American Tower Aktie

Before we begin, disclosures are available at the registration desk. And for those of you that I have not yet met, I'm Mike Rollins, and I cover Communication Services and Infrastructure for Citi. And we're pleased to welcome Rod Smith, Chief Financial Officer of American Tower. Rod, thank you so much for being with us today.

Welcome. Nice being with you, Michael, and thanks, everyone, for attending.

Great to see you. And maybe just to get us started, what are the initiatives that are most critical for American Tower to enhance financial performance and shareholder value? And not just for like the remaining few months of this year, but as you're just looking out over the next couple of years.

Yes, it's a great place to start. Certainly American Tower is a leasing business, a run rate business. So in the near term, we're in really good shape to hit our outlook for 2026, certainly. We always constantly think longer term than that. Being a leasing contracting business, contracts are very important. So we take our time with contracts. We make sure we get those right. And they're not necessarily a here and now type of decision. It's about what's happening with the networks in 1 year, 2 year, 3 years down the road.

Even longer term, we have a great set of tower assets in the U.S. and Europe, complemented by some emerging market assets, high-quality assets in the right locations that are critical to the future networks, wireless networks, really broadband networks around the world. So protecting that value in the contracting is certainly very important. We do see a few catalysts -- when you look out over the next few years, you heard Steve talk about those on the call recently, the 5G networks in the U.S. have been deployed.

We enjoyed the amendment cycle through that. And now most of the carriers are 90%, 95% coverage with the 5G networks. As applications become available and bandwidth goes up, they will come in and densify those networks. They will be adding capacity to their existing cell sites that those will be amendment cycles for us by and large. They also will likely turn to densifying the network, which is adding colocations into their network, so new antenna arrays on towers that they're not currently on, which should be a revenue enhancement, a revenue cycle for us as well.

And we do see evidence that build-to-suits in the U.S. are going to be going up. They're going to need to build new towers in the U.S. so that they can use the higher band spectrum across the U.S., filling in places where the high-band spectrum today doesn't reach. That could be an amendment cycle or a revenue cycle for us over time. So being well positioned to make sure we can execute and be in a good position to monetize some of those activities is certainly critical.

Another catalyst, we see new spectrum coming down the pike over the next few years on a pretty well set schedule, almost 800 megahertz of spectrum. As that spectrum gets acquired by the carriers and deployed, those are amendment cycles for us, certainly. 6G is -- I mean, I want to say it's right around the corner. It will be coming later in this decade. But the one thing that never sleeps, never slows down, never stops is technology development. So it will be coming on different spectrum with different types of equipment, and we're in a really good position with the assets we have around the world to monetize that.

And the fourth catalyst that I would highlight here is AI. Not only is it going to change the way we all kind of live and work and communicate and play and entertain ourselves and each other, it fundamentally will change the way the wireless networks work. It will require the asymmetry that's built into the networks today, which favors downlink. In an AI world, the machines will be sending data through the uplink, more so than any other technology in the past.

That will be a fundamental shift in the networks that will have to be built into the networks, which again will be -- should be amendment cycles for us over time. So we think there's a lot of demand yet to come for our business. We are really well positioned to execute on that, not only in the U.S., but in Europe and other parts of the world. And we have the data center business, which is a highly interconnected cloud on-ramp centric network dense set of assets that also benefits from these new technologies and the fact that humans will be consuming more and more bandwidth over time.

That is another constant on the planet, which is people just consume more and more bandwidth. And with our CoreSite assets, the really well-positioned, high-quality tower assets, we are in great position to execute on that. And with all that said, I would say we do see 2026 as a trough year in terms of organic tenant billings growth on the tower side as well as...

Global?

Yes. Not individually, but in total. You add it all up, we see that inflecting up in future years. One of the reasons is primarily the absence of the DISH churn kind of going forward. Not only the absence of the DISH churn, but consolidation has happened a lot around the world. And we think churn on average, over time, like the consolidation of our global portfolio is coming down. That means organic tenant billings growth is going up. That's a really important fact for us going forward.

So not only do we have these 4 major catalysts that complement our high-quality tower assets, we know we're going to have less churn across the globe. Again, not in every single region, but when you put it all together, when you -- when you have the absence of the reoccurrence of DISH churn and the healing that is happening in Latin America, we're seeing churn elevated this year and last year. That's going to improve, in our view, as we head into next year.

And then the contracts we have in Europe really are churn-light on a contracted basis. So there's stability there when you think about the churn. And in Africa, the primary revenue we have, 90% of it comes from the 2 big carriers across Africa, they're building a lot. They need to cover more ground, not less. Churn is unlikely to materially change from where it is because we have some of the smaller customers here and there go away. But when you add it all up, the reduction of churn in the U.S., the stability when it comes to churn in Europe and the reduction of churn in Latin America, that is a really good backdrop.

And then we have the CoreSite business that's growing double digits. We're investing more capital into it. And you put all that together, and we are really well positioned globally to have 2026 be a trough year and accelerate into 2027. And I would say when you think about the changes in the world in these networks, that's a pretty good start to the next several years. So we feel pretty good about the future.

And that should trickle down to AFFO per share growth that can also accelerate?

Yes, it absolutely should trickle down, and in some cases, even be enhanced. So when you think of the revenue growth expanding because of the lack of churn and the stability in the new business, we are -- much of that will automatically through high conversion rates, expand margins. And we're also actively looking at operating expenses and controlling those, reducing those.

I think most people will know we have a new position in our company of Chief Operating Officer globally, really looking after the way we care for our sites, the way we deploy our sites, the way we run our business, even the way we contract and process leasing around the globe to make it more efficient and to add basis points to our margins, to unify supply chain, and to be smarter about the way we procure things globally to get the best deal. So there is room there to reduce expenses. At the same time, we're adding high conversion rate revenue. So we're looking at 200 to 300 basis points of margin expansion in the tower business over the next couple of years.

So when you look at the big markets that you operate within globally, you mentioned how consolidation has kind of played out quite a bit.

Yes.

Are there any risks left that there could be more consolidation of your carrier customers in certain markets that maybe we're just not anticipating today, whether it's in Europe? I mean, U.S. is, I think, as you described, has played out. But markets that some of us may be less familiar with, Africa or different markets that you operate within in Latin America. As you survey your markets, is there anything significant that we should be mindful of as we look out over the next few years?

Specific to consolidation, I would say no. And that is the U.S. is pretty stable, 3 primary carriers unlikely to really change from that perspective. In Europe, there will be carrier consolidation without a doubt. We're somewhat exempt from that, immune to that, because our revenue is primarily contracted with Telefonica. We have very little exposure to FSR in Europe and others. So we think that when you look at the tower companies in Europe, we are more protected from a consolidation perspective than most others, certainly.

When you look at -- Latin America has gone through a lot of consolidation in the big areas in Mexico and Brazil, that's happened. Could there be some small stuff happening in our other markets? There certainly could be. It's not -- it wouldn't rise to the level of being material to the overall footprint of our company. Brazil has gotten itself down to 3 carriers. We think that there is healing there that has happened and we'll benefit from in the future.

And Mexico is in a similar space. The one risk that I would highlight there is there is the arbitration with AT&T Mexico and us ongoing. I think people are familiar with that. That arbitration is in process. We may have decisions there at the end of this year, maybe even into next year. And that really was a dispute around the way the parties calculated rent increases. So we'll just see what happens there.

But when you're in an arbitration, getting through the end of that, seeing what the result of that is, having that behind us will be a good thing. In the meantime, we don't know what the arbitrator will decide. And when it's decided, we'll implement it. I will tell you, they're paying us directly most of the revenue. There is a holdback that they're putting in escrow.

It is like 20%?

They're reserving about $8 million a quarter, $40 million this year, $30 million last year. So we've got $70 million already reserved. To the extent that, that reserve is needed post arbitration, that will be a benefit to us. And then we'll see where the arbitration comes out if there are any changes to the way you calculate rent increases through the contract. So we feel good about it. We don't think we should lose that by any stretch to the means, but just to size up kind of the relative potential impacts there of what we're talking about.

As the buy side looks to '27 and just thinking about setting expectations for '27, you just -- until you have resolution, is that $40 million just drawing it straight across into '27 and future years as good of any assumption until you have a finality?

Yes, I think so. Until there's resolution. We'll give guidance for '27 out in February. By then, we hope to know and build everything into guidance. Outside of us providing guidance outside of completion and resolution of the arbitration, I think what we're doing today is what we would expect to continue to do. And if there's any change in that, we would update people and you would all know what we're thinking.

And just one last thing on this, because this has been something I've been wrestling with. And it just -- I know it's not a huge amount of total revenue for you that's being reserved. But, is there like -- because it's just a formula issue, is there a much wider set of like outcomes? Or are outcomes more narrow because it's just definition versus the actual integrity of the lease?

You may be asking the wrong person, because I'm not one of the people presiding over the arbitration. They get to decide. We have the obligation to show up and make our case. If you ask me, I think the outcomes are very narrow and in our favor. The contracts are clear. When you're in an arbitration process in Mexico, they'll decide we won't. So, we'll have to just wait and see what they decide, but I think they should be a narrow set of outcomes.

Super helpful. So maybe backing up now to leasing. So you talked about the opportunity for the organic tenant billings growth rate to improve. And I think the question that we get is, the conviction that leasing continues at a solid pace going forward as investors are contemplating the maturation of networks, the software upgradability of networks. You shared some of the reasons why you believe leasing continues at a solid pace. Can you help unpack that a little more at a high level? And then we'll drill, of course, down into the U.S. and maybe some of the other markets.

Yes. When you think about our organic tenant billings growth outside of the churn number, it's really made up of 2 components. It's the annual escalator in the U.S. that is fixed to 3%. Outside the U.S., we're inflation protected, by and large, across the portfolio with very few exceptions. And then it's the new business activity. That new business activity is underpinned really by the carrier investments. They're making those investments because of the growth in mobile data consumption and their desire to keep their subscribers and even add to them. So there's that network quality and competition that is happening.

The networks, the carriers invest $30 billion to $35 billion a year into the network. They don't disclose, but a fair amount of that goes to the wireless networks and a fair amount of that ends up at the tower sites and a lot of it is up in the towers. So that's a function of keeping up with the growth in mobile data consumption. I think we probably all agree that growth in mobile data consumption is going to continue.

That's what we believe the carriers will continue to invest in it. They're going to be putting more things on the towers in the form of additional antennas, additional radios, more cables. Sometimes that will be in support of new spectrum. Sometimes it will be reusing existing spectrum more frequently, and they will have to densify the network. So that all underpins 2.5% contribution from new business into our organic tenant billings growth is what we're seeing this year.

It's what we saw last year if you exclude DISH completely. So their contribution is excluded. The other guys were 2.5%. We expect that to continue. The investments in the growth in mobile data require the investments, and that really underpins that 2.5%. That's 2.5% plus the 3% escalator in the U.S. puts you at 5.5%. Absent DISH, we're running about 1% churn. Our target is 1% to 2%. So 5.5% less 1% churn, you drop in the 4.5% organic tenant billings growth. That is a number that we think mobile data consumption growth in the U.S. requires that is somewhat consistent. And then some of those catalysts we talked about a few minutes ago could be incremental over time.

So those are...

Upside.

spectrum.

It's new spectrum. It's wholesale densification of the network. Certainly, AI workloads finding their way into the mobile devices, which I believe will happen. Sometimes we won't even know it's happening. It will be happening behind the scenes where you may have connected glasses uplinking to the networks constantly with massive amounts of data. That is potentially over and above kind of this 2.5%.

And then if we drive a mid-single-digit organic tenant billings growth in the U.S., we know CoreSite is going to be growing much faster, double digits. Not only that, it will be probably expanding the percentage of contribution it makes to our attributable AFFO. So it will be getting bigger. Europe grows faster than the U.S., just given our portfolio there and the cycle we're in. And we -- Europe -- Africa is growing high single-digit, double digits. It won't always do that. Sometimes there'll be a problem, but in general, it will grow faster than the U.S. and LatAm is recovering.

And we're working on operating expenses and our revenue is at a high conversion rate. We should be able to grow AFFO per share at that mid- to upper mid-single-digit rate over time on average. And then the wildcards there, what's happening with FX and what's happening with interest rate headwinds. So if you exclude those 2 things, should our AFFO growth be up in the upper single digits? Absolutely.

If we include those things and we're working through a cycle where we're still growing into the higher interest rate environment, that's 100 basis points of headwind typically. FX is typically some devaluation, maybe another 100 basis points. So then, do you end up in the mid-single digits, higher than 4.5%? Maybe, on an AFFO per share basis. So that's where we say AFFO per share mid- to high single digits is achievable to us before FX and interest rates.

There will be a time when interest rates won't be a problem like it will be. That will make us more likely to be in the upper single digits consistently. There will be times like this year where FX is a tailwind, not a headwind. That will accelerate us into the upper single digits. And when FX and interest rates are a headwind, we probably dip back into the mid-single digits. That's the way to think about it.

Is there a scenario that you could foresee where you could get back to double digits?

We consistently say mid- to upper mid-single digits, and I would leave it there.

So of that 2.5 of activity in the U.S., in the past, you've talked about early on when you, a few years ago, set out this multiyear outlook, there was more of it that was committed through comprehensive agreements. And over time, that comes down. So implicitly, your customers are electing to spend more with you on an annual basis if that percentage is coming down. Where does that sit today? And does that also foreshadow new comprehensive opportunities with your carrier customers?

Yes. I would say at the outset that we are agnostic about the types of contracts that we actually enter into. And just to level set, we have master agreements that govern terms and conditions across our portfolio with most of our big customers. Then we execute individual site licenses on a site-by-site basis. Sometimes that's priced off a price sheet that has the ability to change rapidly. And then the alternative is, we have the holistic agreements we refer to them where that eliminates the need to negotiate a site license one at a time.

