American Tower Q1 2025 Earnings Report

American Tower EPS Results

• Actual EPS: $2.75
• Consensus EPS: $2.41
• Beat/Miss: Beat by +$0.34
• One Year Ago EPS: $2.79

American Tower Revenue Results

• Actual Revenue: $2.56 billion
• Expected Revenue: $2.54 billion
• Beat/Miss: Beat by +$22.91 million
• YoY Revenue Growth: -9.60%

American Tower Announcement Details

• Quarter: Q1 2025
• Date: 4/29/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, April 29, 2025
• Conference Call Time: 8:30AM ET

American Tower (NYSE:AMT), one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of over 224,000 communications sites and a highly interconnected footprint of U.S. data center facilities.

American Tower Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower First Quarter twenty twenty five Earnings Conference Call. As a reminder, today's conference is being recorded. Following their prepared remarks, we will open the call for questions. If you would like to ask a question, please press 11 on your telephone.

[Operator]

You would then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. I would now like to turn the call over to your host, Adam Smith, senior vice president of investor relations in FP and A. Please go ahead, sir.

[Adam Smith, SVP, IR at American Tower]

Good morning, and thank you for joining American Tower's first quarter earnings conference call. We have posted a presentation, which we will refer to throughout our prepared remarks under the Investor Relations tab of our website, www.americantower.com. I'm joined on the call today by Steve Vondren, our President and CEO and Rod Smith, our Executive Vice President, CFO and Treasurer. Following our prepared remarks, we will open up the call for your questions. Before we begin, I'll remind you that our comments will contain forward looking statements that involve a number of risks and uncertainties.

[Adam Smith, SVP, IR at American Tower]

Examples of these statements include our expectations regarding future growth, including our 2025 outlook, capital allocation and future operating performance, and any other statements that regard matters that are not historical facts. You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward looking statements. Such factors include the risk factors set forth in this morning's earnings press release, those set forth in our most recent annual report on Form 10 ks and in other filings we make with the SEC. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances. With that, I'll turn the call over to Steve.

[Steven Vondran, President & CEO at American Tower]

Thanks, Adam. Good morning, everyone, and thanks for joining the call. As you saw in this morning's report, we're off to a strong start to the year, exceeding our initial expectations across property revenue, adjusted EBITDA, and attributable AFFO per share for the quarter, with demand persisting across our global portfolio against the challenging economic backdrop. I'll briefly share a few updates and trends from the quarter before Rob discusses more detailed financial results and our full year revised expectations. I'll start with leasing trends and carrier activity.

[Steven Vondran, President & CEO at American Tower]

The durability and quality of our cash flows combined with ongoing resilience and network investments to meet growth in the mobile data demand continues to offer our investors a compelling option in American talent. The large US carriers have publicly stated aggressive goals to substantially complete five gs equipment upgrades across nearly all of their networks by the end of twenty twenty six and are driving broad based amendment activity complemented by the early signs of capacity oriented new site demand. In fact, Q1 represented our fifth consecutive quarter of sequential increases in both application volumes and services revenue, which grew roughly 60% and over 140% year over year, respectively. Meanwhile, in Europe, we continue to see steady demand across our ground based and rooftop sites, highlighting a march toward elevating the roughly 45% current mid band population coverage and meeting 2,030 coverage targets. We're seeing similar resilience across our emerging markets.

[Steven Vondran, President & CEO at American Tower]

In Nigeria, improved consumer pricing dynamics are facilitating enhanced cash flows for the carriers and in turn, accelerating new business. In Brazil, the benefits of a stronger three player backdrop are beginning to emerge, with carriers steadily upgrading their networks to similarly realize the spectral efficiency benefits we've highlighted in The US, meet regulatory coverage requirements, and begin to fill on their networks. While we're encouraged by the demand across our emerging markets footprint, we're going to closely monitor the global economic backdrop and any potential implications of that, including on FX, where certain emerging markets could be more susceptible, along with various customer events and collections in select markets. Our CoreSite business posted yet another set of impressive results in the quarter, fueled by strong leasing and continued pricing favorability, while bringing the first phase of our NY3 center and the second phase of our CH2 center online, collectively adding 11 megawatts of capacity with a high degree of day one leasing. The team's consistent approach to underwriting with a focus on curating high quality interconnection rich ecosystems across the diverse set of cloud, network, and enterprise customers in leading markets yields best in class returns while insulating against broader market shifts.

[Steven Vondran, President & CEO at American Tower]

Overall, CoreSite performance, supported by accelerated demand and our right to win through market positioning and service quality, continues to exceed our initial expectations and merit the elevated levels of capital that we've allocated in our 2025 plan. Next, I'll touch on capital allocation and portfolio management. We continue to actively assess and manage our portfolio following our grow, harvest, and resolve methodology to reduce risk and drive higher quality, more predictable earnings. We've previously highlighted discretionary capital prioritization to our developed markets, where we have a right to win. Consistent with this approach, we purchased our DE1 Data Center in Denver, an existing facility where CoreSite had maintained a partial lease.

[Steven Vondran, President & CEO at American Tower]

Direct ownership of this building, which serves as the primary point of interconnection in the Rocky Mountain region, will enable Coorsight to control the area's only four cloud on ramps and one of the top network and peering ecosystems. Furthermore, on the resolve end of the equation, we successfully closed our previously announced sale of our South African fiber business in early March, marking a key step in the continued reduction of our international fiber footprint. These activities reflect productive steps in our continual aim to hone our global portfolio mix by emphasizing core markets and products that drive synergistic value and durable cash flows that we expect to translate into attractive returns for our shareholders over the long term. Finally, I'll touch on our global operations and our value proposition. We have a great core business anchored in high quality, high margin assets that we maximize with strong terms and conditions, strategic counterparties, and world class operational execution.

[Steven Vondran, President & CEO at American Tower]

We already have a track record of building on this strong foundation by leveraging our scale, core competencies, and financial flexibility in a way that drives both customer and shareholder value. This includes US innovations like our instant collocation engine, our fleet of drones and digital twin technology, our suite of site and construction services, our backup power solutions, and our programmatic approach to land buyouts, not to mention our holistic contract structures. Internationally, our best in class African power program, which we've optimized through accretive sustainable energy investments and the use of comprehensive data analytics, predictive monitoring leveraging AI, our enhanced European book to bill processing, and many other developments provide meaningful advantages. As we globalize more intentionally, there's significant opportunity to evaluate cross border applicability of these regional offerings to drive efficiency and unlock incremental value. Now, we're still in the early days of mapping our globalization plan, but we've already had an active start to the year as our team works to evaluate opportunities to streamline our operations and enhance synergies across our markets and products.

