We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SBAC Q3 FFO Top Estimates on International Leasing Gains
Read MoreHide Full Article
Key Takeaways
SBAC's Q3 FFO of $3.19 per share beat estimates by 3.6%, despite declining 3.3% year over year.
International site-leasing revenues rose 13.3%, while domestic leasing revenues fell 3.4% amid churn.
SBAC lowered its 2026 revenue outlook but raised the AFFO per-share guidance midpoint by 8 cents.
SBA Communications Corporation (SBAC - Free Report) reported third-quarter 2026 funds from operations (FFO) per share of $3.19, surpassing the Zacks Consensus Estimate of $3.08 by 3.6%. However, the reported figure declined 3.3% year over year from $3.30.
Total revenues decreased 2.5% year over year to $713.9 million and missed the consensus mark of $727.1 million by 1.8%. Strong international site-leasing growth and higher tower cash flow in overseas markets supported performance, but domestic leasing weakness and a decline in site development revenues weighed on overall performance.
SBAC Gains From International Leasing
Site-leasing revenues increased 1.4% year over year to $665.4 million. Excluding foreign currency movements, growth was 0.4%. Site leasing contributed 98% of the company's total operating profit, underscoring the importance of recurring tower rental revenues to its business.
International site-leasing revenues climbed 13.3% to $211 million. Excluding foreign currency movements, growth was 9.8%. International site-leasing segment operating profit increased 15.5% to $149.1 million, while tower cash flow advanced 14.7% to $146.3 million. The corresponding tower cash flow margin improved to 70.5% from 69.3% in the year-ago quarter.
SBAC Faces Domestic Pressure
Domestic site-leasing revenues declined 3.4% year over year to $454.4 million. Domestic cash site-leasing revenues decreased 3.7% to $453.6 million. Sprint consolidation churn and EchoStar churn continued to weigh on the business and remained significant headwinds.
Domestic site-leasing segment operating profit (SOP) fell 4.4% to $382.6 million. Domestic tower cash flow declined 4.6% to $380.6 million, while the related margin narrowed to 83.9% from 84.7% in the prior-year quarter. These declines partly offset the improvement in international operations.
SBAC Encounters Revenue and Margin Headwinds
Site development revenues decreased 36% year over year to $48.5 million, contributing to the decline in consolidated revenues. Net cash interest expense rose 3.8% to $118.9 million.
Adjusted EBITDA decreased 1.1% year over year to $488.1 million. However, the adjusted EBITDA margin improved to 68.8% from 67.5% in the year-ago quarter. Tower cash flow was nearly unchanged at $526.9 million compared with $526.4 million in the prior-year period. Its margin contracted to 79.7% from 80.4%.
SBAC Expands Its Tower Footprint
SBA acquired seven communication sites for $10.8 million and built 213 towers during the third quarter. Of the newly constructed towers, 210 were international sites, highlighting the company's continued investment in overseas markets.
At September-end, the company owned or operated 45,252 communication sites, including 17,340 in the United States and its territories and 27,912 internationally. Total cash capital expenditures were $105.2 million, comprising $14.1 million of non-discretionary spending and $91.1 million of discretionary investments.
The company also completed the sale of all its towers in Chile and Ecuador and entered into an agreement to sell its Peruvian portfolio. The Peru transaction remains subject to regulatory approval and is expected to close in the fourth quarter of 2026.
SBAC Strengthens Capital Returns and Liquidity
Net cash provided by operating activities totaled $325.1 million compared with $318 million in the year-ago quarter. SBA ended September with $13 billion of total debt, $12.5 billion of net debt and approximately $454.7 million in cash, cash equivalents, short-term restricted cash and short-term investments.
Net debt to annualized adjusted EBITDA stood at 6.4 times, while the net secured debt leverage ratio was 3.1 times. The company also established a $2.5 billion commercial paper program, backed by its revolving credit facility, to support general corporate requirements.
During the quarter, SBA repurchased 1.7 million shares for $300 million at an average price of $179.68. It had $800 million of authorization remaining under its stock repurchase plan.
SBAC Updates 2026 Outlook
Management revised its full-year 2026 outlook. Total revenues are now projected between $2.833 billion and $2.858 billion. The revised total revenue range represents an $18 million reduction at the midpoint compared with the previous outlook. Site-leasing revenues are expected in the range of $2.643-$2.658 billion, a reduction of $13 million at the midpoint from the prior quarter’s guidance. Adjusted EBITDA is forecasted between $1.918 billion and $1.928 billion, reflecting a $7 million reduction at the midpoint.
The company expects AFFO of $1.284-$1.308 billion and AFFO per share of $12.15-$12.37, with the latter midpoint increased 8 cents from the August outlook. The Zacks Consensus Estimate for the metric is currently pegged at $12.20 per share, which is within the guided range.
BXP, Inc. (BXP - Free Report) reported third-quarter 2026 FFO of $1.89 per share, beating the Zacks Consensus Estimate of $1.80 by 5%. FFO increased 8.6% from the year-ago quarter. Lease revenues increased 4.5% year over year to $846.2 million, surpassing the consensus mark of $839.9 million by 0.7%. Total revenues rose 4.6% to $911.4 million.
BXP’s results reflected better-than-projected portfolio performance, higher occupancy and growth in same-property net operating income (NOI), which supported the FFO and revenue beat.
Welltower Inc. (WELL - Free Report) reported third-quarter 2026 normalized FFO of $1.67 per share, beating the Zacks Consensus Estimate of $1.64 by 1.8%. The metric increased 24.6% year over year. Total revenues of $3.72 billion surpassed the consensus mark of $3.63 billion by 2.5% and rose 38.4% year over year.
