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SBA Communications Corporation SBAC reported second-quarter 2025 adjusted funds from operations (AFFO) per share of $3.17, beating the Zacks Consensus Estimate of $3.12. However, the figure dropped 3.6% from the prior-year quarter.
SBAC’s results reflect growth in revenues during the quarter. However, higher costs and interest expenses undermined the performance to some extent. The company raised its 2025 outlook.
Total quarterly revenues increased 5.8% year over year to $699 million. However, the figure lagged the Zacks Consensus Estimate of $670.1 million.
Site-leasing revenues rose marginally year over year to $631.8 million. Quarterly site-leasing revenues consisted of domestic site-leasing revenues of $469.8 million and international site-leasing revenues of $162 million. Domestic cash site-leasing revenues came in at $467.4 million, growing 2.2% year over year. International cash site-leasing revenues came in at $163.7 million, up marginally.
The site-leasing operating profit was $513.2 million, increasing marginally year over year. Moreover, 97.4% of SBAC’s total operating profit in the quarter came from site leasing.
Site development revenues surged 97.5% year over year to $67.2 million.
The overall operating income declined marginally to $334.8 million.
Adjusted EBITDA totaled $475.5 million, up 1.8%, while the adjusted EBITDA margin decreased to 68.1% from 71.3% in the prior-year quarter.
The cost of site development increased significantly to $53.5 million, and interest expenses rose 22.7% year over year to $119.7 million.
In the second quarter, SBAC acquired 4,329 communication sites, including Milicom’s 4,323 sites, for a total cash consideration of $562.9 million. The company also built 94 towers during this period. It owned or operated 44,065 communication sites as of June 30, 2025, of which 17,437 were in the United States and its territories and 26,628 internationally.
SBA Communications also spent $9.4 million to purchase land and easements and extend lease terms. The total cash capital expenditure was $645.1 million in the reported quarter, of which $631.3 million represented discretionary, and $13.8 million was non-discretionary.
As of Aug. 4, 2025, along with around Millicom’s 2,500 sites under contract, SBAC is under contract to buy 13 communication sites for a total consideration of $396.5 million in cash. It expects to complete the acquisition by the end of the fourth quarter of 2025.
As of June 30, 2025, SBAC had $0.3 billion in cash and cash equivalents, short-term restricted cash and short-term investments, down from $0.7 billion recorded as of March 31, 2025. SBAC ended the quarter with $12.3 billion in net debt and a net debt-to-annualized adjusted EBITDA of 6.5X.
As of Aug. 4, 2025, the company had $35 million outstanding under the $2 billion revolving credit facility.
During the second quarter, SBA Communications repurchased 618,000 shares of its Class A common stock for an aggregate amount of $130.7 million. Following the second quarter, the company further repurchased 182,000 shares of its Class A common stock for an aggregate amount of $41.4 million. After these repurchases, SBAC has $1.45 billion authorization under its stock repurchase plan as of Aug. 4, 2025.
In the second quarter, SBA Communications generated nearly $368.1 million of net cash from operating activities compared with the year-ago quarter’s $425.6 million.
Concurrent with the earnings release, SBAC announced a cash dividend of $1.11 per share on its Class A common stock for the third quarter. The dividend will be paid out on Sept. 18 to shareholders of record as of Aug. 21, 2025.
SBAC now expects AFFO per share in the range of $12.65-$13.02 from the previously guided range of $12.53-$12.90. The Zacks Consensus Estimate is currently pegged at $12.75, which is within the guided range.
Further, adjusted EBITDA has been revised upward within the $1,908-$1,928 million range.
Site-leasing revenues are projected to be between $2,565 and $2,590 million. Site-development revenues are expected between $215 million and $235 million.
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.
SBA Communications Corporation price-consensus-eps-surprise-chart | SBA Communications Corporation Quote
Cousins Properties’ CUZ second-quarter 2024 funds from operations (FFO) per share of 70 cents came in line with the Zacks Consensus Estimate. The figure increased 2.9% on a year-over-year basis.
Results reflected healthy new and expansion leasing activity as well as a decline in rental property operating expenses in the quarter. However, the weighted average occupancy decreased, while interest expenses increased and marred the growth tempo.
Alexandria Real Estate Equities, Inc. ARE reported second-quarter 2025 AFFO per share of $2.33, which beat the Zacks Consensus Estimate of $2.29. This compares unfavorably to the AFFO of $2.36 reported in the prior year.
Results reflected decent leasing activity and rental rate growth. However, lower occupancy and higher interest expenses year over year undermined the results to some extent.
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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This article originally published on Zacks Investment Research (zacks.com).
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