples? So just kind of a capital allocation question between stock buyback and M&A.

Rick, thanks for the question. So you hit all the relevant topics, of course. And let me start off by just highlighting our capital allocation philosophy here. As you've seen over the years that you've followed us, it's very consistent and a disciplined approach to capital allocation. Everything we do in capital allocation is really centered around optimizing long-term shareholder value.

With that said, the first priority in capital allocation is dividending out 100% of our REIT taxable income, which this year will represent about $3.2 billion. Of course, that's subject to our Board approval. Next is the internal CapEx programs. We invest roughly $1.5 billion to $2 billion a year historically in internally generated capital programs. And we focus those on the highest risk-adjusted returns we can put that money into at the time. And in today's environment, that is -- I mean, we're more heavily focused on prioritizing developed markets, U.S., Europe on the tower side as well as CoreSite, of course.

Then it comes to evaluating M&A up against share buybacks and also just continuing to pay down debt. All 3 of those are options for us. Today we don't see anything compelling that's material on the M&A side. We have been slightly over our leverage target recently for the last couple of years. As you know, Rick, we've been working diligently to strengthen the balance sheet, improve the credit quality of the business. We're now BBB+. And in this quarter, we're below 5x.

That is helped a little bit by the services contribution to EBITDA, which you can see in our numbers, the full year implies a step down in EBITDA for Q4. That will put a little pressure on our leverage number certainly. And depending on how the euro and the U.S. dollar react, that could move around our U.S.-denominated total value of our European debt.

With that said, it is possible that we could go back up to 5x later in the year. But we are around 5x or below 5x in what we believe is a sustainable way. So that gives us more flexibility.

And share buybacks are certainly an option. You saw us buy back about 28 million shares. We put that up against M&A opportunities around the globe. We're still seeing, in developed markets specifically, private multiples on the M&A side for towers are still elevated relative to the multiples of public tower companies.

But there's more than that that goes into our decision-making. We just think we have a really compelling set of assets. We think buying back shares in this environment makes a lot of sense for us given our ability and confidence in this business generating upper single-digit AFFO per share growth over time before you account for the impacts of FX and interest rates.

So we've got a really solid portfolio. We're improving the quality of earnings so it's getting better along the way. So that's how we think about it. The share buybacks are completely opportunistic. As we continue to delever, we will have even more and more financial flexibility to allocate capital in that -- in a way towards either M&A or share buybacks, and you kind of know what we favor at the moment.

The next question comes from the line of Eric Luebchow from Wells Fargo.

Just curious, there's been some chatter around some of the new spectrum sales and your ability to monetize them, for instance, the 3.45 that AT&T is [ getting ] which they already have in the network just requires a software upgrade. Any just kind of high-level commentary on how you think some of this additional spectrum could impact future densification demand that you're starting to see in your footprint, as you mentioned?

Yes. Thanks for the question. So generally speaking, when carriers get more spectrum, that's good for us because they end up deploying that spectrum and it typically requires them to do network augmentations that are monetizable events.

Now in any given site, depending on the specifics of the site, there could be a software push that may not be an event at that moment. But over time, what we've seen is that more spectrum results mean more leasing revenue for us. Even if they're able to do it with software pushes and kind of as an initial instance, that doesn't necessarily mean that they won't be able -- won't need to densify over time.

If you think about the the growth of mobile data in the U.S., the latest CTI report added in about 35% year-over-year. And all the experts we talk to believe that mobile data usage will continue to rise at a robust percentage and the needs for the networks to augment themselves, you're going to -- basically twice as much capacity in 5 years as you have today. And everyone that we talk to believes that that will come in part through spectrum, in part through efficiencies in their technology, but mostly through densification.

So even the spectrum that's being considered by the FCC to be auctioned, plus the spectrum that's kind of out there in the market, we think that, plus technology, will solve about half of the issues that they need to solve in terms of quantity of data that's produced. The other has to have to come from densification. And so over time, we believe that densification is going to be right in line with what we originally thought. We always thought there'd be more spectrum that came to market.

It could affect the timing a little bit in the near term, and we're kind of watching that to see how that plays out. But we don't think it changes the medium to long-term outlook for growth in our business or the need to densify the networks over the medium to long term.

Eric, I would just add on the application volume that Steve mentioned. We see our overall applications up about 20% year-over-year. That's supporting the good news that we've had in services, but it also reflects kind of the activity level that we're seeing in the marketplace.

We're seeing a higher growth rate in the applications for colos. That's up more like 40% or so. So we are seeing the beginning of this shift or increase in co-locations, which could be the beginning of densification. Now with that said, our colocation applications still represent a modest percentage of our overall apps, but we are experiencing an increase and a faster growth rate than the overall applications, which we think is good news.

Yes. I appreciate that. And I guess just to follow up on one more question. I know you had 1 customer that came off their MLA earlier this year that are on like an a la carte type of leasing arrangement. Any update on them? It sounds like things are progressing as planned. I think there was some revenue contribution that got shifted into 2026. And is there any kind of active discussions on maybe putting them back on a holistic MLA? Or are you kind of happy with the current arrangement you have with them?

We've always been agnostic as to whether we're under a comprehensive MLA or not, because the underlying business that they need to do with us doesn't change, whether they're on a comprehensive agreement or not. And we've proven over couple of decades now that we're successfully able to monetize those deployments whether in a holistic structure or an a la carte structure.

You can assume that we're always talking to every customer all the time. Ink doesn't even dry on a contract before you're talking about the next iteration of it. So those are always ongoing discussions. But there's really nothing to report on that. We're there to support the rollout. And the only real difference for us is it makes a little bit of a timing difference sometimes under the comprehensive agreements, it's kind of more fixed and more predictable and it's a little bit more variable on an a la carte basis. But if you're thinking about the medium to long term, we're going to get that revenue either way. It's just -- it may come in a little bit more fits and starts versus that kind of cadence that we can lay out in the contract.

Your next question comes from the line of David Barden from New Street Research.

It's great to be back. Good to see you guys. So I guess 2, if I could. So the first one for you, Rod, would be just a follow-up on Rick's question, which is just make sure that DISH is current. And under what circumstances would you guys contemplate beginning to take a reserve given the fact that there's this ongoing lawsuit between the 2 of you? And then on a happier note, I would guess -- I don't not to phrase this question, but what are the tower implications potentially for a space-based player that now owns terrestrial spectrum to see some new deployments that we weren't contemplating in our multiyear model in the past?

I'll actually take those just because we're already talking about DISH. So at this point, this is current, and so we wouldn't take any reserves because they're current today. And we expect them to pay. And that's the reason we kind of preemptively filed the lawsuit, is to make sure that there's no interruption to that. So it's premature at this point to even talk about or thinking about reserves on that.

When you think about the space-based player, it really depends on how the -- if they're just complementary to the other carriers and they're reselling to the other wireless carriers, then they probably won't deploy a lot of the ground themselves. Now there may be some teleports or there's a few things that are ground-based that support those networks, but that wouldn't be of any scale to be material in terms of the opportunity.

If they decide to offer direct service, then they might well decide to complement their satellite network with terrestrial sites, because the satellites don't penetrate buildings well, they don't work in dense or urban areas. So that certainly could be an upside that none of us have even contemplated. But at this point, we're not forecasting any of that. We're not putting that near our guidance going forward. So our long-term algorithm that was laid out for you guys does not contemplate that extra carrier in there. That would be all upside for what we [ bring ] out.

I'll just welcome you back. It's great to have you back on the call.

Thank you for that, and I'll use that as an opening to ask one follow-up. I appreciate it, guys. So just as we think about SpaceX deployments, the growth of [indiscernible] access with growing spectrum availability, the [ bead ] funding kind of pushing fiber out, [ the WISP ] marketplace is under threat, I know that they can, in rural markets, be a customer. Is there any reason to believe that kind of the threat to the WISP market is a threat to churn as we look forward in the business model?

Look, we have a lot of great customers that are WISPs, and that's been a component of our vertical market segment for a long time. So they do comprise a very small percentage of our overall revenues. Some of those WISPs have struggled for a long time, so we do see churn every year in that. And that's kind of taken care of in our normal churn, that that 1% to 2% that we see as normal churn. So it wouldn't surprise me for some of those guys to have some trouble, again, consistent with what we've seen in the past. But I don't see anything in there that would make we think we're going to fall outside that normal range of churn 1% to 2%.

And the question comes from the line of Michael Rollins from Citi.

Just given the comments on EchoStar, I just had a couple of other follow-ups. The first one is, you mentioned it's about 4% of domestic revenue currently. How much is EchoStar anticipated to contribute to growth over the next couple of years based on the contractual minimums that you've established?

And then secondly, you referenced, I think, the long-term guidance just a few moments ago, do you still believe American Tower is on track for its long-term domestic leasing growth guidance? And if you pull out EchoStar from that, can you share what the organic growth looks like ex EchoStar?

So in terms of the contributions for the future years, we haven't been specific about that, and that's not something I want to get into the specifics of. Again, we'll issue guidance for next year in February on it.

When you think about our long-term U.S. organic growth guide that we put back in 2021, we're seeing a robust pipeline of activity from the 3 major carriers, and we're feeling very good about the activity levels that we're seeing there. And if you think about that guidance was put out more than 5 years ago and we've been pretty spot-on in terms of the guidance for the first several years of that.

Now looking out toward the last couple of years, there are a couple of events that were not in our view shed when we put that guidance out in 2021. We did not expect T-Mobile to buy U.S. Cellular, and we didn't expect DISH to sell the spectrum and kind of exit the network market. And we'll be factoring those in to our guidance that we think about next year. But in terms of how that affects '26 and '27, I don't want to get specific about that until we actually issue guidance in February on that.

But again, the long-term growth perspective, the medium to long term, view of our business, our U.S. business contributing mid-single digits, that doesn't change with the changes in DISH. And we'll get more specific about those last 2 years of that multiyear guide in February.

And if I could just follow up to that with one other. So when I think about when you gave that multiyear guide several years ago, there's significant change going on in the industry. And so you kind of gave us this North Star, if you would of where you think growth is going over an extended period of time. Do you think that conditions have changed enough and the timing is there where maybe, not just giving a view for the next couple of years, but maybe giving new multiyear guidance when you come out with the fourth quarter results? So kind of giving us a more extended view, an updated view of where that's going.

