SBA Communications' Q4 AFFO & Revenues Miss, Costs Increase

SBA Communications Corporation SBAC reported fourth-quarter 2025 adjusted funds from operations (AFFO) per share of $3.19, missing the Zacks Consensus Estimate of $3.25. The figure compared unfavorably with the FFO of $3.47 in the prior-year period.

SBAC’s results reflect growth in revenues during the quarter. However, higher costs and interest expenses undermined the performance to some extent.

Total quarterly revenues increased 3.7% year over year to $719.6 million. However, the figure lagged the Zacks Consensus Estimate of $724.9 million.

For full-year 2025, AFFO per share came in at $12.85, down 3.9% from the prior-year figure, and missed the Zacks Consensus Estimate of $12.91. However, total revenues improved 5.1% to $2.82 billion.

SBAC’s Fourth Quarter in Detail

Site-leasing revenues rose 3.1% year over year to $666.2 million. Quarterly site-leasing revenues consisted of domestic site-leasing revenues of $464.5 million and international site-leasing revenues of $201.7 million. Domestic cash site-leasing revenues came in at $466 million, falling 1.3% year over year. International cash site-leasing revenues were $197.4 million, up 13.6% year over year.

Site development revenues surged 12.7% year over year to $53.4 million.

The site-leasing operating profit was $535.5 million, increasing marginally year over year. Moreover, 98.4% of SBAC’s total operating profit in the quarter came from site leasing.

Overall operating income declined 21.8% year over year to $298.9 million.

Adjusted EBITDA totaled $486 million, down marginally, while the adjusted EBITDA margin decreased to 67.8% from 70.6% in the prior-year quarter.

The cost of site leasing increased 12.5% to $130.7 million. The cost of site development rose 24.2% to $44.8 million. Interest expenses rose 12.5% to $124 million.

SBAC’s Portfolio Activity

In the fourth quarter, SBAC acquired 2,026 communication sites, including Milicom’s 2,020 sites, for a total cash consideration of $236.4 million. The company also built 164 towers during this period. It owned or operated 46,328 communication sites as of Dec. 31, 2025, of which 17,394 were in the United States and its territories and 28,934 internationally.

SBA Communications also spent $17.1 million to purchase land and easements and extend lease terms. The total cash capital expenditure was $457.1 million in the reported quarter, of which $441.4 million was discretionary and $15.7 million was non-discretionary.

As of Feb. 26, 2025, SBAC purchased or was under contract to buy 48 communication sites for a total consideration of $45 million in cash. It expects to complete the acquisitions by the end of the second quarter of 2026.

In October 2025, SBAC closed its previously agreed 365 towers and related operations in Canada for CAD$446 million.

SBAC’s Cash Flow & Liquidity

As of Dec. 31, 2025, SBAC had $0.4 billion in cash and cash equivalents, short-term restricted cash and short-term investments, down from $0.5 billion recorded as of Sept. 30, 2025. SBAC ended the quarter with $12.5 billion in net debt and a net debt-to-annualized adjusted EBITDA of 6.4X.

As of Feb. 26, 2025, the company had $1.21 billion outstanding under the $2 billion revolving credit facility.

During the fourth quarter, SBA Communications repurchased 1.1 million shares of its Class A common stock for an aggregate amount of $213 million. Following the quarter end, the company further repurchased 12,000 shares of its Class A common stock for an aggregate amount of $2.2 million. After these repurchases, SBAC has $1.1 billion authorization under its stock repurchase plan as of Feb. 26, 2025.

In the fourth quarter, SBA Communications generated nearly $304 million of net cash from operating activities compared with the year-ago quarter’s $310.2 million.

SBAC’s Dividend

Concurrent with the earnings release, SBAC announced a cash dividend of $1.25 per share on its Class A common stock for the first quarter of 2026. This indicates a 12.6% hike over the prior paid-out dividend. The dividend will be paid out on March 27 to shareholders of record as of March 13, 2026.

2026 Guidance by SBAC

SBAC expects AFFO per share in the range of $11.84-$12.29. The Zacks Consensus Estimate is currently pegged at $12.73, which is above the guided range.

Further, adjusted EBITDA is estimated to be in the band of $1,912-$1,932 million.

Site-leasing revenues are projected to be $2,625-$2,650 million. Site-development revenues are expected to be between $190 million and $210 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.

SBA Communications Corporation Price, Consensus and EPS Surprise

SBA Communications Corporation price-consensus-eps-surprise-chart | SBA Communications Corporation Quote

Performance of Other REITs

Digital Realty Trust DLR reported fourth-quarter 2025 core FFO per share of $1.86, beating the Zacks Consensus Estimate of $1.83. FFO also increased 7.5% year over year.

The results reflected steady leasing momentum with better rental rates amid rising demand.

W.P. Carey WPC reported fourth-quarter 2025 AFFO per share of $1.27, topping the Zacks Consensus Estimate of $1.26. The figure improved 5% from the year-ago quarter.

Results highlighted higher revenues, aided by strong investment activity and improved rents.

Note: Anything related to earnings presented in this write-up represents funds from operations (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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