American Tower Corporation ((AMT)) has held its Q3 earnings call. Read on for the main highlights of the call.
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American Tower Corporation’s recent earnings call conveyed a positive sentiment, underscored by a strong growth trajectory in AFFO per share, impressive data center performance, and an optimistic guidance for the year. Despite facing challenges such as legal disputes with AT&T Mexico and DISH Network, and modest exposure to UScellular, the company’s robust financial standing and strategic initiatives foster a favorable outlook.
Double-Digit Growth in Adjusted AFFO per Share
American Tower reported a remarkable double-digit growth in adjusted AFFO per share, with expectations of approximately 7% growth for the year. This growth underscores the company’s strong operational performance and its ability to generate shareholder value.
Services Revenue Near Record Levels
Leasing activity remained strong, complemented by services revenue nearing record levels. This performance is a positive indicator for future deployments and reflects the company’s ability to capitalize on market opportunities.
Strong Data Center Performance
CoreSite, a subsidiary of American Tower, signed record retail new leasing revenue, driven by the increasing demand for hybrid cloud and AI-related services. This double-digit growth highlights the strategic importance of data centers in the company’s portfolio.
Increased Guidance for 2025
American Tower has raised its full-year outlook across key financial metrics, including property revenue, adjusted EBITDA, attributable AFFO, and AFFO per share. This upward revision reflects the company’s confidence in its growth prospects and operational efficiency.
Strong Balance Sheet and Share Repurchases
With net leverage below 5x, American Tower enjoys significant financial flexibility. The company has repurchased $28 million worth of shares since the quarter’s end, demonstrating a commitment to returning value to shareholders.
AT&T Mexico Revenue Reserves
The company recorded $20 million in revenue reserves in Latin America due to a legal dispute with AT&T Mexico regarding tower rent calculations. This issue highlights the challenges in international operations but is being actively managed by the company.
DISH Network Contractual Dispute
A contractual dispute with DISH Network has led American Tower to file a lawsuit to enforce the contract. DISH Network claims exemption from payments under their MLA, posing a legal challenge that the company is addressing.
Modest Exposure to UScellular
UScellular represents less than 1% of American Tower’s U.S. revenue, with a significant portion up for renewal next year. This modest exposure minimizes potential risks associated with this client.
Forward-Looking Guidance
During the earnings call, American Tower provided an optimistic financial outlook, reflecting strong quarterly performance. The company anticipates approximately 7% growth in attributable AFFO per share as adjusted, translating to roughly 9% growth when excluding FX headwinds and financing costs. This forecast is supported by robust leasing activity, significant services revenue, and strong performance in the CoreSite data center business.
In summary, American Tower Corporation’s earnings call reflects a positive sentiment, driven by strong financial performance and strategic initiatives. Despite facing certain challenges, the company’s robust growth in AFFO per share, impressive data center performance, and increased guidance for the year highlight its resilience and potential for continued success.