They have access to our portfolio in the U.S. to use the sites the way they intend to. We grant them certain use rights that are specific and they pay us certain fees, and we can average that out over time. We've had more of those in the past. Some people have come out of those. They may go back in and they may not. We don't mind either way. The real benefit to a holistic deal is it accelerates the speed of deployment for the carriers. It makes the process more administratively efficient.

When they're not in a holistic deal, they have to go site by site. It takes a little bit longer. The economics shouldn't be materially different. They can change a little bit quarter-to-quarter and even year-to-year because we can smooth things out. But we grant them use rights. Those use rights are specific. They're priced up against the price sheet, and that's what they pay us and we average it over time.

So either way, it should have the same economic outcome. The holistic agreement gives us more stability in terms of that period. They're contracted. We know what it will be, and it is what it is. On an a la carte, that could go up and down a little bit depending on their actual deployment cycle quarter-to-quarter and even year-to-year, which can change from time to time. Over the long term, there probably is no impact from a timing perspective because growth in mobile data consumption does not ebb and flow the way the carriers build plan might.

So as long as that's continuing to grow, over time, they've got to make the investments. They could do it this quarter or they could pause and they do more next quarter or they pause this year and they do more next year. So over time, it all works itself out. So we're agnostic in which deal we get. And I would point you back to those catalysts. Those catalysts will come. It doesn't matter if we're under a holistic agreement or not. We will monetize much of that.

And in terms of the lease applications and activity that sits behind all of this, is that also supportive of the trends that you're discussing?

Yes. I would say -- I mean, we've seen with the deployment of the 5G cycles, we had kind of a peak in application volume a couple of years ago. That has come down a little bit. So application volume is down a little bit. Our services business this year will be lower than it was last year. That's evidence that the application volume has come down a little bit. And then, I would say the catalysts that we're talking about are multiyear catalysts. We don't necessarily see that activity in our pipeline today in terms of applications, but we expect we will over time.

And so -- and just one more thing because I know people focus on this. When you say come down, does that come down year-over-year or come down from the peak?

It has certainly come down from the peak and depending on which year you're talking about. By definition, it's come down year-over-year. But we do think this year with application volume, services revenue, and that $245 million of revenue down from $345 million. That's a lower application volume than we saw in the prior year.

So when you take a step back on the spectrum catalyst, one of the questions that comes up is the upper C auction next year. At least as it exists today, it's not really able to put -- you can deploy equipment whenever you want, but a lot of it won't be able to be used until the end of 2030 and the end of 2031. From the work that you're doing and your customers are doing, do you see any evidence that, that could be pulled forward and see that maybe sooner?

We're not planning that, that will be moved up, pulled forward, deployed sooner. It doesn't mean it can't be. It really -- we're not involved in that, in the clearing of the spectrum and making it available for the carriers. That will happen when it happens. What I would say is that broadly will fit into their $30 billion to $35 billion a year investment cycle. They'll continue to deploy that level of capital, whether that spectrum is accelerated or not. There's plenty to do within the networks.

And I would say that the network operators are very methodical, and they plan well in advance. So they have their build plans for this year and next year. They tweak them and they change them and priorities may shift a little bit. But they all know they're going to be improving the networks. They're going to be adding capacity into the networks. They're going to be densifying. They will be doing that regardless of the new spectrum being accelerated in terms of available or sticking to the schedule that happens today. They'll just -- they'll adjust it.

That's one of the things that is noticeable is the carrier CapEx investment is traditionally pretty consistent. And then with new technologies, it steps up. It doesn't go down, it steps up. In the very early stages of new technology development, you could have a bump up and then it pulls back. It pulls back to a higher consistent level than the prior technology required consistently. That's what we see, and that's what we're seeing now. So whether that spectrum is accelerated in terms of its availability or not, we're comfortable that mobile data consumption goes up, carrier investments stay fairly consistent. Our growth rates continue to chug along.

Do you ever see a pause? So like with a potentially significantly sized auction coming up, carriers not knowing what they're going to spend on that, do you ever see them like pause ahead of the auction or after the auction? Anything that we should be mindful of, that could just add a little opportunity or friction to the cadence?

Yes. There certainly can be a little bit of that. When you think of the carrier activity, it really is for them to outline. But the way they interact with us, it's not consistent quarter-over-quarter every quarter, year after year. Like they do have the ability to plan and move things around. Over a multiyear period, things become much smoother, certainly.

Yes, and I would say today, we're at a post 5G deployment. You could look at that and say part of that is maybe a little bit of a pause ahead of some of the new push of investments to get the networks to support the uplink capacity required to fix that asymmetry in terms of the uplink, downlink as well as just getting ready for that demand that's coming across the networks.

So maybe talk a moment about satellite, and just a preview, we'll also try to hit capital allocation and talk maybe a little data centers. So satellite, how do you see the risk of LEOs and Starlink displacing the need for carriers to have certain locations, particularly in rural areas, relative to the opportunity of seeing LEOs as potential customers?

I see the risk of displacing towers as immaterial. It's not something we worry about. We certainly spend time evaluating satellites, the engineering and how it impacts things. We have a seat on AST Mobile satellite company we had for years. We're an investor in that company. This goes way back, but we used to own satellites. I don't know if you recall that, 25 years ago, American Tower had satellites in the sky.

We know the business well. It's a good technology. It's getting better, certainly. And it's important, and it's complementary to the terrestrial networks, not just in the U.S., but really around the globe. There are capacity limitations. It's more expensive than terrestrial networks. The latency isn't there the way it is in terms of the terrestrial networks. It's great to extend coverage to rural areas. We're not concerned with that from a tower perspective.

I think that's actually a productive thing for the industry and for tower companies, not building assets in rural areas that have different return profiles than other assets. We've got lots of assets in suburban areas and approaching the urban areas. And -- with the colocation cycle, the network densification, new towers being built, we'd rather build them there than in rural areas. And if there are some rural sites, which there may be some that the carriers over time don't renew because they can be satisfied and their customers aren't upset if they're not there, that's better for everyone, including us.

We'll take those towers down if and when that comes. But it will be an immaterial impact to our business, and it probably will be positive, not negative because you get out from under carrying costs, leases and other things for sites that really aren't that important in the wireless network in general.

We can recycle that capital into suburban areas in more urban areas where you get multiple tenants and more growth, more revenue for the carriers, they're willing to pay a lot more for the leasing fee. So I think it's a good thing kind of across the board. In satellite broadband delivery, we just don't see it as a threat to the tower business at all, and we see it as a complementary business to the wireless carriers in general.

A few more things to hit actually. So -- and maybe we'll do a little bit of a speed round. So litigation, anything new on the process with DISH? How much are you seeking? And when do you think that could be resolved?

Our process is ongoing. We want it all, and we'll just work through the litigation. Much of the milestones, the formal results from that, even the steps along the way, will be public. People can go out and search on that. We're not going to talk about things that are not public when it comes to litigation. But that litigation is ongoing. And the key for us is that everyone knows we've derisked our business when it comes to DISH. We have 0 revenue and profit in our '26 outlook from DISH.

It's hurting our growth rates this year. You all see that. It will be nonrecurring next year. And our balance sheet is derisked. We're not planning to collect anything from a balance sheet forecasting perspective. So anything we get from DISH, which we do think we'll get, a settlement there, we're certainly entitled to it, and we'll see what the litigation decides, will be additive to the balance sheet. We may be able to pay down some more debt than we're planning to today. We might have less interest expense next year because of the settlement that we're not planning for in the balance sheet. So we've completely derisked our business to DISH, and there is only upside remaining.

Is there a number publicly in the bankruptcy filings that kind of puts a number on the amount you're seeking from them?

No. I mean you can think about it as they owe us $1 billion to -- between $1 billion to $2 billion in terms of a net present value of the future leasing. Then when you think of the escrow agreement that was forced, our portion of a recovery there might be $500 million or $600 million in that range. So those are 2 different aspects.

Would they want to pay more than what's in the -- probably -- I mean, less than what's in the escrow? They probably would. We want what's in the escrow that should belong to us. But we also want a lot more than that. We want it all. Like those are the numbers I think people can think about, right? $1 billion to $2 billion is what they owe us. From an escrow perspective, it's much less than that, maybe $500 million roughly, just roughly speaking. Is there wrangling in the lawsuit for them to even pay us less than that? There absolutely is. But that's kind of just ballparking and giving people some way to conceptualize the array of potential outcomes.

So cap structure and then data center. So cap structure, your leverage is significantly lower than your 2 competitors. You've hit your under 5x target. What's the opportunity to use this additional financial capacity to buy back shares, to think about opportunistic M&A? Or do you think AMT will stay at this lower level for longer?

I would say from a balance sheet strength, the size of our company, the momentum, the critical positioning that we've put ourselves in, we view ourselves as a leader, not a follower. We're not looking to follow other people on a balance sheet management perspective to increase leverage. We say 3 to 5x because that's what we believe, that's our comfort level. Being in the upper 4s is where we really sit, being below 5, but higher than 4.75, that's a comfortable zone. That zone gives us a BBB+ credit rating.

And we want to be the leader. We're not looking to be the follower. We've said that being below 5x returns full financial flexibility to us. That means we can buy back shares, and you've seen us do that over time. And you'll likely see us do it again if the shares are in a place where we think using that capacity then and there makes sense. M&A, we look at M&A all the time. Yes, we can do M&A. And if we do M&A, in the past, we've gone above our target range in terms of leverage to execute the M&A, relying more on lower cost debt than higher-priced equity. And then we delever.

So being below 5x is not a long-term handcuff that doesn't prevent us from doing things. It actually, in a very disciplined way, preserves capacity that we can flex up, and then committing to delever. And it makes it really important that what we decide to flex our muscles on actually works out really well because we can flex up, but we have to also delever because we want to be the leader when it comes to the business quality, the balance sheet quality, the credit rating, the size of the company that we're building.

We don't want to overload the balance sheet with risk. That's why we're also focused not just on balance sheet quality. We're very focused on earnings quality. We want a higher percentage of our earnings coming from the highest quality economies underpinned by the highest quality, credit quality customers. And that means we want the riskier parts of our business to contribute less to the earnings. So earnings quality goes up. Balance sheet quality goes up. We lead from both of those perspectives, and we have the ability to flex our muscle when and where we find the right opportunities with a commitment to relax and to delever, which we always do.

Rod, that brings us to time. It's great to see you. Thanks for spending time with us today.

Nice seeing you. Thanks, everyone.

Great. Good afternoon, everybody. Welcome to the American Tower fireside chat at the Goldman Sachs Communacopia & Technology Conference. My name is Mike Ng, and I cover AMT and telecom services and infrastructure here at the firm. And I have the privilege of introducing Steve Vondran, who's the President and CEO of American Tower. First and foremost, thank you so much for being here this afternoon, Steve. It's an absolute pleasure to have you.

Yes. Thanks for inviting us.

Great. So to kick things off, I was just wondering if you could talk about some of the strategic priorities that you're focused on. Last quarter, during earnings, American Tower raised its full year outlook for the second time this year. You've also talked about long-term outlook for wireless infrastructure just being exceptionally strong. So what's working well and what are some of the key things that you're most focused on?

Sure. Thanks, Michael. Well, as we said on the first quarter call, I'm excited because for the first time in a long time, we're seeing 4 different catalysts for building in the business. And so when I look out over the kind of short-, mid-, and long-term. There are a lot more demand catalysts coming in than we've seen in a while that excites me a lot.

So our goal is to position ourselves to best capture that demand that's coming and to deliver industry-leading AFFO per share growth. And so the strategic priorities that we've outlined for 2026, first and foremost, to focus on organic growth in the portfolio, making sure that we're capturing the growth that we're seeing from that first catalyst, which is densification from 5G and being there for our carrier customers as they're augmenting their networks today.

The second strategic priority is really focused around expanding our margins. We've been very successful over the past few years expanding margins. It's a key priority for us always, cost control. And we've expanded margins by about 300 basis points over the last few years, and we've committed to doing another 200 to 300 over the next few years. So operating an efficient organization that still supports that carrier activity to capture as much of that business that we can is the second priority.

And the third is capital allocation, making sure that we're using the cash flow that comes in that we generate in our business in a way that creates the most long-term shareholder value. And that's whether we're investing in new assets or whether we're buying back shares or delevering any of those options out there, making sure that we're making the right decisions at the right time.

And as we think about some of the catalysts that you've highlighted, 5G densification, 6G, I was wondering if you could just help us size or thinking about the near-term opportunity for those things and what that eventual transition to 6G means from the long-term leasing outlook?

Sure. When we look at these 4 catalysts as self-reinforcing, the first is densification, and it's something that we always expected to happen as part of 5G, if you think about how carriers deploy their networks, the first phase of a build is a coverage build that's largely amendment driven. And then after that, you start focusing on capacity.

So you still get some amendments there, but the carriers start looking at different ways to add capacity to their networks. And they'll add some capacity through technology improvements, some through spectrum additions, but a lot of it comes through densification. And so we're already seeing that. We've seen a shift in the mix of our new business, a little bit less on the amendment side, more on the colocation side, but all underpinning a steady level of investment by the carriers. So the first catalyst is happening now, and we expect that to continue to accelerate over time.

The second catalyst is a little bit further out, 6G, but just around the corner. And so if you look at kind of the standards -- bodies, they're expected to come out with standards in 2029, which means commercial deployments probably happen '30, '31 somewhere in that area. But you'll probably see some activity before that. You'll see some proofs-of-concept, some early-stage network similar to what we did in 5G.

