American Tower Corporation ((AMT)) has held its Q1 earnings call. Read on for the main highlights of the call.
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American Tower Corporation’s recent earnings call painted a picture of robust growth tempered by caution. The company reported a strong start to 2025, with significant growth in its U.S. services business and CoreSite. However, challenges such as Sprint churn and foreign exchange (FX) headwinds were noted, along with a cautious outlook due to global economic uncertainties.
Strong Start to Fiscal Year 2025
American Tower exceeded its initial expectations for the first quarter of 2025, achieving impressive results across key financial metrics. The company reported higher-than-expected property revenue, adjusted EBITDA, and attributable AFFO per share, signaling a strong start to the fiscal year.
U.S. Services Business Growth
The U.S. services business was a standout performer, delivering its highest quarter of revenue and gross profit since 2021. Applications surged nearly 30% compared to the previous quarter and were up roughly 60% year-over-year, highlighting the robust demand in this segment.
CoreSite Performance
CoreSite, a key component of American Tower’s portfolio, posted high-single-digit revenue growth. This performance was underpinned by strong leasing activity and continued pricing favorability, contributing significantly to the company’s overall financial success.
Successful Capital Market Activities
In a strategic move, American Tower issued $1 billion in senior unsecured notes at a favorable weighted average cost of just over 5%. This capital market activity helped reduce the company’s net leverage to five times, strengthening its financial position.
Positive International Growth
Internationally, American Tower saw an 8% growth in property revenue, excluding FX impacts. Emerging markets like Nigeria and Brazil were particularly strong performers, contributing to the company’s positive international growth narrative.
Impact of Sprint Churn
Despite the overall positive performance, the U.S. and Canada property revenue experienced a decline of approximately 1%, primarily due to the negative impact of Sprint churn, which exceeded 1%.
FX Headwinds
The company faced approximately 300 basis points of FX headwinds, which affected consolidated property revenue growth. This challenge underscores the volatility and impact of currency fluctuations on international operations.
Challenging Global Economic Backdrop
Concerns were raised about the global economic environment, with potential uncertainties in emerging markets and FX volatility being key areas of focus. These factors contribute to a cautious outlook for the company moving forward.
Forward-Looking Guidance
American Tower provided comprehensive guidance for the year, revising its full-year outlook upwards. The company now expects property revenue to increase by $50 million, adjusted EBITDA by $30 million, and attributable AFFO by $20 million. The guidance reflects a 5% growth in consolidated organic tenant billings, supported by strong leasing trends and effective cost management, which expanded the cash-adjusted EBITDA margin to 68.2%.
In summary, American Tower’s earnings call highlighted a strong start to 2025, with significant growth in key areas despite facing challenges such as Sprint churn and FX headwinds. The company’s positive performance in the U.S. services business and CoreSite, along with successful capital market activities, positions it well for future growth. However, the cautious outlook due to global economic uncertainties remains a critical consideration for stakeholders.