SBA Communications NASDAQ: SBAC reported what executives described as a solid start to 2026, prompting the company to raise its full-year outlook across key financial measures. Management highlighted steady U.S. leasing activity driven primarily by new collocations, healthy international demand tempered by elevated churn, and early-stage work to expand tower-site use cases into mobile edge computing.
Guidance raised after “solid start” to the year
Chief Financial Officer Marc Montagner said the company is “increasing our full year outlook for all key metrics, including site leasing revenue, Tower Cash Flow, Adjusted EBITDA, AFFO, and AFFO per share as compared to our initial 2026 guidance.” He attributed the higher outlook to “outperformance during our first quarter, higher street-level revenue, and favorable foreign currency rates.”
Montagner also pointed to operational efficiency in the quarter, saying SBA controlled direct costs and delivered “company-wide Tower Cash Flow margins of approximately 80%.”
U.S. leasing led by new collocations; backlog increases
In the U.S., Montagner said SBA added “approximately $10 million of quarterly new lease and amendment billings year-over-year,” with “the bulk of the activity” coming from new collocations as carriers densify and expand network footprints. He added that the company’s churn priorities for the year “remain unchanged” for both Sprint and EchoStar churn.
Chief Executive Officer Brendan Cavanagh said customers continued to invest in their networks, citing 5G coverage expansion with new spectrum including C-band, upgrades such as Massive MIMO antennas, and growth in fixed wireless access that “continues to add strain to carrier networks.” He said “the majority of leasing activity in the quarter came from new leases as carriers focus on coverage gaps and capacity needs.”
On leasing visibility, Cavanagh said U.S. backlog increased from the end of 2025 to the end of the first quarter. He characterized the increase as “moderate,” noting that it reflected more applications coming in than the company is currently executing, with backlog “replenishing faster and at a higher rate than it’s being used.” While he said it was not “an extreme outlier” historically, he added that the trend was “a good sign in terms of the rest of the year,” and he expects “fairly steady activity levels” based on current customer interactions and backlog growth.
Asked whether the backlog gains were uniform across customers, Cavanagh said it was “not necessarily completely even among our biggest customers,” and noted that SBA has “one customer where we’ve signed a recent agreement” and is seeing increased activity tied to that arrangement. He added that activity tends to ebb and flow and said he would expect “all three of the primary customers we have in the U.S. be active at various points during the year.”
EchoStar dispute continues; international demand steady amid churn
Montagner said SBA continues to litigate its dispute with EchoStar in federal court and “believe[s] strongly in our contractual rights.”
Internationally, Montagner said SBA added “approximately $4 million of quarterly new lease and amendment billings year-over-year” and continues to see “healthy demand for infrastructure.” However, he said international churn “continues to be elevated due to carrier consolidations, bankruptcy restructurings, and wireless operators network rationalizations.” Montagner said SBA believes “2026 will be the peak year for international churn” and expects churn to improve “over the next several years.”
Cavanagh discussed integration progress related to the company’s Millicom assets, saying SBA has made “tremendous progress integrating the Millicom assets” and is seeing healthy co-location demand “exceeding our initial lease-up projections.” In response to a question on whether demand could fade after an initial burst, he said there is “an initial interest” as assets shift from carrier-controlled ownership to a more open co-location model, but he expects “a very attractive lease-up for an extended period of time,” citing the number of sites and early-stage customer conversations in those markets.
In Central America, Cavanagh said SBA is “starting to ramp up the number of new tower builds,” having built “just over 60 towers” in the first quarter, with expectations “to do much more over the coming quarters and years.” He said SBA intends to invest capital in Central America “at risk-adjusted returns that are expected to be well above our cost of capital,” and expects the region to help reduce relative foreign exchange exposure, diversify the customer base, and extend lease terms, with a focus on improving long-term cash flow durability.
On land purchases in Guatemala tied to the Millicom transaction, Cavanagh said SBA bought land under “most of the towers” acquired there and said the multiple paid was “in the seven-ish range,” calling it “pretty attractive and accretive” and helpful from a risk standpoint due to greater control of the underlying properties.
Balance sheet, capital allocation, and dividend
Montagner said SBA paid off $750 million of ABS debt in January using its revolving credit facility, and that the company’s outlook assumes free cash flow will be used to pay down outstanding revolver balances over time. He reiterated an assumption that the company’s $1.2 billion November ABS maturity will be refinanced “in November at 5.25%.”
Montagner said SBA remains committed to becoming an investment grade issuer and anticipates making its inaugural investment grade bond issuance “at some point in 2026, dependent on market conditions.” SBA ended the quarter with “approximately $13 billion total debt,” and leverage was “6.6x net debt to Adjusted EBITDA,” which he said is near historical lows and within the company’s 6x to 7x target range.
The company also addressed shareholder returns. Montagner said SBA declared a dividend of $1.25 per share payable June 17, 2026, to shareholders of record May 22, 2026. He said the dividend represents “an increase of approximately 13% over the dividend paid in the first quarter of 2025” and an annualized rate of “approximately 41% of the midpoint of our full year AFFO guidance.”
Cavanagh said SBA did not repurchase “meaningful shares in the first quarter” as it prioritized paying down the revolving credit facility, but added that buybacks remain “an important part” of capital allocation in 2026. He said the company starts with maintaining leverage within its target range and then prioritizes among buybacks, dividends, and investments including new builds and acquisitions, depending on relative opportunities.
During Q&A, Cavanagh also declined to comment on press speculation and rumors regarding potential private equity interest, calling it company policy not to comment. More broadly, he said SBA has “always focused on evaluating all options and all possible routes” to act in shareholders’ best interests and “will always evaluate any opportunity that presents itself to us.”
Longer-term themes: spectrum, 6G, and edge computing
Looking beyond 2026, Cavanagh said drivers of organic growth could include an “Upper C-band auction expected in mid-2027,” potential shifts in 6G network architecture toward a more balanced uplink/downlink mix, and new spectrum bands being studied for future auction—all of which he said would require “new hardware at the tower sites.”
He also said SBA is seeing early signs of 6G, including “higher capacity radios and denser and more intelligent antenna configurations.”
Separately, Cavanagh described mobile edge computing as an emerging opportunity. He said macro tower compounds could provide a “cost-effective solution” for edge needs due to strategic locations, existing power and backhaul, and zoning protections. In response to analyst questions, he said SBA is engaged with multiple companies and has already completed “a very small number” of deployments, some “almost trial in nature.” However, he said it was too early to provide firm timing on when the opportunity would materially impact financial results, adding that SBA expects to provide more updates in future quarters as the effort gains traction.
About SBA Communications NASDAQ: SBAC
SBA Communications Corporation NASDAQ: SBAC is a real estate investment trust that owns, operates and develops wireless communications infrastructure. Its core business is the leasing of space on communications towers, rooftop sites and other wireless structures to mobile network operators, broadband providers and other wireless service customers. The company also provides site development, construction and ongoing site management services to support the deployment and operation of wireless networks.
In addition to traditional macro towers, SBA offers a range of infrastructure solutions designed for dense urban and suburban markets, including small cells, distributed antenna systems (DAS) and fiber backhaul and transport services.
Further Reading
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