Then the third, which will happen kind of throughout this whole process is spectrum availability. We've seen some spectrum auction this year. We're going to see some more next year. And the Big Beautiful Bill has earmarked 800 megahertz spectrum to come to market over the next several years. And that's great for towers. Historically speaking, more spectrum equals more equipment, and we expect that to happen again with the new spectrum that's coming out, that will come over time, and there's a cadence of which that spectrum is going to become available but that should be a catalyst for a number of years.

And then AI is something that kind of is another catalyst that we don't know exactly when that's going to hit. We know that it's a small piece of network traffic today, but we also know there's an asymmetric pattern with AI that's different than the normal usage. There's more uplink required. And we think that as that grows, that's going to put more stress on the network and require more investment. So when we look at all the 4 others together, you've got near-term, medium-term, and long-term drivers that we see creating a great path of growth for us from now going forward.

Great. If I could double click or dive into the catalyst around spectrum availability. AT&T closed its acquisition of the 600 megahertz of spectrum from DISH back in August and Verizon was a very significant bidder in the [ AWS-3 ] auction this past June. So are you seeing any uptick in carrier activity from those spectrum deals yet? Or would you expect to, at this point?

Well, I will leave it to them to talk about their particular cadence. But what I would say is, it takes a little bit of time when you buy spectrum for you to get the planning by the equipment and deploy it. And so it doesn't happen the day after necessarily that we start seeing amendment activity, but you do see network planning starting to happen.

And if you're spending billions of dollars to buy spectrum, you're going to want to deploy that as soon as you can. So I would expect for all of our carriers to be aggressively laying out their plans, ordering equipment. I would expect to see that activity coming pretty quickly after the spectrum is cleared.

Great. And then on the 800 megahertz that's mandated for auction by 2034, including the 160 megahertz of upper C-band next year. How would you frame the opportunity here? Like how should investors think about that as a potential catalyst?

Well, again, historically speaking, more spectrum equals more equipment, and we'd expect that to be the same going forward. And so we believe it's a big positive for us. And that's just assuming that the incumbent carriers buy it. If someone else buys it and you had another network deployed, that would be a whole different catalyst. We're not -- that's not in any of our numbers. That would be upside from where we are today, but that's always a possibility. But that 800 megahertz is critically needed by our carriers to meet mobile traffic demand.

If you think about mobile data growth, it's growing double digit or better. Every year, network capacity needs to double by the end of the decade. Carriers will get some of that through technology upgrades. The rest is going to come from spectrum and site densification. So we think the 800 megahertz is a big opportunity for us, and it will clear over time. It won't all be available day 1, I expect that to happen as a cadence similar to prior swath of spectrums where carriers buy it. You've got to clear it. They'll focus on pockets where they needed the most, spend more money to do that sooner, and some of them will become available over time.

Great. And since you mentioned the potential for someone other than the 3 major players becoming more aggressive in terms of spectrum, maybe we can talk about satellite and Starlink, is it a positive? Or is it a negative for towers? Just how would you frame it for everybody?

We've been getting this question a lot for the past several months. And I'm going to say it again, there's nothing negative for towers in the satellite business. We bought a position in AST in the early days to get a board seat so that we would have a ringside seat to this as it develops.

Satellites are a fantastic complement to the existing terrestrial networks, they can provide ubiquity of coverage, where you don't have it today, that can enable new use cases, new revenue streams for our customers. It's a net positive for the industry. It's not a threat to towers; satellites, are not going to replace towers as the primary method by which people are getting their coverage. And there's been a lot of notes written about it. So I won't go on too much of a rant about this.

But I will just say from a technology perspective and a spectrum perspective, the only places that it's going to meet the need is ultra rural. And I have very few towers there today, if any. And if I have towers there, they're not going to be our most productive because you're not going to have multiple carriers on them. So from our perspective, satellites are good for the industry. They're good for towers, and they provide a lot more upside than they do any potential downside.

Great. It's very clear. Going back to how you opened the session on the key priorities and you talked about margin expansion. I was just wondering if you could expand a little bit and talk about what underpins those margin goals? And if you could just walk through some of the key drivers of the operational efficiencies that you can achieve?

Sure. We've always been cost conscious. And when your margins are as high as ours are, it's always tough to get that extra juice when you squeeze it. But we've got kind of 4 pillars that we've laid out. The first is managing our land costs across the globe. And we've got some very successful programs in the U.S. that we've done that with for a couple of decades and by globalizing that program and being more aggressive there, we think land expense is 1 piece of it.

The second is globalizing our operations and taking advantage of a global supply chain, and so we think that we can get better deals just by concentrating our spend in a little bit different way than we have in the past.

The third is, it's a little hard to explain this, we call it our standard of care. And it's essentially the way we operate our sites in the U.S., you provide a consistent standard of care for them, but you're also doing preventative maintenance, so that it costs less to operate over time. So we can actually reduce R&M by doing a better job maintaining sites today and not letting things get too bad when that cost more to fix. As we roll that out globally, we'll get some savings there. And then finally, we'll continue to focus on SG&A control across the globe using this global organization that we're focused on.

And that's not counting AI, by the way. We actually think that AI could be a further catalyst for more savings. It's early days on that. And so not ready to put a stake in the ground for what it can produce, and got to make sure our token costs aren't too high, just like everybody else is working on, but we look forward to sharing what we think we can do on that as well.

Super interesting. Yes, I'm looking forward to hearing about what you guys are doing internally with AI over time. Just on organic tenant billings growth. This year, American Tower is obviously seeing some onetime headwinds from DISH churn and organic growth should accelerate from here on out. Could you talk a little bit about your outlook for global and U.S. organic tenant billings growth?

You want me to give you '27 guidance today?

If you would like.

Nice try. Look, it's too early to talk about 2027. We'll give guidance in February on that. But what I would say is if you look at our organic tenant billings growth in 2026, and you normalized out for DISH, it's about 4.5%. And within that 4.5%, the new business from leasing, from new leasing -- from new leasing and amendments is about 2.5%. If you look back at 2025, the contribution from new leases and amendments was about 2.5%. And that's kind of a normal investing environment.

And so that's been a pretty steady state for the next couple of years. So if you believe next year is going to be a normal leasing environment, that's not a bad reference point. Now we're not ready to guide yet because we need to see what the carriers are going to do. And we have 2 carriers under comprehensive agreements, but not everything is covered in that. Some of the new leasing is outside of that. And we have 1 that's not on the comprehensive agreement. So when we look at 2027, we've got some variability in there based on how quickly they decide to act.

And so we'll be more comfortable getting that in February once we have a better idea, but when we focus on the long-term growth algorithm, what we expect to see over time, we've given multiyear guidance in the past, that considers a normal leasing environment. And it's been kind of right in that mid-single-digit range, and that's what our long-term growth algorithm calls for. So over time, we've given you guys the guidance year-to-year, depending on when people start and stop and things like that, it can have a little bit of variability. So we'll give you guys that in February, but nice try.

I have to try. It's my job. If we could maybe talk a little bit about the international footprint. We're starting to see some carrier consolidation in Europe. There are reports that Vodafone Spain will move sites onto your portfolio beginning in 2028. On the other hand, would you talk a little bit about your European portfolio how do you feel it's positioned relative to some of the potential consolidation?

Sure. We were very patient before we decided to enter Europe. We sat on the sidelines because a lot of the deals that we saw didn't have the right terms and conditions or didn't have the right counterparties and things like that. And so when we did enter, it was with Telefonica as a partner.

So we feel very good about our position because we're partnered with one of the strongest carriers there. So we don't expect either consolidation to affect our anchor tenants, and we don't have a lot of exposure on the churn side to some of the folks that may or may not be in there. On the contrary, it's an opportunity for us. And when you look at some of the consolidation that's happened, you got weaker carriers who are not investing in their networks as much. They've consolidated to a stronger carrier and they are investing now. And so we're actually seeing the opportunity to increase our sales into these new carriers because they're not big tenants on the portfolio, and because it's anchored really by the top -- 1 of the top quality carriers there and people want to replicate that coverage.

So we feel very good about the current portfolio there. Now Europe in general, we tend to generalize it as a continent. It's really, each individual country has it's own investment case. And so when we think about Europe as a business, we feel very good about the 3 countries that we're in. It's -- there are other countries that would be attractive. If we found the right terms and conditions in the portfolios, but we really haven't found that opportunity yet.

Great. And if I could ask about the international portfolio as a whole. You divested the Philippines and the Bangladesh assets. And that's allowed a sharper focus on some of your developed markets. Maybe you can just talk about the strategy around the, call it, the pruning or the rearchitecture of the international portfolio and what opportunities are in some of the emerging markets.

Sure. So just to kind of reiterate the strategy that we laid out a couple of years ago when I took over as CEO, is to decrease our exposure to emerging markets over time. And it's not because we don't believe in those markets. They're good growth drivers.

They can perform very well for us. There's just a little bit more volatility there, and we think that we have a little bit too much exposure in our portfolio. So just like you guys would rebalance your portfolio we want to rebalance ours to have less exposure over time. Some of the pruning is related to that. But really, it's about making sure that we're generating the best return -- risk-adjusted returns that we can with the best growth prospects. So in markets where we're subscale, if we think that we can create more value by selling it, we will.

But 1 of the things that we've also done over the past 2 years is to sculpt the portfolio a little bit differently as part of our globalization efforts, we're running them more out of regional hubs or through our international organizations, and getting all those markets to be more sustainable and free cash flow positive. So there is no impetus to sell them. We don't have to sell them. And that lets us be more targeted and sell them when it creates more value. And otherwise, we'll just hold them and harvest the cash flow. So I'm not going to telegraph any more divestitures. But if it creates more value to sell it, we will. Otherwise, we'll hold it and harvest.

Great. Very clear. One of the assets that makes American Tower differentiated relative to peers is the data center business, CoreSite, and the business seems like it's doing phenomenally well, right? Record leasing activity, 5 consecutive quarters of double-digit revenue growth in the segment. Could you just spend a minute talking about what's happening in CoreSite and the tailwinds that the business is benefiting from?

CoreSite has been an amazing performer for us. And we are seeing record growth and we're seeing record sales of it. I do want to make sure I distinguish it, it's not just data center company. It's an interconnection hub. It's a little bit different from most data center companies out there. And we curate a mix of customers: it's clouds, networks, and enterprises. And what we've seen -- we knew when we bought CoreSite that it would meet or exceed the business case with the demand drivers that were there. And that's really enterprises that need to be in a multi-cloud environment to connect into their web tools.

What we've seen happen is that's expanded and become even more important with the advent of AI and inferencing. So now enterprises want to be in a multi-cloud multi-inferencing location. And they need to be in that same campus because they're direct connecting into those tools. And nobody wants to use just one. They want to use multiple. And it's this kind of virtuous cycle that's happening.

So the more cloud on-ramps you get, the more inferencing hubs want to go there, the more inferencing hubs and cloud on-ramps, the more the networks want to be there. And so that dynamic has let us underwrite higher yields, higher rates, more interconnection and more demand for the facilities. And our desire is to keep growing that business. We've increased capacity about 1.5x since we bought it. We're continuing to invest in it and increase capacity. And we've got as much under construction -- more under construction today than we've ever had under construction there before, and we're going to continue to invest in that and try to grow it.

Great. And I was wondering if you could spend a minute just talking about the customer composition at CoreSite. How much of it is hyperscalers, presumably wanting to be co-located there to support those cloud on-ramps versus enterprise customers today that obviously need those interconnections, and how do you expect that mix to evolve, if at all?

Sure. Well, we actually curate a mix of that. So we don't -- because we're not doing single tenant buildings and things like that, we want all of them in there but we don't want anybody to be too dominant in it. And so the way we kind of curate that mix is, the enterprise is our core customer. And we're -- that's also the hyperscalers customer. So we're bringing their customer to them, and that's why they want to be there.

They want to be there to interconnect those enterprises. So the installations that you see from the hyperscalers aren't these massive, like LLM and things like that, it's a smaller footprint with their on-ramps to really connect into those. So we're not overexposed to any 1 particular company or even segment on that. It really is a little bit of our secret sauce, how we curate that mix and create that ecosystem effect.

Great. And I was wondering if you could talk a little bit about just the demand environment. I think you mentioned that 36 megawatts of the underconstruction capacity has about 8% already pre-leased. So maybe that's a good leading indicator or KPI for what demand is. But how would you talk about what the demand trends are for CoreSite?

Well, there's more demand than we can service. There's a huge amount of demand and our pre-leasing could be higher. We're being a little bit more cautious in our pre-leasing because some of that delivery dates are a little bit further out. And what we've seen is pricing continues to move up, right? And we've also just brought a lot of things online that had a much higher preleasing. So it's a little bit skewed based on the fact that some things just went in service.

But the overall demand environment is very robust. And again, what it allows us to do is curate that customer mix. So when we look at kind of underwriting the new business, we're able to make sure that we have only the most creditworthy tenants, only people that promote the ecosystem and the interconnects. And we're not just putting folks in there because they want the space, it's because they actually have people we want there to keep building that ecosystem.

That's great. And there's a discrete fee that you can charge for interconnections beyond just renting floor space, right?

Yes, we have an interconnection revenue line, and we -- we're seeing some record growth in there.

If I could just shift gears maybe to capital allocation. AMT is in a much stronger strategic footing given it's delevering and reducing and pruning some of its emerging market exposure, the company is firmly in their target range. What's next? Like what do you see as the next best investment that American Tower can pursue, whether that be more capital investments in data centers, domestic M&A, buybacks?

