Crown Castle Q1 Earnings Call Highlights

Key Points

• Crown Castle says the sale of its small‑cell and fiber businesses is on track to close in the first half of 2026; management plans to use roughly $1 billion for share repurchases and about $7 billion to repay debt while keeping leverage in a 6–6.5x target range, with the full‑year outlook assuming a June 30 close.
• Management reiterated 2026 guidance after Q1 organic growth of 3.1% (3.6% excluding other billings declines) and reiterated midpoint targets of ~$3.9B site rental revenue, ~$2.7B adjusted EBITDA and ~$1.9B AFFO, with a post‑close AFFO midpoint of $2.1B; the company also expects about $65M in annualized cost savings and is pursuing land‑ownership and systems investments to boost margins.
• Crown Castle has terminated its 2020 agreement with DISH and amended litigation to add a breach‑of‑contract claim (including allegations against EchoStar), warning that a legal outcome or any government intervention could take at least a year.

Crown Castle NYSE: CCI executives used the company’s first-quarter 2026 earnings call to highlight progress toward a transition to a standalone tower business, while reiterating full-year guidance and outlining priorities ranging from asset sales to cost reductions and litigation with DISH.

Management reiterates 2026 outlook amid portfolio transition

President and CEO Christian Hillabrant said the company “delivered solid first-quarter results” and reiterated full-year 2026 guidance. He characterized 2026 as “a transformative year” as Crown Castle moves toward becoming “a best-in-class U.S. tower operator.”

Vice President of Corporate Finance and Treasurer Kristoffer Hinson reminded investors that, because Crown Castle has an agreement to sell its fiber segment, the fiber segment is reported as discontinued operations. Consistent with last quarter, management said full-year 2026 outlook and first-quarter results do not include contributions from the former fiber segment, except as otherwise noted.

Sale of small cell and fiber businesses still expected in first half

Hillabrant said the company’s first priority is to conclude the sale of its small cell and fiber businesses, which he said “remains on track to close in the first half of 2026.” He added that Crown Castle has “received almost all required approvals” and has “largely completed the separation” of those businesses.

In response to a question about whether the transaction could be split to accelerate closing, Hillabrant did not address specific regulatory steps, but reiterated confidence in timing. “We continue to work towards our stated goal of closing the transaction by the end of first half,” he said, adding that the company remains “extremely confident” the deal will close by then “or as soon as possible.”

CFO Sunit Patel said the full-year outlook assumes the sale closes on June 30. Following the close, Crown Castle plans to allocate approximately $1 billion to share repurchases and approximately $7 billion to repay debt, while remaining within its targeted leverage range of 6 to 6.5 times.

Organic growth details and full-year financial targets

Patel said Crown Castle had “a solid start to the year” while executing a previously announced restructuring. He reported first-quarter organic growth of 3.1%, or $30 million, excluding the impact of Sprint cancellations and DISH terminations, and noted that this included a 0.3% ($3 million) decline in other billings. Excluding the decrease in other billings, organic growth was 3.6%.

Patel said those gains were “more than offset” at site rental revenues by:

• $5 million of Sprint cancellations
• $49 million of DISH terminations
• $26 million decrease in non-cash straight-line revenues and amortization of prepaid rent

Patel also said adjusted EBITDA and adjusted funds from operations (AFFO) benefited in the quarter from lower repair and maintenance costs, sustaining capital expenditures, and other non-labor costs, though he said these were “largely due to timing and seasonality” and are expected to occur later in the year. He added that interest expense declined modestly due to “lower-than-anticipated short-term borrowing rates.”

For full-year 2026, Patel reiterated guidance and said that, excluding DISH revenues from prior-year site rental billing, the outlook includes 3.5% organic growth excluding Sprint cancellations and DISH terminations, which he said management expects to “mark the low point.” At the midpoint of the 2026 range, Crown Castle expects approximately:

• $3.9 billion in site rental revenues
• $2.7 billion in adjusted EBITDA
• $1.9 billion in AFFO

Patel also pointed to an unchanged midpoint AFFO target of $2.1 billion for the 12 months following the anticipated close of the transaction. He said the company ended the quarter with “significant liquidity and flexibility,” positioning it to maintain an investment-grade rating after the sale based on its “target capital structure and capital allocation framework.”