Look, we'll figure out what we're going to say in February on that. What I would say is we've given you guys a long-term growth algorithm that we think is kind of directionally what you should be thinking about for the longer term with our business. And nothing in the recent eventually changes that long-term growth algorithm. What drives growth of the tower rent and the equipment on the towers is a growth in mobile data consumption. So as long as we continue to see mobile data growth in the U.S. and abroad at the types of clips that we're seeing, then we believe that the need to augment networks is going to continue to roll out just the way we've foreseen it that supports that algorithm.

Now it's possible that you're going to see even more data growth than that because all the assumptions that are out there and the historical growth we've seen doesn't include much AI. So as AI becomes a larger component of our daily lives and that makes its way on to the mobile devices, it's possible that growth is going to be even higher. But in terms of our kind of long-term growth algorithm, we believe that somewhere in the mid-single digits is where you should see the organic growth in the developed markets, a little bit higher in the emerging markets. And that's probably as specific as we're going to get from a long-term guide on that, because again we'll give you guys more color on the next year in February.

Your next question comes from the line of Richard Choe from JPMorgan.

I just wanted to follow up on the U.S. business quickly. What is driving the $5 million in incremental non-rate revenue there?

And then a second question on the U.S. data center business, I guess the quarter-to-quarter growth was kind of a little bit lower than what it's done recently. Was there some churn there that was a little bit higher than normal?

Richard, thanks for the question. Regarding the $5 million, that's a small non-run rate type activity. So nothing really to worry about, and nothing specific that I would point to as well. And that really is the same issue with the differences in the data center business. Really just onetime items here and there. There's always fluctuations quarter-over-quarter, but nothing material.

Got it. And then on a bigger picture one, with the cost efficiency review that you're going to talk more about next quarter, could that also kind of lead to some strategic changes and also kind of, call it, CapEx changes in priorities?

I'll take that one. Right now, we're really looking at how we can get the efficiencies in the business, things like supply chain, kind of getting a little -- some of the best practices across borders, automation, there's some AI opportunities in there. There's nothing specific in terms of the capital.

Now we do spend capital in the U.S. in particular to buy our land, and that does help manage the land cost on it. And we also get very good returns on the capital. It's possible that we could find some opportunities to do that more aggressively in other geographies, but that's something that would come later down the line. That's not one of the near-term things that we're focused on. But that's the only thing I can think of that would be any kind of a shift in capital. And that really wouldn't be a shift; that might just be flexing up a little bit more that opportunity, if we found the right chance to do that.

We will take our final question. The final question comes from the line of Benjamin Swinburne from Morgan Stanley.

Maybe just one more on EchoStar. I know that there will be more infill in the queue, Steve. But anything we should be thinking about in terms of what's next? It sounds like you expect them to continue to pay you. But is there any, I don't know, court date or any other process info you want to share with us at this point as we think about the situation moving forward?

No. We just filed it, so there's nothing on the docket yet to point to on that. And again, we think this is very straightforward. We think that we have a valid and enforceable contract. We don't think that anything has changed in the marketplace that would hamper the enforceability of that through the remainder of the term. And like I said, we just preemptively filed that because we think it's the right thing to do to protect our shareholders' interest on that.

Okay. And then just one1 more. You guys obviously went in and bought back some stock. The stock has been under pressure. I think the multiple we're seeing towers trade at, including AMT, at the lower end of where it's been in a long time. And actually, the spread between data center stocks and towers has widened out significantly as well. I guess it's a long wind-up, just how you think about CoreSite's and the value of this asset. Is there -- did you look at that, sort of the value of data center assets in the public and private markets relative to what's embedded in your stock? It seems like you're not getting credit for today. Is that a relevant factor as you think about the right the right ownership structure for this business? And are you seeing more synergies between the 2 businesses? You've talked about that over the years and whether that's starting to come together in your mind more.

Yes, I'll take that one. Look, we think that CoreSite is a great fit with American Tower. And we still believe the long-term synergies of having towers in a highly interconnected ecosystem will ultimately play out with opportunities at the edge for us. So we believe in that future. And in the meantime, we have an asset that's performing phenomenally well.

And as to the components of the stock price and things like that, we're in this business for the long term and we're thinking about the long-term value creation for the shareholders. We're not looking at a -- kind of a snapshot of where that valuation falls. And so we're -- our focus is maximizing the value of that asset and continuing to work with the industry partners to prove out the edge over time.

So when we're thinking about a stock buyback, that's really us being opportunistic and we're just looking at the value of the stock and our other available uses of our capital, and we think that's a good use of our capital. And so we made the decision to buy some. And so it really has nothing to do with CoreSite or that business. It's really all about what we think the value of the enterprise is. And with CoreSite, we're committed to growing that thing as fast as it can grow as long as we're sticking to our business model and our return profile. And then we'll look forward to proving out the edge over time.

Benjamin, I don't think I mentioned this earlier, but I would just highlight that we do have Board authorization for a buyback program up to $2 billion. So we're just beginning to tap into that. So we do have capacity there already approved by the Board in terms of buybacks.

Thank you. This concludes today's question-and-answer session. I will now conclude today's conference call. Thank you for participating. You may now disconnect.

Welcome, everybody, to the first session of the first day of the 2025 edition of our Global Communications Infrastructure Conference. My name is Jon Atkin. I'm with RBC, and I will be -- you'll see a lot of me on stage, driving a lot of the fireside chats and one of the panels. Very pleased to welcome Rod Smith, who's been the CFO of American Tower for quite some time. And -- welcome and appreciate you having -- being here with us.

Yes. Great. Thank you, Jonathan. It's great to be here.

To maybe just set the stage, if you want to recap kind of your top level guidance that you provided around some of the key metrics organic tenant billings growth, AFFO per share growth and then we'll dive into some strategic and operational and balance sheet topics.

Yes. When it comes to organic tenant billings growth in the U.S., which is really the primary metric a lot of people look at, we've updated our guidance to approximately 4.3% for the year. And that really represents a pretty robust, pretty stable demand backdrop in the U.S. We are continuing to see the wireless carriers roll out their 5G deployments across the country all striving to move the amount of 5G deployment up into the 80% to 90% range. Some are there. Some are not there, and they're continuing to move up. So we benefit from that.

We've seen a very strong beginning of the year in terms of a level of applications. We increased our applications by about 50%, first half of 2025 versus 2024. So we saw '24 kind of ramp up. That ramp-up in applications continued into '25, and that's been a really good -- a good thing to see the carriers continue to spend money on the networks, continue to kind of keep their networks in the right condition when it comes to coverage, quality and capacity. And -- we are I think in the beginning stages of seeing a reflection where AI-driven use cases will increasingly hit mobile devices, which could have another leg up in terms of demand, mobile data consumption on wireless networks, which could continue to drive growth, certainly for the tower industry for a long time.

And I would say the one factor that we really look to above all others in terms of driving sustainable long-term growth on the tower sites is the growth in mobile data that we have seen, that we're seeing and that we expect to continue to see going forward.

In terms of the key priorities, which we've talked about American Tower, we are really focused on the fundamentals driving organic growth in the U.S. and around the globe, making sure we drive as much value as we can, not only for our shareholders but also for our customers, having those sites available for our customers in the U.S. and around the globe is critical, making it easy and efficient for them to use them to get on to them to contract around them is also critical.

We spend a considerable amount of time on operational efficiencies, making sure we have the right cost structure. That is all of our direct costs, things like operations and maintenance, capital investments around the sites, the expenses that we have around land and other things as well as SG&A and the expenses that we see there. We've had a couple of years, '23 and '24, we saw SG&A costs come down. That was purposefully driven us being proactive in bending that -- not only bending the curve down, but actually reducing the aggregate amount of SG&A at a time when inflation was fairly high. So we continue to drive those costs down to help expand margins. We also complement the existing assets we have by building towers in select places where we see the value proposition for our shareholders in places where our customers need it.

With that said, we are prioritizing developed markets. We've increased capital investments in the U.S. We've increased investments in Europe as well as with our core site data center business, which is in the U.S. We've decreased capital investments in emerging markets, particularly Africa and across Latin America. So you can see our actions, our capital investments, our capital allocation is following those priorities. So being efficient is critical.

And the last point that I would make, which we focus on a lot is balance sheet quality. Ensuring that we have the right balance sheet that can weather any kind of economic backdrop that can support us, our customers and shareholders in good times and bad times. You've seen us get upgraded with S&P. We're now a BBB+ rated organization. We're proactively reducing the refinancing headwinds that we have getting out ahead of that. We have no more refinancings this year. That's all done. We have now the next end of this year, the second half of 2025 to be working on planning and dealing with refinancings for next year. So we're well ahead of that curve. That puts us in a position where we can be truly opportunistic when it comes to balance sheet management. We've reduced our floating rate debt. That again reduces uncertainty around interest rates and interest rate headwinds. So we're in really good shape there.

Great. I'm going to have a chance to circle back on some of the topics that you just elucidated. But maybe just hitting some recent headlines. We've got the DISH spectrum sale to AT&T. How do you view the impact to your business given that some of AT&T's capacity needs can be met through software, but in other cases, maybe in the low-band 600 megahertz, they might need to deploy new equipment? So how do you look at the puts and takes around that as it pertains to tower companies?

Yes. I would say that the -- it's probably too early to assess the longer-term impact of that transaction. A couple of things I would highlight in general. Number one is in our outlook not only for 2025, but longer term, when it comes to DISH, we have built into our outlook only the minimum contracted payments that DISH has made in their MLA with us. We haven't assumed or expected anything above the minimum commitments that they've made. That contract is still in place. We expect to get paid for that, not only in 2025 but over the long term. So from that perspective, the contract and the obligations that DISH has financially to meet that contract is pretty well buttoned up and so we expect to get that revenue over time.

That means in 2025, that transaction shouldn't have any effect on our outlook nor should it over the next couple of years. But again, it's too early to really assess exactly what the transaction means, whether or not it's going to get approved and those sorts of things. The other thing I would say is getting more spectrum in the hands of the carriers is a good thing for the industry. It's certainly a good thing for them. And it's a good thing for the tower companies as well because more spectrum means more deployment. When they deploy spectrum, they put equipment on towers, new antennas, cables lines, the whole thing. It also is evidence of the need for more spectrum because the growth in mobile data continues to go up. The networks have to continue to increase the capacity. Also augment the coverage and the quality and based on the type of data consumption that's going through the networks, depending on which frequency it goes through, they may need to densify the networks also to get that higher band spectrum, the C-band spectrum and others to be able to cover more areas to use that higher band spectrum, which gives you more capacity, gives you faster throughput speeds to use it in more places they may have to densify the networks.