Sure. So we take a very disciplined approach to capital allocation. So when you think about what we're funding, first and foremost, we fund our dividend. And so after the dividend, we look at the remaining cash flows that we're going to allocate, and we're really trying to figure out what's going to give us the best long-term returns on it. And so historically, a lot of our internal CapEx investments are giving us the best returns. So things like investing in CoreSite or the build-to-suits we're doing in Europe, et cetera.

But we generate more cash than we can deploy there. if we could source more opportunities there, that would be a great place to put it. And so then we're actually balancing after we kind of fund those internal CapEx deployments, we look at M&A, we look at share buybacks and we look at further delevering and we try to make the decision kind of real time, mathematically based, what's going to give us the best returns. And so what you've seen us do this year is we've deployed about $600 million over the past several months into, I guess, including the last part of last year into share buybacks because that's what we thought was going to create the most value on that capital deployment.

But we really look at everything kind of real time figuring out if there was an M&A deal or if delevering made more sense.

Right. And just focusing on the U.S. for a moment, how do you weigh the opportunities around new tower builds, M&A or ground lease buyouts. Maybe you can just walk through how you think about where the most attractive returns are?

Well, people ask me, who my favorite child is, towers or data centers, and they'll do it in front of my team sometimes. And I still think tower is the best business model ever made. There's more capital intensity on the data. It's a fantastic, the second best business model I've ever seen. The towers are my first love. Unfortunately, we haven't found many opportunities to build in the U.S. recently. I'm hoping that changes, but we haven't found any opportunities to build or buy at any scale in the U.S. So when we look at kind of what's the next best option? Data centers have been a great investment for us. It's growing very well, some of the highest-yielding returns that we can get.

Land buybacks are opportunistic. It's part -- we get good returns on it. It's a very safe investment, but it also protects our towers and the revenue streams there. And so we'll continue to fund that at a robust level, but it's not material enough to compete with the other stuff we can do that and the other stuff we need to do.

Great. And then outside of the United States, focusing on new builds, you've targeted 700 new builds in Europe and have I think, signaled an interest in building more. How is the European build program tracking? And what gives you greater visibility to build out there relative to what you just described in the U.S.?

Sure. Well, we have our agreement with Telefonica, which underpins a lot of the activity there. And look, we're excited about those new builds. They come with a good yield on the anchor tenant and these are really expanding the footprint there. If you go to Europe, if you get outside the major cities, you're going to have some coverage issues. And some of this is kind of government mandated to do that and some of it's the carriers doing that. But we feel good about the long-term prospects of those towers because we were able to build in all the right protections in terms of conditions to give us good growth over time on those. If we could find more opportunities there like that, we would take them. It's not always easy to source those opportunities.

Great. And then if I could just ask about AI workloads, obviously, a tremendous amount of focus on which companies will benefit from AI, what do you think it all means for AMT, whether that's increased densification for 5G or 6G, the edge, tower sites, CoreSite, what's your view on what the next few years will bring from a network requirement perspective and how you make sure AMT is well positioned here?

Sure. Well, CoreSite is benefiting now. And I talked about the inferencing installations. And it's also the enterprises are actually putting their own inferencing models in, so we're seeing our enterprise customers kind of outsizing their installations for that. So we're already benefiting from it there. I think on the mobile networks, the AI traffic is a very small piece of the pie today, but I do think it's going to expand.

I think with all these technologies, it starts out with what you're doing on a desktop in your house, but people don't want to be tethered to that. And so I think as usage grows, you'll see AI changing the way people use their phones. I think that's going to put more strain on the networks, it's going to require more investment, hopefully, new revenue streams to my customers to pay for that investment.

I think it's going to be a huge catalyst for us over the next decade as that kind of expands. There's also a little bit of a change in the usage pattern on AI. And the most recent Ericsson report actually kind of highlights this, and I'll give them a shout out on this. But while it's a small piece of the pie, it's a rapidly growing piece of the pie. and the uplink required by AI is more than what the networks are architected for today. So it could mean that there's a network re-architecture that has to be done over time for that.

And that could also be a benefit for towers as the carrier is going to grapple with how to change the way that they manage the uplink and downlink.

Great. And maybe just in the last couple of minutes here in closing. I was just wondering if you could just maybe tie it back all together for us and talk about what you're focused on execution wise next 12 to 24 months and things investors should watch out for?

Look, we're focused on capturing as much of the new business across the globe as we can. The thing that we do that creates the most value for all of our shareholders is what my teams do every day, and that is going through, working with our customers and making sure that we're best positioned both from a customer service perspective, but also a portfolio perspective, to capture that demand.

So that is always going to be a top priority for us. We will continue to be cost disciplined just in our nature to do that. And then the third is really figuring out what the best use of that capital is. Are there other opportunities for us to get outsized returns in the space by investing it? And if not, do we want to buy our stock back opportunistically.

I don't believe in programmatic ones. I've been very clear about that and opportunistically buying back shares. And so as we think through those, that's why what we're focused on is what's going to create the best long-term shareholder value, what gives us industry-leading AFFO per share growth, and how do we make sure that we're primed to capture as much of those 4 catalysts that are coming that we can.

Great. Well, Steve, thank you so much for participating in our conference. It's been an absolute privilege to have you on stage here.

Thanks.

Thank you.

Thank you very much. Good afternoon. My name is Greg Williams. I cover cable, wireless and comm infra here at TD Cowen. I'm joined in this session by Rich Rossi, the Executive Vice President and President of the U.S. Tower Division of American Tower. Richard, thanks for joining us.

Thanks for having me.

Before we start about talking with the U.S. carrier activity, et cetera, the elephant in the room from earlier last week was about SpaceX and they said more specifically we can sort of figure out a network topology using femtocells, putting them around homes and their dishes or putting them even in Tesla cars. I just wanted to maybe vet that a little bit with your opinion on what that would mean. Would that disenfranchise any towers and just your general thoughts on that? I know there's a lot of more questions than there are answers to that, but your thoughts would be interesting.

Sure. I mean I think that when you look at build-outs in the U.S. macro sites have always been the backbone and we think that they're going to remain the backbone. So while there may be other types of infrastructure that are used help get networks into targeted locations, urban areas or really fixed sites. Macro sites will always be that backbone, so there may be ambitions or plans to do something that pivots in a different direction. But at the end of the day, it comes down to deployment time, cost, efficiency, and that's when you're going to come back to companies like ours. So we think ultimately if there is a large network deployment in the U.S. that we're going to play a big part of that and ready to do it.

Absolutely. And just transitioning over to the U.S. carriers. How would you describe the current activity environment across the big 3? And as part of that, are you seeing any sense of acceleration or deceleration in your application activity?

Yes. I mean we're still right in the thick of things with 5G, and I would describe it as consistent. If you were to look at '25 versus '26, our new business growth was about 2.5%. That component of our algorithm, we're seeing that again in '26. And so while you do have a couple of carriers who are working their way towards the end of their mid-band deployment, we are seeing densification pick up, so it takes a different mix of activity, but you're largely seeing the same output as it pertains to our growth.

So I think it's consistent and it's sort of where we thought we're going to be at this phase of 5G, moving out of that initial paint the map coverage phase and more into how you solve for capacity. And obviously, the capacity demand continues to increase dramatically year-over-year, mobile networks. And depending on what you look at, I mean there are predictions that will double by the end of the decade, maybe sooner, so we're seeing the carriers aggressively respond to that type of demand.

Got it. So some of the carriers are moving from coverage to capacity, so I imagine then the way it looks from your revenue perspective, it shifts from amendments to colocation then. And is that on a carrier-carrier basis or market by market? Is that sort of broad? How would you describe the mix shift?

It's a little bit carrier to carrier because they're all in different phases of their journey in terms of how they're going to get 5G rolled out. And what you see is the amendments still drive a lot of the activity just based on sheer volume of amendments compared to how many new locations you see. But you start to see an increasing share of new colocations and that really is the best indicator for densification given that a lot of those colocations occur in markets where you have mature networks that have been rolled out for years, so you know it's a capacity play versus just a straight coverage need.

Got it. So maybe you've seen a little more colo on like the NFL cities first. Is that...

You're going to see capacity addressed from the urban areas moving out. So you may see different types of infrastructure, rooftops, building facades, small cells in the urban areas, and you get to our sweet spot, which would be suburban and moving out from there. And that's where the macro tower is really play the big role.

Got it. And maybe talk about organic growth, I think you grew 1% in the second quarter year-over-year, but 5% if you exclude the DISH churn. With new business, I think it was contributing 250 bps if I recall. And to what extent do these colocation trends hold? I guess the question there is how long is the legs for the densification or the capacity upgrades? How long does that last, the organic growth?

So I'd say, overall, we have our organic growth algorithm that we look at, which is you've got a 3% escalator, you've got your new business that's somewhere between 2% and 3%, and you've got your churn that pulls that back by about 1% to 2%. And we think that, that's going to hold true over the long term, so we think that it is a durable growth vehicle.

Three plus 3 minus 1 is 5.

Well, it has proven out that way so far over 5G, if you take out the onetime events, consolidation, things like that. And obviously, there's a range on that, right? So it can go down, it could go up a little bit there. But I think densification, as you look at the new spectrum that's coming to market over the next decade, a lot of that is going to be at higher bands. So by its own nature, as you deploy higher bands of spectrum, you need more dense networks for that to mesh correctly.

And then as you have that -- in parallel, you have that increasing mobile data consumption model, things like AI coming along, you're going to see more and more data consumed, more of a capacity crunch and then architecting networks to address the way that the frequencies are going to propagate from those higher bands.

Yes. Higher bands, more towers.

Yes. So to answer your question, we see there to be a really long, sustained period for densification from 5G into 6G, and you're going to see that new spectrum release.

Got it. I want to talk about service revenue guidance. You held it at $245 million for the full year. But you noted a step down in the back half. And a lot of times, we look at service revenue as leading indicators for leasing. So is there a read-through here that's still valid? Or is there a mix of the service work that's changing?

Yes. Well, so I think the tough part is 2025 was our best services year ever.

Tough comp.

Yes, exactly. Tough competition and '26 is going to be a great year. We think it's going to probably be our third largest. So a really healthy business, but compared to last year, it just may not match the peak of what we saw. We've worked hard over the last 5 years or so to really diversify that U.S. services business and our bread and butter was always the AZP, the acquisition, zoning and permitting for our customers. And now we've introduced more construction work which higher revenue, a bit lower margin. So it's kind of a mix and profile, but we've also developed a product that we refer to as end-to-end, which picks up the customers' needs at the scoping, so kind of around the time they're applying for sites and goes all the way through construction.

And that program management has been an offering that's very well received, especially given that some of the carriers have scaled back their resources in market working on deployments. So we're able to help fill that gap, and nobody is going to perform better on our sites than we are in terms of getting people out there quickly. So yes, we're feeling good about services, happy with where our attachment rates are with the major carriers and still very healthy.

I want to talk about MLAs. As we start to look towards 2027, are there any comprehensive MLAs scheduled to sort of roll off through the balance of the year through 2027 that you can sort of help us with? And how does American typically approach the conversation around the next holistic agreements?

Yes, always talking to our customers, right? When the ink is dried on an arrangement, you're talking about what's the next opportunity, how can you upsize, what was agreed to, how can you figure out how to keep continuity when something comes up for expiration? So those discussions are always ongoing. It isn't necessarily a sign of what's to expire, but more so what can we help to do to extend out having a good healthy relationship with that customer, so always ongoing there.

We're somewhat agnostic as to whether we do a holistic agreement or whether we do something that's more paid by the drink. At the end of the day, we think the bottom line result in terms of the growth numbers will be somewhat the same. It may be -- it may translate into the financials over a different period of time, that's one of the nice things about the holistic agreement on the tower owner side is the predictability of it that you can forecast out very clearly. But ultimately, those arrangements really are about the value creation for the customer and how much efficiency you can give them when it comes time for them to deploy.

So you have to have the demand for the customer who needs to have those economies of scale and the speed to market on deployment. And then for us, it just has to be a match on what we think the addressable market is with that particular build or over a longer-term multiple builds and you kind of see where it goes from there.

Yes. And a lot of times, I think of MLAs, it's like sort of when an up cycle is ready to happen, so it would be good for the carrier to do -- sign an MLA. What would be those up cycles? Is it safe to say that maybe it's like Auction 115, but that's -- there's some FAA restrictions there, so it's going to be a little bit pushed out. Would that be an accelerant or a catalyst for an MLA or even -- can you talk to the 2.7 gigahertz spectrum? Are those the factors you think that will create or drive maybe an upswing for internal MLA?

There are different factors, right? They are going to be the frequency auctions and when the carriers deploy capital to acquire the spectrum rights, they're looking to do it and aggressively roll it out. Nobody wants to sort of spend at those levels and then sit on their powder, so to speak. So I think that, that can be a catalyst if they're going to go out and touch a number of sites, but also the natural evolution into 6G is going to be another thing that may help drive some of that.

And when you have multiple of those factors happening that tends to be when there's lot of demand forecasted. And yes, those absolutely are catalysts, right? When someone shows up at a car dealership, they're usually there to buy a car, right? So I think when someone comes in and says, "Hey, I've got a lot of activity that I'm looking at," it means it's probably a good opportunity to maybe talk about getting something done.

Right, right. I wanted to talk about churn a little bit because you guys noted in the second quarter you absorbed what's characterized, I think, as the final wave of churn from a former anchor tenant and none was expected next year. So I don't expect you to give any guidance or anything in the ongoing process, but having that headwind behind you, does that change the way you think about your growth algorithm?