DIS H dispute: termination, amended litigation, and timing uncertainties

Hillabrant said the second major priority is to “preserve the value captured” in Crown Castle’s original 2020 DISH agreement. He said that after DISH defaulted on payment obligations in January, Crown Castle exercised its right to terminate the agreement and is seeking to recover remaining payments owed under the contract.

Hillabrant said the company has taken “appropriate legal action” and believes it has “a strong legal case.” During the first quarter, Crown Castle amended its pending litigation to include a breach of contract claim alongside a request for declaratory judgment. He said the amendment also asserts a claim against EchoStar “for their role in helping DISH evade its contractual commitments.”

In the question-and-answer session, Hillabrant described ongoing engagement with government stakeholders, including work alongside the Wireless Infrastructure Association, and said he has been meeting with “members of the administration, members of Congress, the FCC, and the like.” However, he cautioned that timing remains uncertain. “A legal outcome is going to take at least a year,” he said, adding that any government intervention or negotiated settlement would also “take time.”

Cost reductions, land ownership strategy, and emerging growth ideas

Hillabrant said Crown Castle’s third priority is driving operational efficiency and effectiveness as it seeks to become a “best-in-class U.S. tower operator.” He said the company restructured its tower and corporate organizations in the first quarter, resulting in an anticipated $65 million reduction to annualized run-rate cost.

Patel said the company has already taken significant actions, including a “20% reduction in staffing” during the quarter. Looking longer term, he cited two major areas for potential margin improvement: acquiring land under towers and investing in systems, platforms, and automation. Patel said Crown Castle currently owns land under about 30% of its towers and aims “over the next handful of years” to reach 30% to 40% ownership.

On capital spending, Hillabrant said 2026 guidance includes a year-over-year increase in capital expenditures, driven by land purchases under towers and investments in systems and processes. Patel said the outlook for discretionary CapEx remains unchanged at $200 million, or $160 million net of $40 million of prepaid rent received.

Management also discussed potential growth opportunities being evaluated, including more turnkey services, selective new tower builds, “power as a service,” shared generators, and early-stage work around edge computing. Hillabrant said the edge compute initiative is in a “trial phase,” and Patel described Crown Castle’s role as primarily renting “conditioned shelter space” with power and fiber connectivity, emphasizing the company would not be “deploying our own servers.”

On industry dynamics, Hillabrant said Crown Castle has seen 5G deployments that resemble prior cycles, with a mix of amendments and co-locations depending on carrier spectrum needs. He also said satellite connectivity is viewed as complementary and “de minimis or inconsequential” to Crown Castle “at this point,” and argued satellite solutions have limitations such as in-building coverage and line-of-sight constraints. Regarding longer-term spectrum catalysts, Hillabrant pointed to “over 800 MHz of new spectrum auctions beginning in 2027,” though he said it is difficult to estimate precisely when new spectrum would translate into deployments.

In response to questions about dividend strategy, Patel said the decision to keep the dividend unchanged was deliberated with management and the board. He said the company expects to grow AFFO over the next couple of years and, combined with debt repayment and planned share repurchases, expects to move the dividend payout ratio back into the targeted range over time.

About Crown Castle NYSE: CCI

Crown Castle is a U.S.-focused communications infrastructure company organized as a real estate investment trust (REIT) that owns, operates and leases shared wireless infrastructure. Its primary business consists of providing tower-based site leases, small cell networks and fiber solutions that support mobile voice and data transmission for wireless carriers, cable companies and other enterprise customers. The company's assets are positioned to enable network coverage and capacity, including the densification projects associated with 4G LTE and 5G deployments.

Its product and service offerings include ground-based tower sites that host multiple wireless operators, distributed small cell nodes and associated fiber backhaul used to connect sites into carrier networks, and site development and maintenance services.

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