They can do that with bringing in more spectrum. And if they don't have that additional spectrum, they can do it by reusing the spectrum they have more frequently, which means more transmission points for RF, which means more co-location on tower assets over time. So again, that brings certainly me back to the fundamental piece to look at for tower companies is the growth in mobile data consumption. That drives everything in this industry. We are here with our towers and our infrastructure, which is well positioned to support the wireless carriers as they continue to invest in the network and increase coverage capacity and quality, particularly at a time when 5G applications are just coming to the handsets and AI is beginning to also make its way onto the handsets, which could be, again, that next leg of demand drivers for the long term in the tower space.

You mentioned just real quick by way of follow-up before I hit the next set of topics. But -- so you get paid by -- for those DISH leases over time. So what sort of initial lease term are we looking at, 5 years, 10 years, longer?

We don't disclose specific terms. I think we have talked about it being a long-term lease with certain revenue step-ups. So they today represent about 2% of our global revenue. They represent about 4% of our U.S. revenues and the contract is a long-term contract, more than a decade.

SpaceX purchase -- SpaceX purchase of spectrum, even a more recent announcement and thoughts on impacts to the tower industry.

Yes. We -- I mean, we view the satellites as very complementary to the tower industry as well as the terrestrial wireless network. So I think it's an important element of providing that coverage to rural places in a very efficient way. That's really what it is being designed to provide not only in the U.S. but around the globe. So it is ideal for efficiently and cost effectively extending the wireless coverage into rural places, even hard to build places, so that you can extend that wireless network. It is not meant to or is likely not to be a contributor -- significant contributor to mobile coverage in denser areas. Areas, urban centers, even suburban areas, travel corridors on highways, the amount of bandwidth that is used there and the amount of subscribers is just not conducive to being materially impacted by satellites. Satellites is meant to based on their capacity constraints in their increased latency, the slower speeds of the satellite network, it's really ideal for when you get out into the very rural areas to extend that coverage. So we don't see it as a competitor to wireless networks, terrestrial networks. And we don't see it having an impact on the tower space other than it may reduce the need for expanding the tower networks out into the real rural areas. As the government looks to extend wireless coverage into some hard to cover areas, it may not have to be covered by towers or terrestrial networks. So satellites will do a good job picking that up, and it would be complementary, not a negative to our business over the long term. And we have an investment in AST Mobile. So we're deep into the satellite space. And we -- so we have a lot of knowledge, a lot of experience with them. We think it's a great technology, but very complementary.

Last couple of tower questions, and then maybe we'll hit on data centers. But a lot of folks are kind of thinking for 2026, 5% organic growth given what's happening with U.S. Cellular, which we won't ask you to answer directly, but everything we just talked about, LatAm, AT&T Mexico, how much pressure should we be thinking about mid-single-digit growth over the medium term?

Yes, it's a great question. And as you would probably expect, I don't want to get into too much specifics when it comes to 2026. We will do that in February of '26 when we lay out our guidance. With that said, we expect to hit around 4.3% this year. That still has 3 quarters of Sprint churn coming off of the billing roll. So it's impacted by over 100 basis points just from that Sprint churn. That Sprint churn is nonrecurring when you get into 2026. So we do see this year as an inflection point where organic tenant billings growth is very likely to go up from next year. Even if nothing else changes, just the absence of that Sprint churn. And again, we do see the demand backdrop as being very robust.

With that said, we do have a few challenges around the globe. I think you mentioned, Jonathan, the Mexico issue. That is an issue that could have an impact on our numbers. It really shouldn't have an impact on our numbers but it may, and you may ask other questions, and we can talk about that a little bit more. It's much too early for me to say that it will or won't have an impact in 2026.

And then turning to Europe. You talked about developed markets. Any kind of highlights to point out around your particular geographic exposure within Europe. And then how you see the growth prospects between organic growth around maybe some of the 5G build-outs versus inorganic growth opportunities?

Yes. Europe is an interesting market to us. We did a transaction a few years ago. We bought the tower assets from Telefonica. That was a great transaction. We have a great partnership with Telefonica as well as the other carriers in Europe. We are centered in France, Germany and Spain. I mean we're driving mid-single-digit growth rates there on organic revenue, and we should be able to do a little bit better than that when you drop that down to EBITDA and AFFO. So it's a solid mid-single-digit environment, high-quality economies, robust economies, high-quality counterparties. And we were driving slightly higher than mid-single digit growth for the last couple of years. So we're well ahead of our investment thesis that we originally put forward in making that acquisition, and the market looks very constructive.

Now with that said, it is a small contributor to AFFO and AFFO per share for us in and around the mid-single digits. The market there and our assets in particular, we like a lot. And we think we have the scale to compete well in that footprint and in that market. If we find compelling opportunities to inorganically invest and expand things, ,we will, but only if we see a direct line to value creation limited or risks that are -- that we are able to effectively mitigate. If we don't, we won't expand in Europe. We don't feel a need to just get bigger in Europe for the sake of getting bigger in Europe. And today, it is a small contributor to our AFFO per share growth, although it's performing very well, well ahead of our business case.

You mentioned you like what you see in terms of mobile data growth. So there's mobile data growth and there's growth on terrestrial towers, which would include FWA. I assume you're excluding FWA when you're talking about mobile data growth?

Not necessarily. I mean, in our world, the data growth is the data growth. And when I say grow -- mobile data consumption, it's the data that is going through the wireless networks and fixed mobile -- fixed wireless going through those tower. It's just data going through the pipe. We don't certainly -- in our position as a tower company, we don't see exactly the end case of what that data is doing, and whether it's fixed wireless or if it's truly mobile. We just see that it goes through our antennas, it goes through the radios that are on our towers, and it goes -- it's propagated from our tower locations.

You have a technology team just north of Boston. And what are they kind of thinking and seeing as they look at your customers' behavior and also end users? Is it FWA? Or is it AI applications, which are the two? Or is there a third or fourth category that you would get excited about over the medium term around traffic growth?

Yes. I would say from a -- exactly what the carriers are deploying their equipment to do, we don't have insight to that. We see the equipment that they're putting up. What we get excited about is the consistent growth in mobile data consumption. The fact that more of the handsets out there are converting and being upgraded to 5G handsets. And the 5G applications that will hit those mobile devices has really yet to be seen in a material way. That is continuing to be developed, and it will come. AI, I think, is a very exciting development and one that will also drive growth and activity on the mobile networks and towers will be a critical aspect of helping the carriers keep up with that demand. So that is certainly critical. Fixed wireless access over the mobile devices, I think that's really exciting. I mean we are seeing a convergence of the networks. You see a lot of the carriers investing in fiber. They're continuing to divest in their mobile networks. They're putting that together. And I really do think the industry is focused on delivering bandwidth and looking for the most effective way to do that. And it will be a combination of wireless assets, wireless networks now and for a long time into the future, and also fiber networks will pick up some of that. You'll see more competition between wireless carriers and landline carriers competing for those broadband subscribers that are fixed and not mobile. I think that's an exciting development for everyone, in particular, for the tower company.

So the backdrop, the demand drivers, I think, is just really exciting for this industry. This is a long-term industry, and the investments are long-term investments. That's how we view it. And the long-term outlook for towers and tower companies, I think, is really strong when you think about these demand drivers. And again, I would just highlight the AI is beginning to make its way to mobile devices, and that will continue. We think that our data center assets, high-quality, differentiated interconnection facilities with cloud on-ramps will play a role in the convergence of these networks and potentially tie into towers and create a digital edge or a data center edge, where you have cloud on-ramps, compute power, content cashing, much closer to the end user, much closer to the base radios. We have the cloud on-ramps, the interconnection. We have the towers with the relationship with the wireless carriers, relationship with cloud players as well as landline networking companies, and that all comes to us from a combination of core site to data center assets and our wireless towers that we have in the relationships there. Bringing those together would be another step in that network conversions. And we think we have the right assets in the right places to play a big role in that.

So last question, we'll go a little bit over, but data centers, the product du jour seems to be triple-digit megawatt or gigawatt plus commitments. That's not where you play. So if you look at your peer group, you've got one company in their sub-1 megawatt category is seeing a lot of success with enterprise, one of the bigger peers just recently lowered their financial guidance. You're putting up 13% year-on-year growth in Q2. So how do you see your segment of the data center space which is different than where a lot of the capital seems to be flowing -- performing around organic demand drivers? And what's kind of your strategy going forward?

Yes. When it comes to CoreSite, we're being very disciplined, and we are -- each and every day, we reflect on or remember why we bought CoreSite and the value proposition we think that it brings to our customers as well as our investors, which is the unique nature or the differentiated nature of these assets being well distributed across the U.S. and having cloud ramps, multiple cloud ramps in each campus location, some of the highest quality enterprise customers within these facilities, hundreds of network companies within these facilities, and we're seeing interconnection being -- between 15% to 20% of our revenues, and that is growing double digits every year. So the interconnection nature of these facilities is also critical. That type of an ecosystem is what we see over time naturally migrating out closer to the end users in the wireless network, in the landline network even to the enterprise customers. We believe that they will want those cloud on-ramp access points closer to the way they do the compute, whether it's enterprise landline or wireless. So that's why we bought the business. That business is performing exceptionally well. The demand is strong. And the result of that is we've had a couple of years of record-setting new business. We also are in a position where there is such strong demand that we have pricing leverage, and we're using that leverage. The access to power is critical. We are in locations and we have long-standing relationships with the local utilities where we're getting the power that we need. Not just now, we're planning power of 2 years out, 4 years, 6 years, 10 years out. We're making financial contributions to build substations to ensure the power is there for us. So that is critical when customers come into these facilities to know that not only can we provide what they need today, but they can build a business within our ecosystem that will be able to support them 5, 6, 8 years down the line. That is critical. That does give us pricing power. It does give us the ability to attract the best enterprises into these facilities to keep that ecosystem strong.

So we're seeing double-digit economic growth. We're seeing very good returns on our investments over time and we expect that to continue. Double-digit growth in our core site business is achievable over the next several years based on the pipeline that we have, the backlog that we have, the facilities that we're bringing online today, we see a clear path to that. When we bought CoreSite, we underwrote that transaction between 6% and 8% economic growth. We're well above that and we have been consistently. So again, the fundamentals there, it has been a very good transaction for us and it's performing well. The wildcard, the upside is extending out the edge and connecting it with towers could be a really nice addition, not only to CoreSite but to towers. We don't want to get distracted from that mission. We're not pursuing hyperscale facilities at much lower return on invested capital. We're not building large single-tenant high megawatt facilities. That would be, in our view, not the right path for us, even though the opportunity is there, I wouldn't criticize anyone that's doing it. It would just take us off of our mission. We think we have a very unique mission and a very clear focus on these high-quality data centers that we have, continuing to expand that platform, which we have been doing. You'll continue to see us do that through investments expanding the facilities we have within the geographic regions, maybe expanding into one or two other regions slowly, cautiously in a disciplined way. That's a much different expansion process than jumping into the hyperscale business.