For us, it really just clarifies for folks who are following along with our results and trying to predict our growth. We thought it was important to derisk the business and just make it really easy for people to follow along with what's happening, so canceling the DISH business and taking that out of our numbers was the way we could be most transparent, to make it simple. I kind of gave you the walk on the algorithm, and we think that, that -- outside of those onetime events, that is going to be our long-term outlook on things. So for us, it just makes it easy for people looking at 2026. We've talked about numbers with DISH, without DISH. So it helps for people to understand the magnitude of what we're taking out, but also be able to track what those numbers look like compared to, say, 2025 or prior years.

Got it. What typically happens when a tenant is winding down their network in terms of -- I guess, it's not a typical situation, but when a typical situation, how long do they leave the equipment up there? I will stop there, and then I have a follow-up.

Yes. Sure. So I mean there's usually a kind of contractual protocol for it. You work that out as you're leasing somebody's space, what happens to the equipment at the end. Generally, your customer will come in and take the equipment down as a surrender type arrangement there. As you've seen consolidation of networks over the last 20 years, there have been some commercial arrangements where the acquiring party says, "Hey, I don't want to take down this old network, why don't we work something out where we pay you to -- you keep it, you progressively take it down over time." So sometimes it's removed, sometimes there's a negotiation for it to not be removed. And then there are other cases where maybe a bankruptcy court is helping to decide what happens with the equipment that's up there.

Right, right. And I guess you harken back to Sprint too and there was some decommissioning as well. Just thinking out loud, I mean, do you believe that there's infrastructure up there, could that be a shortcut for a new entrant to enter the market if you buy what's up there already, you're on second base, if you will?

Yes. Yes. I mean there are some restraint or constraints in the sense of you need to have antennas, radios that align with whatever the frequencies are that the newer entrant would be using, so the gear may or may not work in that sense. But when you look at long lead time items for network deployment, you have local permitting, you have power procurement. There are some parts of the country where the power companies aren't able to quickly get meters put out there, get you connected into an existing meter. You may have issues with the ground lessor, where you have to get approvals to get another customer in there or acquire some additional ground space...

There's some change of control the ground lessor will have to...

Sometimes they have consent just to add a new customer. So you go to add selling your tower and the ground lease that was negotiated 25 years ago, says, "Hey, anytime you go to add a customer, I need to know and I need to sign off on it." So some of those things can take a long time. And so if someone were to come in and look to take equipment that's already up on the site, you've got a poured concrete pad, you have cabinets, you have tower mounts, like there's there is infrastructure that can be reused irrespective of the spectrum.

And then those other items, things like building permits, you might be able to transfer the permit or it may be quicker for the local jurisdiction to approve the permit because they've already approved the like type construction project for that prior customer who's exiting. So there are definitely some synergies that exist. And we've seen it with Sprint and others where people went in and acquired shelters or used mounts up on their RAD centers.

Got it. Has the way you looked at counterparty risk changed the way you structure contracts, any lessons learned there with recent events?

Yes. I mean we've always been extremely disciplined when it comes to how we underwrite contracts. What I will say is the scenario we're talking about isn't about an inability to pay, right? It's an unprecedented situation.

Willingness and not...

Yes, exactly right. And I think as an industry we've had to work hard. I see Patrick's sitting out there, right? There's been a lot of work done to try to rectify that. But even though we have three customers that drive a large part of our business, we have several thousand other customers out there that we do business with every month, and so there is a discipline when it comes to how we underwrite, how we collect and we have all the landlord-tenant interactions you'd expect with a portfolio of our size and our ability to keep our churn at a very low rate, I think, speaks to the discipline we've had around that.

I wanted to bring it back to SpaceX. I know we started with the whole femtocell thoughts because I just had to get it out there. But SpaceX did acquire 65 megahertz of nationwide spectrum from EchoStar, flexible use. I appreciate it's early days and a lot of more questions than answers by far. But do you see SpaceX ultimately coming in maybe as a fourth carrier, how do you see this all sort of play out?

I mean we'd have to defer to them in terms of what the size of their ambitions are. I think from where we sit, we look at it and say that anyone who is going to be a scale entrant in the U.S. is going to look to portfolios like ours. We said with the MLA question, we talk to customers all the time, and sometimes that's prospective customers, too. So we think we're well plugged into where the potential opportunities are, and we feel strongly that our assets would be very key to somebody rolling out a network of any real size in the U.S. So as you look at the mobile data consumption trends and the fact you're going to need denser networks, you're going to need more portfolios like ours where you can get that shared cost model and find ways to leverage existing infrastructure, so yes, I mean, another entrant would be exciting, but we know it's a competitive landscape out there already.

And it seems like in satellite rural takes care of itself, but you're in a lot of rooftops, too. So that obviously helped for them augment their network should they need to. How about direct to cell? Is there any change in the network architecture over time because today, it just seems like you're using a cell and it finds a satellite, vice versa. But is there anything in terms of changing the network topology that you can think of in the direct to cell play?

I think you still have to see what happens, particularly with spectrum, like how that is going to change with the amount of spectrum that's going to come to market over the next decade, see how that goes. I mean, obviously, with the satellite that works today, you have the issue of building penetration, you have some latency issues. You have some limitations on handsets in terms of what can be done there. So I think a lot of details still have to unfold before we can know exactly what changes would be required, but still a lot to be seen there.

And maybe talk about the spectrum opportunities past, present, future. So we had Auction 113. Verizon took a lion's share. Is there an opportunity there? Is that a lot of just augmenting the ecosystem that exists versus what's coming up is the upper C-band and Auction 115 and there's chatter out there, 2.7 gigahertz. Maybe we'll just stop right there and talk about the spectrum opportunities.

Yes. Look, we're always excited about spectrum coming to market and a lot of credit the SEC and NTIA for creating that road map to identify spectrum to give the FCC the auction authority back so they can start to plan and think long term. When it comes to spectrum being deployed, it generally involves more gear being put up on towers, more trucks being rolled, which is good for the vendor community, good for our services business. There's just a lot happening there. So investment in capital typically converts to investment on infrastructure like ours. So contract to contracts, spectrum band to spectrum band, there may be different outcomes in terms of what the result is. But when you take the amount of spectrum that's going to be deployed and combine that with the data demand and what AI may bring coming down the pike as well, then we think you're going to see a lot of deployment across the board.

And to help with that deployment with the upper C-band auction slated for maybe hopefully next spring or summer, knock on wood. Can you help us with that opportunity? What is the typical lag between an auction to actually putting it up on the towers? And in this case, it might be a little more delayed, right, because there's some, I guess, FAA and other issues, but maybe talk to that time line of the upper C-band opportunity. And is it an opportunity because if they have C-band equipment, is that additional equipment they need on the towers for the C-band?

So to start your question on the timing, I mean, the -- there's always a lengthy process overall from beginning to end from identification of spectrum, auctioning, clearing and then deploying, so it's natural that there is a lag between when the spectrum is auctioned versus when you actually see gear hung on towers, and that could be a year, 2 years, 3 years, depending on the spectrum. In some cases, you've seen the carriers find creative ways to accelerate it as they did with the 600 megahertz on the broadcast repo, right? So they got together with the broadcasters and figured out a quicker path. With lower C-band, obviously, there was a lot of coordination with the FAA and different aviation...

A category or in the B, C category.

Right. There was a lot going on there. So I know that there's been a lot of collaboration on upper C-band over the last couple of years, learning from the lower C-band experience, so I think the conversations are ongoing. It seems like they're trying to find a way to do this collaboratively. The auctions in '27 you're still probably looking -- you've heard from the carriers, maybe it's '29 or early '30 when you start to see that stuff show up on towers, but we may see some activity a little earlier than that, but for the most part...

You're saying the carriers will collaborate with the owners of that spectrum to try to accelerate it, obviously.

Correct. And with the FAA and others in the aviation space to figure out what's left of concerns around alt emitters and things like that.

Right. Because if we call the C-band, one of the big resolutions was we'll just keep the towers off near the runway, I guess.

Right. If you recall, that was some of those sites that have been constructed and ready to go and then that slowed down so they could figure out what was a viable solution for everyone. So again, I think that they've been leveraging a lot of those lessons over the last couple of years as if they've figured out how much of that upper C-band can actually be brought to market. So we anticipate there will be a good resolution there.

Okay. I wanted to switch gears to M&A. As you consider the U.S. market, how would you characterize the Tower M&A environment? Is there a case for further consolidation among players at this point in the cycle?

Yes. We are always on the lookout for what's out there for M&A. We do anything from single towers rolling up mom-and-pop tower here and there to looking at the bigger portfolios that are out there. And I think when you talk about things that are more sizable, you need a couple of stars to align. You need a willing counterparty, somebody who wants to come to the dance with you. You need economics that make sense and you need a regulatory framework where you can get the deal done. And thus far, we just haven't seen those three things align on something that's very large. But we're always on the lookout. We want to invest in our developed markets, whether it's towers or data centers in the U.S. or towers in Europe, so we're active lookers in the space.

Can you talk about the private market tower valuations? There's been a stubborn private to public multiple gap. And how has that moved over the last year from your perspective? And how would you describe that bid-ask spread between buyers and sellers today?

Yes. I mean there's still a spread there, right? It's still a measurable difference in terms of the multiples on private versus what us publics are trading at. And I mean just one person's opinion, but I think we've seen a little bit of a rollback just slightly on some of the private deals that are changing hands, but there's also not a ton of data points...

Is that a tightening of the spread?

Very small tightening of the spread. But again, not a lot of data points out there. The sample size is small and not big portfolios, so that can probably fluctuate. But I think on the private side, you have investors who sometimes are looking over a longer time horizon. Obviously, with the public, people looking quarter-to-quarter, year-to-year. And I think some of the private investors, they like those secular tailwinds that they see with spectrum and densification and AI and things like that. And so they're willing to put down a bigger price on some of these things because they're looking at more of a long-term opportunity.

Got it. I wanted to switch gears to fixed wireless. In the cable and broadband space, it's fixed wireless and fiber-to-the-home are all the rage and taking up a lot of -- not just the net adds in the broadband space, but the spectrum usage. Can you help describe what you're seeing? Are you seeing fixed wireless specific demand on your towers at all?

I think it generally blends more in with the overall demand that we see. So is it possible that you see an application that's a capacity colocation that also represents an extension of fixed wireless? Sure.

Could that also explain some of the densification?

It could. I mean any use that's driving more consumption of the network is a potential driver of densification. So it could be one of multiple factors that could help drive those type of decisions.

It's hard for you to answer this on behalf of your customers. Do you think they have enough spectrum then with their fixed wireless ambitions?

I mean I'd leave that for the carriers to answer. I think the carriers have worked really hard to try to help clear the way for more spectrum to be identified and figuring out the best way it can be put to market. So I think the carriers have been open about their desire to get spectrum and it's a scarce resource, so that would just be one of many contributing factors.

I want to talk about spectral efficiencies and AI RAN, Nokia's CEO on its recent earnings call said that AI RAN, that platform could "deliver more than 100% spectral efficiency gains by 2028." And I always thought of spectral efficiencies as a mid-teens percentage efficiency. So when you're 100% over the next couple of years, it's a pretty big deal on their existing spectrum, so is that a software item that can double that network capacity or they need hardware, which is obviously benefit official for you? Because otherwise, is this a headwind on these levels of spectrum efficiencies that they're talking about.

Yes. We don't see it as a headwind. I mean, I think the software optimization, software-defined networks, that's been around for a long time, and so we have carriers today and over the past decade who have done upgrades to our sites where they've just gone out and been a software push to make a modification to the site. That's not going to be a new thing. And we know that where the demand is going on mobile data, it's going to take more than just spectrum. It's going to take densification. It's going to be the combination of those things that do it.

So if there's some level of efficiency that they can create to help create more space for data to be consumed, and that's a good thing. We don't look at that as being something that's going to be detrimental to our opportunity, because we know that you are going to need more sites, you're going to need more equipment, and then also your AI RAN also works for distributed real estate portfolios like ours, creates opportunities for things like the edge, helps to feed an AI use case ecosystem where you are going to need the networks to have lower latency. So we think a lot of those things actually create opportunity.

Yes. And in part of that huge number -- efficiency number, they'd say, I imagine there's like beam-forming technologies. And so the radios themselves and maybe even move around, motors and things like that. That's equipment and equipment for you would be a good tailwind. That's a good way to think about it.

My last sort of question or set of questions is on the edge. Like Mike and I were at ConnectX back in May and the edge sounded like 5G 2018 all over again, right? And meaning that there's so much talk about it again, maybe it was lackluster between here and now, of course, we had COVID, et cetera. But here we are again talking about it. And should we come in with some skepticism like we did last time, there was AI really finally that use case that will proliferate the edge? Second question would be, could some of that edge reside even at the extension of the base of the tower? I know you got the CoreSite assets, of course. But just like to hear your views on where you see the edge playing a role in your business?

Look, we're bullish on edge. And one of the reasons why we're so excited about acquiring CoreSite in 2021 was the opportunity to marry up the large regional data center model that CoreSite had with a distributed real estate portfolio that we have at Tower, so we still believe that, that is on its way. And it has taken more time, and to your point, it's taking longer than we thought it would. You haven't seen the use cases emerge yet where that close proximity, low latency has been really key. And you still hear the autonomous vehicles wearables, the same kind of litany of things...

I was going to talk about what are the use cases you think that might actually drive it?

It sounds a lot like 5G to your point, and then you add in AI, which is obviously a big disruptor, right?

Smarter autonomous vehicles.

Sure. But I think with things like wearables, people wearing Meta glass and stuff like that, it's putting more pressure on the uplink on these networks than you traditionally have seen in the past. So I think there is going to need to be some reconfiguration of networks, downlink versus uplink. And it's not because downlink is going to be reduced. It's because uplink is going to have to be more symmetrical, so I think you need more overall capacity, but a little more balanced.