[Steven Vondran, President & CEO at American Tower]

We're excited to build on the momentum we've established and further leverage our scale, core competencies, and balance sheet to enhance our market leading position. And I look forward to sharing more specifics in time. In closing, growth in mobile data has proven resilient across various economic cycles over my two plus decades with American Tower. As I mentioned at the onset, I'm encouraged by the durability and leasing demand for our global portfolio of assets. While simultaneously exercise a degree of caution in anticipation of persisting forward looking volatility and uncertainty.

[Steven Vondran, President & CEO at American Tower]

I firmly believe that American Tower's approach to enhancing our organization and customer value proposition through the means that are within our control, including our globalization initiatives, portfolio mix and quality of earnings and balance sheet, provides an additional degree of strength and differentiation moving forward. Similar times of volatility uncertainty during my tenure have historically presented incremental opportunity for us. And I'm optimistic that the steps we're taking today will have us well positioned to capitalize on any environment. Now I'll hand the call over to Rod to discuss our first quarter financial performance.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Thanks, Steve. And thank you all for joining the call. As Steve mentioned, we are off to a strong start to 2025 with our customers continuing to invest in their networks as global mobile data consumption continues to grow. Before I discuss the specifics of our Q1 results and revised full year outlook, I'll summarize a few highlights. First, the solid leasing trends we observed over the course of 2024 continued into Q1 of twenty twenty five, resulting in consolidated organic tenant billings growth of 4.7%.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

As a result of accelerating power activity, our US services business delivered its highest quarter of revenue and gross profit since 2021, with applications rising nearly 30% compared to levels seen in Q4 of twenty twenty four and up roughly 60% versus Q1 of twenty twenty four, reflecting a mix of continued amendment driven upgrades and new co locations. In addition, CoreSite delivered high single digit revenue growth underpinned by a continuation of robust demand for our interconnection hubs. Consistent with past quarter themes, we complemented durable top line performance with prudent cost management providing year over year cash adjusted EBITDA margin expansion of nearly 70 basis points to 68.2%. Next, we continue to execute on our stated priorities, successfully closing the sale of our South Africa fiber business in early March, completing the purchase of our DE1 data center asset in Denver in early April, deploying over 75% of discretionary capital expenditures in the quarter towards our developed market platforms and resuming dividend per share growth of approximately 5% year over year for the quarter. Finally, we further mitigated 2025 refinancing risk by successfully accessing the debt capital markets last month issuing $1,000,000,000 in senior unsecured notes at a weighted average cost of just over 5 percent.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Proceeds from the transaction were used primarily to pay down existing debt. At the end of the quarter, floating rate debt represented approximately 4% of our total outstanding debt, while net leverage reduced to five times, in line with our stated target resulting in enhanced balance sheet strength and improved financial flexibility. Turning to first quarter property revenue and organic tenant billings growth on slide six, consolidated property revenue growth was slightly positive year over year and up approximately 3% excluding non cash straight line revenue, while absorbing approximately 300 basis points of FX headwinds. U. S.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

And Canada property revenue declined approximately 1% and grew over 3.5% excluding non cash straight line, including over 1% negative impact from Sprint churn. International property revenue was roughly flat year over year with growth of approximately 8% excluding the impact of foreign currency fluctuations. Finally, property revenue in our data center business grew by approximately 9%. Moving to the right side of the slide, consolidated organic tenant billings growth was 4.7% supported by solid demand across our global portfolio. In our US and Canada segment, organic tenant billings growth was in line with expectations at 3.6% and approximately 5% excluding Sprint related churn.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

As highlighted on our last earnings call, we continue to expect growth to be below 4% for the next two quarters due to Sprint churn before increasing to over 5.5 in Q4. Our International segment drove 6.7% in organic tenant billings growth, a modest acceleration from Q4 of twenty twenty four with generally consistent leasing trends, escalator contributions, percent and up over 5.5% excluding non cash straight line impacts, while absorbing approximately 300 basis points of FX headwinds. Growth was supported by a high conversion of cash property revenue through ongoing cost control and an over 140% increase in our US services gross margin associated with an increase in tower activity. Moving to the right side of the slide, attributable AFFO and attributable AFFO per share declined by approximately one and over 1% respectively, primarily due to contributions from the India business in the prior year period, which had benefited from nearly $30,000,000 in revenue reserve reversals. On an as adjusted basis, normalizing the prior year period for the sale of India, growth was approximately 6.6% driven by the high conversion of cash adjusted EBITDA growth to AFFO through the effective management of below the line costs.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Now turning to our revised full year outlook on slide eight. We are pleased with the results to date in the durable demand trends that underscore our performance. However, like prior years and given proximity to our previously released outlook, we have kept core full year expectations largely unchanged with updates to our FX assumptions. Consistent with past practice, our projected FX rates for outlook take the more conservative of bank forecasts and the trailing thirty day spot rate averages for each currency, which has generally resulted in rates more conservative than current spots. As a result, we are raising our expectations for property revenue, adjusted EBITDA, attributable AFFO and attributable AFFO per share by approximately $50,000,000 30 million dollars 20 million dollars and $04 respectively compared to prior outlook solely attributable to updated FX assumptions.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

At the midpoint, our expectation for attributable AFFO per share is $10.44 or nearly 5% growth year over year on an as adjusted basis. Furthermore, we are reiterating our prior outlook expectations for organic tenant billings growth across all regions, including greater than or equal to 4.3% in The US and Canada, or greater than or equal to 5.3% excluding the impacts of Sprint churn, and approximately 12%, five % and two % to the Africa and APAC segment, Europe and Latin America respectively. Collectively driving approximately 6% for international and approximately 5% on a consolidated basis, Complementing our organic trends and supporting margin expansion, our revised outlook maintains the expectation for a year over year reduction in cash SG and A. Turning to slide nine, we are generally maintaining consistent capital allocation expectations for the year, updated only to reflect small M and A transaction closed during or shortly after the quarter. We continue to expect an approximately $3,200,000,000 common dividend distribution to our shareholders subject to Board approval and approximately $1,700,000,000 in capital expenditures, which includes 2,250 newly constructed sites at the midpoint and roughly $610,000,000 for data center development.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

I'd like to reiterate that while overall capital spend is moderately increasing year over year as we execute on attractive development opportunities across The U. S, Europe and CoreSite, we continue to reduce investments across our emerging markets. In 2025, investments in Latin America, Africa and APAC will primarily consist of augmenting sites to accommodate incremental tenants and executing on previously committed multi year built to suit agreements with leading carriers. Moving to the right side of the slide, our balance sheet remains strong, providing financial flexibility and optionality, including $11,700,000,000 in liquidity and low floating rate debt exposure. Turning to slide 10 and in summary, we're off to a great start to 2025.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

The resilience of our global business demonstrates strength amidst the challenging economic backdrop. Despite ongoing market uncertainty, carriers continue to invest in the networks to accommodate growing demand for mobile data consumption, which underscores the critical nature of our global portfolio of assets. This, combined with our highly focused and disciplined approach to capital investing, our best in class operating platforms, and our strong balance sheet position us well to reliably deliver high quality earnings and compelling total shareholder returns over the long term. And with that operator, we can now open the line for questions.