WELL’s results benefited from robust senior housing operating portfolio performance, with same-store NOI growth and improvement in average occupancy.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.
View the Zacks #1 Rank List
Image: Bigstock
SBAC Q3 FFO Top Estimates on International Leasing Gains
Key Takeaways
SBA Communications Corporation (SBAC - Free Report) reported third-quarter 2026 funds from operations (FFO) per share of $3.19, surpassing the Zacks Consensus Estimate of $3.08 by 3.6%. However, the reported figure declined 3.3% year over year from $3.30.
Total revenues decreased 2.5% year over year to $713.9 million and missed the consensus mark of $727.1 million by 1.8%. Strong international site-leasing growth and higher tower cash flow in overseas markets supported performance, but domestic leasing weakness and a decline in site development revenues weighed on overall performance.
SBAC Gains From International Leasing
Site-leasing revenues increased 1.4% year over year to $665.4 million. Excluding foreign currency movements, growth was 0.4%. Site leasing contributed 98% of the company's total operating profit, underscoring the importance of recurring tower rental revenues to its business.
International site-leasing revenues climbed 13.3% to $211 million. Excluding foreign currency movements, growth was 9.8%. International site-leasing segment operating profit increased 15.5% to $149.1 million, while tower cash flow advanced 14.7% to $146.3 million. The corresponding tower cash flow margin improved to 70.5% from 69.3% in the year-ago quarter.
SBAC Faces Domestic Pressure
Domestic site-leasing revenues declined 3.4% year over year to $454.4 million. Domestic cash site-leasing revenues decreased 3.7% to $453.6 million. Sprint consolidation churn and EchoStar churn continued to weigh on the business and remained significant headwinds.
Domestic site-leasing segment operating profit (SOP) fell 4.4% to $382.6 million. Domestic tower cash flow declined 4.6% to $380.6 million, while the related margin narrowed to 83.9% from 84.7% in the prior-year quarter. These declines partly offset the improvement in international operations.
SBAC Encounters Revenue and Margin Headwinds
Site development revenues decreased 36% year over year to $48.5 million, contributing to the decline in consolidated revenues. Net cash interest expense rose 3.8% to $118.9 million.
Adjusted EBITDA decreased 1.1% year over year to $488.1 million. However, the adjusted EBITDA margin improved to 68.8% from 67.5% in the year-ago quarter. Tower cash flow was nearly unchanged at $526.9 million compared with $526.4 million in the prior-year period. Its margin contracted to 79.7% from 80.4%.
SBAC Expands Its Tower Footprint
SBA acquired seven communication sites for $10.8 million and built 213 towers during the third quarter. Of the newly constructed towers, 210 were international sites, highlighting the company's continued investment in overseas markets.
At September-end, the company owned or operated 45,252 communication sites, including 17,340 in the United States and its territories and 27,912 internationally. Total cash capital expenditures were $105.2 million, comprising $14.1 million of non-discretionary spending and $91.1 million of discretionary investments.
The company also completed the sale of all its towers in Chile and Ecuador and entered into an agreement to sell its Peruvian portfolio. The Peru transaction remains subject to regulatory approval and is expected to close in the fourth quarter of 2026.
SBAC Strengthens Capital Returns and Liquidity
Net cash provided by operating activities totaled $325.1 million compared with $318 million in the year-ago quarter. SBA ended September with $13 billion of total debt, $12.5 billion of net debt and approximately $454.7 million in cash, cash equivalents, short-term restricted cash and short-term investments.
Net debt to annualized adjusted EBITDA stood at 6.4 times, while the net secured debt leverage ratio was 3.1 times. The company also established a $2.5 billion commercial paper program, backed by its revolving credit facility, to support general corporate requirements.
During the quarter, SBA repurchased 1.7 million shares for $300 million at an average price of $179.68. It had $800 million of authorization remaining under its stock repurchase plan.
SBAC Updates 2026 Outlook
Management revised its full-year 2026 outlook. Total revenues are now projected between $2.833 billion and $2.858 billion. The revised total revenue range represents an $18 million reduction at the midpoint compared with the previous outlook. Site-leasing revenues are expected in the range of $2.643-$2.658 billion, a reduction of $13 million at the midpoint from the prior quarter’s guidance. Adjusted EBITDA is forecasted between $1.918 billion and $1.928 billion, reflecting a $7 million reduction at the midpoint.
The company expects AFFO of $1.284-$1.308 billion and AFFO per share of $12.15-$12.37, with the latter midpoint increased 8 cents from the August outlook. The Zacks Consensus Estimate for the metric is currently pegged at $12.20 per share, which is within the guided range.
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
BXP, Inc. (BXP - Free Report) reported third-quarter 2026 FFO of $1.89 per share, beating the Zacks Consensus Estimate of $1.80 by 5%. FFO increased 8.6% from the year-ago quarter. Lease revenues increased 4.5% year over year to $846.2 million, surpassing the consensus mark of $839.9 million by 0.7%. Total revenues rose 4.6% to $911.4 million.
BXP’s results reflected better-than-projected portfolio performance, higher occupancy and growth in same-property net operating income (NOI), which supported the FFO and revenue beat.
Welltower Inc. (WELL - Free Report) reported third-quarter 2026 normalized FFO of $1.67 per share, beating the Zacks Consensus Estimate of $1.64 by 1.8%. The metric increased 24.6% year over year. Total revenues of $3.72 billion surpassed the consensus mark of $3.63 billion by 2.5% and rose 38.4% year over year.
WELL’s results benefited from robust senior housing operating portfolio performance, with same-store NOI growth and improvement in average occupancy.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.