That's a great overview. Appreciate your taking the time.

Thank you.

Good morning, everybody. Welcome to the Goldman Sachs Communacopia and Technology Conference. My name is Jim Schneider. I'm the towers analyst here at Goldman Sachs. It's my pleasure to welcome American Tower and President and CEO, Steve Vondran to the stage today. Welcome, Steve.

Thanks. Thanks for inviting us.

Thanks for being here. Maybe, Steve, just kind of starting out at a very high level, company changed a little bit since you were here last, you sold India, domestic market opportunities improved a bit. The data center market continues to evolve. So as you see here today, which segments of the business do you think have the greatest change at this point a year from now?

Yes. Thanks for the question. So I think about how the business has changed in the last year. We laid out a number of strategic priorities. And those haven't changed dramatically. When you think about how we're going to drive the most value focusing on organic growth in our core portfolios, what's going to drive the most value out there.

So as we focus on the next year, we're going to continue to focus on that organic growth. And as you mentioned, the demand dynamics continue to improve. We're seeing improved care activity in the U.S. We're seeing healthy growth in Africa and Europe. LatAm is still a little bit challenged. But that existing portfolio of assets is still going to be the biggest growth driver we have, and there's a lot of opportunity to create value on that portfolio.

So the second kind of component when I think about that strategy is complementing that with investments predominantly in our developed markets. And that's one of the changes that you referenced. Previously, we were growing faster in our emerging markets. We've reallocated our capital planning toward developed markets. And so I'll touch on a couple of those opportunities in a second, but I just want to kind of reiterate the rest of the strategic pieces.

Third element has been cost control, and we've been very successful in bringing down SG&A. We also see an opportunity to bend the cost curve across some of our other expenses, and that's something we're going to be focused on. And then complementing that with our balance sheet. We've done a lot of work on the balance sheet over the past 1.5 years, where we've taken our short-term debt down pretty dramatically. We've also brought our leverage down within our ratios.

So we've made a lot of improvements to the overall company quality of earnings. And that's been reflected in both the ratings upgrade on our debt and also in some of the results that you're seeing coming out. So when I think about what's going to drive the investment for the next couple of years, some of the biggest opportunities we continue to see are in the tower space. We're doing a significant number of build-to-suits in Europe, a few hundred build-to-suits in Europe. And that's a great place for us to invest.

The second area that we're excited about the growth in is CoreSite. Because of the demand outstripping supply in all of our markets because of the new impetus from AI we see CoreSite having a lot of opportunity to continue to grow. And so we're allocating more capital into that as well. So as I think about next year, I think towers are still going to continue to grow. We're going to see more activity by carriers. And I think CoreSite is going to have that opportunity as well.

So you'll probably see that capital allocation continue to follow that. Build-to-suits when we get the right terms and conditions on the towers and then continue to investment in CoreSite.

Very good. One of the initiatives I know you also have underway is to kind take a harder look at your class base. Can you help investors understand the process you're undertaking to optimize things?

Sure. So over the past couple of years, we've been very successful in bringing down SG&A. And if you think about the rotation in our investment philosophy, that's helped with some of that. When you're aggressively growing in markets, you need a larger team that's invested in that growth. We've pulled back on some of those emerging market investments, that let us rightsize some of the teams there. So that's some of that savings.

The rest of it has really come from taking a hard look at our kind of global organization and saying, what can we do more efficiently. And so there were some low-hanging fruit. That was kind of the first phase of it. As we look forward, it gets a little bit harder.

I think we've picked most of the low-hanging fruit. Not to say there's not more work we can do in SG&A. But the incremental SG&A statements we're going to get now will be driven by things like automation and some optimization of processes and things like that. Earlier this year, we named Bud Knoll as our global COO. And the reason we did that is that we think looking across that global enterprise, there's opportunities in the rest of the cost stack as well.

Now there's pieces of that, that you don't have as much control over our land rents, you kind of have some escalators that are kind of contractually based there, but we have a program to buy those out. Utilities, they tend to fluctuate with kind of inflation in the local geographies, but you can do some bulk purchasing. So when you think about all those components of the direct cost stack, a lot of it's fixed, some of it's variable, some of those fixed costs, you can do some longer-term planning around and so as Bud to take a look at that across the entire organization and bend the cost curve. And this is a very simple formula. If we can grow those expenses slower than we're growing the revenue, we'll continue to get margin expansion. And so what I'm planning to do later this year is lay out how we're going to bend that cost curve and what the time line is, et cetera. Bud is still working on it. It's -- this is not easy stuff, but it's not instant. You're not going to see.

Times have taken.

Yes, exactly. But we do have -- we do see some opportunity there as well. So that's how we're looking at it. But I want to also be clear, we can't break the machine. We're a great partner to our customers across the globe. And so kind of the third rail issue I've given my team to look at on this is you've got to keep the customer service levels up. I believe that customers are willing to pay more for superior service, and we've proven that time and again. So we're not changing the way we service our customers, the way we maintain our assets.

We're just looking for efficiencies in the process.

Great. Before we dive to the business, I want to ask you one question on capital allocation. You've got a lot of options available to you, dividends, inorganic, organic tower builds, M&A. Just give us some insight as to how you think about the different return hurdles for each of these international and M&A, domestic, ground lease purchases, build-to-suits you mentioned and so on.

Sure. So I'll start with the dividend because it does take the largest share of our cash flow. As a real estate investment trust, we're required to pay out 90% of our taxable income. The most tax efficient way, we believe, to do it is actually pay out 100% of our taxable income, and that's been our policy.

We did pause the dividend last year in terms of the growth because we thought it was more important to get within our leverage ratios than to keep increasing the dividend. And we did restart growth this year on that. And what we've indicated very clearly, I think, to people is you should expect the dividend to grow in line with AFFO per share roughly on a multiyear basis because that's how our taxable income should grow in line with kind of AFFO growth.

So that will -- that's how we think about the dividend. Past the dividend, we really look at it and say, we can either further delever, we can buy back our own stock, we can fund more internal CapEx or we can do M&A. And we've worked very hard to get the flexibility to make that a math-based exercise where Rod and I can sit down and look at it and say, what's going to create the most shareholder return over the long term on that. And so there's not really a preferential rank of those in terms of how we look at it.

Right now, this year, the highest returns that we can drive on that additional cash is our internal CapEx program. We found opportunities to build towers in Europe to increase our investments in CoreSite they are going to give us better yields than the other alternatives there. But we have the flexibility to look at all those options on every year to see what we're going to do with that. And so that mix could change a little bit next year or it could stay the same.

Yes. Great. So maybe digging into your domestic tower business for a moment. You said on your Q2 call, excuse me, application volume activity levels were strong. Services business, quite strong and actually lead activity levels, but I think you slightly lowered your organic growth guidance, which you attributed to timing.

So maybe starting with the sort of activity levels is mainly a continuation of what we've seen on rural builds and mid-band 5G deployments? Or is there anything else going on there?

No, we continue to see the carriers invest in getting mid-band 5G rolled out ubiquitously across the portfolio. And so it's broad-based activity there. One of our carriers is kind of over 80% deployed one are kind of in that 75% range and one is still a little bit over half.

So there's still a long way to go to get ubiquitous mid-band 5G coverage. And so we expect to continue to see that roll out until they all get into the kind of high 90s in terms of that coverage. But we're also seeing new colocations.

So that comes in 3 flavors that I would say. The first is fill insights. And that's just kind of looking at the propagation of the networks, the 3.5 probably gets a little bit differently than the lower bands do. So there will be some infill just to fill in holes in the network. The second area is we're still seeing efforts to increase coverage, kind of paint the map approach. Some of that's being driven by regulatory requirements that people signed up to and then some of these competitive pressures.

So we do continue to see that kind of paint the map approach, slowly increasing the coverage of the terrestrial networks. And then the third element that we're starting to see is densification because of capacity-driven constraints on the network. That's a little bit harder for us to measure because carriers don't always say that's what this is for. But when we look back at 3G and 4G and where the cell splitting started there, we're seeing activity in the same location. So we do feel like that we're on the cusp of identification phase as well in terms of cells splitting and new colocations. And it's really all those things that are driving the increased application activity on the portfolio.

Very good. And then as for the downtick in guidance, it sounds like you're confident that's timing related, but -- we believe that's being driven by AT&T and given your expiry of the MLA with that company, maybe does that kind of change how you're thinking about doing an MLA with AT&T?

So it's $5 million change on a $10 million P&L. But I understand it's important to people to telegraph. It's timing. There was a certain -- I think we've been very clear that there's 1 carrier that's not on the comprehensive MLA. So that timing is variable based on when they sign things and when they commence. And we thought the activity was going to happen earlier in the year. It's going to happen later in the year. It's not a question of if, it's when. And if you're long on the stock and you're looking at our portfolio, it's a shift of $5 million and $10 billion P&L.

So we feel very confident but that's just a timing-related issue.

Yes. Okay. Very good. U.S. carriers, I think, have upgraded more than 50% of their sites with 5G at this point. Verizon has publicly talked about 80%, 90% of C-Band finished by the end of this year. So given the size of your domestic business, with carrier CapEx seemingly not moving very much, may potentially flat to down for the next few years. Sort of what level of comfort should investors have in your ability to sort of drive 5% organic growth long term?

So when you think about the guidance we've given, the 5% was through 2027. Beyond that, we said is our algorithm supports mid-single digit. When you just look at the carrier deployments and what they're doing, that CapEx funds a lot of things. It's not all just the radio access network on towers. That's also funding fiber and core and things like that. So there's some flexibility within those budgets. Having said that, their CapEx budgets are still roughly $5 billion a year more than they were in 4G.

So there is a healthy CapEx budget that the carriers are spending on 5G. And the thing that gives us comfort in knowing that we're going to hit those kind of activity driven milestones that we're looking to hit is really what we're seeing in terms of consumer behavior as the mobile data growth continues to grow at that kind of 15% to 20% in the U.S., a little bit faster than in some of our other geographies and it's the carrier behavior that we see, which is very consistent with what we saw in 3G and 4G.