[Operator]

Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by while we compile the Q and A roster.

[Operator]

Our first question comes from Matt McNam from Deutsche Bank. Please go ahead.

[Matt Niknam, Analyst at Deutsche Bank]

Hey, guys. Thanks so much for taking the questions. Maybe two if I could. First, maybe more high level. You've done a lot of portfolio optimization in recent years.

[Matt Niknam, Analyst at Deutsche Bank]

And so I'm wondering if it's fair to assume on a go forward basis a more sharpened focus on the globalization strategy, more cost optimization with the remaining assets that you've got in place? And then secondarily, on The U. S. Side, it sounds like there's still a lot of momentum both in services and new applications. I'm just wondering how we should think about the cadence of COLO and amendment revs in upcoming periods relative to the 38,000,000 in 1Q?

[Matt Niknam, Analyst at Deutsche Bank]

I guess more specifically, whether you're still comfortable with that 165,000,000 to $170,000,000 range that was laid out for new leasing last quarter? Thank you.

[Steven Vondran, President & CEO at American Tower]

Yeah, Nick, thanks for the questions. I'll take the first question. I think it's fair to say we're going be focused on both. When you look at our portfolio optimization, that's an ongoing analysis that we will continue to do with the management team and the board. And so that's something that we look at on a continuing basis.

[Steven Vondran, President & CEO at American Tower]

We review it and, I think what we've said pretty clearly is we don't have anything that we're specifically looking to divest necessarily, but there are markets that are in our resolve category that we've highlighted and also businesses that are non core to our business. And with those businesses, the way we look at that is we look at the value of the ongoing cash flows. And then if we think that someone's willing to pay more than the value of those ongoing cash flows, then we would look to do a transaction. If not, we'll harvest the cash flows from those and continue to operate them. And we have kind of reordered our operations so that there's nothing that there's a compelling reason to divest.

[Steven Vondran, President & CEO at American Tower]

We've kind of started operating some of those markets out of regional hubs and looking at it that way. So we'll continue to do that evaluation, and you may see us continue to optimize. You may see us not do that if it's not going to add more value for the long term. Our globalization efforts though are a huge focus for us right now. We've been very successful in bringing down SG and A over the past couple of years.

[Steven Vondran, President & CEO at American Tower]

And, we've kind of took the low hanging fruit first on that. We still think there's some room there as well. We're going to keep working on that. And what we've got Bud focused on in his new role as Chief Operating Officer is really looking at the rest of the business across the globe to see what type of synergies can we get across the globe with the rest of our cost structure. And we're in the sick of that right now.

[Steven Vondran, President & CEO at American Tower]

We've got people, teams looking at that. We're looking through the different categories of spend and we're trying to figure out what the opportunities are there. And that's something that we'll share with you guys later in the year as we come up with some better targets on that. But we're encouraged by what we're seeing. We think there's definitely some opportunities there to take some of these best practices that I highlighted in my opening remarks across the globe.

[Steven Vondran, President & CEO at American Tower]

And we're excited to focus on that as well.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Hey, Matt. Good morning. I'll take the second part there. I think you asked really two questions. The first one hit, the services number and how that kind of rolls into the new business number.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

As you heard in my prepared remarks, we started this year with a really strong services result, achieving about $75,000,000 of services revenue for Q1. And we're seeing a pickup in activity versus our original outlook that we talked about last February when we announced the Q4 earnings. Things are starting off very strong for us. We also expect that to continue into Q2. That's steady kind of strong demand for the services business.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

So Another quarter in that range of about $75,000,000 is what we're targeting. Still in the range for the full year for a strong revenue full year number in or around the $240,000,002 $50,000,000 range, That would imply a lower amount of revenue for Q3 and Q4. So we do see that in our outlook. Now, of that is driven just on the reduced visibility when you get into the outer part of 2025. So can we outperform that?

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Certainly possible. We have less visibility when you get to the end of the year. So we are seeing a very strong start to services and we expect maybe that drifts down a little bit just because we don't have as much clarity when you get to the end of the year. When you jump into the new biz numbers, the +1 number for The US is absolutely what we are targeting. You saw for Q1 we hit a number around $38,000,000 That was down a little bit from Q4, which was about 45,000,000 This cadence here is really the opposite of what we see in the services.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Another month or another quarter for Q2 in that $38,000,000 range wouldn't be out of the expectation for us. And then in acceleration, they're getting up over 40,000,000 for the last two quarters, over $40,000,000 for the last two quarters. That would put you right in that target range of the 165 plus.

[Matt Niknam, Analyst at Deutsche Bank]

Great. Thank you both.

[Operator]

Thank you. One moment for our next question. Our next question comes from Jim Schneider from Goldman Sachs. Please go ahead.

[Jim Schneider, Senior Equity Analyst at Goldman Sachs]

Good morning. Thanks for taking my question. Two, if I may. First of all, when you look at the, sort of U. S.

[Jim Schneider, Senior Equity Analyst at Goldman Sachs]

Carrier activity and the activity you're seeing there, with respect to leasing activity, seems relatively consistent with what you had projected. But on the margin, can you maybe talk about any kind of changes that you're seeing as we head through the end of the year in terms of what is being prioritized by the carriers in terms of new activity? And then secondly, following up on the cost efficiency program, Steve, you're pretty clear about that being a focus for you. Maybe just give us a sense of without giving us a firm target directionally as you head into the out years, is the target to kind of get from the 7% constant currency AFFO growth you're doing this year to something closer to double digit in the out years? Thank you.

[Steven Vondran, President & CEO at American Tower]

So I'll start with the care activity in The U. S. So, what we're seeing is exactly aligned with what we've expected to see. We talked about it last year and talked about it this year, which is kind of a steady ramp, which we think is consistent for this phase of the five gs build. And if you look at the public statements by the carriers, they've all set some pretty aggressive targets to getting to, close to full deployment of their mid band spectrum, across the portfolio.