On the edge, being able to distribute closer to where we think the action is going to happen. 40,000 U.S. sites puts us in a good position to have a lot of great locations. We have CoreSite. We have their Open Cloud Exchange, so we can have the interconnection between our edge facilities and the big regional facilities that CoreSite has and distributing power, right? Being able to procure power in some of these areas is very challenging, so being able to take down smaller blocks of power and put them in a distributed ecosystem versus having to aggregate and potentially wait years to get the power is a positive thing, too.

And I mean the really great thing for us is we look at -- CoreSite continues to have a ton of activity, AI and otherwise. And we think the stuff that you're going to see at the edge it has to be processed more locally is all additive to that. It's not a shift of taking from here to there. It's the, how do you handle the more traffic coming through, and we think you're going to handle that stuff locally to some extent with these small...

A lot of the distributors. So the data gravity sort of goes towards the outside as well. And the power point is actually interesting, right? I mean, if you've got a megawatt here or there, and we're seeing some of that with central offices being redesigned for these like a little mini couple of megawatt spaces in the -- closer to the edge, interesting.

Yes, that's the type of stuff that we're following on with. So again, we feel really good that, that is going to emerge and emerge soon. And just like I said, it just may not be tomorrow.

Right. Great. Well, with that, we're all about out of time, so thank you very much.

Thanks so much. Appreciate it.

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower Second Quarter 2026 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 hand the conference over to your host, Spencer Kurn, Senior Vice President of Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to our second 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 today's call. We delivered another strong quarter fueled by robust leasing demand across our global tower portfolio, record leasing activity at CoreSite, and continued operational discipline. The strength and consistency of our execution, combined with the momentum we're seeing across the business enabled us to raise our full year outlook for the second time this year.

Our performance reinforces what we believe is one of the most compelling long-term growth stories in digital infrastructure. Around the world, mobile data consumption continues to grow at an extraordinary pace. Cloud adoption remains resilient. AI-driven workloads are accelerating and network architectures are becoming increasingly complex.

Together, these trends are driving a growing need for the critical infrastructure that American Tower provides. Against this backdrop, we remain focused on the 3 strategic priorities we outlined at the start of the year, driving durable revenue growth, enhancing operational efficiency and maintaining disciplined capital allocation.

Starting with revenue growth. This year, we remain on track to deliver approximately 4% organic tenant billings growth across our global tower business, excluding onetime disrelated impacts and we're raising our outlook to approximately 15% revenue growth from our data center business. The long-term outlook for wireless infrastructure remains exceptionally strong.

Mobile data usage continues to expand globally, supported by increases in smartphone penetration, 5G adoption, fixed wireless access and a growing range of enterprise and consumer applications that rely on ubiquitous high-quality connectivity. In the U.S., industry analysts estimate that mobile network capacity will need to at least double over the next 5 years to meet projected traffic demand.

Notably, these forecasts largely reflect existing use cases and may not fully capture the incremental requirements associated with emerging technologies such as AI native applications, autonomous systems or the transition to 6G. As carriers work to deliver this capacity, we believe the industry is approaching an inflection point.

For the first time in several years, we see a path to 4 major catalysts creating multiple overlapping demand drivers that could support network investment well into the next decade. First, the industry is entering the next phase of the 5G investment cycle. While early deployments focus primarily on coverage, the next phase is expected to be focused on capacity.

Based on our discussions with [ Cara ] customers, supporting future traffic growth will require meaningful network densification, creating additional opportunities across our portfolio. Second, the industry is preparing for a significant new spectrum deployment cycle. With approximately 800 megahertz of new mobile spectrum expected to become available over the next few years, starting with the upper sea block in 2027 and operators will have new opportunities to expand network performance and capacity.

Historically, new spectrum deployments have translated into incremental equipment installations and lease amendments and we believe this cycle could represent another meaningful source of growth.

Third, the eventual transition to 6G will bring another meaningful infrastructure investment cycle. Early indications point toward architectures that leverage higher frequency spectrum, greater intelligence at the network edge and more distributed deployment. These characteristics would likely require both additional equipment and increased site density across wireless networks. And perhaps the most exciting catalyst is the emergence of AI applications.

We believe AI has the potential to fundamentally reshape how people, enterprises and machines interact with wireless networks. From AI-powered smartphones and smart glasses to connected vehicles, autonomous systems, robotics, and real-time edge computing applications, future traffic patterns are expected to be more persistent, more data-intensive and increasingly bidirectional to those of today's networks.

According to Ericsson's most recent mobility report, AI-enabled applications are already contributing to uplink traffic growth rates that, in many cases, exceed downlink traffic growth by more than 50%. This is a significant development because today's networks were primarily designed around downstream consumption.

As AI adoption accelerates, operators may need to invest beyond their existing network road maps to support these evolving requirements, creating an additional layer of infrastructure demand on top of traditional traffic growth. Taken together, these trends point toward a future that requires significantly more capacity, greater network density, lower latency and enhanced connectivity.

Terrestrial wireless networks will unquestionably remain the foundation of that future. And our global portfolio of communications infrastructure is exceptionally well positioned to support this next era of wireless innovation and investment. Many of these same secular tailwinds continue to drive exceptional performance at CoreSite.

CoreSite continues to differentiate itself as a premier digital infrastructure platform as the convergence of network connectivity and cloud ecosystems, enterprise workloads and AI-driven demand. CoreSite remains the fastest-growing segment of our business, and this quarter delivered another record leasing performance reinforcing our conviction that 2026 has the potential to be another record year for the business.

Demand remains broad-based, spanning hyperscale cloud providers, enterprises, network operators, AI innovators and a growing number of cloud-to-cloud connectivity deployments. What we're seeing is not simply an expansion of demand, but an evolution in how customers are architecting their digital infrastructure with CoreSite serving as the central hub. CoreSite's campuses have become critical destinations for AI traffic and data exchange.

Today, 9 of the top 10 AI companies and 3 of the top 5 Neo clouds are deployed within our facilities. These customers are moving beyond traditional colocation use cases establishing private on-ramps that enable the direct transfer of massive data volumes between cloud and AI environment.

As AI inferencing scales, we believe CoreSite's strategic position at the center of these ecosystems will only become more valuable, enhancing both our competitive advantage and long-term returns. The momentum we're seeing at CoreSite continues to exceed our expectations and further strengthens our conviction in its long-term growth trajectory and strategic importance within American Tower.

Since acquiring CoreSite in 2021, we've grown our megawatts in service by 1.5x, and our development pipeline provides a clear path to nearly triple our capacity from here. We believe these investments create a substantial runway for sustained double-digit revenue growth. And given the strength of customer demand, we continue to evaluate opportunities to expand our development pipeline even further to accelerate value creation for our shareholders.

Moving to our second strategic priority, operational efficiency. Operational excellence has long been a defining characteristic of American Tower. Over the past 3 years, we've expanded tower cash EBITDA margins by more than 300 basis points while leading the industry in profitability. We continue to identify opportunities to operate our global portfolio more efficiently and we remain on track to deliver an additional 200 to 300 basis points of Tower cash EBITDA margin expansion by 2030.

In parallel, we're exploring ways to leverage AI and automation to enhance productivity across the organization. While still early, we believe these technologies have the potential to create meaningful incremental value over time.

Our third strategic priority is disciplined capital allocation. We continue to allocate capital with a focus on driving industry-leading AFFO per share growth while generating the highest risk-adjusted returns. Over the last several years, we've deliberately shifted our investment focus toward developed markets and higher quality earnings streams.

Consistent with that strategy, during the quarter, we completed the sale of our operations in the Philippines and Bangladesh marking our exit from the APAC region. We expect the transaction to be neutral to AFFO per share growth while enhancing the quality and focus of our global tower portfolio. Our balance sheet remains in an excellent position.

We ended the quarter with leverage within our targeted range of 3 to 5x, and we continue to maintain one of the strongest credit profiles in our peer group. Combined with our significant cash flow generation, our balance sheet provides substantial flexibility as we evaluate opportunities across M&A, share repurchases and further deleveraging.

Taken together, we believe American Tower has one of the highest quality growth profiles in the digital infrastructure sector, supported by industry-leading U.S. tower assets, faster-growing international tower assets and a differentiated data center platform.

In summary, I'm extremely pleased with our performance through the first half of the year. American Tower has never been better positioned to capitalize on the powerful secular trends shaping our industry. Our portfolio of towers and data centers is uniquely positioned to benefit from growing mobile data consumption, expanding cloud adoption and the accelerating proliferation of AI-driven workloads and applications.

I want to thank our employees around the world for their continued dedication and execution as well as our customers, shareholders and business partners for their ongoing trust and support.

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

Thanks, Steve, and thank you all for joining the call. As Steve mentioned, we've carried our strong momentum into the second quarter and increased our 2026 outlook for the second time this year. I'll start by reviewing our second quarter results, and then I'll touch on our revised full year outlook.

Slide 7 shows a snapshot of our second quarter highlights. Consolidated property revenue grew over 5% year-over-year when excluding noncash straight-line revenue and FX impacts. Normalized for the impact of one-time DISH churn, property revenue grew over 7% on a cash FX-neutral basis. Our growth was primarily driven by organic tenant billings growth of nearly 2% or 4% normalized for the impact of onetime dish churn and complemented by data center cash revenue growth of approximately 12%.

Adjusted EBITDA grew over 3% when excluding net straight-line and FX impacts. Normalized for the impact of one-time DISH churn, adjusted EBITDA grew over 6% on a cash FX-neutral basis. Cash adjusted EBITDA margins declined approximately 40 basis points year-over-year, primarily due to DISH-related churn and SG&A timing. Excluding DISH-related churn, cash adjusted EBITDA margins expanded approximately 30 basis points. Attributable FFO per share grew approximately 1% when excluding FX impacts.

Normalized for the impact of onetime DISH churn and excluding the impact of refinancing costs, attributable AFFO per share grew over 5% on an FX-neutral basis.

Moving to Q2 organic growth and data center growth on Slide 8, we delivered consolidated organic [indiscernible] billings growth of nearly 2% or approximately 4% when excluding DISH churn. Across each of our tower 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 nearly 1% and approximately 5% when excluding DISH churn, consistent with our expectations for durable growth in the mid-single digits in Africa and APAC and Organic growth was nearly 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% expected in the second half of the year.

In Europe, organic growth was approximately 4%. And in Latin America, organic growth declined over 2% primarily driven by elevated churn in Brazil. Consistent with our expectations laid out at the start of the year. We remain encouraged by the prospects of an earlier-than-expected market repair in Brazil in the forthcoming acceleration in organic growth in 2027.

Finally, on the right side of the slide, data center property revenue growth was approximately 12% when excluding noncash straight-line revenue. As Steve mentioned, this quarter marked another record quarter of new leasing revenue for CoreSite. In fact, we added more new business this quarter than we did for the entire year of 2021 and the continued strength in underlying demand drove double-digit revenue growth for the fifth consecutive quarter.

Now, let's turn to our revised full year outlook. We are raising guidance across all of our key consolidated financial metrics primarily driven by consistent growth across our global tower portfolio, data center outperformance operating expense benefits and FX tailwinds. In addition, as Steve mentioned, we completed the divestiture of our Philippines and Bangladesh portfolios this quarter.

The divestitures occurred in mid to late June and our revised outlook now excludes contributions from Bangladesh and Philippines for the remainder of the year.

Starting with property revenue outlook on Slide 9. We are raising our outlook by $110 million at the midpoint, representing a 1% increase to our prior outlook. Our revised outlook now implies nearly 4% 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 6% growth on a cash FX-neutral basis. The increase to outlook was primarily driven by approximately $35 million of FX tailwinds, $25 million of data center outperformance and $65 million from other items, including pass-through and straight-line revenue, partially offset by approximately $15 million related to Philippines and Bangladesh divestitures.

Our underlying operating trends remain consistent with the assumptions embedded in our prior outlook. We are reiterating organic growth assumptions across all regions and continue to expect organic tenant billings growth of approximately 1% and or approximately 4% when excluding DISH churn and data center growth of approximately 15% year-over-year, which represents a significant acceleration versus our prior outlook of 13% growth.

Moving to adjusted EBITDA on Slide 10. We are raising our adjusted EBITDA outlook by $45 million at the midpoint, representing an approximately 1% increase to our prior outlook. Our revised outlook now implies over 2% growth year-over-year, excluding noncash net straight line and FX impacts.

Normalized for onetime impact of DISH-related churn, our outlook for adjusted EBITDA implies approximately 5% growth on a cash FX-neutral basis. The increase to outlook was driven by approximately $20 million of FX tailwinds, $30 million of data center outperformance and approximately $35 million of onetime benefits.

Primarily related to an indirect tax recovery in Latin America, partially offset by approximately $10 million related to the Philippines and Bangladesh divestitures and $30 million of other items, primarily comprised of noncash straight-line impacts.

Turning to AFFO on Slide 11. We are raising our attributable AFFO outlook by $0.09 per share, representing a 1% increase to our prior outlook. Our revised outlook now implies growth of approximately 3% 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 nearly 6% growth on an FX-neutral basis.

The increase to outlook was primarily driven by adjusted EBITDA outperformance of approximately $0.12 and FX tailwinds of approximately $0.06. Higher cash taxes related to the EBITDA outperformance represent approximately $0.04 of downside and higher net interest expense also represents approximately $0.04 of downside.

Finally, the Philippines and Bangladesh divestitures represent $0.01 of downside. As a reminder, we continue to expect our services business growth to represent an approximately 100 basis point headwind to attributable AFFO per share growth this year. Due to higher interest rates, we now expect our debt refinancings to be an approximately 150 basis point headwind to attributable AFFO per share growth this year, up from an approximately 100 basis point headwind in our prior outlook.