So we feel confident they're all going to get to that high 90s percent mid-band coverage that's coverage. That doesn't give you necessarily the capacity to serve every person that is using the network. And if you look at the handset penetration rates, we just got over 50% mid-band capable handsets kind of earlier this year, I believe, is the stat.

So there hasn't been that much activity on the networks compared to like 4G where the handset refresh rate was like 12 months, now it's closer to 2 years. So all those demand dynamics are going to continue to drive investment because capacity will be constrained, they will have to invest more. That's what underlies our guide through 2027, that's kind of what underlies our long-term algorithm guide as well.

Fair enough. EchoStar. I believe your current exposure is $200 million annualized.

We don't get that specific, it's about 4% of our U.S. revenue and about 2% of our global revenue.

Okay. Fair enough. So maybe just help us understand the contracts you have in place with them and their ability to churn? And what years those renewals kind of have come up? And how should that kind of think about. How should we be thinking about your overall churn profile over the next sort of 5 years plus?

So we signed an agreement in 2021. It's a 15-year agreement. The comprehensive portion of that is a shorter period. We haven't been specific about that much shorter. But the noncancelable lease term goes through into 2036. So we would expect to get paid through 2036 under that contract, and that's kind of our contractual position on that.

Okay. Great. I don't think we're worried about 2037 yet. Okay. Can you maybe remind us just in principle, if you have a customer would say, like a 700-megahertz antenna on your tower, they want to deploy 600 megahertz antenna, would that be considered for you a co-location or an amendment? And maybe if you were to kind of change the type of antenna configuration, are there any kind of like multiband antennas going to accommodate both?

The answer is it depends. It depends on what -- who the carriers, what they're doing and what -- who their vendor is on it. There are multi-band antennas out there -- but I don't think we have enough information to speculate as to how that's going to play out in terms of how you deploy it. Generally speaking, the lower the band, you optimize the wavelength of the longer antenna, but you can do a suboptimal installations if you choose to do that.

So I don't know yet how that's going to play out. And in terms of the monetization events for us, if they're installing. Generally speaking, if they're installing new equipment, there's usually some monetization opportunity. There are some substitution rights within certain limits on there. So it depends on what they're doing and what that equipment looks like and how it functions. But it's just too early for us to tell what the opportunity set is there for us on that particular question.

Okay. Fair. Maybe just sort of thinking a little bit longer term with changes at the FTC, there seems to be more likelihood of spectrum option come up at some point in the next several years. Based on what you know about the potential spectrum that could be auctioned, do you see those bands as a driver for potential new tower deployments?

Yes, absolutely. When you look at the Spectrum pipeline that's being identified, some of it is to complement 5G, but they're also identifying the future 6G bands. And it's critically important that the U.S. identifying clear that spectrum to drive 6G development. We don't want to be behind the rest of the globe in terms of 6G. And so when you look at some of the things that are identified in the big beautiful bill. There are some things that are in kind of that 6 to 7 gigahertz band that we believe will be the 6G spectrum.

And it's just around the corner. I mean those standards are supposed to be out in 2029. So you're looking at commercial deployments in 2031 potentially. And so getting that spectrum identified cleared and sold is incredibly important. So we think that's a huge positive for the industry. When you look at the 5G spectrum, our customers need it.

When you look at the CTI put out a white paper that said that they needed 400 megahertz of additional mid-band spectrum by 2027, I think it's 1,400 about 2032. If you're going to get that type of spectrum in the hands of those carriers, you've got to start off it now.

So I'm excited to see the government taking proactive action on it. I think it's going to take some time. Most of that spectrum has incumbents in it that you're going to have to relocate. So I don't think there's a lot of that spectrum that's usable today. But I think it's very encouraging to see the government being proactive, identifying the bands, getting a plan in place to clear those and sell them.

Okay. Great. Moving to international for a second. I think last quarter, you increased your organic growth guidance in both Africa and Latin America, maybe walk through these markets starting with Africa, but I think the Colo side and the mineral side of the business has been at a pretty attractive level. Churn has been better. What's driving that trend? Can you maybe help us break down how investors should think about how that region should move in the out years?

So in Africa, we had some care consolidation churn, a lot of [indiscernible] in South Africa and we are through the churn that we foresee happening there. Our exposure in Africa is by and large, to the largest 2 players in each market there now. We have very little exposure to the smaller guys, even if there's additional consolidation, there's a little bit of churn, but not a ton of churn there. So we feel like we're on the kind of through that in Africa.

When you look at the care activity there, there's a lot of demand in Africa. 5G is only being rolled out in the kind of major cities right now. And 4G is the bulk of what we're seeing in terms of the activity and most of that's coverage related. And when you think about the need for connectivity in Africa, it's huge. It's not just driving telecommunications and e-mail and people on social media, it's banking, it's telehealth, it's fundamental to their economy.

So we see a tremendous amount of demand there. You're seeing it reflected in the amendment and colocation activity. And so that market, in general, should continue to see a demand driver versus kind of going out several years. When we pull back on some of the investments there. It's not because the market is not an attractive market. There are a lot of good demand drivers there.

For us, this was really a strategic focus to get the emerging market exposure down because it injects a lot of volatility into the results. You do have FX headwinds that can be more or less in certain years that you do have more episodic events that you see there. So when we think about Africa moving forward, we're very encouraged by what we're seeing there. we just think we've invested enough and that we have a good healthy portfolio there, it's going to see some nice growth. And we just don't want to increase our investments dramatically there because we think we've -- we need to rightsize the exposure to the emerging markets.

Fair enough. LatAm, leasing activities there have been sluggish for a little while now. How are you thinking about how long will you kind of hang out in this kind of low single-digit growth rate? And when can we start to see an improvement in more accurately reflects kind of the underlying trends in the market.

Yes. So the carrier consolidation churn in LatAm has been significant for a couple of years now. And that will at least last through 2027 we do think that we'll be through the bulk of it by the end of 2027. And in Brazil, in particular, we have Oi churn, some of it structured, some of that's the remaining wireline business that will wind down, and that's keeping Brazil constrained.

In some of the smaller markets there, we've had other care consolidation that continues kind of to ripple through the numbers. And then in Mexico, we've highlighted an issue in the past week that we have with the customer who's not paying us right now. It's part of a contractual dispute.

So when you kind of look at all those things, we expect to be through those issues by 2028. When you think about the dynamics of the markets, we're already seeing an improvement in Brazil. So we're seeing 3 well-capitalized customers. They're starting to accelerate their investments in the market. So we think that market is going to continue to accelerate and get better over time.

Mexico is a market still needs to figure out how to get spectrum in the hands of the customers. They don't have the 5G spectrum deployed in a way that they can build robust networks. So we're expecting that to get fixed in the next couple of years. And so you should see some acceleration in Mexico. And with the smaller countries, it's a mixed bag on 5G.

So Latin America in general is going to be challenged for us in the next couple of years. And so again, we've tried to telegraph very clearly low single-digit growth because of the carrier consolidation churn that we're seeing there. But we do think we'll be through that, and we'll see an acceleration in 2028 and beyond.

Great. maybe ending up on Europe. You reiterated your organic growth guidance there. I think a lot of investors have been surprised the durability of growth there. Maybe unpack for us what's happening on the ground? And in which countries are you seeing sort of the most demand or the most interesting trends happening?

Sure. This all comes back to being very selective about the portfolios you buy and making sure the terms of conditions are right. And we've talked a lot about why we didn't go bigger into other countries in Europe. And so for us, Europe means Spain, Germany and France. And when you look at the Telefonica portfolio, the Telxius deal that we did, most of the revenue comes from the anchor tenant, Telefonica. So as you've had some churn there, we have a lot less exposure to that than other people do because there's not as much third-party revenue on that portfolio. And we are seeing healthy demand drivers because they're the market leader. So when you think about other carriers deploying to try to get parity and they're trying to get parity to telephonic because they're a market leader. And so for us, the demand is really coming in predominantly Spanish, Germany, France has got healthy growth, but it's a much smaller market for us.

And it's largely driven by the same thing that's driving in the U.S. It's mid-band 5G coverage. Europe is just a little over half in terms of their mid-band coverage they have a stated goal of getting more ubiquitous coverage by 2030, and they're a little bit behind on that.

So that's going to continue to be a demand driver for us. And then you are seeing new colocations and build-to-suits as well that we're doing in those markets and that's predominantly driven by trying to get better coverage in smaller towns. The networks in Europe are much more skewed toward the population centers, and there have been government incentive programs out there. Some of it is tied to the spectrum licenses and some of it is just tied to antennas to get better 5G coverage in the more -- I won't say, rural areas, but the less urban areas of Europe. And those are really the demand drivers driving the new colocations. And then in Germany, we do have one in one is still building kind of very methodically building their network.

So from our perspective, we see these growth trends as being durable because our churn will continue to be low, and they're going to continue to build out 5G and that's going to be a good driver for us going forward.

Got it. Data centers and CoreSite. We cannot get through for 1 of these presentations at the conference without talking about AI. So let me get right to it, we've started to see AI inferencing pick up as a business among many of your customers. I think it's against the reason of CoreSite should benefit from that. How do you think that plays out? And when would you expect to see CoreSite benefits more directly from the inference market?

We're benefiting directly today. So if you look at the new business funnel that's coming in, we have a lot of AI applications coming in. It comes in a couple of different flavors.

The AI companies want to host our distribution in a highly interconnected ecosystem. So you'll see them put kind of some smaller installations and just to get connectivity to their customer base in there. But the other thing that we're seeing is the enterprise customer that's been our bread and butter customer for a long time, they're also building their own inferencing models.

,

So -- and this is something we didn't -- even 6 months ago, we didn't think this was really going to be that material. Now I think it's going to be huge. A company that wants to use cloud tools, that wants to use an LLM to train their own inferencing model, but use their data needs to be highly interconnected right at the source of those cloud on ramps. And the AI companies are putting their own kind of a version of an on-ramp in those same facilities, which is CoreSite. And that's going to continue to feed that ecosystem.

So we're seeing that today. We're seeing enterprises that say, okay, I've got my data house here. I've got my machine learning module here. I want to put my GPU stat from my inferencing model right next to it. And we're seeing a lot of demand for that right now. And that's got a very long tail to it. So I think you're going to continue to see CoreSite experience elevated demand for the foreseeable future, and AI is a huge driver of that. And I also think when you think about the interconnection ecosystem, it's even more valuable today than we thought it was 3 years ago when we bought it because that same distribution hub is what has to be used to get to the population centers for the AI inferencing model, at one point, without inferencing not close to the LLMs, it's not going to. That's not where they want to put it. They need to put it near the population.