[Steven Vondran, President & CEO at American Tower]

So there's still a decent amount of amendment activity that we expect to see over the next two years as they take those percentages covered by mid band, from somewhere in the 50% range for one of the carriers, one, the other two are little bit higher up to that 80 to 90% coverage over time. So there's still a good degree of activity there as well. We are still seeing, some new collocations as well though. And that comes in two flavors. We are seeing people that are increasing coverage.

[Steven Vondran, President & CEO at American Tower]

Some of those consistent with governmental requirements they have. Some of them just trying to paint the map a little bit more. And we are starting to see some new co locations coming in for densification. So it's really consistent with what we've been talking about for the past couple of years, which is the care activity is broad based. They are going to continue to deploy their five gs until that becomes ubiquitous.

[Steven Vondran, President & CEO at American Tower]

And we are starting to see the early signs of densification, which is what we thought we would see at this place in the cycle here. When it comes to the globalization, nice try. I'm still not gonna give you guidance for multi year, but, I'll give you credit for trying there. The way we're looking at it is we're looking at the category of expenses that's really in our controllable spend. So you've got our operations and maintenance, the SG and A we're already looking at, looking at our supply chain to see if we can actually impact our growth CapEx, our maintenance CapEx by doing a little bit better there.

[Steven Vondran, President & CEO at American Tower]

And we'll continue to assess that. There's no specific target for that. And so I'm not gonna commit to what we're gonna get to on AFFO in those out years. Certainly the focus for the entire management team here though is to do everything we can in the business to grow our FFO per share. And we're focused on that long term value creation.

[Steven Vondran, President & CEO at American Tower]

So everything that we do, including our cost savings is geared toward the long term. We're not looking to make a splash in a quarter and then have expenses rebound. We're not looking to damage the business and hurt our growth. We're looking to be very thoughtful about all the changes we make to actually increase our customer service, to increase our automation, to actually increase revenues by being a better partner to our customers. And as we have those targets, I'll share those later in the year.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Hey, Jim, maybe I'll just highlight a couple of numbers here. So for the '25 outlook, maybe just reminding you and the group here that we are planning for SG and A reductions at about $13,000,000 mid teens here, excluding the impacts of non recurring bad debt that we saw in 2024. And that's on top of a '24 over '23 result where we reduced SG and A without the impacts of bad debt by even more than that. So we've been managing costs pretty tightly throughout the SG and A for a few years now, consistently bringing those numbers down in the face of pretty significant inflation in The US over the last several years.

[Jim Schneider, Senior Equity Analyst at Goldman Sachs]

I had to try. Thank you.

[Operator]

Thank you. One moment for our next question. Our next question comes from Rick Prentiss from Raymond James and Associates. Please go ahead.

[Ric Prentiss, Managing Director at Raymond James Financial]

Thanks. Good morning, everybody.

[Steven Vondran, President & CEO at American Tower]

Morning, Rick.

[Ric Prentiss, Managing Director at Raymond James Financial]

Hey. Couple questions. Appreciate that. First, I always have thought capital allocation is probably the top job for senior management. You guys have been working on on that as you laid out.

[Ric Prentiss, Managing Director at Raymond James Financial]

Leverage now hit 5.o. We're getting closer to that coming below 5.o. Update us as far as thoughts on stock buyback. Is there an authorized program? M and A, clearly another potential.

[Ric Prentiss, Managing Director at Raymond James Financial]

Any portfolios out there? And maybe explicitly talk about Canada as a market, not necessarily the transactions that might be out there, but what would be the attributes that would be attractive in a country like Canada?

[Steven Vondran, President & CEO at American Tower]

Sure, Rick. So stock buybacks are absolutely on the table as one of the potential uses for the capital that we generate. We do have an authorization by the board. It's a $2,000,000,000 authorization that's outstanding. So that is out there.

[Steven Vondran, President & CEO at American Tower]

At this point, the way we look at our capital allocation to your point, we just got to So we should be delivering further from there. And the way we really look at is what's going to create the most long term value. So we'll weigh those stock buybacks against any M and A opportunities, our internal CapEx program further delevering, etcetera. In terms of the M and A market today, we did close a small transaction in The US this year already.

[Steven Vondran, President & CEO at American Tower]

So we'll continue to be opportunistic where you find the right portfolio at the right price. We don't see any large scale opportunities that are taking us off of our path. And so we've been pretty clear about that for the past few quarters. That hasn't changed. We're still not seeing any huge opportunities out there that we think are compelling enough.

[Steven Vondran, President & CEO at American Tower]

Canada is an interesting market for us. We have a small portfolio there. It's performing very well. So we like that market in terms of what we're seeing today. And we have a lot of ability to operate that market out of The US.

[Steven Vondran, President & CEO at American Tower]

So there's a lot of synergies that we would have if we did do something in Canada. And I know there's some rumors of transactions out there. And what I would say is true of Canada is very similar to what we had in Europe, which is we're gonna be very disciplined in looking at terms and conditions, number one, and valuations, number two, in terms of trying to figure out if a transaction makes sense. And so if a portfolio trades and the terms and conditions are something that's not gonna give us a long term value creation opportunity, that's probably not the right deal for us. Similarly, if the price is too high, you know, we're not gonna stretch for something unless we think it's gonna create a lot of long term value for our shareholders.

[Steven Vondran, President & CEO at American Tower]

So we like the market. We can operate it from The US with a very huge amount of synergies that we did there. And it would make sense if we had the right deal, but we're gonna be patient and get the right terms and conditions and valuation on it.

[Ric Prentiss, Managing Director at Raymond James Financial]

Makes sense. I think, have you changed your middle name officially to C terms and conditions on John?

[Steven Vondran, President & CEO at American Tower]

I think I did it a long time ago, Rick.

[Ric Prentiss, Managing Director at Raymond James Financial]

One follow-up for me also, some questions around colocation amendments. Can you break out for us what either in the applications or new revenue 1Q saw as far as colocation amendment kind of the split between those? Because we are watching it. Some folks are starting to see some higher amount of new colocation obviously comes in at a much higher incremental revenue than amendment.

[Steven Vondran, President & CEO at American Tower]

Yeah, so we're seeing a continued increase in the colocation applications. And so with that, we're seeing an increase in both amendments and new leases. And while the percentage of contribution from the colocations has increased a little bit, the base has gotten bigger too. So it's not a huge proportionate shift for us. Again, if you look at where those carriers are, you've got one that's about 80% deployed, one's in the 65 to 71 that's still around 50.

