SBA Communications Corporation SBAC reported fourth-quarter 2024 adjusted funds from operations (AFFO) per share of $3.47, beating the Zacks Consensus Estimate of $3.36. The figure also reflects a rise of 3% from the prior-year quarter.
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SBAC results reflect an improvement in site-leasing and site-development revenues during the quarter. The company announced an increase in dividends and issued its 2025 outlook.
Quarterly total revenues increased 2.8% year over year to $693.7 million. The figure also surpassed the Zacks Consensus Estimate of $681.7 million.
Per Brendan Cavanagh, the president and CEO of the company,“Carrier activity levels in the US continued to grow and we finished 2024 with our highest backlogs of the year for both leasing and services, setting us up well for continued momentum in 2025. Our US customers continue to invest in their networks, deploying mid-band spectrum in support of Fixed Wireless Access and 5G coverage expansion, as well as investment in general network densification and expanded rural coverage.”
For full-year 2024, AFFO per share came in at $13.37, up 2.2% from the prior-year tally, and beat the Zacks Consensus Estimate of $13.24. However, total revenues declined 1.2% to $2.68 billion.
SBA Communications Corporation Price, Consensus and EPS Surprise
SBA Communications Corporation Price, Consensus and EPS Surprise
Site-leasing revenues increased 1.6% year over year to $646.3 million. Quarterly Site-leasing revenues consisted of domestic site-leasing revenues of $471.9 million and international site-leasing revenues of $174.5 million. The domestic cash site-leasing revenues came in at $472.3 million, growing 2.5% year over year. International cash site leasing revenues came in at $173.8 million, rising 1.4% year over year.
Moreover, site development revenues increased 21.6% year over year to $47.4 million.
The site-leasing operating profit was $530.2 million, marking an increase of 2.6% year over year. Moreover, 97.9% of SBAC’s total operating profit in the quarter came from site leasing.
The overall operating income grew 82.3% to $382.3 million.
The adjusted EBITDA totaled $489.3 million, up 1.8%, while the adjusted EBITDA margin decreased to 70.6% from 71.6% in the prior-year quarter.
SBAC’s Portfolio Activity
In the fourth quarter, SBAC acquired seven communication sites for a total cash consideration of $1.3 million. The company also built 159 towers during this period. It owned or operated 39,749 communication sites as of Dec. 31, 2024, of which 17,464 were in the United States and its territories and 22,285 internationally.
SBA Communications also spent $14.3 million to purchase land and easements and extend lease terms. The total cash capital expenditure was $87 million in the reported quarter, of which $69.7 million represented discretionary and $17.3 million was non-discretionary.
Subsequent to the quarter-end, along with more than Millicom’s 7,000 sites under contract, SBAC purchased or is under contract to buy 32 communication sites for a total consideration of $14.6 million in cash. It expects to complete the acquisition by the end of the second quarter of 2025.
SBAC’s Cash Flow & Liquidity
In the fourth quarter, SBA Communications generated nearly $310.2 million of net cash from operating activities compared with the year-ago quarter’s $432.6 million.
As of Dec. 31, 2024, it had $1.7 billion in cash and cash equivalents, short-term restricted cash and short-term investments, up from $263.6 million recorded as of Sept. 30, 2024. SBAC ended the quarter with $12 billion net debt and a net debt-to-annualized adjusted EBITDA of 6.1X.
As of Feb. 24, 2025, the company had no amount outstanding under the $2 billion revolving credit facility.
During the fourth quarter, no additional repurchases were made, and the company had $204.7 million of authorization remaining under its $1 billion stock repurchase plan.
SBAC's Dividend Raise
Concurrent with the earnings release, SBAC announced a cash dividend of $1.11 per share on its Class A common stock, indicating an increase of nearly 13% from the prior quarter. The dividend will be paid out on March 27 to shareholders of record as of March 13, 2025.
2025 Guidance by SBAC
SBAC expects AFFO per share in the range of $12.40-$12.76. The Zacks Consensus Estimate is currently pegged at $12.91, which is above the guided range.
Further, adjusted EBITDA is estimated to be in the band of $1,885-$1,905 million.
Site-leasing revenues are projected to be $2,530-$2,555 million. Site-development revenues are expected between $160 million and $180 million.
SBAC’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other REITs
Ventas, Inc. VTR reported fourth-quarter 2024 normalized funds from operations (FFO) per share of 81 cents, beating the Zacks Consensus Estimate by a penny. The reported figure increased 6.6% from the prior-year quarter’s tally.
Results reflected an increase in same-store cash net operating income, led by higher Senior Housing Operating Portfolio (“SHOP”) same-store average occupancy. VTR issued its guidance for 2025.
Welltower Inc.’s WELL fourth-quarter 2024 normalized FFO per share of $1.13 surpassed the Zacks Consensus Estimate by a penny. The reported figure improved 17.7% year over year.
Results reflected a rise in revenues on a year-over-year basis. The total portfolio same-store net operating income (SSNOI) increased year over year, driven by SSNOI growth in the senior housing operating portfolio. WELL issued its guidance for 2025.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.
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