So I'm very excited about what that means for CoreSite, its growth trajectory. And then that will actually spill over the wireless networks, too, because as we start using our phones for more and more AI applications that will put demand on the network. So it's a game changer.

Yes. And I think that sort of edge compute thesis was part of your rationale for doing CoreSite in the beginning. Has that kind of played out as you thought? Or do you think we're now kind of like finally catching up to fulfill that thesis. And have you actually had any discussions with your customers about putting compute at the base of your towers.

So it's later than we thought it was going to be. But yes, I think we're starting to get there now. We are having discussions with customers about it. It's still in the early stages of it though. There's still some technological things that have to be figured out to make it work. And that's why we built a small facility in Raleigh at the base of a tower is to kind of set up a playground so that you can have customers come in there and interact together in a way they never had before, because they've got to figure out some challenges in their networks to make it work. But again, it's -- I look at that as a matter of when not if.

It's not happen as fast as we thought, but it's going to play out over time. But even without the edge compute, you are still going to see demand on the wireless networks from AI. Today, it's text and still photos. It's not a high-bandwidth driver. As AI evolves into video applications and things like facial recognition technology and wearables and things like that, that's going to require so much upload capacity that the networks don't have today.

That's going to be a driver. When, I don't know, but it's going to be.

Yes. Fair enough. A couple of financials to round this out. With the potential churn from Sprint coming and what other events are on the horizon, how should investors think about the growth algorithm for the company financially over the medium and long term. In other words, X percent topline growth translates to Y EBITDA and FFO?

Yes. Let me just run through the elements of the algorithm for you on that because it's a little complicated. To be clear, we're past Sprint churn. The last tranche was at the end of Q3 last year. So once we get to Q4, we're clean this year on Sprint churn finally. When you think about that long-term algorithm, the mid-single-digit growth, OTBG in the developed markets, plus slightly higher in the emerging markets once we get past the churn. If you just think about -- we actually put a chart out this year, how it affected this year, that's kind of where we were this year, and that led to about 6% growth in AFFO. And then CoreSite and a little bit of savings added another 2.5%.

So kind of the core growth rate of the business was about 8.5% this year. And that's kind of what the algorithm over time should give you mid-single-digit growth in the developed markets, a little bit better in the emerging markets. CoreSite growing faster but being a smaller piece, a little bit of cost savings. But then we had some headwinds this year. And those headwinds are going to persist for a little while, refinancing is going to be a headwind for us for a couple of years. If you look at the debt that we have to refinance next year at a similar level than it was this year. And I'm not going to speculate what interest rates are, but if you assume similar headwinds have kind of a similar kind of a deduction from AFFO that we had this year, '27 a little bit higher because we have some asset-backed securities for renewal. But once you get to 2028, a lot of what you're refinancing has already been refinanced to 2023. So those headwinds will die out in the cost of interest rate environment. Interest rates get better, it's a little bit better, worse, a little bit worse, but I'm not going to speculate on that. And then FX continues to be volatile. And when we kind of put that chart out, the Q4 chart that we put out in Q1. It was -- I think we were anticipating headwinds on call it, 2.5%, 3%, somewhere in that range. Now it's looking more like 1%, kind of the forward-looking piece of it, but moderated a bit, but that's going to continue to be a headwind that kind of happens and then the other thing that we're keeping an eye on is cash taxes because in those international markets, as those markets grow, you'll have a little bit of cash tax headwinds on that. So as we put all those things together, we think that gives you a durable mid-to-upper single-digit growth rate over time and the difference between the mid and the upper is how you anticipate some of those headwinds and if you have a little bit of variability in growth year-to-year. And so that's how we think about it.

Now that is -- that's kind of on the steady-state business. And so that's not anticipating a huge inflection from AI, spiking up demand in the U.S., it's not anticipating a new carrier or entry or there's a lot of speculation on things that could drive that up and they are absolutely some things that you could be optimistic about and see us doing a little bit better than that. But from an expectation setting perspective, we're looking at it saying that mid-to-upper single digit is in a steady-state business, what we think that we're capable of delivering kind of given the current environment that we're in.

Okay. Very good. I think we'll almost out of time. So when we end it there. But thank you much Steve for being with us. We appreciate it.

Thanks.

[Audio Gap] and infrastructure for Citi. Just a quick housekeeping item. Disclosures are available at the back of the room. If you don't have access or would like another copy, please e-mail me at [email protected], and we'll get those to you. It's a pleasure to welcome back Steve Vondran, President and CEO of American Tower. Steve, thank you so much for being with us today.

Well, thanks for inviting us.

So maybe to get us started, we'll start maybe high level and get into some of the particulars of the regional segments. But maybe just provide us with an update on American Tower's strategy to enhance financial performance and improve value for shareholders.

Yes, happy to. As we laid out about 18 months ago, we're laser focused on several key priorities for the portfolio. And the first and foremost is to maximize organic growth across the portfolio. That's going to deliver the best bang for the buck for our shareholders. And that's our #1 priority. It's focused on organic growth. Second is we will selectively deploy capital predominantly in our developed markets to further enhance the portfolio, have more assets to sell and that will complement that growth as well.

You couple those 2 things with a very disciplined approach to costs. And we've been very successful in bringing down SG&A over the past couple of years. And now we're turning to kind of the bigger cost stack. And the goal there is to keep our costs growing slower than our revenue. And that could be challenging in an inflationary environment, but we think we can do it, and we believe that we'll continue to offer an expanding gross margin that creates value for our shareholders.

And then finally, it's focusing on our balance sheet as a strategic asset, making sure that we've got a balance sheet that can withstand the up and downs of the market, that is less subject to volatility than it has been in the past. At one point, our floating rate debt was a little bit higher. We've brought that down, making the balance sheet an asset and making sure that we do have dry powder when there are other opportunities to invest as well.

So when you combine all of those with the backdrop of our industry, which is still an incredibly strong industry, mobile data growth continues to grow in our developed markets in that kind of 15% to 20% range. In the emerging markets, it could be around that range or even higher. And that means our carrier customers have to continue to deploy assets across the globe. So we see a very long horizon of investment by the carrier customers that's going to drive tremendous growth and a lot of value for our shareholders over time.

And so maybe drilling down just on some of that for a moment. You mentioned this transition, increasing mix towards the developed markets with the investments. You've also in the past talked about optimization of the portfolio. Are you through all of that optimization? Or is there more to go?

So when you think about the international markets in general, the reason that we originally went into those markets is we've had 2 thesis that underpinned the investment there. The first is that we could leverage our operational capabilities to provide a differentiated value proposition for the customers that would give us the chance to drive better returns than anybody else could in those markets. And we've been phenomenally successful with that. I can tell you without any hesitation, we are the best operator on every continent we operate, and we get paid for that. We get to charge a premium for that operational excellence.

The second leg of that was that by investing in those markets that were a little bit further behind the technology curve that we could enhance and elongate our growth curve as a company. And that's where we've struggled a little bit in some of the emerging markets. And it really comes down to kind of 3 categories of things that happen in those markets. The first is additional carrier consolidation beyond what you see in the developed markets, the second is you're more subject to one-off things that happen in those markets and the third is FX has been a little bit more than what we underwrote in those. And I'll actually use Latin America as an example of kind of how those 3 have played out to be more challenging for us.

When you look at carrier consolidation in Latin America, and we've been very clear that Latin America is a challenge for the next couple of years for us. We've seen Telefonica exit Mexico. We've seen Oi that kind of sold itself to its 3 competitors in Brazil, and you continue to see some smaller consolidations in the other countries we're in there as well. And so that's put some challenge into the growth there because you're having churn from those carrier consolidation.

The second thing is you have more one-off items that happen in the emerging markets, that happen in developed markets. In fact, last quarter, we disclosed that we have a customer who has initiated an arbitration on some of the contractual provisions and the calculation of rents in the market. I actually want to give a little bit more clarity on that than what we gave there. That customer is AT&T Mexico. Their annual rents are about $300 million. And we took an additional reserve in Q2 on that because as part of that, they've stopped paying tower rents this year. So the AR has gone up there. And we feel really good about the contractual provisions, and we intend to fully defend ourselves in the arbitration and use all the legal remedies.

But that's an example of the one-off item that can lead to more volatility in those earnings because we may have to book additional reserves if they keep withholding payment. And then the third issue that we see in those developed markets is really FX. And in some years, it's a benefit and in some years, it's a big decrement. And over the past several years, the dollar has been stronger than historically it has against some of those currencies. So it's been a real headwind for us. So when you add all those things together that really leads to more volatility in those markets.

But we believe that there are still good markets that will deliver growth in excess of our developed markets over time. But that volatility decreases the quality of earnings that we have and it makes us a little bit more subject to those things that we don't control. And so strategically, what we said is we're going to pivot more of our investments to developed markets. We did divest India. And before we divested India, about 40% of our AFFO came from emerging markets. After we divested India, it's about 25%.

And we still think we should decrease that. Now we haven't set a specific target for that. But as we continue to invest in developed markets versus emerging markets that mix will generally kind of come down over time. Again, we think they're an appropriate part of our portfolio. It just needs to be a smaller piece of it. So when we think about strategically where the company needs to be, it's more focused on developed markets, a little bit less interest in the emerging markets and then going back to those kind of key strategic priorities.

Now you asked about further divestitures, et cetera. We did also divest fiber in Mexico, in South America -- or South Africa, sorry. And there are some markets that we've designated as kind of noncore or that we are not at our subscale in. But what we've done is, we've changed the way we operate those, to operate them from regional hubs. So there's no compelling need to get rid of them. They're not a drag on the business. So we're not going to do any fire sales. But if we found somebody else who wanted those assets and are willing to pay more than what we think they're worth to our shareholders, we would certainly look at that. Look, I grew up in a family owned business. Everything is for sale at the right price, but I'm not going to do any fire sales in terms of divestitures.

And just going back for a moment. So this customer that you've entered arbitration with, you mentioned $300 million of annual rent, what's the range of outcomes that investors should keep in mind from that process?

Look, we're not going to speculate any kind of worst-case scenarios on that. We feel very good about our contract. We feel that it's very clear in terms of what we should be collecting on it. And so we'll continue to pursue that. And as the arbitration develops, we'll let people know. We just want to be a little more clear on what that disclosure was because if this payment pause continues, we could be taking additional reserves in addition to what we took in Q2.