[Steven Vondran, President & CEO at American Tower]

So there's still a lot of amendment business to be done on our portfolio. So while I do see an increase in colocations, it's not making a huge shift in our mix today.

[Ric Prentiss, Managing Director at Raymond James Financial]

We expect over the next couple of years, we see more of that.

[Steven Vondran, President & CEO at American Tower]

Oh, you definitely will. We're seeing this phase of densification start and even before you get the applications, you start having conversations with the carriers. They start asking for more information on the towers, what rad centers are available, what structural capacity look like, etcetera. So as we continue to hear that information request, that gives us a lot of confidence that we're gonna see an increase in collocations over time as they move into that densification phase over the next few years.

[Ric Prentiss, Managing Director at Raymond James Financial]

Great.

[Ric Prentiss, Managing Director at Raymond James Financial]

Thanks, guys.

[Operator]

Thank you. One moment for our next question. Our next question comes from Michael Rollins from Citi. Please go ahead.

[Michael Rollins, Analyst at Citigroup]

Thanks and good morning. Just first, when you look at the colocation opportunity that you're just describing, I'm curious how much of that is competitive, whether it's other large tower firms or smaller private firms or build to suits, whether it's by the carrier or some of the other private firms. How much of that is competitive? And is there an opportunity to work with your customers to try to improve your share or win rate, if that's an option? And then second, just looking at the annualized EBITDA and it looks to be above the high end of the guidance range, the annualized first quarter number.

[Michael Rollins, Analyst at Citigroup]

Just curious if there are certain items that we should be mindful of through the year that may pull EBITDA back into the current guidance range.

[Steven Vondran, President & CEO at American Tower]

Sure. I'll take the first question and let Ron answer the second. So when you look at the new colocations, the carriers are deploying, it really depends on where they're deploying on what the competitive options are. If you look at all the towers in The US, there's very little overlap between existing towers in most of the markets. And that just makes sense.

[Steven Vondran, President & CEO at American Tower]

You don't want to deploy redundant capital if you don't need to. Colocation is the most cost effective way for everyone to deploy. So you don't see a ton of overlap between the towers that are out there. When you're getting into pushing into kind of paint the map spaces where people are trying to increase rural coverage, a lot of those areas don't have coverage because there are towers there. So you do see more new builds in that area.

[Steven Vondran, President & CEO at American Tower]

So overall, it kinda depends on the geography that they're in. In terms of whether you can influence your share, you can, and it comes at the RF design phase. It's when they're actually designing their networks. And if you are a preferred partner and you provide great customer service, they know you can get them on air quickly, they'll target your sites. And that's what we see with our customers and what we've been able to do over time is to get a good share of their business by being a really good partner to our customers, providing great customer service.

[Steven Vondran, President & CEO at American Tower]

Now, when you're looking at infill sites and some of the densification, there may be a little bit less flexibility because you're looking at filling in sites within an existing design. So the geography probably plays a bigger role in where that split cell has to be, or in terms of trying to fill a hole in the network where that is. And so they made fewer choices there. So it's a little bit of a mixed bag depending on what their goal is, where they're building and what the existing infrastructure is.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Hey Michael, I'll take the second question you had there relative to the EBITDA and the cadence throughout the year. What I would say is we're very pleased with our Q1 results. We had a strong result on EBITDA and AFFO, AFFO per share. When it comes to EBITDA going out for the full year and our outlook, at this point, we believe that it's prudent to just hold our outlook kind of where it is. So we did outperform our EBITDA outlook for Q1.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Some of that was driven by the strong services outcome. Again, and I mentioned this a few minutes ago, there is the potential for services revenue and therefore margin and EBITDA contribution to drift down in Q3 and Q4. So that could reduce kind of the run rate of EBITDA. But at this point, given the proximity of our original outlook and quite frankly, the general kind of market backdrop and maybe this is more appropriate to AFFO and AFFO per share, where you see the same kind of a cadence, right? If you look at our Q1 AFFO and AFFO per share result and you annualize that for the full year, it suggests we're going to outperform our full year outlook.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

When you get into the AFFO numbers, some of the drivers there can be different quarter to quarter. Notably, cash taxes, there's a significant timing issue there for differences quarter over quarter, as well as maintenance CapEx. So those things kind of can move that number around on a quarterly basis. So when look at EBITDA and AFFO, yes, we had a very strong, very good quarter in Q1. If you would annualize that, you'd get an additional outperformance for our full year numbers.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

At this point, because of timing issues, because of a potential decline in services at the end of the year, we think it's prudent to just hold those outlooks consistent with the original outlook with the exception of updating the FX numbers.

[Michael Rollins, Analyst at Citigroup]

Thanks.

[Operator]

Thank you. One moment for our next question. Our next question comes from Nick Del Deo from MoffettNathanson. Please go ahead.

[Nick Del Deo, Managing Director at Moffettnathanson LLC]

Hey, good morning guys. Thanks for taking my questions. First, can you expand a bit on the sort of services work that you're seeing behind the big increases and the degree to which that revenue is coincident with the leasing activity that you're seeing versus being more of a leading indicator? And second, I know you need to be a bit careful with the specifics of any deal in any particular customer. But if EchoStar would engage in some sort of transaction involving its spectrum, whether a sale or a lease, do you have any contractual protections above and beyond, their promise to pay the agreed upon rent?

[Nick Del Deo, Managing Director at Moffettnathanson LLC]

Thanks.

[Steven Vondran, President & CEO at American Tower]

So I'll start with the EchoStar question first on that. When we get in terms of conditions with the agreement, but we do, expect to get paid. So all we've built into our kind of ongoing guidance our kind of future growth is the minimum contractual commitments under that agreement. So that's what's baked into our multi year guide and that's what we're expecting out of those guys. We're not anticipating anything that materially changes their business.

[Steven Vondran, President & CEO at American Tower]

And if it does, we'll kinda figure that out when it happens, but we do expect to get paid there. Sorry. Remind me the first question. Hold on. The service.

[Nick Del Deo, Managing Director at Moffettnathanson LLC]

Oh, sorry. You just

[Steven Vondran, President & CEO at American Tower]

Yeah.

[Nick Del Deo, Managing Director at Moffettnathanson LLC]

Yeah. The service, you know, the mix there and the degree which is coincident versus a a leading indicator.

[Steven Vondran, President & CEO at American Tower]

Yeah. So our services business, I kinda break into two categories. The the first is really site acquisition services and that's things like zoning and permitting, engineering services, things like that. And that's a pretty steady part of the business. We do have a slightly larger proportion of construction services this year.

