SBA Communications Surpasses Its Own Targets

SBA Communications (NASDAQ: SBAC) reported 3Q23 results that the company says beat its own estimates. Total 3Q23 revenues were $683 million compared to $676 million in the prior year period, an increase of one percent. Site leasing revenue in the quarter of $637 million consisted of $468 million in domestic site leasing revenue and international site leasing revenue of $169 million. Tower Cash Flow of $512 million comprised Domestic Tower Cash Flow of $393 million, up six percent YoY and International Tower Cash Flow of $119 million increased more than 27 percent over the prior year period.

“We posted strong financial results for the third quarter, exceeding estimates and our own expectations,” stated Jeffrey A. Stoops, SBA President & CEO. “We continue to execute very well, making the most of varying demand. Customer activity varied by region, with U.S. customers less active in the aggregate with their wireless networks year over year, and international customers more active than we expected. Combined, we posted solid growth in site leasing revenue, Tower Cash Flow and Adjusted EBITDA. Despite higher interest expense, we generated solid AFFO in the quarter, providing ample cash for discretionary spending and strong dividend coverage.” 

During the quarter, SBA acquired 45 communication sites for a total cash consideration of $41 million. The company also built 86 towers 3Q23. As of September 30, 2023, SBA owned or operated 39,546 communication sites, 17,469 of which are located in the U.S. and its territories, and 22,077 of which are located internationally in Latin America, Africa and the Philippines.

In addition, the company spent $15 million to purchase land and easements and to extend lease terms. Total cash capital expenditures for the third quarter of 2023 were $114 million, consisting of $14 million of non-discretionary cash capex (tower maintenance and general corporate) and roughly $100 million of discretionary cash capex (new tower builds, tower augmentations, acquisitions, and purchasing land and easements).

The company revised its full-year 2023 outlook from its July 2023 view. Its midpoint guidance is now: Site leasing revenue of $ 2,515 million, up $3 million; Tower Cash Flow of $2,016 million, up $2 million; Adjusted EBITDA of $1,891 million, up $3 million; and, AFFO of $1,418 million, up $2 million.  SBA expects its Discretionary cash capex to be down $5 million to $340 million, and Non-discretionary cash capex of $57 million, down $500,000.

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