And the details are very helpful. Maybe moving to the domestic business, the domestic tower business. So when we look at your leasing activity, you seem to be -- American Tower seems to be generating better activity and organic tenant billings growth than some of your competitors when you pull out that merger churn. And you mentioned earlier that you're able to extract a premium for the services that you provide. Are there other factors that go behind what's driving your relative success in the U.S. market?

Sure. Well, I don't want to comment on my competitors, but I'll just tell you what we've done and what we've focused on. The first thing you have to remember is it's a real estate business. And so not every tower is created equal, and we were very thoughtful in constructing our portfolio and some of the most valuable towers in our portfolio go back to those old A and B block carriers that really formed the nucleus of the network and everything was designed around that.

So I think we've had some natural advantages from that construction of our portfolio. But then you add on to that, the value proposition we've created for our customers. It's not -- we're not just a landlord, we're a partner to them. Our services business has become a real benefit to the customers. In fact, they're the ones that are driving us to do more. It's not us trying to grow it, it's them wanting to do more with us. We have a shared power program that gives them a little bit of an easy button in terms of that.

And the way we maintain and operate our assets decreases their total cost of ownership. Then you add to that the investments we've made in our operational capabilities to get them on air incredibly fast, coupled with those comprehensive MLAs that they're kind of like an easy button in terms of [ upwards ] that really gives them a reason to do more business with us. And I think it's the combination of all that, that's led to us being able to continue to offer more value to our customers and drive higher growth.

What are you seeing in terms of leasing activity? Is it still improving quarter-over-quarter? And do you have some updates just in terms of what you're seeing out of the environment?

Bless you. Yes, we continue to see growth in the pipeline there. And if you look at our guide for the year, it implies a higher growth toward the back end of the year. Our services guide is going down a little bit towards the back end of the year. That's because we had some customers that were kind of front loaded in terms of their efforts. And I think what I would say about the pipeline is you kind of see it mirroring where people are in terms of their network deployments.

The folks that are further along in terms of getting their mid-band upgrades done, they're slowing down a little bit. And the folks that are further behind are speeding up a little bit. So we continue to see a robust pipeline. It is building throughout the year and that's a good sign for activity. I would just mention that there's a little bit of decoupling of activity from property revenue sometimes with us because of our comprehensive agreements. So when the customers have the comprehensive agreements, it kind of evens out the revenue piece of it. So if those customers are scaling down a little bit, it doesn't mean that revenues come down because it's a little bit more of a spread on that.

But we are still seeing a robust pipeline. We're also seeing a little bit of a mix change. On a percentage basis, it's about the same for colocations and amendments, and that is still about 90% amendments in terms of volume, which you'd expect because we have carriers on a lot of our towers and about 10% colos. But as the overall volumes increased, that means the number of colos has increased, and it's actually up about 200%. So that's a very positive sign as well. So we're excited about the carriers continue to invest. We are seeing densification starting, and that's in line with what we thought was going to happen at this point in the cycle, and we feel very good about the carrier activity that we're seeing and how much work they have left to do.

So with the news last week, can you help us understand the implications of EchoStar selling spectrum to AT&T and how this is going to influence the forward pace of organic leasing growth for American Tower?

Sure. So all we know is what's public. We don't have any specialized knowledge that you guys don't have on this. I think it's too early to tell in terms of some of the knock-on effects of what's going to happen there. I think generally speaking, spectrum in the hands of a well-capitalized carrier promotes more development and more activity over time than it does in the hands of an undercapitalized carrier.

Having said that, we don't know exactly what's going to happen with Boost yet. First of all, it hasn't been approved. There's still a government approval process. Second, the terms of that agreement are pretty generic that have been put out there. We don't know how that's going to pan out and exactly what the plans are between AT&T and Boost on that. And so we don't really know exactly what's going to affect this yet. Having said that, if you look at Boost as a customer of ours, what we've been very transparent about in the past is we have a comprehensive MLA in place. The only thing that's baked into our guidance through 2027 is the contractual minimums under that agreement. So as long as they continue to pay under that agreement, it shouldn't have an effect on that piece of it. Beyond that, it remains to be seen what's going to happen on that.

And in terms of kind of the downside risks with Boost, again, we feel very good about the contract we have in place. But the worst impacts, if you had churn from it is they represent about 4% of our U.S. business, about 2% of our global business. Now we don't expect the worst to happen, but that's just to size the exposure for everybody there. So we'll continue to evaluate this as it plays out. And when we have more information, we'll be able to give you guys a better feel for how that impacts us.

So we've been getting a bunch of questions, as you may imagine, across the implications. And so One of the questions that we're getting, maybe just to think about the durability of the lease itself. So if EchoStar were to decommission the network, you mentioned you have a comprehensive through '27, but the contract actually goes for longer, right?

It does. We signed that agreement in 2021 and it expires in 2036.

So it's a 15-year deal.

Yes.

What's the durability of a customer who may be decommissioning the network, paying out what's owed on the contract versus the risk that they find a way not to pay the contract?

We do our best when we craft these agreements to protect ourselves on it, and we will aggressively defend our revenue stream on that. So how it's going to play out? I don't know exactly, but rest assured, I'm a lawyer by training. We've done everything we can to protect ourselves on it. But I can't predict what the other party is going to do or what's going to happen with that. So I expect to get paid, but we'll have to see. If something else happens, we'll have to figure that out but I expect to get paid.

And in terms of just thinking conceptually, so one of the interesting things about the sale is AT&T is buying 600 megahertz spectrum, which they currently don't have in their network. Is this an incremental amendment opportunity for American Tower above and beyond what they're doing with the mid-band right now?

It could be if they decide to deploy it. It could be. Again, it's too early for us to know exactly how that's going to pan out and how they plan to use it. But look, any spectrum that a carrier has when they deploy it, they represent opportunity for us. And so we'll just have to see what their plans are because as of yet, they haven't shared with us what they're planning to do with it.

So 1 other question on this, and this is maybe a hard one because it's kind of in the realm of scenario analysis. But with AT&T potentially getting more spectrum with this transaction and the possibility that other carriers get some spectrum as well that could be plug and play. So like maybe more mid-band, maybe more AWS 3. I guess maybe just a quick clarification is if those things happen, those are kind of like plug and play where those are not amendment. If the carrier has that spectrum deployed and they're getting more of it, is that right?

They could be. It's possible that's the outcome on it. Again, I think it depends on who gets what, what they do with it. At the end of the day, though, the additional spectrum is not going to solve their need to densify the networks. If you go back to the CTIA white paper that was published a couple of years ago, they said they needed 400 megahertz of mid-band spectrum by 2027. I think it was 1,400 by 2030 or 2031, somewhere in that time frame.

And so the DISH spectrum is a lot shallower than that. It gives them some of it, and they're going to be able to utilize that. And that's a good thing because, quite frankly, it can make some of the other things that they're doing, like fixed wireless more viable for them. So I don't view this as a negative for towers at all in terms of the other 3 carriers. I think this is a positive because it gives our customers another avenue to monetize their network and to invest more in the assets that they're putting on our sites.

Because this has been, I think, one of the concerns is that if there's more spectrum that the carriers have, they densify less? Like, for example, if they're getting maybe on the downlink, 20% to 30% more spectrum, let's just take that as a percentage and network traffic is growing. You mentioned earlier like 15%, 20%, that's at least a year of extra capacity that they can use with spectrum versus other sources. So in the past, when you've seen these kinds of things happen, at least for short term or midterm period of time, does it reduce -- like is it going to affect the trajectory that you're on right now for densification just for a period of time and then you get to the other side of this and it's back to that longer-term path?

Okay. We'll have to see how it plays out. I don't think so. I think if you look at where they need spectrum, where the densification is occurring today, it's a drop in the bucket of what they need to do in terms of accelerating it. If you think about the need to densify and where they need spectrum, it's not uniform across the country. If you're in a rural Montana, you don't need a lot of spectrum. But if you're in a dense urban area, you need a ton of spectrum, and you need it quickly. And if you just think about handset penetration, we just kind of got over 50% mid-band handset penetration this year. That continues to accelerate. 5G mid-band use, those users are using twice as much data as 4G. So I think that where that demand happens is just as important as the fact that it's happening in general.

So when I think about that spectrum being deployed and the spectrum that they're getting, they need every tool in the toolkit to meet that demand. So I don't think it's going to delay significantly any types of densification. And when we've seen these types of things in the past, any delays are very short-term, it's really around network planning, trying to figure out what are the -- they have to figure out what they're going to do. And then that's usually where you see a short-term little pause. But even that's pretty short term, and it doesn't affect the most acute need areas that we're seeing them already attacking.

On the second quarter earnings call, American Tower noted that $5 million of leasing revenue got shifted, right, from '25 to '26.

Yes.

What caused that? And does this transaction do you think had anything to do with it?

$5 million on a $10 billion P&L, but I understand how important it is to everyone on a new business perspective. There was a cadence of activity that we thought was going to happen. It's going a little bit slower. This is not a if we're going to get it, it's when we're going to get it. And quite frankly, we're probably a little too precise in our guide at the beginning of the year given that more of our revenue is subject to the volumes.

I don't think it's related to this transaction. I think that you're talking about a very small number of sites that got pushed out a quarter or 2. So I don't think it's this. I think it's just they're not going as fast as we thought they were going to go.

So zooming out on the domestic business, how do you see organic growth pacing over the next few years? You have your multiyear guide out there, how do you see the growth rate from here?

So I'll just kind of refer back to what we said before in terms of our long-term growth algorithm. We think our developed markets will continue to be kind of mid-single-digit growth markets. And the components of that are we've got a 3% escalator in the U.S. In Europe, it's CPI-based. I'll focus on the U.S. first, 3% escalator, historical churn has been 1% to 2% and absent U.S. Cellular, which is a new thing, we think it's going to trend to the bottom end of the 1% to 2%.

And just to size, U.S. Cellular again that represents less than 0.5% of our global revenues, about 1% of our U.S. revenues. So depending on what happens with that, you can have a little bit more churn from that than what we expected. But -- so you got the 3%, you got the churn trending down closer to the 1%, so you got about 2% there. Then you have the incremental growth that's coming from colocations and amendments. We think that gets you into kind of that mid-single-digit organic growth rate. Europe, we have a CPI-linked escalator. We continue to see good demand trends there. We think that will continue to be kind of mid-single digit as well.