[Steven Vondran, President & CEO at American Tower]

We don't do construction services nationwide. We don't do it for all the carriers. It's much more of a targeted activity that we do in a couple regions because we've got really good teams there. And that construction services is project management. We don't have the crews climbing the towers.

[Steven Vondran, President & CEO at American Tower]

We're managing that process. So we have seen a slightly larger component of that this year, but the overall services business is up. And in terms of how that translates into revenue, there's a little bit of a disconnection from the activity levels and services to our property revenue because of our comprehensive agreements. So in those agreements, there's a steady cadence It's a little bit independent of the activity levels.

[Steven Vondran, President & CEO at American Tower]

However, we do have one customer that's not on a comprehensive agreement, and we also have, new co locations that are outside of some of the other comprehensive agreements. And so those are much more affected by activity timing. And when you think about the cadence of services versus the property revenue, if they're not part of the comprehensive agreement, there is a little bit of a lag time from when you see the services revenue to when you see those commits. And that varies a lot by customer. So I would think about that as being somewhere in the neighborhood of sixty to one hundred and eighty days, depending on the customer and the type of transaction and the geography on that.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Hey Nick, I'll just add one additional point when it comes to services. The margin that we see in that business this year, notwithstanding the increase in revenue and what's in the way Steve talked about the shift towards a little bit more construction management. We are consistently seeing north of 50% margins. Our outlook assumes a 52% margin on this business, which is very consistent with what we saw in 2024.

[Nick Del Deo, Managing Director at Moffettnathanson LLC]

Okay. Great. Thanks, guys.

[Operator]

Thank you. One moment for the next question. Our next question comes from Badia Levi from UBS. Please go ahead.

[Batya Levi, Managing Director - Communications, Media & Infrastructure Analyst at UBS Group]

Great. Thank you. My other question on LatAm, I think you mentioned that you are seeing a bit of more activity showing up. We haven't really seen that in the results yet. So can you talk to the cadence of incremental leasing in LatAm?

[Batya Levi, Managing Director - Communications, Media & Infrastructure Analyst at UBS Group]

And I think churn came in a bit lower. Was that just timing? And how should we think about the escalator? I think that was better as well.

[Steven Vondran, President & CEO at American Tower]

Sure. So we are seeing pockets of increased activity in particular in Brazil have some of the carriers who made some public statements about starting to enhance their five g offerings. So we continue to see some new business from that. There are also markets that are further behind in that cycle because it's taking time to get the spectrum out there. So, if you look at Mexico, Mexico is a little bit behind in terms of starting a five gs deployment there.

[Steven Vondran, President & CEO at American Tower]

So it's a little bit of a mixed bag. And we do still have multiple years of churn in Latin America. So we are guiding for OTBG in Latin America to be low single digits for the next three years. And part of that is the Oi churn. We'll continue to see wireless churn from Oi over the next two years.

[Steven Vondran, President & CEO at American Tower]

And 2027, we'll have wireline churn from Oi. And we do have some churns that we've already recognized in those markets. So we're past most of the Telefonica churn in Mexico at this point. And we have had some churn in Columbia and Chile that we've worked through with WOM and we'll continue to monitor that and see how that progresses. But that's all consistent with our multi year guide of low single digits there.

[Steven Vondran, President & CEO at American Tower]

And so we are seeing again, a little bit more investment as the Brazil carriers get through their digestion of the purchase of Oi as they start working on their networks. We think that'll continue and we think we'll continue to see growth in leasing across that market, but we're still going to face the headwinds of churn for the next three years there. In terms of the escalator, it's, we're anticipating about 5% in 2025, but that is CPI dependent.

[Batya Levi, Managing Director - Communications, Media & Infrastructure Analyst at UBS Group]

Got it. Thank you.

[Operator]

Thank you. One moment for our next question. Our next question comes from Eric Luchow from Wells Fargo. Please go ahead.

[Eric Luebchow, Director - Senior Equity Analyst at Wells Fargo Securities]

Great. Thanks for taking the question. You know, you mentioned that, you know, you're obviously off a holistic agreement or comprehensive agreement with one of your large carriers and I know they have a lot of work to do with mid band coverage. So maybe you could provide some color on any discussions with them on potentially, moving into a new holistic agreement? Are you happy with the ala carte arrangement?

[Eric Luebchow, Director - Senior Equity Analyst at Wells Fargo Securities]

And how do you think about kind of the gains of their spending contributing to your leasing throughout this year into next?

[Steven Vondran, President & CEO at American Tower]

Yeah, thanks. When we think about our comprehensive agreements, those are really a vehicle to make the operational relationship between the customer and us a lot simpler and a lot easier. And we're very comfortable operating either on a la carte basis or in a conference of MLA. And you can pretty much be assured we're always talking with all of our customers about about a deal. The ink doesn't even draw on the signature before you're having the next discussion with with the customers on that.

[Steven Vondran, President & CEO at American Tower]

But in terms of whether we're gonna get into a new agreement or not, we're pretty agnostic about that. We're open to it. And so we'll just continue to provide the best customer service we can. We'll continue dialogue with the customers. And if the interests align in doing something, we will.

[Steven Vondran, President & CEO at American Tower]

And if they don't, we'll continue in the a la carte basis. For us, it's really about whatever drives the best long term value. And if you look at our leading growth that we had today, it's a function of what we signed in our Ts and Cs twenty years ago. And we'll continue to be disciplined about that. We'll continue to do what is the best thing for our customers and our shareholders in terms of negotiating those agreements over time.

[Steven Vondran, President & CEO at American Tower]

So you shouldn't read anything negative or positive into the fact that we don't have a comprehensive MLA. It's just not the right structure for the parties at the time.

[Eric Luebchow, Director - Senior Equity Analyst at Wells Fargo Securities]

Great, thank you. And just one follow-up question. I wanted to touch on the CoreSite footprint. There obviously have been a ton of headlines in the data center segment year to date around certain hyperscalers slowing, some questions around enterprise IT spending, just given the lack of visibility in the broader economy. So maybe you could just touch on what your sales funnel looks like within the data center business, across the cloud companies and the more type of retail colocation companies as well.

[Steven Vondran, President & CEO at American Tower]

We have a robust sales funnel at CoreSite. And just to remind everyone, it's really an interconnection business. It's different than what you would see in a hyperscale world or in a colo facility that's really there for people to save money. People come to CoreSite because they need to be in an environment where they can interconnect to multiple players, have access to multiple cloud on wraps. And we're not seeing any flagging of demand for that today.