Our ability to raise outlook while absorbing an additional 50 basis point headwind from higher interest rates highlights the strength of our underlying business and the benefits of the proactive steps we've taken to reduce floating rate debt.

We believe this year represents a trough for attributable AFFO per share growth, as these headwinds ease heading into 2027, we're confident that we can deliver a meaningful inflection in growth and return to our long-term expectation of AFFO per share growth in the mid- to high single-digit range.

Turning to capital allocation and our balance sheet on Slide 12. Our capital allocation strategy remained focused on balance sheet strength, disciplined investment and long-term value creation. The work we've done over the past several years to strengthen our financial position, has created significant flexibility. We ended the quarter with leverage of 4.9x, within our target range of 3 to 5x and in the highest credit rating among our peer group.

In today's environment, where opportunities across digital infrastructure continue to expand. Balance sheet capacity remains an important competitive advantage. 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 to develop more capacity in our data center portfolio, approximately $370 million to construct new towers globally and approximately $210 million to purchase land beneath our towers.

In addition, year-to-date, we have allocated over $230 million to acquisitions of towers and data center land and over $200 million to share repurchases.

Turning to Slide 13. Our second quarter results reflect the durability of our business model and the consistent execution of our strategy. We continue to see resilient demand trends, supported by increasing mobile data consumption, ongoing network investments and growing requirements for highly interconnected digital infrastructure.

Combined with our disciplined approach to capital allocation and strong financial position, these trends provide confidence in our ability to continue generating sustainable earnings growth and long-term shareholder value.

With that, operator, please open the line for questions.

[Operator Instructions]. Our first question comes from the line of Michael from Goldman Sachs.

I just had one and one follow-up. First on capital allocation. AMT is clearly on better strategic footing given the delevering and reduce emerging market exposure. Now that AMT's leverages in the target range, APAC has been exited. What's next? What are the best investment opportunities today? Any comments on how we should think about the rest of the year in terms of buybacks or potential domestic M&A?

And then second, just as a housekeeping item. I was just wondering if you could talk a little bit more about the data center upside? Was it more from lease rate expansion or improvements in occupancy?

Thanks, Michael. Rod, I'll take the first part of the question, and you can jump in. When we think about the opportunities to invest capital, I kind of refer you back to the 4 major catalysts that I talked about in my prepared remarks that we think are setting towers up for a good front of growth going forward.

Starting with the dempification phase of 5G, the additional spectrum that's coming to market, some starting in 2027, some a little bit later. AI applications starting to put more traffic on the networks and then that leading into the 6G technology cycle.

So when we look at our portfolio and the other areas where we can invest capital, we think that investing in towers in domestic markets and also developed markets is a really good use of our capital. Those same factors will provide benefits in the emerging markets. They'll be a little bit later in the cycle.

But as we've said about our capital allocation strategy, we are allocating more of our capital toward developed markets. We'll continue to do that. And so really, the amount of those investments in towers will depend on the opportunities, we have had the opportunity to invest more capital in Europe by doing build-to-suits in that market. And we like that business. We've got some good day 1 yields, and we see some good growth prospects there.

We haven't been able to invest as much in the U.S. just because we haven't had the opportunities that met our financial criteria that we felt were actionable in the U.S. But certainly, if those opportunities come to market, that's kind of our first priority is Towers because we think towers are poised for another good growth cycle going forward.

The other area where we are investing more capital, and we would like to continue to accelerate the investment is CoreSite, it is a rapidly growing segment of our business, and we're able to continue to underwrite mid-teens or better stabilized yields on all our incremental new investments there. So to the extent that we can continue to find opportunities to invest in CoreSite, expanding that model and earning those types of returns, we'll do it.

So from my perspective, the top priorities are domestic and developed market towers and data centers. Our internal CapEx program has provided us a lot of opportunities to invest, and that's been through build-to-suits and this organic builds in the CoreSite.

Rob, anything you want to add to that?

Thank you for the question, and it's great having you on the call. Just a couple of things that I would add to Steve's comments relative to capital allocation.

Number one is I'll just highlight our long-standing, consistent and disciplined approach to capital allocation. It really is designed to optimize long-term shareholder value. And I like Michael, the way you brought a couple of things in there, certainly subset for us of optimizing long-term shareholder value is driving purposely the quality of our earnings and our balance sheet strength. And you kind of picked that up on the rotation out of Bangladesh and Philippines and in the way we allocate capital. So that is a couple of keys for us.

When we think about our capital allocation approach, first and foremost, it's supporting the dividend and a growing dividend, we think that is a very important part of our business in relationship with our shareholders. And with that, we aim to dividend out 100% of our REIT taxable income each year. This year, that will equal about $3.3 million billion and represent roughly a 5% growth.

Of course, those 2 numbers are full year, and they will be subject to approval by our Board on a quarterly basis. We then next look at internal uses of capital we have a capital program and an outlook this year that is nearly $1.9 billion. We have allocated -- we expect to allocate nearly 85% of that towards developed markets with nearly $700 million of that into data centers, as Steve talked about. That is purposeful, of course, and it relates to driving that quality of earnings and achieving stability in our cash flows and our cash flow growth.

After the internal CapEx programs, as Steve said, we look at M&A opportunities, we always scan the market there. Our goal there is not to be bigger in terms of assets, but bigger in terms of AFFO and AFFO per share growth over the long term, really with a keen eye on driving total shareholder return over the long term.

We're happy to continue to reduce debt. We are below our target range of 5x at the moment, which puts us in a really strong position with limited exposure to floating rate debt in our industry-leading credit rating really is a strategic benefit for us as we move forward. [indiscernible].

Apologies for the delay. We're just moving up in technical difficulties. Please stand by.

Operator, can you hear us now?

Yes, I can hear you.

Okay. Great. I'm not sure where we cut out on that, but Rod was talking about our capital allocation priorities. I'll assume that we got through that question that you guys heard most of the answer on that. Michael, I'll pick up with your question on the data center upside. And the outperformance in Q2 and really the growth that we're seeing in CoreSite is broad-based.

In Q2, we saw another record quarter, and that was driven by strong sales in both traditional customers and retail customers. It's the hybrid multi-cloud installation, and we were AI use cases. Also, we saw very strong trends in mark-to-market and an inflection in interconnection activity, a big inflection of interconnection activity. So it's really everything in that business is seeing positive tailwinds that are driving that outperformance.

Sorry for the technical glitch there, guys.

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

So first, Steve and Rod, I was curious if you could talk a little bit more about what you're seeing from the carriers in terms of their interest to densify along this 5G cycle in the U.S.? And if that's something where you're already in conversations for densification later this year, next year?

And that's something where the carriers may want to enter into comprehensive deals for colocation, may be different in the ways where they more predominantly did that for amendment activity and if I just have 2 quick follow-ups on the data center side.

Just curious, you mentioned an acceleration of interconnection. I'm curious where that's coming from and what you're seeing as maybe the catalyst for that? And then just related to the upcoming convertible for the data center business with your financial partner.

Curious if that's something where if you could walk us through the mechanics -- and how you're thinking about your ownership position in these assets over time? Is that something you actually may want to increase your ownership over time, given what you discussed in terms of the growth of the business.

I'll take the first 2, and then Ron, you can talk about the last one. In terms of the carrier trends, this is something we've been talking about for over a year now. It's something that we've been seeing in our conversations with carriers and it's translated into our application pipeline. So we're already seeing the benefit of more co-locations in our new business pipeline with the carriers. And it's exactly what we expected to see at this point in the network evolution.

Just a reminder, the first phase is a coverage phase. It's largely amendment-driven and then you enter into a phase where they're working on the quality of their network, and then you come to a capacity phase. And that's where we are today. And so it's exactly what we thought we would see at this point and there is a change in the volume of new colocations that we're seeing.

With respect to the comprehensive agreements, we're pretty agnostic about whether we're in a comprehensive agreement or a pay by the drink agreement, that contractual construct is really designed to speed the deployment and the operational efficiency. And that's something we're always open to with our customers, and it's really kind of up to them to define how they want to operate in those frameworks. And we're always having those discussions. So we may or may not end up with 1 of those, and it's okay, either way because we're going to see the new business from that.

In terms of the interconnections at CoreSite, it's really -- it's pretty broad-based. But what I would say that we're seeing, it's partially driven by AI. It's partially driven by the continued adoption of cloud tools. And so what we see is more and more data that needs to be moved between these large customers of ours. And it's why CoreSite is such a key part of their IT infrastructure.

Using the Internet to move petabytes of data is just not practical. And that's why people come to CoreSite is to be natively co-located with their cloud providers with their inferencing providers. So they can connect their data sets, their enterprise data sets to these large models. And that's really the virtuous cycle that we have in terms of core site and why it's a value driver. It's why we can get the types of returns that we're getting there is because we're creating the environment where they can exchange those huge data sets -- so we think it's right in line with our traditional business. It's accelerating because people are trading more data.

I'll address your question around the the data center business and our joint venture there. So as you know, as of today, we own -- American Tower owns about 72% of that business. We are clearly the in-control shareholder and Stonepeak as our partner owns about 28%. They also have that convertible note where we give them a preferred dividend.

The cost of that is actually reflected in our AFFO and the distributions. So our attributable AFFO per share to American Tower already includes that distribution for that convertible note. In Q3, we will expect -- we expect that to convert to equity. So that will move the ownership percentage of Stonepeak up to about 36% or move ours down to about 64%. And that ownership split will then be reflected in our attributable AFFO per share. And we really don't expect a material difference from the way that it -- the result of that, those numbers compared to what we've had in the past.

So we've always had the charge for that convertible note instead of being a distribution, now it will be an attributable piece of AFFO. That's the way that will work. You'll see that happen in Q3.

The other thing that I'll address here just briefly is jumping back to your question about carrier activity and highlight the fact that in our U.S. business, the pipeline and the demand for our sites continues to be very healthy and consistent and largely driven, as Steve said, by late-stage 5G amendments as well as the early-stage densification that we're seeing.

As a result of that, in 2026, we expect the carrier network investments to drive revenue growth for us that contribution to organic tenant billings that comes from new business of about 250 basis points. That is very consistent with what we experienced last year on an ex DISH basis.

So from an apples-to-apples standpoint, we see that being very consistent. Because of the drivers that Steve also articulated in his prepared remarks, and the comments around the questioning there. We expect that demand to continue going forward. That means we have that 2.5% new business contribution. We add to that 3% from the escalator that we have. Our churn is running 1% to 2%. We've been at the lower end of that, ex DISH and expert in prior years.

So you put all that together, you end up with an organic growth rate of -- in the mid-single digits, maybe 4.5% for 2026. That is very constructive and supportive of our aspirational intention to deliver mid-single-digit to upper single-digit AFFO per share growth going forward.

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

First, I guess I was wondering if you've been in contact with any satellite providers that might be exploring terrestial deployments to augment their offerings.

And then second, Steve, in your prepared remarks, and you also emphasized it in some prior response prior questions, you said that you continue to evaluate opportunities to expand your core site development pipeline even further. -- looks like you have a couple of new markets that you're looking to enter. Can you talk about other levers you might pull to expand the pipeline?

Sure. Thanks, Nick. All the existing satellite providers are current customers of ours on their existing networks. They do have some terrestrial presence there. And we're always talking to all of our customers.

When you think about the aspiration to participate in the U.S. wireless market, as we said before, so I let complementary to terrestrial networks. So if you want to be a player in that market, you would need terrestrial infrastructure. And so if they decide to go that route, we are confident that we would be a good partner for them.

And if you look at how other market entrants have looked at entering the market, most recently, DISH, even though that they've exited the market now, their path to a large scale build in the U.S. was to partner with American Tower. And we're confident that the satellite providers, if they decide to go that route and decide to build terrestrial infrastructure will come to us and partner with us to build, that's the most efficient and quickest way to build.

So when it comes to those customers, they are customers today, we always talk to our customers and we're there to support them in whatever they decide to do, but I'd refer you back to them in terms of what their plans are.

In terms of CoreSite, we're looking at all options, everything is on the table in terms of expansion there. We are looking at some new market expansions. We also will continue to seek to expand our existing campuses. That's where we have the best investment opportunities. And then if there was something inorganic that made sense, we would look at that. We bought a small data center in Miami a few years ago.

We have a couple of data centers at American Tower or the CoreSite acquisition. Those have worked out very well for us. So those are things that we would consider. We just have to have the right opportunity to do that. But I do want to reinforce that we will continue to pursue our business model. It's a highly interconnected ecosystem that generates that virtuous cycle I talked about in the last call. So we're not interested in going into hyperscale or what I call undifferentiated colo facilities that don't have interconnection systems.

And so for us, there's a limited universe that we're willing to invest in, but that universe has a lot of opportunity in it. And we're going to continue to look to invest that. And again, I just repeat what I said in my prepared remarks, we've expanded CoreSite's capacity by 1.5x since we bought it. And we have a good runway to triple that going forward, just in what we've got today, and we're going to continue to seek opportunities to go even further and expand that more.

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

A couple of questions. I appreciate the details on kind of the catalyst. As I always say, you got to follow the spectrum for the tower fundamentals. -- wanted to probe a little further on that. AT&T getting the 600 megahertz stuff, low band frequency, it seems like that's heavy but more amendment type style. Upper C-band auction that we've gotten a lot of good information with the FCC and good to have that scheduled. Walk us through a little bit about -- what that means to add upper C band on top of lower C-band? Can the radios and antennas handle it? Does it mean some carriers need to actually get deploying and back to the densification question. And of course, we have other blocks that are being targeted. Do you think those blocks will actually show up on towers as we keep going up a higher gigahertz range?