Maybe while we're just starting that to traverse around the world. So LatAm, Africa data centers, maybe just a sense of how you see growth in those businesses as well.

Yes. So we've been very clear. LatAm is a challenge for us for the next couple of years. We continue to have churn for Oi that will affect us in '26 and '27. There's some other carrier consolidation churn happening in our smaller markets there as well. So we're expecting growth in Latin America to be low single digits in the next couple of years. After that, we feel good about the rebound of growth there. And we're seeing some early signs of that in Brazil where the carriers are starting to invest more in their networks there.

So I think that once you get past 2027 that LatAm will be accretive to growth and they'll be growing faster than our developed markets. Same thing with Africa. In Africa, we're largely through the carrier consolidation churn there. In fact, I think we're pretty much through with everything that we're anticipating there. And so we're seeing very healthy demand drivers in Africa. And the big challenge there has been FX, and we've seen a little bit of moderation in that this year. So we feel really good about Africa continue to be a growth driver in U.S. dollar terms for us over the next several years as well.

So CoreSite is our fastest-growing segment. I think what we said publicly on that is we expect them to be double-digit revenue growth for the foreseeable future, but they're a smaller piece of the pie. So it just doesn't have as much [ oomph ] on our growth rates, but it's doing phenomenally well. And we expect that to continue because all the secular drivers in the data center business are durable in terms of what CoreSite is seeing. They're not subject to some of the fluctuations that you're seeing in the hyperscale space.

Coming back to some of the priorities you talked about at the beginning of our conversation, you talked about the goal to grow revenue faster than expense. And you also have talked in the past about the efficiency initiatives that you've been pursuing. Is there anything more you can share with us in terms of how that's progressing to identify maybe a step function change in the cost structure?

Yes. So the first thing we do is attack SG&A. At this point, I think we've harvested most of the low-hanging fruit there. So I don't think you're going to see dramatic reductions in SG&A, but there's still some incremental improvement that we can do. It just requires more time, things like automation, some investments, things like that. And so we'll continue to work on that over time. What Bud's focused on is the rest of the expense stack. And so some of that's a little bit fixed like property taxes. There's not much you can do. We do have an aggressive program on land rents. But then it's looking at things like utilities, maintenance CapEx spend, kind of our global supply chain.

And so I'm not ready to set targets yet. I told Bud's got until the back end of the year to do that. But the way to think about that is there's a trajectory that we've historically had in terms of the cost curve and how it relates to inflation and our revenue growth. And the goal is to bend that down over the next several years so that you get more daylight between the 2. And so that's what you should expect to see from us is more of a projection on a bending of the cost curve over time on that.

And again, for us, the mission is grow expenses slower than revenue, expand margin. We're very confident in our ability to do that. And today, if you look at the gross margin and the way the revenue on towers drops down at the bottom line, it's converting to EBITDA kind of greater than 80% in terms of every incremental dollar we put on the site. So you're getting some natural margin expansion from that. And just keeping that cost discipline is going to just help us to keep that growth going.

When you look across your global portfolio, what region product is the most underappreciated in terms of the growth contribution to American Tower that could actually deliver some upside to how you think about multiyear growth.

So I think there are some growth drivers in the U.S. on the tower side that are kind of in that kind of long-term view shed. And there are things that we can't predict yet. So if you think about fixed wireless as a driver, today, the carriers are using fallow capacity on their networks for it. But as that product becomes more mature and they're able to monetize it better that could be something that's a stepwise driver.

I think when you look at the impact of AI on the mobile networks as well as on the data center business, over time, that's going to create an accelerating demand curve on the networks as well. When you start getting to the point there you're doing AI manipulation of video on devices, it could have the same types of effect as social media. And if that happens, there's not enough spectrum. The densification is going to have to accelerate. So I think that there are some demand drivers just on the core tower business that are underappreciated in terms of what could happen out there.

I think in terms of the rest of our portfolio, I think there are some opportunities for us to do more in terms of power. We've developed a lot of really interesting things in Africa on power that could benefit our customers in places like the U.S. or Europe. It's just it's a little bit tough to break through that because that's kind of one of their core competencies and you're asking to share more components. But I think that's a value add we could do for our customers there.

I do think edge compute will have its day. It's a little bit further out than I expected it to be, but it will come. And I think that will be an enhancement. So when I look at the future, there's a lot of drivers that are going to drive the core tower business, some of the ancillary offerings that we have. And I'm excited about what the future holds. I think we've got a lot of ways to grow the revenue base and the portfolio over time.

And then so maybe boiling that down to AFFO per share growth, what's the current goal for the multiyear annual AFFO per share growth, recognizing that there's a few things that you're dealing with right now. You've got some merger churn, you've got interest rates, you've got FX. But when you sort of cut through and normalize, help us appreciate what that trajectory looks like.

Yes. So I'll give you the generics, and then I'll refer you back to -- we put out a chart on our Q1 earnings that shows this year because I think it's illustrative of this. If you look at our long-term growth algorithm, if you can grow developed markets at mid-single digits on an organic basis and you can grow the international markets a couple of hundred basis points higher, then that drops down to the bottom line and higher because of the conversion rate, right?

If you take that plus some incremental investment in the portfolio, minus some FX headwinds, minus some refinancing headwinds, we still think we can drive mid- to upper single-digit AFFO growth per share on a durable basis over time. And that's -- our goal is to get as high as we can every year on that. But that's how we think about the business. And if you look at that chart that we put out in Q1 -- I'm sorry, Q4 earnings...

In Q1...

Yes. Then kind of the core growth rate for portfolio was over 8% this year when you kind of look at the core growth before you have the detractors on some of those other things. So we think that we're delivering results that are supportive of that higher, single-digit growth if you can get some moderation in some of the headwinds like FX, refinancing, and then we will have a little bit of headroom from [indiscernible] cash taxes growing in the non-U.S. markets.

And so that, a, just to clarify, was that -- remind me because I remember the slide, but was that inclusive of the merger churn? Or is that exclusive of that?

I don't remember off the top of my head, to be honest with you. I think it included the churn. I think that was our overall growth rate for this year. It's the -- it's really -- I'm talking from memory. I'd refer you guys back to the chart.

Because I guess the question is, do you see that like the organic, the underlying strengthening based on your multiyear outlook. Because you've got getting through the merger churn, you talked about activity getting better in the U.S., you talked about Europe, LatAm is going to get through its issues over the next couple of years.

Yes. We certainly think that when you look out a couple of years from now, we're past all the big churn events, we think that the organic growth internationally is going to expand. I think when you look at the U.S. and in Europe, it's going to be a little bit range-bound around that mid-single digits unless there's a catalyst like fixed wireless or something that really improves that.

You mentioned the balance sheet also and using your balance sheet. What's been interesting is, I think your competitors have talked about the opportunity to be IG-rated at 6x plus EBITDA in terms of a leverage multiple. Your target is still trying to be below 5x at the high end, which you're kind of right there at the moment, if I recall correctly. You're right near there. So what's the opportunity to potentially revisit your target leverage over the next few years and maybe use that as an opportunity to enhance shareholder returns?

Well, that range is something we set. That's not a range that's dictated by the ratings agency. So we've kind of put that range out there. And the importance of getting down to 5 is because that's a commitment that we made when we flexed up out of our policy. And so if you look at what's happened over the past year, we've gotten upgrades. So we certainly think there's some flexibility in terms of what those ranges look like. At this point, we haven't elected to do that.

And frankly, we don't need to do that right now. We've got enough liquidity and enough opportunities in our current balance sheet structure that we don't need to do anything with that today. But I certainly think if you look at what other companies have done, there's probably some flexibility in there. And we'll figure that out over time. But we're excited about the upgrades we've gotten. We think that's also very reflective of the change in quality of earnings. And that's been one of the focuses is to make sure that as we decrease the emerging market exposure that the ratings agencies as well as the investors appreciate the fact that, that gives us a more durable, reliable, less volatile cash flow stream on it, and that's worthy of a premium and you're seeing that in the debt markets as well.

And then in terms of using your financial flexibility, how do you think about the priority stack right now of capital allocation, where buybacks might fit into that equation as well as if there's any M&A that you feel like could be opportunistic for the company.

So when we think about capital allocation, the first obligation is, we're going to pay our dividend. In this year, subject to Board approval, that's looking to be about $3.2 billion-ish of our capital allocation on that. And then beyond that, we have our internal CapEx program and that typically drives some of the best returns that we can make because those are the investments that we're able to do incrementally.

And then beyond that, it's really a math equation for us. Is there more opportunity in an M&A environment than what a share buyback is going to give us or further delevering, depending on the interest rate environment.

And we've gotten to this to sufficient scale everywhere that we operate that there's no strategic imperative to buy something that would take us off of kind of a pure math equation. And so the way Rod and I both think about it is every opportunity that comes our way, gets paired up against theoretical stock buyback and we look at that. So we think buybacks are a very viable part of capital allocation. Now I've also been very clear that I personally believe that opportunistic buybacks create a lot more value than the programmatic buybacks.

So you shouldn't expect to see us put in some sort of buy a certain number of shares at the market. That's not likely to happen under my leadership. But opportunistic buybacks are certainly on the table. And if we don't have a better use for the capital, that's what we'll look at.

We talked about a range of topics today. Is there anything that we didn't talk about or anything that you want to revisit just to leave our clients with today?

No, look, I would just reiterate, towers are still one of the best business models ever created, probably the best business model ever created. And there are so many growth drivers over a multiyear period. It all comes down to how often people are using their phones. And so we tend to focus kind of on what's happening quarter-to-quarter. But at the end of the day, people are going to do more mobile connectivity over time, and there are so many new growth drivers coming machine-to-machine, AI, all types of drivers to the business. That's going to make all these businesses grow continually at least over the next several decades. So this is not -- you shouldn't be thinking about this as a short-term business. This is a long-term investment in infrastructure and that infrastructure is going to power the next wave of innovation and the next. That's what people need to focus on when it comes to towers and quite frankly, data centers.

Thanks for your time. Thank you.

All right. Perfect. Good morning, everyone, and welcome to TD Cowen's 11th Annual Communications Infrastructure Summit. My name is Michael Elias, and I am the Comm Infra Analyst here at TD Cowen. For this session, we're joined by American Tower. And from American Tower, we have their EVP and President of the U.S. Tower division, Rich Rossi. This session is structured as a fireside chat. I've said this in other sessions. I promise you I will try and open it up for questions at the end. But like I said, I do get excited.

So with that, Rich, thank you so much for being here. Really appreciate it.