[Steven Vondran, President & CEO at American Tower]

In fact, what we see is more and more enterprises wanna take advantage of the multi cloud environment so that they can take advantage of some of the new tools, some of it being AI, some of it being traditional cloud tools that are there. And what we're seeing in that space is more demand. We're seeing our existing customers looking for more space. We're seeing new customers looking for larger installations there. And we just don't see that tailing off anytime soon.

[Steven Vondran, President & CEO at American Tower]

We think that core business of ours continues to be robust. We also see good demand in the retail space. So we've been able to have a few good quarters in retail that give us a lot of, confidence about that business going forward. But it's really that core enterprise demand. It's in that interconnection ecosystem that drives the bulk of our leasing in CoreSite.

[Steven Vondran, President & CEO at American Tower]

And we think that that's a durable demand for the foreseeable future, despite the pullbacks you see in hyperscale, despite, you know, even in the economic uncertainty that's out there, people are gonna continue to invest in automation because that's how they're gonna get the cost savings they need for the rest of their business. So we feel very confident about that demand pipeline.

[Eric Luebchow, Director - Senior Equity Analyst at Wells Fargo Securities]

Alright. Thanks, Steve.

[Operator]

Thank you. One moment for our next question. Our next question comes from Mike Funk from Bank of America. Please go ahead.

[Michael Funk, SVP at Bank of America]

Yeah. Good morning. Thank you for the questions.

[Michael Funk, SVP at Bank of America]

So you mentioned uncertainty a few times in prepared remarks and you held back from increasing guidance ex the FX impact. So I guess maybe some more color if you could on the markets that are more vulnerable that are leading you to maybe hold back on increasing guidance and, what you're looking for in those markets?

[Steven Vondran, President & CEO at American Tower]

I'll start. Maybe Ronald want to jump in there. When we think about The US, you don't think any of the uncertainty that's out there is gonna affect demand in The US this year. Even some of the uncertainties driven by things like tariffs, that's probably more of a future looking risk than a 2025 risk. Most of the equipment that people are gonna deploy is already here in warehouses this year.

[Steven Vondran, President & CEO at American Tower]

So we're not as worried about The US. When we look at internationally, there's probably some opportunity and some risk in those markets given some of the macro uncertainties that are out there. When there's global macroeconomic shocks, it tends to affect the emerging markets more than it does the developed market. And so that's what we're watching now is to see if there's any impacts there that we're not anticipating. There's nothing in our view shed today that we're specifically worried about.

[Steven Vondran, President & CEO at American Tower]

It's much more the general economic condition that's out there. And probably the biggest impact that we're seeing right now in the uncertainty is FX. But I'll let Rod jump in.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Yeah, good morning, Mike. Thanks for the question. A couple of things that I would highlight when I think of uncertainty, and you heard me say it in my prepared remarks, it's really the general macroeconomic backdrop. The uncertainty around potential increases in inflation in The US or decreases. It could go either way.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

I think the uncertainty there still exists. That certainly has puts uncertainty in the mix when you think about interest rates going forward. I think we've all appreciated over the last several months some of the political discussion around tariffs and other things can have impacts on businesses around the globe. It also can have impacts on foreign exchange rates, which we are sensitive to in certain regions. So maybe I'll highlight that piece first.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Think everyone can appreciate our methodology of applying FX rates to our outlook. I described that in the prepared remarks. If you just take the spot rates today, we would see a benefit of up to $120,000,000 in our revenue line in our outlook for the balance of this year. That would also translate into a $70,000,000 positive impact to the EBITDA numbers that we have. That's better than $0.10 on an AFFO per share.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

That's better than the outlook we just rolled out this morning for everyone. So it's too early for us to count on those spot rates. Things can change. That's an example of uncertainty. And then also with interest rates.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Interest rates can move around and that certainly can impact our AFFO and AFFO per share. Now with that said, you've seen us take multiple steps to strengthen our balance sheet to reduce the refinancing risk this year. That includes paying down much of the bonds that are coming due this year as well as dramatically reducing our exposure to floating rate debt. We've gotten that down into the low single digits as a percent of our total debt being exposed to floating rate debt. That's less than $1,000,000,000 of floating rate debt in aggregate in total.

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

The other thing I would highlight here is we only have a handful of bonds left to renew. It's a little over $2,000,000,000 when you think about the balance of this year. And within that, it's about $2,500,000,000 or so. Within that, we've already refinanced or issued new bonds at the beginning of Q2 here of $1,000,000,000 So we've already taken half of that remaining refinancing risk off the table. That puts us in a pretty good place relative to refinancing risk, right?

[Rodney Smith, Executive VP, CFO & Treasurer at American Tower]

Maybe $1,000,000,000 of refinancing going out up against the very low percentage of our debt that is exposed to floating rate debt. That means we could refinance all of the remaining bonds throughout 2025 without getting into the capital markets at all if we chose to. And we could pay those off with the revolvers we have and still be in the single digits in terms of ending the year with floating rate as a percent of our overall. That gives us tremendous optionality to manage through this uncertainty. So those are just a couple of examples of what uncertainty means to us.

[Michael Funk, SVP at Bank of America]

Yeah. Thank you for the color. One more if I could quickly. Can you help us frame how much the service revenue growth was due to one carrier upgrading or doing the RAN upgrade versus more traditional, service revenue? Or maybe how far they are through that process?

[Steven Vondran, President & CEO at American Tower]

You know, it's pretty broad based on that. So, you know, with with the construction services, that is much more regional for one carrier, but you can't read anything into that because it's a pretty steady cadence with that carrier, regardless of what they're doing in the active you know, in the area there. But I would just say the rest of the services business is pretty broad based.

[Michael Funk, SVP at Bank of America]

Okay. So so more

[Michael Funk, SVP at Bank of America]

more organic, not necessarily one carrier ran upgrade on dependent.

[Steven Vondran, President & CEO at American Tower]

Yeah. It's just more general activity levels on the tower. So it's a little bit of everything. It's the new new co locations. It's the amendments.

[Steven Vondran, President & CEO at American Tower]

It's just all the activity on our sites. We capture a pretty high degree of that activity in our services business.

[Michael Funk, SVP at Bank of America]

Great. Thank you for time.

[Operator]

Thank you. One moment for our next question. Our next question comes from Ben Swinburne from Morgan Stanley. Please go ahead.

[Benjamin Swinburne, Head of U.S Media Research at Morgan Stanley]

Thanks. Good morning. Excuse me. Two questions. We had another quarter last week of strong fixed wireless growth across your domestic carrier customer base.