And the final piece of spectrum is the DISH wireless bankruptcy process is moving forward. Hopefully, you get the escrow fund that equipment, is it still on your towers? And do you know what frequency bands are up on that dish equipment as they kind of go through that bankruptcy process and maybe look to sell that equipment to somebody?

Yes, Rick, there's a lot there, so I'll dive right in. So we'll start with spectrum. And we are excited about the 800 megahertz spectrum that was identified as a big beautiful bill and you've referenced some of the spectrum that's in there.

With respect to the lower band spectrum, what we've seen is that the carriers have been using that as a very good complement to the higher bench spectrum in their network. And it's the layer cake of spectrum that I think people have talked about as part of 5G in terms of how they're meeting that need. And so we absolutely expect those lower bands to be deployed, and that will generate some revenue for us just like every spectrum deployment does.

In terms of the upper C-band, that will go on to ours, and we do expect that over time that we will get significant activity as a result of that. And when you talk about radios, what they can handle and things like that, no radio can handle an infant amount of spectrum and infant number of traffic going through it. So the real driver for us is mobile data growth. And so the carriers will continue to deploy spectrum as the mobile data growth goes up, they're going to need to add more equipment with that to meet that demand.

And just a reminder, we've talked about the need for the carriers to double their capacity by 2030. And that's some of the projections we've seen by numerous industry analysts. And we've said for years now that we thought that, that would be met half from new spectrum and new technology upgrades, but half from densification. And so we've always anticipated that more spectrum will come to market that will get deployed. That will meet some of the capacity needs, but they're going to need to densify and they're going to need to add more equipment to deploy that spectrum over time as well.

And when you talk about the higher frequency blocks, the 6, 7, 8 gigahertz blocks, those are the frequencies that are being talked about for 6G. We're very excited about that. They will absolutely go on towers. Towers will be the backbone of 6G, just like it was the backbone of 5G, 4G and 3G. And we think that, that will drive significant activity on towers over time as those bans become available, but we also think that's going to require more densification.

Those higher frequencies won't propagate as far as easily as the lower bands do. And that's part of the densification story that we see playing out for 6G and some of the plans that that we see carriers making that we're engaged in talks about is how do you deploy those frequencies in the future? What does the network look like? So we're excited about all of that frequency.

Again, there's 800 megahertz it's been identified and a big beautiful bill. We're anxious for them to to get allocated auctioned and start working with our customers on that. And we think that, that's going to be a good story for towers for the next several years as that comes to market.

Yes. On your specific question on the DISH equipment, I don't want to get into the details of our customer contracts on that. The equipment is still up on the towers, and that's kind of all I really want to say about that at this point. Everything else is kind of subject to the litigation, Rick.

Okay. And going back to Michael Ng's question, you did cut out -- I'm not sure we got the full answer, particularly on stock buybacks. Last quarter, you did about $150 million worth of buyback. Obviously, 2Q, you had a dislocation event with SpaceX IPO occurring.

As we look at the subsequent to second quarter, where the stock is trading, M&A, inorganic and data centers, but stock buyback, maybe finish that answer because Rod, you did cut off. I'm not sure if we got the full answer on kind of how stock buyback fits into it that Michael first asked.

Yes. Great. Thanks for the opportunity, Rick. And not knowing exactly where I cut out, this -- a little bit of this may be redundant, but we do follow a very consistent and disciplined capital allocation approach, and it really is targeted to drive long-term shareholder value.

And as subsets of that, quality of earnings is significantly important in that as well as balance sheet strength. And we've been driving those very successfully over the last several years and even longer. With that said, I think everyone knows we prioritize the dividend.

We then look at internal capital programs. Those programs are being allocated roughly 80% towards developed markets with a big chunk of that going towards data centers. Then we look at M&A, we look at share buybacks and debt repurchases and all of those options are available to us.

We will consider all of those options at any time and all the time and make the right decisions at the moment relative to our priority of driving long-term shareholder value, driving quality of earnings and maintaining a strong balance sheet. And at times, there's uncertainty around rates. That's why you've seen us really drive down our exposure to floating rate debt. And at times, that may also require us to preserve cash and maybe delever a little bit further, which we're comfortable doing in certain environments.

Share buybacks are in the toolkit. We do have a program approved by our Board of Directors. That was a $2 billion program that we're working through today. I think we've spent or invested about $600 million of that program. So we have a little less than $1.5 billion, maybe $1.4 billion. This year, we've allocated $200 million towards share buybacks in 2026 year-to-date.

So we're active in that program. We think it's an important part of our toolkit. We're happy that we have the program approved by our Board of Directors, and we'll continue to balance our capital allocation and keep it consistent with our kind of overall disciplined, consistent philosophy.

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

Just 2, if I could. So First, we've heard that headcount reductions at some of the U.S. carriers has perhaps caused a little bit of a slowdown in activity levels this year. So are you seeing any impact from that, whether that's in the services business or perhaps new bookings for colos and amendments that could inform growth rates going into next year.

And then secondly, we also read that Vodafone in Spain is moving some infrastructure of competitor sites to you in 2028. Maybe you could comment a little bit on that and what that could do to growth rates in the EMEA region in a couple of years.

Yes. Thanks, Eric. In terms of our business, we're very confident that our customers are very good at running their businesses. They're very good at planning what they're trying to do. And so I wouldn't point to anything that's happening on their side as a slowdown or impacting our results.

Again, if you go back to the way we've talked about the 5G investment cycle over time, it's playing out exactly the way we thought it would. And we always know there's going to be a first push where you do an overlay network. That will be the busiest time. There will be a short pullback as they get through that first wave of investment as the looking at the networks and trying to make sense of what they're doing there and then they go into a much more consistent phase of investing in both quality and capacity.

And as Rod referenced in his remarks, our new business levels are pretty consistent year-over-year. And we expect that investment cycle by the carriers to be consistent at this part of 5G or accelerate if some of the catalysts with AI and other things create higher demand than what we originally thought there.

So there's nothing that's happening on the carrier side that I would point to that's concerning us in terms of the cadence of their builds on that.

With respect to the rumors you're talking about in Spain, we don't talk about individual customer agreements. What I would say is that Europe continues to be a good region for us, and we feel confident in the growth that we're seeing there. We were very disciplined when we entered that market, and we made sure that we didn't enter that market until we had an agreement in place that gave us good reliable protection on the downside and good growth prospects going forward. And it's driving mid-single-digit growth for us -- we see a lot of potential to continue that as those carriers continue to invest.

Our portfolio is anchored largely by Telefonica and we're largely insulated from the negative impacts of some of the smaller carrier consolidation that you're seeing there. And so we view what's happening in Europe as a little bit of a market correction as you're seeing some of those smaller carriers merge out of existence or enter into agreements with each other.

And we think that we're well poised to benefit from that because we have an exceptionally strong tower portfolio that we acquired as part of that deal. So again, we're confident that we're going to continue to see that kind of mid-single-digit growth and we're going to get that broad based from a variety of sources there.

And Eric, I would just add a couple of quick comments. One is on our services revenue. We have not reduced our outlook for services revenue. So we are maintaining that $245 million million of services revenue. That is really underpinned by the broad base of services that we provide to our customers, which really include end-to-end solutions as well as continued strong contributions from our services and acquisition in zoning and permitting. So that's pretty consistent.

There has been a step down in '26 from 2025. But in '26, we are seeing very consistent we have a very consistent outlook over time. Now with that said, it is slightly front-end loaded. So we do expect a small step down in the back half of the year in services, but we are maintaining the $245 million of services revenue.

And then I would just highlight what Steve says, in Europe, our European business is performing exceptionally well for us, solid mid-single-digit organic tenant billings growth it performs -- it has performed better than our original underwriting when we did the Telefonica transaction. And the key to that really is that it's a differentiated portfolio compared to other portfolios in Europe. And what that really means is that the counterparty and the way the customer contracts work of a steady mid-single digit to better growth.

We have very limited churn. There's not a lot of consolidation risk within our portfolio. We are covered off on inflation and CPI with uncapped CPI, local CPI-based escalators. So it really is a very well performing, very stable, very much a differentiated portfolio than others you may see in Europe.

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

Just had a couple. First, just curious what you've learned from the rail deployment from -- about the AI inference and edge computing opportunity and what might be the primary bottleneck to greater adoption of edge computing at this point in time?

And then secondly, I saw that CoreSite ended the quarter with 36 megawatts under construction of which, I think around 8% was leased. Given the robust demand environment that we're seeing, can you discuss the current pre-leasing pipeline and opportunity to extend that preleasing window going forward?

Sure. I'll take those. In terms of our deployment in Raleigh, it's part of our overall edge strategy -- and we continue to work with multiple partners in trying to help evolve that edge ecosystem. And I'd say that the biggest learning we've got from Raleigh so far is there is demand out there for capacity. And so we've seen a lot of interest in that facility. And that was probably a little bit more of a surprise to me given that we were kind of building that as a test bed for innovation, but we have people who want to put their equipment in there. So there's demand there.

In terms of the overall edge, we're excited to see other people talking about finally, and we're encouraged to hear our carrier customers starting to experiment on the edge and working with various providers. AI RAN could be a driver of that as we work with various partners to figure out what that's going to look like.

And we continue to think that we're positioned very well for the edge as it evolves, because it's not just about having power, it's also about having connectivity. And that's the reason why we bought CoreSite in the first place is to have that connection between towers and a highly interconnected ecosystem so that you can exchange data with various players in there.

And we're continuing to see that evolve. So we're excited about it. We're excited other people are working on it, and we'll continue to innovate in that space. and we'll keep you guys up-to-date as there are developments that happen there. In terms of the pre-leasing, we're in a demand environment today where there is a lot of demand, and we could increase that pre-leasing if we wanted to.

There are 2 reasons that it's a little bit lower than it's been in prior quarters. The first is some of those deployments are a little bit further out right now, that kind of 2027, maybe early 2028 is on some of that. And we are choosing not to necessarily pre-lease everything because the demand environment is so robust and pricing is so dynamic, we don't want to end up underpricing it. So we're being careful in terms of the deals we are signing up on preleasing. It doesn't mean we won't sign up releases. We will, over time, as those get closer to coming live, but we're going to be disciplined to make sure that we're maximizing the yield that we get on those facilities.

Our next question comes from the line of Batya Levi from UBS.

A follow-up on activity levels that you're seeing in the U.S. Can you provide maybe a little bit more color on when you expect that activity to inflect. But based on your conversations with the carriers, you mentioned strong application volumes, would you expect next year's domestic leasing to be higher than the 2.5% this year?

Thanks, Batya. Good try. I'm not going to give guidance for next year yet, but nice try. What I would say is we're in that steady investment phase by the carriers. And the shift into densification is a reallocation of priorities by them. So today, we're expecting to see that kind of consistent steady demand environment that we have projected all along on this.

The inflection would come if there are demands on the network that are different from what those long-term plans have been. And so if you see AI becoming a more prevalent use case, if you see uplink but taking a larger share of the network as the Ericsson Mobility Report has indicated is starting to happen. If you see some of those types of activities, you might see the carriers starting to invest different from the road map that they've laid out before.

But in terms of what we see happening on the ground, we're already seeing some densification happening as their not in the coverage phase. So you're seeing a little bit less coming in from amendments more coming in from new colocations and that's a trend that we'd expect to see going forward.

It's great having you on the call. I would just like to add one additional piece to that. When you think about the growth in the U.S., certainly the word consistency there, I think, is important. I talked a little bit ago about that contribution from new business of about 2.5%. And -- but I do want to highlight the fact that as we transition through 2026, we do view this as an inflection year where we will be driving higher AFFO per share growth going forward.

And there's a couple of components that I'd call out, even with steady consistent activity and organic tenant billings growth from the carriers in 2026, we are guiding our outlook towards a 0% growth on an FX-neutral basis. Certainly, the FX is about a 300 basis point tailwind to that number. But on an FX-neutral basis, it's about 0%, that includes a couple of nonrecurring headwinds.

Most notably, it's DISH churn, which is meaningful at about 400 basis points of headwind. We also have the refinancing headwinds, which this year in '26 in that 0% FX-neutral outlook, that is about a 150 basis point headwind and the step-down in services from $340 million in revenue down to $240 million in the corresponding earnings that come off of that, that represents about a 1% headwind.

So if you normalize for those, what we view as nonrecurring headwinds, we would be at around 7% AFFO per share growth on an FX-neutral basis. So we know that we are on the other side of the DISH churn issue, and we won't have DISH churn next year. That is what gives us the confidence that this really is an inflection point, a trough year in terms of AFFO per share earnings. And we expect to be in line and on track on average and over time to be in that aspirational range of mid-single digits to upper single digit AFFO per share growth going forward.

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

Quick 1 here. So CoreSite is clearly now a key growth driver and an excellent asset. But candidly, given that scale investors are not giving you a ton of credit for it, really kind of following you as a pure tower read. Any incremental strategies you guys are considering to better unlock that CoreSite value.

We certainly consider CoreSite to be a core asset, and we're excited about the growth that we're seeing there. And in terms of the valuation being given it, I'll leave that up to you guys as you're doing the analysis to figure out the relative weighting of that. We are growing it faster than a lot of other segments in our business right now.

And we do have that pathway to triple the capacity in the existing portfolio, and we're going to consider other opportunities to expand even beyond that. So we think that as we continue to grow that business and it becomes a larger component of our AFFO per share over time that it becomes more visible, it's more apparent the value that we're driving to our shareholders in that asset.

Thank you. This concludes the question-and-answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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?