[Benjamin Swinburne, Head of U.S Media Research at Morgan Stanley]

And I know it's hard to sort of map that to what you're seeing in your business, but just wanted to see if, Steve, do you have any updated thoughts on sort of the increased activity you keep talking about and seeing in your business, the outlook for accelerating growth and the role fixed wireless may or may not be playing in carrier investment into their networks? And then maybe for Rod, I think you guys last quarter talked about having maybe a quantified cost savings initiative message for us later this year. I know you don't have anything new on that front today, but just wondering if you have any update in terms of the process or things the team is focused on or opportunities that you think are sizable just as we kind of, think about that opportunity longer term for the company? Thank you.

[Steven Vondran, President & CEO at American Tower]

I'll take the second one first on the cost savings. And it's really a matter of where we are in the process is we've got teams looking at the various cost components around the globe. And so the way I would think about that is you've got SG and A that we have looked at. We've already made some progress on SG and A over the portfolio. And so we've kind of harvested a lot of the low hanging fruit there.

[Steven Vondran, President & CEO at American Tower]

There's still probably a little bit of room there, but we're still trying to figure out exactly what what that means. When you look at the rest of the of the cost stack, it's things like operations and maintenance, know, some of our our development CapEx, things like that. We may be able to save some money with supply chain, but we're still in the early days of assessing that. So we really don't have targets for you guys, but we do think there's opportunity for it directionally on that. In terms of the fixed wireless, anything that our carriers can monetize is good news.

[Steven Vondran, President & CEO at American Tower]

Right? They're able to put more customers on their network. We're seeing them earn some some healthy returns on the fixed wireless that they're doing. But what they're saying publicly is still that they're using fallow capacity on the network. And, there's nothing that I would say that would contradict the carriers on that.

[Steven Vondran, President & CEO at American Tower]

I think that that's what they continue to do. In terms of what that means for the future, we don't know. I hope that they find a business case to invest in standalone fixed wireless. What I can tell you is that to the extent that they're using the existing network for fixed wireless, we wouldn't see that broken out. That would just show up as kind of normal business for us.

[Steven Vondran, President & CEO at American Tower]

And that would just kind of be kind of the normal course of business. To the extent that they started building, dedicated fixed wireless assets, that's not something that's been in our viewshed and it's not in any of our projections. So that would be an upside opportunity for us if they started doing that. But there's no indications today from any of the carriers that they're investing in a separate fixed wireless network at this point.

[Benjamin Swinburne, Head of U.S Media Research at Morgan Stanley]

Got it. Thank you.

[Operator]

Thank you. In the interest of time, we have time for one more question. Our next question comes from Jonathan Atkin from RBC Capital Markets. Please go ahead.

[Jonathan Atkin, Managing Director at RBC Capital Markets]

Thanks. So I wanted to ask a little bit about inorganic growth and particularly in Europe, what would be the some of the criteria that you would look at to maybe get bigger in some of those developed markets, whether it's scale or valuation? And what's kind of the landscape there and your lens around acquisition? And then back on Coresight, you made some pretty positive comments. Are we to conclude that you're seeing accelerating growth in say cross connect counts and kilowatt or cabinet growth based on the demand trends that you saw anything on book to bill that you can share and other metrics around Coresight?

[Jonathan Atkin, Managing Director at RBC Capital Markets]

Thank you.

[Steven Vondran, President & CEO at American Tower]

Sure. So when it comes to Europe, First thing that we look for in any market that we're looking at is a healthy carrier ecosystem that supports long term growth. So we would be looking, we talked about Europe as one thing, it's not. Each country has its own dynamics there. So for us, it's making sure that you have a healthy carrier environment and that you have an environment that supports colocation as a business model.

[Steven Vondran, President & CEO at American Tower]

So that's the first criteria. The second thing that we look for is to make sure the terms and conditions are something that gives us long term viability for growth there. And so, it's easier to talk about the things that we've passed up on in the past and some of those transactions. So, we've seen transactions where you couldn't monetize amendments with the anchor tenant. We've seen transactions where the carriers are right to buy the assets back in a certain number of years.

[Steven Vondran, President & CEO at American Tower]

We've seen transactions where they had low fixed escalators versus CPI linked. You've had sites that were characterized as kind of golden sites where you couldn't lease them up. Those are all things that diminish your opportunity to grow in the future. And those are things that we would pass up on. And then the third criteria is really valuation.

[Steven Vondran, President & CEO at American Tower]

And can we drive, incremental value by doing a transaction there? So, know, there are a number of countries in Europe that we like that we think have got some of those good characteristics. What we've not seen is a portfolio trade that has the right terms and conditions at the right price. And so we'll continue to be disciplined on that. And we'll see if any opportunities arise on that.

[Steven Vondran, President & CEO at American Tower]

On the CoreSite side, yeah, we continue to see good cross net growth. It was high single digit to low double digit revenue growth in 2025 from cross connects. And, we are continuing to see strong and elevated pricing. Our mark to market is above our historical two to 4% range and our churn is kind of in line with our historical churn range there. So we feel very good about pretty much all the dynamics in CoreSite right now.

[Steven Vondran, President & CEO at American Tower]

And, like I mentioned earlier, the demand is not waning and we do see long tail of that enterprise customer that's gonna continue to repatriate workloads from the cloud and continue to repatriate workloads from their own data centers into CoreSite.

[Jonathan Atkin, Managing Director at RBC Capital Markets]

Thank you.

[Operator]

Thank you. This does conclude the question and answer session. I will now turn it back to Adam Smith for closing remarks.

[Adam Smith, SVP, IR at American Tower]

Thank you all for joining the call today. If you have any other questions, please feel free

[Adam Smith, SVP, IR at American Tower]

the Investor Relations team. Thank you.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Adam Smith, SVP, IR
• Steven Vondran, President & CEO
• Rodney Smith, Executive VP, CFO & Treasurer

Analysts

• Matt Niknam, Analyst at Deutsche Bank
• Jim Schneider, Senior Equity Analyst at Goldman Sachs
• Ric Prentiss, Managing Director at Raymond James Financial
• Michael Rollins, Analyst at Citigroup
• Nick Del Deo, Managing Director at Moffettnathanson LLC
• Batya Levi, Managing Director - Communications, Media & Infrastructure Analyst at UBS Group
• Eric Luebchow, Director - Senior Equity Analyst at Wells Fargo Securities
• Michael Funk, SVP at Bank of America
• Benjamin Swinburne, Head of U.S Media Research at Morgan Stanley
• Jonathan Atkin, Managing Director at RBC Capital Markets